Twitter, Starbucks, Colombia, Sao Paulo and Aston Martin are the key topics of this week's TradeTalk.
BY CHRONICLE STAFF
Despite surpassing Chile as Latin America’s top nation on The World Bank’s Doing business ranking this year, Colombia aims to improve further. This year Colombia ranks 37th – an improvement of 12 spots from last year and 39 spots from 2006. However, it now aims to be among the top 20 nations worldwide by 2014, Commerce Minister Sergio Diaz-Granados announced this week, according to Dinero.com. Other 2014 goals include boosting foreign direct investment from $10.6 billion in 2008 to $13.2 billion and the number of international arrivals from 2.5 million last year to 3.9 million. Colombia last year had Latin America’s highest growth in arrivals and the third-highest growth in tourism receipts, according to the Latin Tourism Index from Latin Business Chronicle.
US-based Starbucks Coffee Company plans to open outlets in Central America through a partnership with Salvador-based Corporación de Franquicias Americanas (CFA), one of Central America’s largest multi-brand franchise operators. The first store will open in Salvadorian capital before the end of the year. “El Salvador will provide Starbucks with a strong platform to further expand across Central America,” Pablo Arizmendi-Kalb, vice president and general manager, Starbucks Latin America, said in a statement. CFA employs 5,000 people in Central America and boasts such brands as Pizza Hut, KFC, Wendy’s and China Wok. Interestingly enough, Central American nations like Guatemala and Costa Rica are among the top providers of coffee to Starbucks worldwide.
TWITTER: LATIN AMERICA
The number of unique visitors to Twitter.com in Latin America reached 154 million in June, a whopping 305 percent increase from a year earlier and the highest growth worldwide, according to market researcher comScore. Globally, the rate doubled in the same period. Brazil and Venezuela led the way in Latin American growth. They now rank as the second and third markets globally in Twitter penetration. In Brazil, for example, 20.5 percent of adults aged 15 or older use Twitter versus 11.9 percent in the United States. ComScore attributes much of the growth in Venezuela to the decision by president Hugo Chavez to join. “With Venezuelan President Hugo Chavez joining Twitter in late April, Twitter.com penetration in the country spiked 4.8 percentage points in a few short months,” the company said in a statement.
SAO PAULO: WORLD’S TOP US VISA POST
SAO PAULO--The U.S. Consulate in São Paulo is the single largest visa-issuing post in the world, issuing about 300,000 visas yearly or 2,000 a day and generating some $40 million that helped fund the consular operations, said U.S. Ambassador to Brazil Thomas A. Shannon. Brazil is now the fourth-largest U.S.-visa recipient in the world, coming after China, India and Mexico. “Brazil right now is the fourth-largest country in the world in terms of visa recipients,” Shannon said. “That is a pretty remarkable fact from my point of view considering there are only 190 million Brazilians and you are thousands of miles away from the United States,” Shannon told a recent Latin Trade CFO meeting in São Paulo. Shannon said that the consulate was operating at full capacity. Currently about one million Brazilians visit the United States annually, with 400,000 visiting Orlando, Florida alone. But U.S. tourist destinations believe that the potential for Brazilian tourists is larger. The country’s middle class has grown in recent years, and almost half of Brazilians are classified as middle class currently. Shannon said that a recent visit to Brazil by executives of The Walt Disney Co. from Florida, they suggested the number of Brazilian tourists visiting Orlando alone could reach one million a year. --Jane Bussey
THE LAN-TAM MERGER
After Friday’s news about Chilean carrier LAN’s plan to merge with Brazilian airline TAM (subsequently revealed to be a $3.8 billion acquisition of TAM), pundits are analyzing the results for the airline industry in general. Not only will the new holding LATAM be Latin America’s largest, it will also rank as the world’s 11th largest carrier by passengers and would be the biggest acquisition of an airline in at least two decades, according to data compiled by Bloomberg
BRAZIL’S MIDDLE CLASS GROWS
Brazilian Finance Minister Guido Mantega estimates that the country’s middle class grew last year to 53 percent of the population of 200 million from 42 percent in 2002, Bloomberg reported yesterday. Brazil’s statistics institute defines middle class as a monthly income of $608 to $2,623. The news comes as Brazil's economy overall now ranks eighth worldwide, replacing Spain, according to Spanish newspaper Expansion.
FARM SUBSIDY SOLUTION?
BCP Securities analyst Walter Molano predicts that the sluggish economies of the United States and Europe will force them to eventually stop their farm subsidies to the benefit of Latin American exporters. “No longer able to afford such generous subsidies for its agricultural sectors, Europe and the U.S. will phase out its farm supports,” he wrote last week in a prediction for the year 2020. “No longer able to afford such generous subsidies for its agricultural sectors, Europe and the U.S. will phase out its farm supports. This will put the world’s food producers on an even playing field by allowing prices to rise and removing some of the west’s competitive advantages. Consequently, Latin America will become much more prosperous, allowing the region’s currencies to appreciate and economic activity to expand.” He also predicted that with more economic integration and promoting cross-border trade, the region will start to again draw immigrants rather than export talent “As it occurred a century ago, immigrants from all over the world will begin to arrive on Latin American shores to take advantage of the region’s bounty,” Molano forecasts. “The top of the list will be comprised by Brazil, Argentina, Colombia and Peru. The new frontier economies will be Bolivia, Paraguay and the Guyanas.”
ASTON MARTIN ENTERS LATIN AMERICA
Aston Martin, the venerable luxury sports car featured in many James Bond movies, has just entered Brazil and Chile, its first Latin American markets. Today, it opened a new showroom in Sao Paulo. “São Paulo and Brazil represent one of Aston Martin’s strongest and most important emerging markets,” Aston Martin Chief Executive Ulrich Bez said in a statement. ”It should come as no surprise then, that a culture so passionate about luxury, beauty and quality should be home to the largest Aston Martin dealership on the continent.” The move to Brazil made sense, since the country is expected to become the fourth-largest auto market in the world by 2020, pointed out local dealer Sergio Habib, the principal of Aston Martin São Paulo. Meanwhile, Aston Martin opened a showroom in Chilean capital Santiago on Tuesday. “I am confident Santiago will perfectly represent our brand and be central to our growth in Latin America,” Bez said. The Chilean dealership is owned by Comercial y Arrendamientos Leon Ltda.
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