Latin Trade presents its first forecast for the performance of Latin American companies. Sales will show similar growth as in 2012. Mining will recover, and retail will maintain its profits.
The expected economic growth for 2013 in Latin America will offer an opportunity to recover for some of the companies in the region that were affected during 2012, as a result of a slower regional and global economic growth. Most mining companies in the region are among those that are expected to recover. This year will also help sectors such as telecoms and retail maintain their expansion rates.
The mining and energy sector is expected to maintain its leadership in terms of striking the biggest business deals in the region this year. The main goal for integrated oil firms such as Petrobras, Pemex and Ecopetrol is to increase their reserves and production. To achieve this, they have planned multi-billion dollar investments, mainly in exploration and production. Brazil's state-owned Petrobras, one of the companies in the stock market with the highest revenues in Latin America in 2012, will continue its ambitious investment program, valued at $237 billion from 2012 to 2016. Mexico's state-owned Pemex will invest some $25 billion this year alone, which could turn out to be the year it radically changes its business model by introducing private investment into its activities, a move proposed by the government.
Other large oil companies in the region, such as Argentina's YPF and Colombia's Ecopetrol have planned investments of $7 billion and $9.5 billion respectively. They too will focus on exploration and production. Ecopetrol will also use its investments to expand and improve its refinery capacity and transport. Optimizing refinery activities will require investments of $1.3 billion by Peruvian company Petroperu, and some $800 million by La Pampilla, a subsidiary of Repsol, also from Peru. Braskem, from Brazil, expects more positive conditions for the petrochemical industry this year, and hopes to recover some of its losses from 2012. Braskem's plans for this year include several expansion projects, such as a mega refinery worth $12 billion, to be built in association with Petrobras. In addition, the company plans to build a polypropylene plant worth more than $3 billion in Mexico, currently under construction. Grupo Ultra, a Brazilian petrochemical company with the highest sales during 2012, is planning to invest $700 million for the expansion of its plants in Brazil, Mexico and the United States. Grupo Ultra might also make more investments in acquisitions. Grupo Copec has announced its intentions of increasing investments in its fuel distribution sector, which could lead to acquiring more assets. However, the investments in Arauco, the cellulose producer, will be shunned by the poor projections in the global market prices of cellulose.
Mining companies are hoping that an expected growth in China's economy will lead to an increase in the price of raw materials, helping them make up for their losses during 2012. Last year, the companies were affected by a sharp drop in sales and international prices. Brazil's Vale, one of the world's largest iron producers, has been recovering over the last few months thanks to an increase in the prices of iron, which has gone up by 70 percent since last September. Vale reported huge losses during all of last year. However, the predicted increase in iron prices in no way compares to the historic prices of2008. Facing challenges and uncertainty as to the stability and growth in the global economy, Vale has implemented an austere investment plan for 2013, of about $16 billion. Sixty...