US oil major Chevron Corp. announced Oct. 9 that it had made a technical- cooperation agreement with Mexican state oil giant Petroleos Mexicanos (Pemex). The agreement will allow Chevron to provide training to Pemex for deepwater exploration and drilling projects. Because Mexico’s constitution does not allow for commercial ventures with foreign oil companies, the agreement precludes any financial aspects. Pemex’s dwindling reserves and production and lack of technical capacity had led the firm to seek out constitutionally legal foreign expertise. In addition to Chevron, Pemex has signed similar accords with Canadian oil firm Nexen, Norway’s Statoil, Brazil’s Petrobras and Royal Dutch Shell in 2007.
US food retailer Taco Bell has reentered the Mexican market 15 years after its first failed attempt. The chain opened 1 location in Monterrey, Mexico in September 2007 and is planning to expand operations – opening about 10 locations in 2008, with eventual plans to open 300 locations throughout Mexico. The initial stores will be company owned though later stores will have franchise opportunities. Taco Bell was a difficult sell to Mexicans who generally buy tacos at “taquerias” –traditional, quick-service taco stands. The company brand – “Taco Bell is something else" – is attempting to draw the distinction between Mexico’s taqueria-culture and US-style fast food.
A Mexican family bidding for Aeromexico airline increased its offer Oct. 9 to $166 million. The Saba family, one of the wealthiest dynasties in Mexico, is facing bids from Mexican airline Mexicana, who has bid $200 million, and a consortium consisting of Citibank’s Mexican arm and brewing giant Modelo, who has bid $160 million. Mexicana airline’s bid is complicated by Mexico’s anti-trust commission which has said Mexicana’s purchase of Aeromexico could constitute a monopoly.
Brazilian Industry and Trade Minister Miguel Jorge said Oct. 9 that his country’s auto industry should spend $15 billion by 2010 to increase production capacity. Current production is about 3.5 million vehicles annually; the goal would be 5 million vehicles annually. Brazilians are purchasing vehicles in unprecedented numbers because of more favorable lending terms and improved economic growth. Automakers operating in Brazil include Germany’s Volkswagen, Italy’s Fiat, US firms General Motors and Ford Motor Company, along with smaller Japanese and French operations.
Legislation before Brazilian Congress is sparking concern from environmentalists who contend that it would cause mass destruction of the rainforest if passed. The proposal would reduce the amount of forest that Amazonian landowners would be required to leave untouched as a forest reserve. Brazilian environmentalist say they bill could cause more than 181,000 square miles to be deforested – an area about the size of California. Present legislation, from 2001, requires that 80 percent of a landowner’s Amazon property be left standing, with 20 percent free to be clear cut for agriculture or animal grazing. But landowners contend that the current legislation limits prosperity in the poor Amazon region and are lobbying for more freedom to clear cut. Though Congress maintains that it is in investigatory stages regarding the proposed legislation, environmental groups contend that there are two separate proposals before the legislature seeking to drop the 80 percent reserve requirement to 50 percent. About 20 percent of the Brazilian Amazon has already been clear cut.
Mexican homebuilder Desarrolladora HOMEX announced Oct. 9 that it will be the first Mexican company admitted into the Companies Circle of Latin American Corporate Governance Round Table organization, which consists of 13 other leading Latin American companies. Formed in 2005, the Company Circle is internationally recognized for bringing together leaders from Latin American companies and industry who have adopted the practice of good corporate governance. HOMEX is the only Mexican homebuilder fully listed in the New York Stock Exchange. Joining the organization, HOMEX will now be able to contribute to how other foreign companies manage themselves and do business.