Edition July 2024: Argentina's Economic Rollercoaster - A Deep Dive into Milei's First Six Months in Office
Frank P. Neuhaus
Senior Business Development Manager New Markets | Interim Management for International Project Missions | 100% international mobility | office in S?o Paulo & Hamburg | Blog Publisher BizDev Circular
Publishers: our project partners in Argentina - the CryptoARG Team ????
Pretext
Are you keen on understanding the current economic landscape of Argentina under President Javier Milei? Our latest blog, "Argentina's ???? Economic Rollercoaster - Milei's First Six Months in Office," provides an in-depth analysis of the country's political and economic state.
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Why Read This Blog?
This comprehensive analysis is crucial for anyone interested in the economic and political dynamics of Argentina ????. Whether you're an economist, investor, or simply a curious reader, our blog offers valuable insights into the factors shaping Argentina's ???? economy under Milei's leadership.
Explore Argentina's ???? economic landscape under President Javier Milei in our latest blog. Delve into the inconsistencies in his economic plans, the country's high inflation rates, political fragility, and the current recession. Gain insights into historical parallels and future challenges. Stay informed with our in-depth analysis of Argentina's ???? rollercoaster economy.
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oil & gas industry, Mexico
Record Investments in the Mexican Oil Sector in 2023: A Year of Unprecedented Growth
Pretext
The year 2023 marked a historic milestone for the Mexican oil sector, with both PEMEX and private oil companies setting new records for investments in migrated projects, associations, and blocks acquired through bidding rounds. According to the National Hydrocarbons Commission (CNH), investments in the sector surpassed a staggering US$3.074 billion, the highest since operations began in the country in 2015. This figure represents a remarkable 40.7% increase compared to the US$2.184 billion invested in 2022, as highlighted by Excélsior. Notably, January 2023 alone saw investments reaching an impressive US$437 million.
A Deep Dive into the Investment Surge
PEMEX, Mexico's state-owned petroleum company, along with its partners in exploration and production, has cumulatively invested US$15.563 billion in fulfilling project obligations from bidding and migration rounds. However, this substantial investment represents just 23.6% of the approved resources, which total more than US$65.939 billion. These funds are expected to be utilized progressively as projects advance through various development phases.
Interestingly, PEMEX has yet to commence four projects it won in bidding rounds. Instead, the company has opted for sporadic work in certain fields to maintain control, even if this results in delays in development. This strategic approach reflects PEMEX's long-term vision for managing its assets and resources efficiently.
Key Players and Their Investments
1. ENI: Leading the Charge
Italian energy giant ENI leads the pack in investment allocation, dedicating over US$2.887 billion to its projects. A significant portion of this investment is focused on the exploration and development of the CNH-R01-L02-A1/2015 contract, which has yielded over 22,000 barrels per day (bpd) of crude oil. ENI's commitment underscores its confidence in the Mexican oil sector's potential.
2. PEMEX Exploration and Production
PEMEX Exploration and Production follows closely with investments totaling US$2.684 billion. A substantial part of this investment is directed towards the Ek-Balam field's migrated contract and various projects secured through bidding rounds. This strategic investment is pivotal for PEMEX as it seeks to enhance its production capabilities and maintain its leadership in the sector.
3. Hokchi Energy
Ranking third, Hokchi Energy has invested over US$1.605 billion in its projects. This investment highlights Hokchi Energy's robust engagement and long-term commitment to the Mexican oil industry.
4. Fieldwood Energy E&P México
Fieldwood Energy E&P México is not far behind, with investments totaling US$1.602 billion. The company's substantial financial commitment reflects its strategic focus on expanding its operations and enhancing production efficiencies.
5. Shell Exploración y Extracción de México
Shell has made significant strides with investments amounting to US$993 million. This investment is part of Shell's broader strategy to strengthen its presence in the Mexican oil market and leverage the country's rich hydrocarbon resources.
6. Woodside Petróleo Operaciones de México
Woodside Petroleum has invested US$716 million, with a notable focus on the development of the deepwater Trion field in collaboration with PEMEX. This partnership underscores the importance of international cooperation in advancing Mexico's deepwater exploration and production capabilities.
Conclusion: A Promising Future for Mexican Oil
The record investments in the Mexican oil sector in 2023 signal a robust and promising future. With significant financial commitments from both PEMEX and leading international oil companies, Mexico is well-positioned to enhance its production capabilities and cement its role as a key player in the global oil market. As these projects progress and more resources are utilized, the Mexican oil sector is poised for sustained growth and development, benefitting the national economy and global energy markets alike.
the LatAm story - creating a high impact scenario
Coup d’état in Bolivia?
Santa Cruz de la Sierra, July 2nd, 2024
The Fragile Political Landscape of Bolivia: Analyzing Last Week's Attempted Coup
Last week, Bolivia faced a dramatic and alarming event: an attempted military coup by then-general Juan José Zú?iga, aimed at deposing President Luis Arce. This incident highlights the fragile political scenario and the popularity crisis plaguing the current head of state, further exacerbated by his estrangement from former President Evo Morales.
The Unexpected Coup Attempt
Despite escalating tensions, the notion of a general attempting a coup d'état solo was unexpected. General Zú?iga appears to have perceived Arce's dwindling popularity as an opportunity to garner political support from the opposition. In his recent media appearances, Zú?iga explicitly declared his intent to arrest Evo Morales if the latter attempted to run for another term in 2025. This stance underscored Zú?iga's readiness to challenge the political status quo.
Personal Motives Behind the Coup
General Zú?iga’s actions were driven more by personal interests than patriotism. He faced multiple allegations of corruption involving the misappropriation of public funds. This backdrop suggests that Zú?iga might have viewed the coup as a means to seize power forcefully. However, the general’s personal ambitions intersected with the tactical interests of President Arce.
Arce's Challenging Tenure
Luis Arce ascended to the presidency in 2020 with substantial support from Evo Morales. While his administration initially saw considerable GDP growth, subsequent rising inflation and increasing unemployment bred widespread dissatisfaction. The rift with Morales in early 2023 further amplified this discontent.
Specific unresolved issues, such as the scarcity of dollars and irregular fuel distribution, have created a pervasive sense of malaise, significantly undermining Arce's governance. For months, project partners and clients in the commodity industry in Santa Cruz de la Sierra and La Paz have voiced these concerns repeatedly.
Comparing 2019 and 2024: Different Contexts of Unrest
The mobilization witnessed last week starkly contrasts with the events of 2019 when Bolivia experienced a coup that led to Evo Morales' resignation. The 2019 uprising was a citizen-led movement in response to electoral fraud and an institutional crisis. In contrast, the recent coup attempt stems from an economic crisis, lacking support from any political or social force.
Public Sentiment and the Future of Bolivian Politics
Despite Luis Arce’s plummeting popularity and polls indicating that many would no longer vote for him, this does not imply support for drastic measures like a coup. No coup can succeed without substantial societal backing or at least tacit acceptance from a large segment of the population. Current indicators suggest that, despite governmental dissatisfaction, Bolivians are more inclined to seek solutions within the democratic framework, even amidst the nation’s challenges.
The Potential Return of Evo Morales
In this turbulent scenario, the prospect of Evo Morales returning to power in 2025 remains a pivotal question. Morales continues to be a popular and influential figure, especially among the grassroots supporters of the Movement Towards Socialism (MAS). His leadership is still viewed as vital by many advocating for significant political change in Bolivia.
However, Morales' return is fraught with legal and political complexities. Constitutional restrictions on consecutive terms pose a significant hurdle. Furthermore, the internal dynamics within MAS will play a crucial role in shaping Morales' prospects.
Conclusion
Bolivia’s political landscape is undeniably fragile, marked by economic woes and political discontent. The attempted coup by General Zú?iga underscores these tensions but also highlights the populace's preference for democratic solutions over military interventions. As the nation navigates these turbulent times, the potential return of Evo Morales in 2025 adds another layer of complexity to an already intricate political scenario.
Read also GreyRhino newsletter Special Edition on Bolivia
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automotive industry, Brazil
Massiv Car Imports by BYD - Target 100,000 Units in 2024
During the first quarter of 2024, BYD has already unloaded at least 10,000 vehicles at the port of Porto do Suape in the state of Pernambuco. These deliveries also include the new King sedan, which is already making its presence felt on Brazil's roads. There is also the new SUV model SongPro. The Chinese company's target is ambitious. In the current year, 100,000 vehicle units are to be brought to Brazil - from pure EVs to plug-in hybrids. BYD bought the former Ford factory in Bahia, in the city of Cama?ari, north of Salvador de Bahia, some time ago. The factory is not yet operational and is still being adapted for future local production. In May 2024, the maritime car carrier Explorer No. 1 once again unloaded 5,469 vehicles in Brazil. The sea voyage from China to Brazil takes 27 days.
automotive industry, Brazil
EVs in Brazil may face higher taxes
It may sound surprising to many Europeans and North Americans, but EVs in Brazil could be subject to higher taxes as a result of the negative environmental balance. This has to do with the way environmental factors are assessed in Brazil. In the case of cars, for example, the whole world effectively only measures CO2 emissions at the tailpipe. In Brazil, however, which is unique in the world, the "well to wheel" principle is applied. This means that the entire value chain is included in the CO2 balance as far as possible.
As part of the comprehensive tax reform in Brazil, a higher tax will be levied on excessively harmful products - known as the selective tax. This group includes, for example, drinks with a high alcohol content, foods with a high sugar and fat content, cigarettes, as well as a significant proportion of the oil and gas industry and the mining industry.
And this is where the share of environmentally harmful battery production for EVs falls into the balance. Brazil's Ministry of Industry points out that EV technology is not the only path to decarbonization. With a view to the value chain and the Brazilian principle of evaluating the entire process along the life cycle of the products, battery production, starting with environmentally harmful and exploding mining projects, through to disposal, falls into the overall balance.
The Chinese manufacturer BYD with its national Brazilian production would be particularly affected by this. BYD Brazil argues that similar conditions also prevail in the production of photovoltaic systems and that no increased tax rates are planned here. In addition, BYD is also investing in the national Brazilian production of solar systems based on local minerals.
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BYD Brazil also argues that the export business would be negatively impacted by such tax rates.
From 2027, the rules of the new MOVER automotive industry program will take full effect. This will not only take into account CO2 emissions, but also the proportion of recycling and the proportion of sustainable energy used in the production process.
civil construction/real estate, Brail
25% of all real estate projects are completed in S?o Paulo
In 2023, a total of 293,000 real estate projects (apartments) were completed in Brazil; 73,000 of them in S?o Paulo. In the current year 2024, an absolute historical record will probably be set, but this should not be repeated in the coming years. This absolute peak will only be reached because many of the projects are from the period when the key interest rate was cut to an irresponsible 2%, setting off a huge spiral of inflation and devaluation of the real. The market for affordable housing will grow by 10% in 2024 and the market for premium and luxury properties by around +5%.
ups & downs
In May 2024, Latin American start-ups raised a total of 63 investment rounds via seed investment and VC capital. These rounds raised a total of USD 505 million for the young companies. The result represents the best round since October 2022.
Revenue in the Brazilian mining sector amounted to USD 12.4 billion in the first quarter of 2024, representing an increase of +25% compared to the same period in 2023. Iron ore accounts for around 64% of the revenue balance. Exports increased by +18% to USD 11 billion. The share of exported iron ore is 74%. Imported mining products fell by -31% to around USD 2 billion.
Brazil now generates more than 14 gigawatts (GW) from large solar power plants. This volume of generated energy is now at the same level as the installed capacity for hydro energy from the Itaupú dam complex. Since 2012, solar energy has been continuously expanded in Brazil, accumulating approximately USD 17 billion in new investments and the creation of more than 420,000 new jobs during the period under review. Brazil generates around 90% of its total electrical energy from renewable sources.
The economic activity of the so-called micro-entrepreneur in Brazil grew again in April 2024. Overall, the micro and small business segment recorded an increase of +7.2% compared to 2023. The sector index is currently at around 103.5, which represents a robust positive scenario.
The risk premium for international capital procurement by Brazilian companies with an investment rate fell to its lowest level in five years. Despite all the current turmoil in the market, there is no trend towards an increasing risk premium. What is particularly positive is that the same trend can be observed for Brazilian companies without an investment rate. The international financial market appears significantly less nervous and politicized than the national financial market.
The confidence index for Brazilian industry fell by 0.8 points in June 2024 compared to May and now stands at 51.4 points. The index is now in the moderate-positive range. Anything above 50 is considered positive.
The turnover of Brazilian mechanical engineering companies fell by -18% in May 2024 y-t-y, and reached USD 3.7 billion. The annual decline within 12 months amounted to -15%. This does not include agricultural machinery, sales of which grew by +5%. Despite the cautiously positive situation in the export sector, the sector is suffering from the strong devaluation of the real and thus the decline in investment in productivity. The massive imports of machinery from China, which account for around 47% of turnover in the machinery sector, are also having a negative impact.
As a result of the prospect of no further interest rate cuts in Brazil, equity funds experienced massive capital outflows in June.
iMB news & publishing
English Version ????
After a very detailed planning phase and a large number of discussions with former clients of mostly family-run medium-sized companies in Brazil, as well as lawyers, accountants and other professional service providers specializing in this segment, we decided to launch iMB MiD48.
Looking at the more than 19 years that iMB has been in the market, we see that 50% of all projects we have carried out have been for medium-sized Brazilian companies. Over the last few years, we have clearly observed that the demand and need for project missions of all kinds has continued to grow.
We are now reflecting this development. With iMB MiD48, we are offering this segment of the national economy an all-round coordinated system to meet the demand and also the needs of this clientele. With immediate effect, we will make around 60% of iMB.Solutions' total capacity available to these project missions. The remaining 40% is earmarked for our international project missions. This also corresponds to the reality of recent years.
We will also be introducing changes with regard to the GreyRhino newsletter outlet. Since the beginning of 2024, five newsletters have been published in English and sent to subscribers every month. From now on, only two, maximum three English-language newsletters will be sent out each month. The monthly number of newsletters written in Portuguese will also be between two and a maximum of three editions. The list of subscribers is segmented according to language, target country and the interests defined in the newsletter registration. This ensures that only interested subscribers receive the corresponding newsletter.
Vers?o Brasileira ????
Após uma fase de planejamento muito detalhada e um grande número de discuss?es com ex-clientes de empresas de médio porte, em sua maioria familiares, no Brasil, bem como com advogados, contadores e outros prestadores de servi?os profissionais especializados nesse segmento, decidimos lan?ar a iMB MiD48.
Analisando os mais de 19 anos em que a iMB está no mercado, vemos que 50% de todos os projetos que realizamos foram para empresas brasileiras de médio porte. Nos últimos anos, observamos claramente que a demanda e a necessidade de miss?es de projeto de todos os tipos continuaram a crescer.
Agora estamos refletindo esse desenvolvimento. Com a iMB MiD48, estamos oferecendo a esse segmento da economia nacional um sistema completo e coordenado para atender à demanda e também às necessidades dessa clientela. Com efeito imediato, disponibilizaremos cerca de 60% da capacidade total do iMB.Solutions para essas miss?es de projeto. Os 40% restantes s?o destinados às nossas miss?es de projetos internacionais. Isso também corresponde à realidade dos últimos anos.
Também estaremos introduzindo mudan?as com rela??o à saída do newsletter GreyRhino. Desde o início de 2024, cinco boletins informativos foram publicados em inglês e enviados aos assinantes todos os meses. De agora em diante, apenas dois, no máximo três boletins em inglês ser?o enviados a cada mês. O número mensal de boletins escritos em português também será de duas a, no máximo, três edi??es. A lista de assinantes é segmentada de acordo com o idioma, o país de destino e os interesses definidos no registro do boletim informativo. Isso garante que somente os assinantes interessados recebam o boletim correspondente.
Don't miss out on visiting the iMB MiD48 website!
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Exploring an Abandoned Glass Production Plant: Capturing the Ghostly Beauty
As on-demand managers, we are constantly involved in a wide variety of project missions. A stark and exciting contrast to the usual projects are those missions where old, abandoned assets are involved in some way. This is especially true for deactivated factories.
Stepping into an abandoned glass production plant feels like entering a forgotten world, frozen in time. The first rays of sunlight filtering through broken windows, the echo of footsteps in cavernous spaces, and the rusted remnants of machinery all create a hauntingly beautiful atmosphere. For a photographer, this is a playground of textures, shadows, and stories waiting to be captured.
The Entrance: A Gateway to the Past
The adventure begins at the plant's entrance, often overgrown with vines and surrounded by crumbling walls. Pushing open a creaky, rusted gate, you step into a realm where nature and industry intertwine. The anticipation is palpable, each step revealing more of the plant’s secrets. As you enter, the musty scent of decaying wood and metal greets you, a stark reminder of the years of neglect.
The Play of Light and Shadow
One of the most striking features of the plant is the way light interacts with the space. Broken windows and skylights create beams of sunlight that cut through the dust-filled air, casting dramatic shadows and highlighting the textures of peeling paint and rusted metal. Capturing these moments requires patience and a keen eye for composition. Every shift in the light can transform a mundane scene into a work of art.
The Machinery: Silent Witnesses to the Past
The abandoned machinery, once the heart of the plant, now stands as silent witnesses to its bustling past. Rusted conveyor belts, massive kilns, and shattered control panels tell the story of an era when the plant was alive with activity. These elements offer rich photographic opportunities. Close-up shots of gears and levers can reveal intricate details, while wide-angle shots can convey the scale and desolation of the space.
The Challenge of Composition
Finding the perfect shot in an abandoned plant is both a challenge and a thrill. The sheer size and complexity of the space can be overwhelming. It’s essential to take your time, explore different angles, and experiment with various focal lengths. Look for leading lines created by conveyor belts or pipes, and use the interplay of light and shadow to create depth and dimension in your photos.
Safety First
While the allure of an abandoned plant is undeniable, safety should always be a priority. These structures can be unstable, with loose flooring, broken glass, and sharp metal edges posing potential hazards. Wearing sturdy shoes, gloves, and a hard hat can help protect you as you navigate the site. It’s also wise to bring a buddy along, not only for safety but to share the excitement of the exploration.
The Final Shots
After hours of exploring, composing, and shooting, you leave the plant with a memory card full of images that capture the eerie beauty of the space. Each photo is a testament to the plant’s history and a tribute to the artistry of industrial design. Back in the editing room, these raw images can be transformed into striking black-and-white shots or vibrant, color-saturated works of art, each telling its own unique story.
Conclusion
Exploring an abandoned glass production plant is a journey through time, a chance to capture the ghostly beauty of a forgotten era. The thrill of discovery, the challenge of composition, and the stories hidden in every corner make it an unforgettable experience for any photographer. So, grab your camera, lace up your boots, and step into the past. The perfect shot is waiting for you.
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UnitedInterim - seit 2017 - The Place to be in Interim Management
Für die deutsch-sprachigen Leser des Newsletters wird auch die offene Plattform UnitedInterim empfohlen. Hier kann der interessierte Leser ohne Nebenkosten Interim Manager und unabh?ngige Berater mit unterschiedlichsten Profilen finden. Der Autor des Newsletters GreyRhino newsletter, Frank P. Neuhaus, ist ebenfalls auf der Plattform gelistet. Neben erg?nzendem Informationen zum Profil, sind auch zahlreiche
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