CONVERSATION WITH…
José; Luis Vittor
OPPORTUNITIES IN LATIN AMERICA
BY GENILEE PARENTE
At almost any event businesses with global interests have attended in the last few years, one of the hot topics of discussion has been Latin America. Such was the case in January
at VMA’s Leadership Forum where international expert José ;
Luis Vittor took the podium to explain opportunities in that area
of the world to attendees.
“Latin America fared much better during the recent economic crisis than many parts of the industrialized world,” Vittor, a
partner in the international law firm of Hogan Lovells US LLP
in Houston, explains. Vittor has more than 20 years of experience in the region. “That’s partly because it was insulated in
certain markets from the events in Europe or the U.S.—and,
after some tough times and better structural and fiscal policies,
more used to relying on its own resources. This self sufficiency
turned out to be a benefit,” Vittor adds.
However, add to that reality the strife that
has been going on in other parts of the world,
such as Libya and Egypt, and it’s easy to see
why the Southern half of the Americas, with its
rich natural resources, blossoming markets and
wealth of commodities, is attractive to business
investors and partners.
“I’m not saying there are no problems at all
or that there weren’t problems in certain areas
from the recession. And I believe there is still much work to be
done at the macro or institutional level. But most of the countries are more careful in their fiscal policies, and that means
they are now in a much better position. A few countries, such as
Brazil, experienced growth during the crisis,” Vittor adds.
“All of this was a progressive process that slowly brought me
toward the United States,” he says.
He was asked to speak at VMA’s forum because his background has put him in contact with so many of the end-user markets valves, actuators and controls affect.
THE OPPORTUNITIES
When asked where the valve industry has the best chance of
shining in Central or South America, Vittor points to oil and gas
and water/wastewater as two of the brightest markets—oil and
gas because of available resources, the need to diversify the
sources of supply from traditional areas in the Middle East and
the infrastructure that’s already in place, and water/wastewater
because of the sheer size of the demand.
Geographically, “If you ask me where the
greatest opportunities lie, I would point to
Brazil, Colombia, Peru and Chile. But there are
pockets of opportunity in many places, such as in
certain areas of Central America.
“What you need to look at in considering a
place to do business is the macro framework,
how broad a country’s treaty network is and
whether they have provisions for double taxation
or investment protection,” he says.
For example, the government’s involvement in the economic environment in Chile is minimal and “appropriate,” Vittor
says, and this makes the country one of his favorite picks
because of favorable free trade agreements with several
nations and a well-run government. Brazil, on the other hand,
is a more complex market for regulated industries and still in
negotiations with the U.S. on a tax treaty but “the size of its
economy and natural resources makes it almost an inevitable
option,” he says.
Vittor says companies considering doing business in Latin
America have three levels of considerations: the macro level,
which is the institutional makeup of the country itself; the project level, which includes factors such as how relevant the project
might be to the local economy or what infrastructure is in place;
and the institutional level, which includes financing availability
and mechanisms, returns on investment, appropriate flexibility
in the structure of a transaction and other considerations.
“If you can check the boxes on these three levels and feel
comfortable with what you see and you have conducted a thorough diligence and became familiar with the culture and business environment, you should seriously consider making an
investment in the specific host jurisdiction,” Vittor advises. VM
GENILEE PARENTE is managing editor of Valve Magazine. Find a longer version
of this article on ValveMagazine.com.
What you need to
look at in
considering a place
to do business is
the macro and
institutional
framework.
AN INTERNATIONAL UPBRINGING
Vittor was born and raised in Argentina, got his undergraduate
degree in a German school and a JD at the University of Buenos
Aires, and then an international postgraduate degree from the
University of Texas at Dallas and a masters of law from the University of Houston Law Center. He worked for many years on
various privatization projects, including the exploration and production company YPF, the biggest company in his own land,
then became involved in a wide range of international legal work
that focused on large corporate transactions, public and private
partnerships and infrastructure development and international
finance, and foreign inbound and outbound investments. His
Latin American efforts included representing international
investor George Soros in Argentina, Brazil and Venezuela; Mexican oil giant Pemex; Chile’s largest oil and gas company
ENAP; and other water, infrastructure and international energy
companies in the areas of LNG, renewable energy and project
development and finance.
