Economic environment in 2016
After five years of deceleration, economic growth in Latin America turned negative in 2016. Prolonged recessions in Brazil and Venezuela and weakened economies in Ecuador and Argentina largely explain the aggregate performance in the region. While these four countries contracted in 2016, the region suffered a generalized slowdown – not only due to its exposure to external shocks, such as the low oil and commodity prices and heightened exchange rate volatility, but also due to some structural weaknesses, which undermined the region’s growth potential.
Venezuela’s economic depression continues to drag on the region’s growth. Political instability, lower oil output and prices, the total collapse of the bolivar, and a shortage of foreign currency are causing a variety of difficulties with little sign of an immediate upturn.
Peru, Colombia and Chile had stable or contracting GDP numbers at already low levels. While prices for copper and other commodities have surged in the last quarter of 2016, the full year averages were low and continued to affect the mining and public infrastructure markets across Latin America.
In Latin America, Bekaert manufactures an extensive product portfolio to serve construction, mining, agriculture and a wide range of industrial and consumer markets across the region. Bekaert has wholly owned and majority owned subsidiaries in Costa Rica, Ecuador, Colombia, Venezuela, Peru, Chile and Brazil and also runs joint ventures in Brazil in a 45/55 partnership with ArcelorMittal.
Bekaert’s activities in Latin America go back to 1950. Today, they represent 30% of combined sales.