Misguided energy policies threaten its manufacturing sector and the global fight against climate change.
The combustible engine’s end date is firming up: General Motors Co., the largest of the Detroit big three, plans to stop making gas-driven cars by 2035. The global green shift goes beyond vehicles, as hundreds of companies and a growing number of nations pledge to neutralize their carbon footprints. Mexico’s natural bounty in alternative energy sources and its close industrial ties to the United States give it advantages going into this new era. Yet Mexico’s government is squandering them by rejecting the green revolution just as it picks up its global pace.
Mexico’s manufacturing base rests heavily on autos. The factories of Ford Motor Co., GM, Nissan Motor Co., Volkswagen AG, Toyota Motor Co., and other companies fill its industrial heartland and churn out nearly 4 million vehicles a year, making Mexico the world’s sixth biggest producer. Global parts-makers have followed their clients: Aptiv Plc set up with GM, Visteon Corp trailed Ford, and Denso Corp came with Toyota. Mexico developed sophisticated homegrown suppliers, too: Brake and suspension maker Rassini SAB, chassis provider Metalsa SA, powertrain manufacturer Nemak SAB, as well as hundreds of smaller shops that make the basic nuts and bolts assembled into seats, dashboards, mechanical systems and more. The sector is now Mexico’s biggest export driver by far, bringing in $100 billion in annual revenue.
Read full article here.
Should Latin American SMEs consider the possibility of exporting their products to Brazil? Yes, because Brazil is the largest market in the region with almost 200 million inhabitants and because in addition to being a member of the Mercosur it has trade agreements with several countries in the region such as Chile and Bolivia, facilitating the entry of products into its territory.
If this information has convinced you to face the challenge of exporting to the verdeamarelho country, then you should investigate the characteristics of the Brazilian market. Below we provide answers to your possible questions.
Chilean miner SQM plans to invest US$700mn in an Australian lithium project in 2021-25.
The project, known as Mt Holland, is a JV between SQM and Australia’s Wesfarmers, which will invest another US$700mn in the initiative.
The parties announced a final investment decision in disclosures on Wednesday.
According to an updated definitive feasibility study, initial concentrator and refinery production will be about 50,000t/y of battery grade lithium hydroxide. Environmental approval for the refinery is pending.
Construction is forecast to start in 2H21 and first production of lithium hydroxide is expected in 2H24, SQM said in a filing with Chile’s securities regulator CMF.
Read full article here
Perth-based retail and industrials conglomerate Wesfarmers has announced it will forge ahead with a near billion-dollar investment to construct a lithium mine in the Western Australian region of Mt Holland.
Wesfarmers told investors after market close on Wednesday evening it had made a final decision to proceed with the investment in the mine and its associated refinery in Kwinana which it is building via a joint agreement with Chilean chemical company Sociedad Química y Minera de Chile (SQM).
The two businesses’ joint venture company, Covalent Lithium, completed a fresh feasibility study on the mine, determining its annual production capacity of 50,000 tonnes of battery-grade lithium, a 5,000-tonne increase on the original planned production capacity.
Wesfarmers and SQM are currently in the process of landing all necessary approvals for the project though final approval is required from the Western Australian Environmental Protection Authority.
February 2021 ALABC E-Newsletter
Dear Members and Friends,
I am please to welcome you to our first ALABC E-Newsletter of 2021. It is great to hear that many of our members are well an on their way to returning to stronger growth. We are looking forward to keeping our members engaged in our upcoming activities and supporting your business expand in this rapidly evolving business landscape.
We recently finished planning our calendar of events for 2021 and as you would expect, we will be-re-instigating our traditional annual dinners in Sydney, Perth, Melbourne and Brisbane. We will continue with webinars throughout the year and hosting boardroom luncheons with Ambassadors, Senior Government officials and business leaders. Our AGM will be held in May and our ALABC-COALAR Networking Day in Canberra is scheduled for October. Please remember to save the dates to ensure you secure your place.
We will also be expanding on our bilateral relations with specific countries in the Latin American region and establishing binational leadership forums with Peru and Brazil, in addition to the one already establish with Chile. The Australia-Chile Business Council is established and if you are interested in joining this binational business leaders forum, please do so by following the instructions here.
With the support of COALAR, we will continue to enhance our digital tools to help our members maximise their networking opportunities as well as providing easy access to data and key insights regarding countries in the region.
During 2021, ALABC will be strongly advocating for a comprehensive globally connected strategy for Latin America. Australia needs to expands its horizons, diversify markets and reduce the dependency on Asia. It is not about the reallocation of priorities, or the broadening of perspective, it's about thinking bigger and being enthusiastic about the world.
We hope that 2021 brings more health and recovery as we strive towards growing the business links between Australia and Latin America. I look forward to connecting with you all.
Chief Executive Officer
Australia-Latin America Business Council
Mexican bill would reform tax law for subcontracted services
November 16, 2020
Mexico’s Executive branch submitted a bill to Congress on November 12 that would reform labor and tax laws related to the tax treatment and legal permissibility of subcontracted services. Given the political context, Congress likely will pass some version of the proposed legal reform and that the effective date could be as early as January 1, 2021.
Subcontracted services are a widespread feature of Mexican business both through third-party personnel providers and, more commonly, through related-party service companies. For decades, Mexican businesses often have maintained their employees in legal entities that are separate from the operating entity.
Additionally, Mexican Labor Law mandates an annual 10% profit-sharing payment to employees. The payment is made directly to the employees and is not a tax. Labor Law bases the payment on the employer’s taxable profits. As a result, an employee´s profit sharing is limited to a portion of the fair market value profit at the legal entity employer rather than the consolidated business profit of a group of entities.
For MNCs that house their employees in a separate legal entity, the proposed legal reform could disrupt various aspects, including legal structure, people planning, income tax and value-added tax (VAT). Companies that provide workforce solutions such as staffing to unrelated parties also should consider the proposed legislation’s impact.
Read full document here.
December 2020 ALABC E-Newsletter
The directors of ALABC were able to share their insights on plans for 2021 and welcome opportunities for potential events next year with our member companies at our virtual end of year drinks. We were extremely pleased to have Jeanne Johns, the Managing Director and CEO of one of our Patron Companies, Incitec Pivot, at the meeting to share their plans with us for the coming year. In addition, we were also very pleased to have Jason Stirbinskis, Managing Director of Los Cerros, Rolf Fandrich, Co-Founder and Business Development Director of Voconiq and Liliana Harris, Business Advisory Partner at Mazars also share insights about their companies over the past year.
I would like to remind our members, that the Australia-Chile Business Council will be starting activities early in the new year and if you are interested in joining this binational advisory group, please do so by following the instructions here.
ALABC has a number of events related to specific industries planned for the coming year that can be viewed in our upcoming events page on our website. Please remember to save the date to ensure you secure your place.
In the next few months, ALABC will be strongly advocating for a comprehensive globally connected strategy for Latin America. Australia needs to expands its horizons, diversify markets and reduce the dependency on Asia. It is not about the reallocation of priorities, or the broadening of perspective, it's actually thinking bigger and being enthusiastic about the world.
I would like to wish everyone a safe and happy holiday period. We hope that 2021 brings more health and recovery as we strive towards growing the business links between Australia and Latin America. I look forward to connecting with you all in the new year.
Read Full Newsletter Here
Austrade is making it easier for businesses to go further, faster with services delivered online, in person and via partners. To support Australian businesses anytime, anywhere in the world Austrade is reimaging existing services and developing new ones. These services will help businesses unlock more opportunities, more often, making it easier to find export markets, understand exporting rules and get the latest insights. Businesses going global can also connect with Austrade and other government services through the advisory centre, staffed by experienced specialists. In 2021, Austrade will provide more tailored information and digital services based on where a business is in its global growth journey, from new to experienced exporters, through a fully integrated online export guide.
Learn more about Austrade's Digital Services and try Austrade’s new digital tools, currently in beta for Food and Agriculture businesses.
November 2020 ALABC E-Newsletter
On the 12th November 2020, an MOU was signed between ALABC and the Chilean Federation of Industry (SOFOFA) for the establishment of the Australia-Chile Business Council (ACHBC). The ACHBC will provide a regular platform for a more systematic approach of cooperation, coordination and consultation for the private sector. The mandate of this new organisation is to explore new ways to expand and deepen the business links between the two countries.
This strategic alliance with SOFOFA, represents unique opportunities for the members of ALABC to access key players and decision makers in the Chilean private sector. Given Australia’s outstanding success in managing the current health crisis and the current economic stability, medical and economic conditions in place, there has never been a better time for Chilean companies to explore investment opportunities in Australia.
Chile is home to over 200 Australian companies, of which over one quarter are listed on the ASX200. This is by far the largest Australian presence in Latin America. Some of the Chilean companies already present in Australia are Antofagasta Minerals, SQM, Duratray, ENAEX, Latam Airlines, Arauco and CMPC. In 2009, Chile became just the fifth country in the world to sign a Free Trade Agreement with Australia.
As a member of ALABC you can join this Advisory Group just by simply editing your member profile here:
The Board of ALABC would also like to recognise the importance of diversity and inclusion when delivering our services to our members and stakeholders. We strive to ensure commitments are made between cross cultural, institutional, societal and organisational departments with our members, industry partners, government agencies and the broader community. We will actively engage in promoting our vision and goals and its connections to the business environment between Australia and Latin America.
Currently, the ALABC board is comprised of 30% women and 50% of our permanent staff is female. ALABC is proud to continue to grow and establish relationships with all individuals who want to develop stronger economic ties between Australia and Latin America.
Finally, I would also like to draw attention to the Council on Australia Latin America Relations has opened a new Special Grant Round which replaces the 2020-21 grant round postponed earlier this year due to the impact of the COVID-19 pandemic.
The Special Grant Round has the focus theme of ‘Economic Recovery’ and will support innovative activities that use digital technologies to strengthen relationships between Australia and Latin America and contribute to COVID-19 economic recovery. Please click here for more information.
We hope you are all keeping safe and well in the lead up to the holidays and I look forward to hearing any feedback regarding potential business ventures for 2021.
Read full newsletter here.
The establishment of the joint business council between the Australia-Latin America Business Council and the Chilean Federation of Industry.
On November 12, a Memorandum of Understanding (MOU) was signed between the Australia Latin America Business Council and the Chilean Federation of Industry (SOFOFA) for the establishment of the Australia-Chile Business Council ACHBC), to foster closer friendship and promote economic, trade and investment between Australia and Chile.
The signing ceremony was co-hosted by the Chairman of the Board of Directors of ALABC Mr. Richard Andrews and by the President of SOFOFA Mr. Bernardo Larrain and included the participation of the President of the Australian Chapter Mr. Andrew Phillips and by the President of the Chilean Chapter, Mr. Ramon Jara and the Vice-Presidents of both Chapter Mr. John O’Donogue and Mr.Pablo Altimiras along with the respective members of the boards.
Special mention to highlight the presence of H.E.Patricio Powell, Ambassador of Chile in Australia.
In his welcoming remarks the President of SOFOFA Bernardo Larrain highlighted that the signing of the MOU marks a new milestone in the consolidation of the business relations between Australia and Chile and that the main objective is to provide a regular forum for a more systematic bilateral business promotional initiatives that lead to increase trade in goods and services and investment between the two countries. He added that “the current trade and investment figures demonstrate that the existing potential remains largely untapped. An essential role for the Australia-Chile Business Council it is to encourage investor confidence and strengthen relations to establish the bases for stable growth that is beneficial for both countries”
The President of ALABC, Richard Andrews mentioned that this is the first binational business advisory group created by ALABC . The bilateral business councils are unique instances of private sector cooperation, coordination and consultation whose objective is to increase business between two countries. They are made up of senior businessmen and executives of companies that have significant investments or trade flows with the countries that act as counterparts.
They are an effective tool for business diplomacy and complement the efforts made by DFAT, ALABC along with key industry player such as COALAR (lead by Alberto Calderon), Austrade, Global Victoria, Trade and Investment Queensland and their Chilean counterparts.
Andrews also mentioned “Latin America has been growing in economic importance for Australia in recent years. Chile, for example, in 2009 became just the fifth country in the world with which Australia entered a free trade agreement, and this basis for exchange has only been bolstered through both countries’ membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – an accord that also includes Mexico and Peru.
Clean energy and green hydrogen are a major focus for the Chilean government and industries are wanting to attract and partner with Australian energy technology exporters on new projects.
Online commercial platforms are gaining traction for tech companies that can focus on digitalisation solutions. That's where we see new and emerging sectors for Australian companies. With the new Asia and South America digital gateway (submarine cable) connecting Australia and Chile, plus the 5G networks rolling out across the region, provides new opportunities for data driven businesses.
Mr. Andrews Phillips added that “ the road is long, the challenges are great and the goals are ambitious. Although the Australia-Chile Free Trade Agreement signed in 2009 allowed for an important advance, which was deepened when both countries granted tariff preferences to almost all products, this is still insufficient” .
“ The importance of the MOU signed between the two industry bodies, through which an strategic alliance is established represents a unique opportunity for Australian companies to access key players and decision makers in the Chilean private sector. On the other hand, there has never been a better time given the reasonable success that Australia have had in managing the health crisis caused by Covid-19, the relative stability, medical and economic, offered by Australia, to explore opportunities here”.
Pedro Reus, Chief Executive Chilean Chapter
Marcelo Salas, Chief Executive Australian Chapter (0412643343)
Currently, SOFOFA has established 15 bilateral business councils and the business council of the Pacific Alliance.
Some of the Chilean companies that have a presence in Australia are: Duratray, Latam Airlines, SQM, Antofagasta Minerals, ARAUCO, CMPC, Davey Bickford Enaex, Downer Blasting Services, Covalent Lithium.
SOFOFA is a non-profit trade association that brings together companies and associations related to the Chilean industrial sector.
It brings together about 4,000 companies, 48 industry associations and 22 regional business associations. All these members together comprise 100% of Chile's industrial activity and 30% of GDP.
Its political independence, soundness of principles, technical approach and prestige of its leaders, has allowed it to achieve an important place in national life, and is listened with respect by governments and political, economic and social sectors.
ALABC ALABC was established in 1989 as a Non-for Profit association and our membership is comprised of companies and organisations ranging from large multinational corporations to education and research institutions, SMEs, sole traders and professionals, who are at the forefront of forging business relations between Australia and Latin America.
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