Sr. Jorge Barata - Director Superintendente - Odebrecht

Jorge Barata General Director of Odebrecht

Press Tribune: What opportunities do the InterOceanic roads represent in the Peru-Brasil relationships and what will be their impact on Peruvian economy?

Sr. Barata: The need for Southamerican integration was strengthened in Brasil when 12 South America Presidents where brought together in 2002. There they talked about integration and their difficulties. Naturally the issue strengthened, took shape and the Banco Interamericano de Desarrollo (BID), la Corporación Andina de Fomento and several other organizations joined the discussion to decide what were the axis for the road integration network. Brasil had all the Amazonian jungle all to itself and no connection whatsoever to the other countries. All of them were isolated not only by the geographical barriers, but also because some historical barriers between Ecuador and Peru, and between Bolivia and Chile. So the axis for the road integration network were decided and Peru was chosen as President of the Asociación Sudamericana de Naciones, this strengthened the role of Peru in this south american integration process. Peru takes decides to start implementing its integration axis. Starting there the north and south axes were constructed, right now the central axis is being constructed
All the axis are cross-axis and bring together people with the brazilian roads and brazilian river ports. This will allow the connection with the Amazonian communication axes, this is without a doubt a decision of historic proportions since it will drastically alter the relationships between those countries and definitively will promote commerce and integration. But even more important is the integration inside Peru itself. Peru has cities with over 80 000 habitants that still aren't connected, that don't have access to the road infrastructure, whose residents are isolated from the rest of the country and don't have the privilege of being connected to the world.
I think this huge leap in integrating the country, in allowing all these people and all these regions to take part in the country development. You can´t talk about social inclusion if you have several cities that aren't linked not even physically, that don't have access to the country road communication network. I believe this has been the main change, subsequently a change in the relationships between these countries, a change in the treaties to be signed, IIRSA is the best example.

The road hasn't been built in stretches when the budget for that stretch was ready because that would have meant losing benefit from those roads over time. A road built all at once, with an overall vision and in a public-private cooperation model, so that the country will not contract debt and that the private investors will invest, the country will reap the development and growth benefits and then start to pay off its debt. It is a more balanced equation, the problem has to be solved all at once, it generates an overall benefit, besides in these works the operation and maintenance for 25 years has been incorporated, that guarantees raising up the standards for operations quality. In addition to that these roads will have, towing and mechanical service, medical assistance units, something that is not a characteristic in south american countries.

This change, all this integration of cities that were so isolated, the south american integration process and the improvement in the hiring conditions have all been a result of IIRSA Sur. This project is unique in its reducing bottlenecks for its development and allowing the 7-8% growth to be steady. WE are very comfortable and satisfied with the country, and its procedures; with every passing day the country becomes more organized, more institutionalized, this is even reflected on the politicians, and it seems this will only improve in the future.

Press Tribune: Can you elaborate on the enterprise technology that Odebrecht uses? Does this explain the company success internationally and specially in Peru ?

Sr.Barata: Odebrecht has a very noticeable enterprise technology, that indeed makes the difference with many companies. Odebrecht knows very clearly the importance of the client, of the people for the process and that much more brings with himself a very intense work of social responsibility that gives permeability much more him, positioning to the company in the market where it acts. The success of Odebrecht in Peru is explained because always Odebrecht has come to remain, to be and to make businesses. That vision of long term much more generates a commitment and an entailment hard with the country as much as the one that could have the Peruvians. If are it jeopardize to have left we in this country, we must cause that this country leaves ahead because the only form to grow like company is that the country also grows. That is for fundamental us. This history of 28 years in Peru has been to us consolidating in the country and nowadays we are the greater construction company of the country and are with investments that surpass 2 billion dollars in roadworks, of hydraulic and power generation. We are sure that soon the country is going to happen to have another stage of development and for us that jeopardizes to us because the salary believed in this country, the salary delivered this attack, makes us arrive at this moment in a differentiated position.

Press Tribune: How is it to work with Peruvians, How would you describe the profile of the Peruvian worker?

Mr. Sale: In Dominican Republic alone we have 35 Peruvians there were brought from Peru to work there. We Peruvians working in Uruguay, in Angola, everywhere. The quality of the manual labor, the persistence and the commitment of the Peruvian are equal everywhere. From the moment at which people identify themselves with the enterprise policy, with the objectives of the company, commit themselves to them, they identify with the company. Today we have more than 6 thousand people working in Odebrecht in Peru. And probably at the end of the year there will be nine thousand people. And this growth does not worry us because we understand the people idiosyncrasy and their way of working. In addition that has resulted in the fact that we have been chosen during four consecutive years as one of the best companies to work in Peru. And that identification even occurs between the workers. From that point of view I do not see any problems for the foreign investors. But first they must learn. Because if one comes with its own languages, with its own ways to do contracts, that will arise some issues and might generate understanding problems.

Press Tribune. How do you perceive you which you will influence the Free Trade Agreement will affect Peru and what are its reaches to a country like Chile for example?

Mr. Sale: It seems excellent. There is much capital, there is much availability, there are many things to do. The infrastructure deficit in this country is 23 billion dollars so that it can be at the same level with Chile. And Chile was at that deficit level some years ago if you want to make a comparative analysis comparative. Peru can develop much further than Chile and capital, starts flowing from wherever it comes, it generates work, generates businesses for all the industrialists who are working in this country, that is good. Because it fortifies the market, it generates more work opportunities, more businesses opportunities; we want Peru to develop more, we want it to become a richer country because then surely we will have more opportunities and more wealth.

Press Tribune: How do you perceive the promotion that Peru is getting on its tourist potential?

Mr. Barata: There are many advantages, but little is know about Peru outside Peru but also within Peru. For example, in the north of Peru there is an impressive tourism potential. There are sites that are prettier and bigger than Machu Picchu but nobody knows about them, not even the Peruvians. But they are working on the promotion, perhaps not with the intensity that they should, but something is being done. I believe that the government employees and the government in spite of knowing this has to be done, lack speed in the promotion, in the approval, lack to trust more in these potentialities. I believe that the crisis is still near. All of Latin America is coming out from a long crisis period. There are generations that never have lived trough times bonanza, of sustained growth in Latin the America countries, except in Chile; always there was fuel crisis of fuel or some other kind of crisis. There has always been inflation, something that was so bad that it harmed everything. I believe for the first time that the economy has become stabilized, that democracy is also balanced, that we are able to turn around the factors that are important to let investment rest easy and to let the country grow. After many years, then it is understandable that we who we have lived as many years under pressure, suffering difficulties, have many doubts. But I personally have already got rid of my doubts and am very optimistic in the growth that we are seeing. Peru is a country that has cheap energy, there is gas. There is a great development promoter that is industrial agriculture products that is an industry that every day grows with more speed and these days it can sell with more attractive margins and is having very important growth. The mining is having excellent prices, the mining industry is already well established down here. Almost all the great companies are participating here. What is lacking? The terrorism has been controlled, the cocaine issue is limited to certain places. The country is in a democratic regime, with rules, conditions. Everything is for ready to start growing now.

Press Tribune: Which is the vision, the dream that Odebrecht has in Peru? Where do you want to take it?

Mr. Sale: The dream of Odebrecht in each country that we have branches is to have an important role in the development of the country. To guarantee that our role in supporting the growth is so important that it fills with pride all those who work in the company. That is a dream that ends because we can always do much more. Personally I wanted the company to have the same importance, the same diversity in Peru that it has in Brazil. That is to say, to expand into other branches of the business. What we already have developed in Brazil, here in Peru is also important. For example, we are working hard to create the Odebrecht Foundation in Peru, we are aslso working hard so that we give the company in Peru the same dimensions that it has in Brazil, proportionality with country size. I believe that Peru has an investment model of public-private hiring that Brazil does not have; I believe that it is in a more advanced stage. And there we have an example of what we can give from Peru to Brazil. Brasil may implement this model once it surpasses the difficulties it has to this day in reaching that system.

Press Tribune: What is your managment style?

Mr. Sale: The company has the delegation philosophy. The people who work here know what are our objectives, where goals we want to reach; they have participation in the utilities of the company. Then the company practically runs by itself. Since the moment that you decide what are your goals, you can elaborate a plan and discuss with every one to see what to needs to be done, how to do it and what is the company´s role. There are not many things to do, but to go with and support the people´s work so that they are growing and fortifying their ambitions and expectations. There is no secret. Simply it is the enterprise technology.

Press Tribune: How do you imagine Peru without Odebrecht?

Mrs. Sale: I believe that if it was not for Odebrecht, there would be another company that would occupy a similar space. I do not believe that there will be a significant difference. But the fact that Odebrecht is here, is contributing, its adding to that development. We have always bet onthe country. In 1987, during Alan Garcia previous period, when there was nothing, Odebrecht brought credits from Brazil and it financed some government projects. I believe was done during the governments of Fujimori and Toledo. And now we are doing it again with president Garcia. That means that our role is to bet on the country. All the projects that extend to the governments of Peru, are also our projects I do not believe that there is a difference between Odebrecht and other constructors who have gone beyond the construction sector. We want to keep growing, to keep having our space, working in along many construction companies. We are partners of almost every Peruvian construction companies on different projects because our role is also to help develop the market, since the more developed it becomes better for us; it will raise the standards, improve the development. I believe that the vision to arrive, to share, and to always bet on Peru has been our great differentiating factor. Sometimes companies think "profit for us and not for them", but we think that "profit for us and for them". There is enough room so that we all can grow together.