Walmart of México, also known as Walmex, has acquired 100% of the stock of Walmart Centroamérica.  The acquisition includes the 51% stake held by Walmart Stores, Inc. (of the U.S.) and the remaining 49% held by partners in Costa Rica (CSU) and Guatemala (La Fragua).  The transaction will take place primarily in 593 million new shares of Walmex stock.  A smaller portion, $110 million, will be paid in cash.  As a result of announcement of the deal, shares of Walmex shot up 3.19% to 58.1 pesos (or, a little over $4.00) on the Bolsa Mexicana.  In addition to the initial compensation, Walmex will issue an additional 55 million shares in an “earnout.” These shares will be kept in treasury and issued to shareholders of Walmart Centroamérica once the merged entity reaches a predetermined level of profitability.  The deal also gave the shareholders of Walmart Centroamérica the opportunity for some participation in corporate governance of the merged entity.  The president of Walmex, Eduardo Solórzano, expressed his pleasure about the growth prospects the deal brings for Walmex, adding that this deal is the first time that Walmart Stores, Inc. has shown sufficient confidence in a foreign company (in the case, Walmex) as to allow it to gain control of Walmart’s operations in other countries.  Walmex operates 1,410 commercial units in México, including supermarkets, clothing stores and restaurants.  Walmart Centroamérica operates 519 units in Central America, plus 11 distribution centers, and employs 30,000 in Costa Rica, Guatemala, Honduras, El Salvador and Nicaragua.  For the fiscal year end of September 2009, Walmart Centroamérica had sales of $3.3 billion.  With this transaction, Walmex expect to reach sales of $25 billion.

Link to Article in La Nación

A professor at the University of Costa Rica (UCR) has invented a new system for attaching bamboo to walls, foundations, and other structures.  The commercial name for this new invention is Guaduatec and it is the invention of Alejandro Ugarte, professor of architecture at UCR.  Architects have problems with using bamboo because of its geometric shape and the fact that its dimension change over time due to variances in environmental conditions.  Bamboo normally is attached to other surfaces by using perforations in the canes, but this over time can cause fractures and thus connections with screws and nails will loosen.  The new mechanism adapts to the changing dimensions of the bamboo cane and thus prolongs and expands its usefulness as a construction material.  It consists of two plates that mold to the shape of the cane that are joined by a springed tensor that runs through the stalk, holding the two plates together and the cane firmly in place.  If the bamboo increases or decreases in dimension, the plates will adjust by means of the tensor.  Bamboo is environmentally friendly and can substitute for wood in many structures.  It has the potential to play an important role in reforestation and can also be more easily recycled and reused as a construction material.

Link to Article in La Nación

A group of young ticos have a taken a stab at developing a VOIP program to compete with the popular Skype program, that is widely used all over the world, including Costa Rica.   I have read in a couple blogs lately that Skype may be going out of business in Costa Rica, but I have certainly seen no signs of that with my own Skype account.  Here at Package Costa Rica we use Skype extensively to communicate with our customers in the U.S. and Canada.  The name of the new program is VoxOx and can be accessed and downloaded at the web site www.voxox.com.  What is special about this new program?  Well it does interface with all the popular social network sites such as Facebook, Twitter, MySpace, etc.  The company that is behind this project is known as Telcentris Latinoamerica, whose office is located in Curridabat.  The company also has a U.S. office.  However, 90% of the project is being developed right here in Costa Rica.  The group is very young, with none over the age of thirty.  The group’s efforts have already been recognized by the likes of Cnet, PCWorld and even The Financial TImes.  It seems they may be on to something here.  I personally downloaded the program on my laptop, but was experiencing problems with failure.  Not sure if the problem was related to the software or my machine.  I will try again in the future.  At any rate, it is good to see an ambitious group of young “tico techies” trying to give the giant Skype a run for their money.

Link to Article in La Nación

One of the major software companies of the world, Oracle, has opened a new office in the Santa Ana suburb of San José, Costa Rica, to provide legal and financial support to its subsidiaries throughout Latin America.  The new office was inaugurated yesterday in the Forum II, where 150 Costa Rican’s will be employed with the firm.  The total investment was over a million dollars as the firm will be occupying 3,000 square meters of space in one of Costa Rica’s highest price office complexes.  Services will be offered in English, Spanish and Portuguese.  Oscar Arias stated with regard to the event that the decision by Oracle to offer services from a base office in Costa Rica signals that there are better times to come in the Costa Rican and world economy.  Oracle first entered Costa Rica in 1990 with a software and distribution center that serves Central America.  The center employs 80 people.  Oracle was founded in 1977 in the U.S. and currently has operations in 145 countries serving some 300,000 customers worldwide.  In total the company employs 84,000 persons.  Oracle is one of 81 foriegn service companies operating in Costa Rica and employing some 24,000 Costa Ricans.

Link to Article in La Nación

Talk about a “divorce” made in heaven.  I have for a long time denounced having to pay two different companies every month for my internet service.  I and my company are customers of Amnet cable internet and television services, but I have to pay Racsa every month as well. And what’s worse, you cannot pay both in just one payment.  Oh no, you have to pay them completely separately as they are two completely separate entities.  Now this alliance that has lasted ten years will finally come to an end.  Amnet will be the first private company in Costa Rica to be authorized to offer internet connection services independently.  Racsa, you see is the internet connectivity arm of the telecommunications monopoly ICE.  In dispute as a result of the breakup is the issue of who gets the some 55,000 subscribers that now receive services under the joint agreement between the two.  Another issue is that in order for Amnet to actually be able to offer services apart from Racsa, ICE must agree to the terms of renting space on the oceanic cables that connect Costa Rica with the rest of the world.  Those cables are located in Limón and Parrita.  The way things have worked since 1999, the year the two joined forces, is that Racsa provides the internet signal via these cables and Amnet carries the service to homes and businesses through its cable modems.  Under this setup each company has been entitled to 50% of the income generated by the services.  Racsa works in similar fashion with other local companies such as Cabletica, Cablevisión, Coopelesca and Supercable.  Amnet is owned by the firm Millicom, which is also one of the companies that will compete for cellular phone service under the brand name Tigo (11 other companies have been authorized to compete with ICE as well).  George Miley, president of Sutel (Superintendencia de Telecommnicaciones) made it clear that the separation must protect the right of customers to choose which service they want. Also, if the two firms cannot agree on prices to charge each other for access to their respective networks, then Sutel will step in to fix the prices. 

Link to Article in La Nación

The Ministry of Environment, Electricity and Telecommunications (Minaet) announced this week that the Costa Rica telecom market will be opened for entry by thee competitors.  Historically the market has been closed to competitors and only ICE, the government monopoly, is allowed to offer such services.  The firms that will bid for the right to enter the market initially will be Tigo-Amnet, Telefónica, Cable and Wireless, and Digicel.  Minaet plans to offer bandwidth to bidders in the form of an auction.  However, it is yet to be determined exactly what form of auction that this will be, i.e., a “pure” auction where the highest bidder wins, or some hybrid that requires a pre-qualification prior to auction.  It is expected that the first competitors will be open for business by the middle of next year.  ICE’s top executive, Pablo Quirós, stated in the La Nación article that while competition is good, he believes that allowing three competitors in at this point in time is too much given the size of the market in Costa Rica.  The four that plan to initially bid for the right to enter already have plans to open offices in the country, where they believe exist segments of very low penetration that present great opportunities.  Jorge Nicolau, who represents Cable and Wireless, stated that the investment in infrastructure that will be required will exceed $400 million.  Representatives all highlighted the need to have a clear regulatory framework for operating in the country.

Link to Article in La Nación

Firestone will invest $14 million into a new production facility in Pavones, Turrialba.  The investment will consist of $8 million in the location of the plant and $6 million in machinery and equipment.  The plant will initially employ 26 with the plan to increase to a total of 130 employees by the end of the year.  The plant will manufacture vibration absorbers to be used in such applications as heavy mining equipment assembled in the U.S. Initially all products will be exported to manufacturers in the U.S., but talks are also underway with locations in Mexico as well.  Alfonso Perez, mayor if Turrialba, commented that the new plant will help greatly to confront the growing challenge of unemployment in the region.  Firestone Industrial is a subsidiary of Bridgestone Corporation, which also has a tire manufacturing plant in Costa Rica located in La Ribera, Belén, Heredia.

Link to Article in La Nación