BUSINESS & ECONOMICS

Three Japanese GEOLOGISTS have SET OUT TO PROVE once and for all whether THERE'S OIL IN THE Honduran MOSQUITIA. Although it has long been rumored that eastern Honduras is home to sizeable petroleum reserves, no one has yet proven that this is more than wishful thinking. There's certainly enough evidence, however, to convince Japan's JAPEX petroleum company that it's worth a look.

Nationalist Congressman David Matamoros has submitted a BILL that WOULD GIVE parents of school-age children a LPS. 15,000 TAX BREAK TO COVER the rising cost of TUITION, UNIFORMS AND SCHOOL SUPPLIES. The break would cover children in both public and private schools. Matamoros says the government needs to recognize that it has been unable to guarantee a good, low-cost education to all Honduran youth, which has forced many parents to turn to the more expensive option of private schools.

The Honduran Telecommunications Company (HONDUTEL) HAS CUT PRICES ON LONG DISTANCE CALLS to the United States and other Central American countries. Effective June 23, callers will be billed $1.60 per minute on calls to the States made between 7 a.m. and 7 p.m. and $1.20 on calls made during other hours. Calls to the rest of Central America, meanwhile, have been cut to $0.35.

The Ministry of Public Works, Transportation and Housing says FURTHER DELAYS ON THE construction of Tegucigalpa's ANILLO PERIFERICO -- a highway that will circle the city, connecting its main outlets -- WILL INCREASE COSTS BY LPS. 400 MILLION. Although the city has about Lps. 60 million of construction left to complete, some Lps. 300 are tied up in lawsuits against constructions companies who allegedly failed to comply with their contracts.

If Honduras fails to comply with the international intellectual property protection laws sanctioned by the World Trade Organization, the United States says it will lift the country's eligibility for the Caribbean Basin Initiative. Last year, HONDURAS EXPORTED MORE THAN $100 MILLION UNDER THE CBI, says an El Heraldo report.

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IFC to finance Honduran manufacturing and agri-business company

WASHINGTON, D.C. -- The International Finance Corporation (IFC) on Thursday (June 26) signed a US$55 million investment agreement with Corporacion Cressida, S.A. de C.V., a highly-integrated manufacturing and agribusiness company based in Tegucigalpa, Honduras. The IFC financing will support a US$84 million investment program being undertaken by Cressida to establish a new production facility and upgrade and modernize its existing plants.

The investment program includes the establishment of a production complex for soaps, detergents and edible-oils. Cressida will also expand and modernize its soaps and detergents facility in El Salvador and its food, drinks and snacks plant in Honduras. Moreover, the investment program will result in significant environmental improvements by closing Cressida's antiquated facilities and bringing all new and existing facilities in line with World Bank Group environmental guidelines.

"The expansion of Cressida will promote entrepreneurial development and corporate governance by assisting a Central American company in its transition from a family run enterprise into a modern corporation," said IFC Director Helmut Paul. "We expect that Cressida's expansion will create approximately 800 jobs in the region, while simultaneously increasing the firm's competitiveness."

Cressida is a leading Honduran business group with operations throughout Central America. The company is the largest soaps, detergents and tomato-based goods manufacturer in the Central America and Panama region.

IFC's investment consists of a US$15 million loan and a US$10 million subordinated loan for its own account, and US$30 million loan for the account of participating banks.

Present at the signing ceremony in Tegucigalpa were Miguel Facusse, Cressida's president and chairman of the board; IFC Manager Hugh Henry-May; members of Cressida's board of directors; as well as Honduran private sector and government representatives.

IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.

Sara Apolonia Valladares Rodriguez, who died June 9 of natural causes, has become Hospital San Felipe's biggest donor. The 70-year-old Tegucigalpa native left her entire estate to the Hospital for a total donation of Lps. 1.9 million. San Felipe has been providing medical care to poor Hondurans in Tegucigalpa for nearly 120 years and remains in operation largely through its fundraising campaigns.

If Honduras fails to finalize and begin enforcing its legislation to protect intellectual property within the next four months, the country will lose eligibility for the General System of Preferences and the Caribbean Basin Initiative, say U.S. officials. The United States, which has been coming down hard on the international piracy of books, CDs and other intellectual property, says if Honduras doesn't cooperate it will rescind the export advantages it offers under the GSP and the CBI. Honduras currently saves $5 million in export tax exclusions under both programs.

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A project is nearly finalized that will bring German cruise ships to Honduras twice a year. According to a La Prensa report, investors from Germany and Honduras met at a seminar held in February on European tourism investment here. The Germans have already contacted a number of Honduran tourism operators about providing services for the cruise passengers. The ships will land twice a year in Puerto Cortes, which will serve as a point of departure to inland trips to the Copan Ruins, Trujillo and Tela, as well as jaunts to the Bay Islands. No word so far on the date of the first cruise.

Sixty percent of Hondurans are affected by the housing deficit, said a special El Heraldo report this week. Although more than 40 housing projects are currently underway in the nation's major cities, most Hondurans can't afford to buy these new homes, given rising construction costs. Construction firms and financial organizations are looking for ways to facilitate the financing of these homes. The country needs an estimated 633,000 new homes to meet housing demand, said the report.

Coffee growers are enjoying a record year in 1997, says the Honduran Coffee Institute. The more than two million sacks of coffee being exported from the 1996-1997 harvest will generate an estimated $370 million in profits. That's $70 million more than last year.

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Citing the success of many British companies in the region (Lloyd's Bank and Shell, for example) and calling Central America's trade and investment opportunities "limitless," the Central American British Chamber of Commerce opened its doors to the public this week, promising strengthened business ties between the United Kingdom and the isthmus. Just of few of the organizations services are a databank of potential investors and investment opportunities, participation in trade fairs and investor missions. For more information, write to 35 Bepton Down, Petersfield, Hants, GU31 4PR, United Kingdom.

Honduras demands trade parity at New York conference

By LIBARDO CARO

NEW YORK -- Honduran industrialists demanded commercial parity in imports and exports with the United States at a recent conference to promote investment in that Central American nation.

"Honduras is a country that pays high tariffs and this is unfair, especially when Mexico receives trade advantages from the United States," said Honduran businessman Juan Canahuati at the event, held at City Hall.

Canahuati also said he wonders why so many large U.S. companies continue to look to Asia for their investments, ignoring the opportunities and facilities available in Honduras, a county he says is receptive to foreign investment, politically stable, full of natural resources and excellently located.

Canahuati, his son Mario and Honduran entrepreneur Roberto Leiva came to New York as part of a special mission on behalf of Honduran President Carlos Roberto Reina to participate on the event's panel titled "Honduras: A New Investment Option in the Global Marketplace."

The event was organized by the New York City Council and Julio Eduardo Sandoval, Honduran Consul General in this city.

Referring to Honduras as an excellent spot for investment, Roberto Larios, general manager of San Miguel Industrial Park, said the human quality evident in Honduras' large labor force is just one of the guarantees offered to investors who wish to set up manufacturing operations overseas.

Roger Marin, executive secretary of Honduras' Great Project for National Transformation, says the Reina administration has also established innovative and agile mechanisms to allow Honduras to compete successfully within the climate of economic globalization that has spread around the world.

Engineering consultant Ely Pina de Lasprilla closed the panel with a presentation on the natural beauty of Honduras, especially the Copan Ruins, the Bay Islands, Tela Bay, Trujillo, Lake Yojoa and the cloud forests. She also outlined new laws to promote investment in the tourism sector.

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The Honduran government has established a Lps. 25 million emergency fund for North Coast banana producers. Most of the money will be used to build retaining walls aimed at holding back the floods that usually cost the industry millions of lempiras in losses annually.

Two U.S. citizens who have come to Honduras as independent monitors of human rights violations in the country's maquilas have stirred both support and ire among Hondurans. While big-name industrialists argue they are here to ruin the reputation of Honduras and channel U.S. investment back into the United States, the Committee for the Defense of Human Rights says Charles Kernahgan and Barbara Briggs are simply looking out for the best interests of Honduran workers.

BUSINESS BRIEFS

The Honduran Telecommunications Company says its plan to lengthen national phone numbers from six digits to seven will multiply the company's service capacity tenfold. According to a La Tribuna report, HONDUTEL surpassed its current capacity of 400,000 lines early last year. The new seven-digit numbers will be enough to cover demand over the next 40 years, say experts. The change, which goes into effect Nov. 1, will be a simple one: a single digit will be tagged onto the beginning of current numbers, according to region. In Tegucigalpa the phone number 32-1234 will become 232-1234. The code for San Pedro Sula will be 5.

A group of investors from Texas accompanied U.S. Congressman Salomon Ortiz on a recent visit to Honduras. The investors are interested in the tourism industry, particularly in Copan, the Swan Islands and La Mosquitia, says a La Tribuna report. But before launching any concrete projects, they've asked for assurance that port tariffs will remain stable. "They've noticed inconsistencies in the way [port] tariffs are applied," said an Economy Ministry official. "They want to make sure what they will have to pay remains clear."

The new gas prices in Tegucigalpa are: Lps. 25.16 per gallon of regular gasoline (up 81 centavos), Lps. 25.86 per gallon of super gasoline (up 89 centavos), Lps. 16.81 per gallon of diesel (up 43 centavos) and Lps. 14.23 per gallon of kerosene (up 40 centavos.

National and foreign investors have pumped an additional Lps. 137 million into the country's cellular telephone system and are now building a series of new towers that will allow inter-regional cellphone calls. The first two, one in Amarateca Valley and one in Choloma, will link Tegucigalpa and San Pedro Sula. The Cellular Telephone Company (CELTEL) also plans to open up service in Zambrano, Comayagua, Siguatepeque, Lake Yojoa, Choloma, El Progreso and Choluteca in coming months.

Honduras demands trade parity at New York conference

By LIBARDO CARO

NEW YORK -- Honduran industrialists demanded commercial parity in imports and exports with the United States at a recent conference to promote investment in that Central American nation.

"Honduras is a country that pays high tariffs and this is unfair, especially when Mexico receives trade advantages from the United States," said Honduran businessman Juan Canahuati at the event, held at City Hall.

Canahuati also said he wonders why so many large U.S. companies continue to look to Asia for their investments, ignoring the opportunities and facilities available in Honduras, a county he says is receptive to foreign investment, politically stable, full of natural resources and excellently located.

Canahuati, his son Mario and Honduran entrepreneur Roberto Leiva came to New York as part of a special mission on behalf of Honduran President Carlos Roberto Reina to participate on the event's panel titled "Honduras: A New Investment Option in the Global Marketplace."

The event was organized by the New York City Council and Julio Eduardo Sandoval, Honduran Consul General in this city.

Referring to Honduras as an excellent spot for investment, Roberto Larios, general manager of San Miguel Industrial Park, said the human quality evident in Honduras' large labor force is just one of the guarantees offered to investors who wish to set up manufacturing operations overseas.

Roger Marin, executive secretary of Honduras' Great Project for National Transformation, says the Reina administration has also established innovative and agile mechanisms to allow Honduras to compete successfully within the climate of economic globalization that has spread around the world.

Engineering consultant Ely Pina de Lasprilla closed the panel with a presentation on the natural beauty of Honduras, especially the Copan Ruins, the Bay Islands, Tela Bay, Trujillo, Lake Yojoa and the cloud forests. She also outlined new laws to promote investment in the tourism sector.

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The Honduran government has established a Lps. 25 million emergency fund for North Coast banana producers. Most of the money will be used to build retaining walls aimed at holding back the floods that usually cost the industry millions of lempiras in losses annually.

Two U.S. citizens who have come to Honduras as independent monitors of human rights violations in the country's maquilas have stirred both support and ire among Hondurans. While big-name industrialists argue they are here to ruin the reputation of Honduras and channel U.S. investment back into the United States, the Committee for the Defense of Human Rights says Charles Kernahgan and Barbara Briggs are simply looking out for the best interests of Honduran workers.

BUSINESS BRIEFS

The Honduran Telecommunications Company says its plan to lengthen national phone numbers from six digits to seven will multiply the company's service capacity tenfold. According to a La Tribuna report, HONDUTEL surpassed its current capacity of 400,000 lines early last year. The new seven-digit numbers will be enough to cover demand over the next 40 years, say experts. The change, which goes into effect Nov. 1, will be a simple one: a single digit will be tagged onto the beginning of current numbers, according to region. In Tegucigalpa the phone number 32-1234 will become 232-1234. The code for San Pedro Sula will be 5.

A group of investors from Texas accompanied U.S. Congressman Salomon Ortiz on a recent visit to Honduras. The investors are interested in the tourism industry, particularly in Copan, the Swan Islands and La Mosquitia, says a La Tribuna report. But before launching any concrete projects, they've asked for assurance that port tariffs will remain stable. "They've noticed inconsistencies in the way [port] tariffs are applied," said an Economy Ministry official. "They want to make sure what they will have to pay remains clear."

The new gas prices in Tegucigalpa are: Lps. 25.16 per gallon of regular gasoline (up 81 centavos), Lps. 25.86 per gallon of super gasoline (up 89 centavos), Lps. 16.81 per gallon of diesel (up 43 centavos) and Lps. 14.23 per gallon of kerosene (up 40 centavos.

National and foreign investors have pumped an additional Lps. 137 million into the country's cellular telephone system and are now building a series of new towers that will allow inter-regional cellphone calls. The first two, one in Amarateca Valley and one in Choloma, will link Tegucigalpa and San Pedro Sula. The Cellular Telephone Company (CELTEL) also plans to open up service in Zambrano, Comayagua, Siguatepeque, Lake Yojoa, Choloma, El Progreso and Choluteca in coming months.

Although Honduras was initially pleased with last month's World Trade Organization ruling that the European Community give Latin American banana producers the same preferences as producers in former European colonies, the victory turned empty when the WTO added that only large transnational companies -- not independent producers -- would be affected. Honduras, whose bananas are largely cultivated by independent farmers, plans to appeal the ruling.

Taiwan has granted Honduras a $10 million loan to strengthen small- and medium-sized businesses here. The funds, which will be available as early as next month, will be used to improve the productivity and competitiveness of small- and medium-sized businesses so that they will be better prepared to perform on the national market.

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Last week, Credomatic became the first Honduran company to offer its customers an 800 number. Now, cardholders can dial the toll free 800-22-2222 for information about accounts, services and other Credomatic business. Although the service is currently only available in Tegucigalpa, the company says it plans to extend the number to San Pedro Sula soon, and eventually throughout the entire country. Credomatic and HONDUTEL announced the new service last Saturday.