www.forbes.com Reuters, 03.07.03, 1:23 PM ET By Alistair Bell MEXICO CITY, March 7 (Reuters) - The head of Mexico's Grupo Bimbo <BIMBOA.MX>, the world's third-biggest bread maker, said he is not overly worried by a recent depreciation of Mexico's peso against the U.S. dollar. "If there is economic turbulence it affect us. We are in a globalized world and everything affects you negatively or benefits you. But I think that is where the value of companies that look for staying power, quality and service come in," Bimbo Chief Executive Officer Rafael Velez told journalists on Thursday night. "Staying power enables you to resolve and confront all the possibilities that arise," he said. The Mexican peso has weakened by more than 6 percent against the dollar since the start of the year, mostly on fears that a war in Iraq would dampen the U.S. and Mexican economies. Mexico's currency also fell almost 12 percent in 2002. Currency depreciations can drag on a company's earnings by reducing the value of revenues earned abroad. For Mexican companies it can also make servicing foreign-denominated debt more expensive. Bimbo has four bonds outstanding, all denominated in pesos. Bimbo, which bakes bread, pastries, cookies and snacks, last year paid $610 million to buy the U.S. baking unit of Canada's George Weston Ltd. In the fourth quarter of 2002, Bimbo's sales came 68 percent from Mexico, 26 percent from the United States and 6 percent from operations around Latin America. Velez said Bimbo was not considering pulling out of any Latin American country, despite political upheaval in Venezuela and the economic crisis in Argentina. "We are where we are, and in those countries we have to deal with the good and the bad," he said. "We are a baker, and I have never heard of Bimbo abandoning anywhere." NO FARGO ACQUISITION Bimbo's profits have slumped in recent quarters due to the cost of implementing an information technology system known as Enterprise Resource Planning. Bimbo's share price has lost more than 3.8 percent since the start of the year. It was unchanged on Friday morning at 14.81 pesos on the Mexican stock exchange. Velez ruled out any bid to acquire Argentina' Fargo bakery, taken over by Deutsche Bank <DBKGn.DE> from an Argentine investment fund last year after Fargo defaulted on its $150 million debt. "Our company is known for its conservative style of administration, so we have a lot to consolidate before going and taking on risks. Now we are investing in systems and I think that is better," he said. Velez said Bimbo's sales were struggling recently but he gave no figures. "Some (sales) rise and some fall; but I think in general if you fight to give the best service, the best quality and the best possible price, then the public will judge you," he said. "We are feeling the sales difficult but we are growing," he said.

edition.cnn.com Friday, March 7, 2003 Posted: 1830 GMT ( 2:30 AM HKT)

CARACAS, Venezuela (AP) -- A legislator who belongs to President Hugo Chavez's political party was kidnapped, robbed and freed Friday, police said.

Two armed men in a Chevy Corsa intercepted Jose Gregorio Castro's taxi Friday morning while he was on his way to the Simon Bolivar International airport, just outside Caracas, said commissioner Carlos Medina, a federal police investigator.

The kidnappers forced Castro and a businessman into the Corsa and drove off. The taxi driver was allowed to go and alerted the police, Medina told Globovision television. Medina said Castro and the businessman, Renzo Basso, were robbed and freed in Catia la Mar, a town in the northern state of Vargas.

There were no immediate arrests or suspects, Medina said.

Castro is a substitute for legislator Calixto Ortega in the National Assembly. Both belong to Chavez's Fifth Republic Movement party.

Crime has risen sharply in Venezuela, which is mired in a deep economic recession and political turmoil. In 2002, there were more than 9,000 homicides in this country of 24 million people, up from almost 8,000 in 2001, according to federal police figures.

www.vheadline.com Posted: Friday, March 07, 2003 By: Oliver L. Campbell

VHeadline guest commentarist Oliver L Campbell writes: Upon the nationalization of oil industry in 1976, PDVSA became one of the world’s major oil companies, but that did not make it a multi-national since it did not have subsidiaries ... mainly marketing companies ... in other countries as did the major oil companies like Exxon, Gulf and Shell. Instead PDVSA sold its oil to other oil companies and large customers such as electrical utilities.

PDVSA were initially content with this situation and had no plans to become a multi-national.  However, they soon realised they had no control over export markets and were vulnerable to competition from both the multi-nationals and other national companies. They thus decided they needed to secure some sales volumes through long-term contracts and downstream investment in foreign countries. Ideally, the companies would have refining capacity and a substantial share of the local market, for which Venezuela could supply the crude oil.

The best deal that came up was with Veba Oil, which had both refineries, and a substantial share of the German market, but no crude supplies of its own.  PDVSA proposed a joint venture under which they invested in the German refineries in exchange for the right to supply the oil for their local market requirements.  The Minister for Mines and Hydrocarbons supported the investment, but many in Congress were against the concept of investing abroad and asked PDVSA to justify the investment. The latter’s explanation that it was a defensive strategy designed to secure an outlet for Venezuelan oil failed to convince many of them.

So the first attempt to gain some control over export markets got off to a bad start.

However, the deal was approved and, presumably, gave a satisfactory result otherwise PDVSA would have terminated it.

The CITGO investment ... made on very favourable terms ... was very much larger and had the goal of securing a large volume of sales to the USA.

PDVSA has supplied CITGO with about half its crude oil requirements and, in 2001, this amounted to 281,000 barrels per day (bpd), compared with the latter’s refining capacity of 589,000 b/d.

It is interesting to note that PDVSA has an additional refining capacity of 616,000 bpd under other ventures unrelated to CITGO ... taking PDVSA’S total refining capacity in the USA (including Saint Croix) to 1,205,000 b/d.

This is a significant figure, which compares with the 1,246,000 bpd actually processed in 2001 in the Venezuelan refinery system.

Though PDVSA saw its overseas investments as a defensive strategy, rather than one to improve its sale price, it also expected that refining its crude and marketing the products in the same country would produce an added value i.e. one that gave more than the sale of the crude oil to a third party would have done.

The USA products market is a lucrative one ... so this may well be the case ... but only PDVSA can confirm it.

Even if no added value resulted, what price does one place on the security of supply?

In 2001, PDVSA exported 2,762,000 bpd of which 1,497,000 bpd (54%) went to the USA.

The 281,000 bpd sold to CITGO represents only 18.8% of the latter so, with hindsight, one can question whether that particular investment was needed to secure sales since, it seems, PDVSA managed to sell its oil in North America, Latin America and the Caribbean with no particular problem.

Conflicting statements have appeared that the government does and does not want PDVSA to sell CITGO ... the rumor is that the assets are worth in excess of US10 billion though this seems doubtful ... the question is does a sale make commercial sense?

On the face of it, there may be a case for sale if:

1. PDVSA is short of funds for new investment, and
2. the crude oil at present sold to CITGO can be sold elsewhere at the average price for such crude oils.

The answer to the first is a definite yes, and to the second a qualified yes.

Traditionally, the bulk of the profit from oil comes from the E&P (exploration and production) function, and the writer suspects that PDVSA may well find the net cash proceeds from the sale of CITGO give a better return if invested in the upstream development of existing and new oil and gas fields than if kept tied up in CITGO.

PDVSA certainly needs to evaluate the opportunity cost of the CITGO investment, taking into account the security of supply and any added value which the investment provides.

However ... even if a good case is made for selling CITGO ... it only has merit provided PDVSA keeps the proceeds for upstream investment.

• So the crucial question is would the government allow PDVSA to keep the cash?

If not, then nothing will be achieved except to endanger the goose’s ability to continue laying the golden eggs.

PDVSA must invest in order to maintain and increase its production capacity, and the country needs PDVSA to increase its income in order to restore economic growth.

One comes before the other.

Oliver L Campbell, MBA, DipM, FCCA, ACMA, MCIM  was born in El Callao in 1931 where his father worked in the gold mining industry.  He spent the WWII years in England, returning to Venezuela in 1953 to work with Shell de Venezuela (CSV), later as Finance Coordinator at Petroleos de Venezuela (PDVSA).  In 1982 he returned to the UK with his family and retired early in 2002.  Campbell returns frequently to Venezuela and maintains an active interest in political affairs: "I am most passionate about changing the education system so that those who are not academically inclined can have the chance to learn a useful skill ... the main goal, of course, is to allow many of the poor to get well paid jobs as artisans and technicians."  You may contact Oliver L Campbell at email: oliver@lbcampbell.com

www.wishtv.com March 7, 2003 - 1:05 pm

It's been a busy week for WISH-TV's new colleagues at WIIH. The WIIH presented the first local news broadcast in Spanish on Monday night.

Today News 8 spoke to WIIH's anchors, Marco Dominguez and Carolina Pimentel. "It's been great. It's amazing. I mean, the support we have received from WISH-TV, the support that we have received from the whole community. We can't complain," said Dominguez.

"We have been working hard, but because we have a huge responsibility with the community, we're enjoying ourselves. And this is an incredible job," said Pimentel.

Pimentel says she learned English through the infamous "immersion" style. "I came here in 1997 to study English and I just lived with my host mother at the time. I went to Butler University and everything was in English - except my roommate. She was from Venezuela, too, so we spoke a lot of Spanish. But lots of time - I would say like 90 percent of the time - was in English. I had to learn."

Dominguez also came to Indiana from Venezuela a few years ago and tried the immersion technique. "But I had a professor that told me once, 'The best way to practice your English is to listen to the Brady Bunch show.'  And I still have that song in my mind. I used to see it at 4:30 every afternoon, It was great," he laughed.

If you're considering immersing yourself in the Spanish language, check out WIIH at 11:00 pm on Channel 17.

www.ktsm.com LOCAL NEWSCHANNEL 9

NewsChannel 9 wanted a sampling of what El Pasoans thought of the President's speech, so we invited some of our viewers to watch Thursday night's speech and give offer some of their thoughts.

Friday, March 07, 2003 -- Here is a look at their mixed opinions.

President Bush made his case Thursday night to use force against Iraq if it doesn't disarm voluntarily. Some NewsChannel 9 viewers who watched the conference in our studio say he gained their support.

Fernando Rodriguez said, "I am convinced because they have had more than enough time to disarm. September 11th can't happen again."

But others say the President has not given them proof that Sadaam Hussein is tied to terrorism.

Eduardo Barboza said, "I was hoping that he would present a more balanced approach, but it seems that he's still fixated on Iraq and there's more important issues like North Korea, Venezuela, and our own economy at home."

Some say the President's conference didn't affect their views.

Joe Oliva said, "Finally, the decision is Saddam's. All he has to do is comply with the United Nation's Resolution 1441 and there will be no war."