Money train: high commodity prices, high demand and production ramping up all around. For Latin America's export economies, it doesn't get any better than this.

As hard as it might be to believe, considering the slow-growth, no-growth disaster most Latin American economies suffered at the end of the century, these are the good times--the very good times.

There was a lot of talk during the dot-com boom of the rules being rewritten. Foolishness, of course, but the rules are a-changin' in a fundamental way now: Chinese demand--and to a degree a nascent recovery in the United States and Europe--is driving huge growth across the board for most of Latin America's biggest exporters. Oil, a linchpin for several of the region's Big Eight economies, rose 33% to average just over US$41 a barrel. Copper jumped 63%, and minerals like iron ore, molybdenum, silver and gold also rose. Soybeans are flying off the docks in southern Brazil and Argentina.

Most managers are quick to admit that their good fortune is not the doing of stellar management or deep strategy. In fact, many public-sector companies are scrambling to find financing and add capacity after decades of mismanaged decline. Private companies, particularly the traded companies that respond to institutional shareholders, are having a field day, cleaning up debt and gulping down fresh capital in expectations of continuing China-driven growth. Hold on to your hats: Some oil forecasters are talking about $105-a-barrel price spikes in the months ahead.

Perhaps sudden money will allow change for the good among the worst of the state-run operations. Perhaps all that cash will just get swallowed up in a miasma of corruption. But a lot of money is changing hands quickly, pumping up national coffers and allowing disciplined companies public and private to reinvest while still paying out healthy dividends to investors.

Exports are so strong they helped spark a recovery in Mexico in 2004, mainly on heavier demand from the country's No. 1 customer, the United States. Last year, Mexico sent abroad goods worth $188.63 billion, 14.7% higher than the year before, the Central Bank of Mexico reported. The bank noted a 27.2% increase in oil exports and a 12.9% gain in non-off exports. State-owned oil company Pemex reported record-high exports of $21.30 billion, up $4.50 billion on 2003, due to high world oil prices.

Although the United States is not expected to grow as quickly this year, experts believe the Mexican export sector will still fare well. "We will continue to be heavily dependent on the United States, as 90% of our exports are bound for our neighboring country," says Manuel Tron, president of the Mexico City National Chamber of Commerce. "But Mexico's potential exports are diversifying." Brazil's oil giant Petrobras, comparatively, saw only a slight uptick in its export numbers, despite higher prices and record production of 1.65 million barrels a day, since the country consumes most of the state-run operation's production. Brazil's economy is booming just the same on soybeans and iron ore sent abroad.

Dizzy. Venezuela--home to oil giant PDVSA--saw dizzying growth in 2004. Last year, crude and non-traditional exports came to $38.80 billion. According to estimates at the Ministry of Energy and Mines, oil exports alone hit $32.54 billion, while the Venezuelan Exporters Association believes that non-traditional exports were $6.23 billion. Venezuela's Banco Comercio Exterior, an export development bank, expects that non-traditional exports for 2005, once all the numbers are finalized, will reach $7 billion.

Economic activity in the was intense during the period. Venezuelan public-sector exports increased 57% while private-sector exports rose by 24%. Destinations for exports included the United States, Mexico, Colombia, Ecuador, China, the United Kingdom, Canada and the other countries in the Andean Community. Total exports in 2004 increased by more than 40% from 2003, when sales abroad came to $4.47 billion, according to Vesta Touron, trade intelligence manager at Banco de Comercio Exterior.

Argentine petroleum companies like Repsol YPF and Pan American Energy also posted good export results in 2004. Repsol remains the largest exporter in the country. Of all exports by the oil company, 70% were petroleum products processed in Argentina refineries using domestic technology and workers. The remainder was exported as unrefined crude oil and natural gas.

After three consecutive years of posting moderately healthy growth rates, Colombian exports last year shot up 29.5%. They also rose in a year when the Colombian peso strengthened 16% against the U.S. dollar, making the country's products more expensive abroad. Nevertheless, heavy demand for raw materials at the global level was a boon.

For decades, Colombian state-owned oil company Ecopetrol ruled the roost as the country's largest exporter, and 2004 was no exception. Things are changing, though. Experts say the company faces a grim future due to declining oil reserves, so Ecopetrol has cut costs while crafting a strategy to shield itself against an eventual drop in the oil price. "In 2004, we reaped what we sowed in 2003," says Federico Sanin, an Ecopetrol analyst. "We got our accounts in good shape, we improved relations with labor unions and we modernized production." For 2005, the company faces the same challenge from the past few years: finding more oil.

Ecuador's state-owned oil company, Petroecuador, continues to top the list of exporters, despite the company's failure to modernize and open up to private capital, as well as the weight of conflicts on political and labor fronts.

In 2004, the company's oil exports hit $1.62 billion, up 43.5% from 2003. Petroecuador's oil shipments abroad also accounted for 20% of national exports. That percentage makes the trade balance--and the economy--vulnerable to the whim of global petroleum prices, according to Economy Minister Mauricio Yepez. Nevertheless, oil prices have stayed high since 2003 and they should stick through 2005, helping Petroecuador cover up its operating deficiencies and avoid serious problems with public budgets.

Emergency. According to Ecuador's energy minister, Eduardo Lopez, Petroecuador's management has prioritized an emergency plan to slow declining production, which the World Bank says has been slipping 6% annually over the past five years. Lopez warns, however, that without structural reforms the company will collapse since the government does not have the resources to reverse this trend. So Lopez is preparing reforms to present to the president and the Congress this year. "In the meantime, we can't sit around with our arms crossed," Lopez says. He's pushing to raise production as high as 600,000 barrels a day from the current 205,000. Such an increase will require investments of $6 billion during the next six years.

Demand has been high, too, for iron ore--a base ingredient of steel--and for copper, used to make hundreds of industrial products and, of course, to string power lines across a rapidly growing and energy-hungry Asia. Brazilian iron ore giant Companhia Vale do Rio Doce (CVRD), the third-largest exporter in that country in 2004, says that its increased exports last year were the result of a nearly 19% increase in the price of ore during 2004, as well as heavier Chinese purchases. "Demand should stay hot for at least the next 18 months," CVRD CEO Roger Agnelli recently told reporters, speaking of his Chinese customers. The Middle Kingdom accounts for almost 18% of all CVRD's iron ore sales, and iron ore itself accounts for 48% of total CVRD sales. Eighty-five percent of CVRD'S output--a mix of iron ore, aluminum, manganese, and ferroalloys--is exported.

In economies that rely on commodity prices, there are good years and bad. But for Chile, 2004 was truly phenomenal. The world's top copper exporter cruised along on average prices of $1.30 pound, up from $0.80 a pound in 2003. According to Chile's Central Bank, copper exports totaled $14.30 billion--91.2% more than the year before. Copper accounted for almost half of Chile's total export earnings. It's no surprise that nine of the country's ten hottest exporters are mining companies.

"It's exclusively the result of market conditions," says Rodrigo Toro, commercial vice president for Chile's third-largest copper miner, Dona Ines de Collahuasi, which raked in more than $1 billion last year, more than double the $491 million revenues it reported in 2003. "Or, at least 98% of it was," says Toro. "We still want to believe that our management had a small part to play, or else any dummy could be in charge and you would see the same results."

Toro says Collahuasi's sales can be explained in part by improvements in extraction machinery, which allowed production to increase to 450,000 tons in 2004 from 410,000 tons the year before. Discounted prices for copper concentrate--a form of semi-processed ore that is 20% to 30% copper and is often shipped to buying countries for smelting--also helped boost sales. Increased production also helped Chile's Escondida. While its production increased 20%, the country's largest private mining company watched its export earnings more than double, to $2.25 billion last year from $1.05 billion in 2003.

Stockpiled. Meanwhile, Chile's top exporter Codelco, the state-owned copper miner and the world's largest mining company, made stellar gains despite a marginal increase in production. Codelcos export earnings also more than doubled, to an impressive $5.90 billion in 2004 from $2.60 billion in 2003, but these gains have more to do with strategy, says Juan Eduardo Herrera, vice president of business development for Codelco. He says the mining giant managed to put more copper on the market because it had stockpiled 200,000 unsold tons in 2003.

"We knew the market didn't want more copper so we accumulated a big part of our production," says Herrera. "In 2003, we produced 1.5 million tons and sold only 1.3 million. But in 2004, with the price higher, we sold our current production plus our 200,000 leftover. So we produced 1.6 [million tons] and sold 1.8 [million tons]."

Grupo Mexico, the third-largest producer of copper in the world, is also optimistic after having posted good results in 2004 on high copper prices. Past investments to modernize the company paid off, executives say. "We expect that 2005 will be a good year," says Juan Rebolledo, vice president of international affairs at Grupo Mexico. "Part of that depends on our output and part depends on the sustainability of high copper prices."

In a mineral-dependent country like Peru, it's no surprise that the country's top 10 exporters are all mining companies. More than 55% of the country's $12 billion in exports in 2004 came from the mining sector, particularly from companies involved in the production of gold and copper.

Yanacocha, Latin America's first producer and Peru's second-largest overall exporter in 2004, has reaped the benefits of the increased demand of this precious metal.

"We attribute our sales growth to a combination of increased production and improved prices." says Carlos Santa Cruz, managing director of Newmont South America, which holds a majority share in Yanacocha. The company's continued investment in infrastructure also has been key to maintaining Yanacocha's current export levels, which last year stood at $1.20 billion.

Meanwhile, the rise in the price of copper--and an increase in production--has largely contributed to positive results at Antamina, one of Peru's largest producers of copper and zinc. The company's dollar exports grew 103% in 2004, making it Peru's third-largest exporter.

Increased demand for molybdenum, a by-product of copper mining used as a steel alloy and in demand among construction, auto manufacturing and defense contractors, has also boosted Antamina's bottom line. "Much to our surprise, molybdenum has become a star product for us," says Antamina Corporate Communications Manager Gonzalo Quijandria. "Demand has hiked the price of this metal, making its export more profitable for us. We have been working with the right metals at the right time."

Coal is another big mining export, especially for Colombia. Drummond, a U.S. company and a major coal producer in Colombia, reported a 69% increase in exports during 2004. "Over the last few years, when the price of coal was low, we invested a lot of money," says Augusto Jimenez, president of Drummond's operations in Colombia. "We didn't just buy mines. We also improved our infrastructure." The company raised its production capacity, he says, but it didn't raise output until global prices went through the roof. "Coal is truly black gold," Jimenez says.

As much as Eastern economies are demanding raw materials, they are also demanding more food. Traditionally, Argentine exports largely consisted of raw materials, mainly grains, oilseeds and edible oils. In 2004, six of the 10 biggest exporters in the country were raw materials producers, and those products continue to dominate Argentine sales abroad. In fact, among the major exporters in the country in 2004, there were no value-added manufacturers.

To feed demand, Argentine grain and edible-oil producers increased their export activity strongly, although prices over the year were on the decline. Cargill, Bunge Argentina, Aceitera AGeneral Deheza, Nidera and Toepfer were among the companies that benefited from the export boom.

"The company had a very good level of activity, despite a decline in expected harvest volumes, and one should remember that our industry is very strongly connected to the available supply," says Raul Padilla, president of Bunge Argentina. "We have a better outlook for this year since there is already better output and higher volumes."

Bananas, Ecuador's second largest export, generated $1.02 billion in 2004, 20% of which came from Exportadora Bananera Noboa, owned by one-time presidential hopeful Alvaro Noboa. While a big seller, bananas--like coffee beans--nevertheless have taken a serious dive on international markets on oversupply, which shows up in company statistics as double-digit declines in dollar values exported. For countries that depend on the fruit's prospects abroad, working harder for less money is the downside of the export business.

Value added. Manufacturing, however, has been a bright spot in a region plagued by its longtime reliance on commodities sales. Aircraft maker Embraer, Brazil's second-largest exporter in 2004, got bigger export wings with its first sales of its new regional jets that can handle up to 70 passengers. The buyers were U.S., Polish and Italian airlines.

Embraer last year exported 46 of those planes, each costing $26.5 million, and 89 of its smaller jets, which hold up to 50, at $16 million to $21 million each, as well as 12 executive jets. "Our new 170/190 family jet allowed us to boost jet exports by 47% in 2004 compared to 2003, and the first-ever sales of this higher-priced jet were the main reason for our impressive increase in export revenues in 2004," says Horacio Forjaz, Embraer's vice president of corporate relations. "Also, 109 of the 145 planes we plan to export this year will be 170/190 family regional jets, thus further boosting export revenues."

Volkswagen do Brasil, Brazil's fifth-largest exporter in 2004, also increased exports, in part by shipping a new model called the Fox, says Leonardo Soloaga, VW's export manager. The charm of the Fox--a compact car, although larger than the German company's top-selling Gol model--lies in its modern design and spacious interior, with wide front and rear seats, and far more leg and head room than most compacts. Developed and introduced in Brazil in late 2003 for sale domestically and abroad, it added to export sales already logged by VW do Brasil's top export model, the Gol. "We increased exports in 2004 by exporting 25% more cars than in 2003, some 208,000 vehicles, mostly the Gol and the Fox," says Soloaga. "Over half of those cars went to Argentina, and most of the rest went to other Latin American countries, North Africa, and Eastern Europe and Asia, to countries where there was an increased demand for lower-priced compacts."

In 2004, Mexican conglomerate Grupo Alfa, which produces items as varied as petrochemicals, frozen foods, auto parts, and steel, exported $2.30 billion--measured by its international sales--a figure close to 25% higher than the year before. "In general terms, it's because all of our companies posted excellent results in 2004 and reinforced their positions in different sectors, as well as a stronger economy in the areas where we are present," says Enrique Flores, director of corporate communications at Grupo Alfa.

For 2005, the company expects its exports to stay comfortably in line with economic growth in the United States and Mexico. A 25% jump might be hard to repeat in most sectors, but Latin America's exporters are looking for more opportunities to sell, and the world seems ready to buy.

ARGENTINA                      exports in US$   % change '04/'03
                               millions 2004

 1 Repsol YPF                       2,700              4.7
 2 Cargill                          2,334             21.3
 3 Bunge Argentina                  2,251             32.2
 4 Aceitera General Deheza          1,250             14.3
 5 Louis Dreyfus                    1,160             -1.9
 6 Nidera                             753             13.0
 7 Minera Alumbrera                   749            -30.9
 8 Molinos Rio de la Plata            682            -55.5
 9 Pan American Energy                673             44.0
10 A.C. Toepfer                       650              6.0

SOURCE: CERA

BRAZIL

 1 Petrobras                        4,562              3.8
 2 Embraer                          3,348             66.8
 3 CVRD                             3,176             56.2
 4 Bunge Alimentos                  2,543             31.2
 5 Volkswagen do Brasil             1,549              4.3
 6 Cargill Agricola                 1,433             23.2
 7 General Motors do Brasil         1,336             36.7
 8 Halliburton Productos            1,176               --
 9 Ford Motor Company Brasil        1,110             41.2
10 Sadia                            1,046             53.5

SOURCE: Ministry of Development, Industry and Foreign Trade

CHILE

 1 Codelco Chile                    5,911            124.6
 2 Minera Escondida                 2,256            113.4
 3 Cia. Minera Dona Ines de         1,058            115.3
   Collhuasi SCM
 4 Minera Los Pelambres               953            100.8
 5 Celulosa Arauco y                  737             52.1
   Constitucion
 6 Enami                              729             90.9
 7 Molibdenos y Metales               670            272.7
 8 Cia. Minera Disputada de           633             76.5
   Las Condes
 9 Minera El Abra                     617             57.5
10 Minera Candelaria                  522             70.9

SOURCE: Prochile

COLOMBIA

 1 Ecopetrol                        2,138             29.6
 2 Federacion Nacional de           1,054             18.4
   Cafeteros
 3 Drummond                           712             69.3
 4 Cerro Matoso                       623             50.2
 5 BP Exploration Company             552             10.4
   Colombia
 6 Intercor                           444             -0.3
 7 Cerrejon Zona Norte                345              1.2
 8 Tepma                              279             -4.8
 9 Occidental Andina                  254             45.0
10 Occidental de Colombia             249             40.1

SOURCE: DIAN

ECUADOR
                               exports in US$   % change '04/'03
                               millions 2004

 1 Petroecuador                     1,622             43.5
 2 Exportadora Bananera               209            -15.8
   Noboa
 3 Union de Bananeros                 147             -9.6
   Ecuatorianos
 4 Kimtech                             95            -13.5
 5 Rey Banano del Pacifico             69            -17.2
 6 Empresa Pesquera                    64            -36.6
   Ecuatoriana
 7 Corp. Internacional                 49            731.9
   Palacios
 8 Negocios Industriales               43            -21.1
   Real
 9 Promarisco                          41              4.4
10 Exporklore                          29            -25.3

SOURCE: Central Bank of Ecuador, Manifiestos, Corpei

MEXICO

 1 Pemex                           23,397             26.9
 2 Cemex                            5,237             18.8
 3 Grupo Mexico                     3,040            101.0
 4 Grupo Alfa                       2,303             25.9
 5 Femsa                            2,031             59.6
 6 Coca-Cola Femsa                  1,780             67.6
 7 Grupo Imsa                       1,642              9.3
 8 Gruma                            1,544             10.6
 9 Grupo Bimbo                      1,525              7.6
10 Grupo Modelo                     1,140             18.6

SOURCE: BMV Based on sales abroad. Private companies not included.

PERU

 1 Southern Peru Copper             1,375             92.5
   Corporation
 2 Minera Yanacocha                 1,233             17.8
 3 Compania Minera Antamina         1,007            103.6
 4 Doe Run Peru                       504             35.4
 5 Minera Barrick                     273            -19.6
   Misquichilea
 6 BHP Billiton Tintaya               243            253.3
 7 Minsur                             231              9.5
 8 Consorcio Minero                   213             60.4
 9 Petroperu                          205             33.8
10 Refineria La Pampilla              183              6.8

SOURCE: COMEXPERU

Liseth Camacaro (Caracas), Darcy Crowe (Bogota), Michael Kepp (Rio De Janeiro), Jen Ross (Santiago), Marisol Rueda (Mexico City), Juan Pedro Tomas (Buenos Aires), Maria Elena Verdezoto (Quito) and Lisa Wing (Lima)