Peru's Ransa betting on 2016 infrastructure growth

Peru's largest infrastructure and transport logistics operator Ransa is betting that a series of infrastructure, mining and energy projects will boost revenues next year after a "difficult" 2015, a senior executive said.

Ransa, part of the Romero Group, plans to inaugurate a US$60mn automobile distribution center on the outskirts of Lima next year, although the Lima-based company has worked to improve operating efficiency amid declining revenues, CEO Emilio Fantozzi said.

"2015 is a difficult year for the country's economy," Fantozzi told newspaper Gestión. "Our sales to the mining industry have fallen, as well as in oil and gas due to the drop in crude oil prices and social problems in some parts of the jungle."

Ransa, which also operates in Bolivia, Colombia, Ecuador and Central America, is not the only company in the Peruvian infrastructure industry to have taken a beating this year. Port and airport operator Andino Investment Holding posted a loss through the third quarter, while cement producer Cementos Yura and construction company Graña y Montero also saw profits decline.

But while major mining projects such as China Minmetals' US$8.3bn Las Bambas mine and Freeport-McMoRan Copper & Gold's US$4.6bn Cerro Verde expansion are scheduled for completion by early 2016, companies such as Buenaventura, Southern Copper and Rio Alto Mining plan to move ahead with medium-sized investments.

President Ollanta Humala, who is scheduled to step down in July 2016 after April general elections, has awarded US$20bn in public-private partnership infrastructure concessions since 2011. Humala aims to increase the country's public budget for 2016 by 6.6% to 138bn soles (US$42bn), including 10.2bn soles for the transport and communications ministry.

At the same time, Peru has lined up US$64bn in mining investment projects and US$33bn in energy projects over the next decade, according to the energy and mines ministry (MEM).

"We expect that next year, with a series of projects that are already moving along, we will be able to resume the growth we've been having over the past five years," Fantozzi said.