Empresas “multilatinas” – or Latin American multinationals

Latin American businesses are benefiting from the economic growth of the region and thinking globally, some for the first time. While exporting to neighbouring countries (for example from Mexico to the US or from Brazil to Argentina) tends to be the first stage, some businesses that start in Latin America go global quickly. Usually, they are classified as “multilatinas” when they penetrate a second continent.

Business Week reported in December 2010 that “The 2006 BCG New Global Challengers list included 18 Latin American companies. In 2008, the total climbed to 22. Last year, in a follow-up report called the “The 2009 BCG Multilatinas,” we identified 100 Latin American companies with a global reach or global potential”.

So why are these businesses growing in Latin America? Business Week summarises it perfectly: “the answer is a combination of economic reform, advances in technology, improved education, comparatively low costs, abundant natural resources, and increased management sophistication”.

América Economía highlights some of the key benefits that internationalisation has brought for these multinationals: economies of scale, access to global capital markets and investors, and reduction in currency risks through market diversification.

 So who are these Latin American multinationals? Just a few examples include:

Air transport: TAM (Brazil), LAN (Chile)

Manufacturing: Embraer (Brazil)

Food and drink: Compañía Nacional de Chocolates (Colombia),

Grupo Marfrig (Brazil), Grupo Bimbo (Mexico)

Oil and gas: Petrobras (Brazil)

Financial services: Itaú (Brazil)

Telecoms: Telmex (Mexico)

América Economía quotes the INSEAD analysis that suggests the three key sectors that Latin American multinationals can excel at: telecommunications, creative industries and environmental technologies. What is important for the region is that these businesses contribute in turn to economic development, rather than solely benefiting a few.

But what do these businesses mean to YOU here in the UK or in Europe?

 1-      They could be your competitors, not only in Latin America, but also in Europe, and in emerging markets they are penetrating.

2-      They could be your clients – can you supply to them (somewhere in the world)?

3-      They could be your partners – they could invest in you, or you could invest in them.

Have you ever come across any of these businesses? You might be closer to them than you think!

Sources/interesting reading:

América Economía: excellent for first-hand data

CEPAL-OECD magazine: slightly out of date (2008) but still useful, particularly in terms of comparison with other emerging markets and with Spain

Business Week

FT Beyond BRICS Blog