The phenomenon of fast-growing Latin American companies expanding beyond their national borders, maintains its strength. Above Cisneros’s first female CEO seeks Latin America expansion.
The 2013 Multilatinas Ranking (Latin-American Multinationals) published by AméricaEconomía* Intelligence unit and measuring the level of globalization reached by these companies, shows increases in their foreign sales (in absolute terms and as a percentage of their total sales), investments, and number and proportion of employees. Besides a general increase in the globalization indicators of the Multilatinas compared to 2012, the Ranking has also become more competitive, with a smaller gap between top and bottom companies. Another highlight of this year’s edition is the incorporation of 15 new companies, becoming relevant in terms of globalization within the range of values of the Ranking. All these elements account for the strength of a process that began in the 1990´s, when there were no relevant Latin-American multinationals, and continues up to this day with 75% of the 500 main companies in the subcontinent having been originated in the region.
The Ranking is built based on a Multilatinas Index (base 100), formed by three weighted indicators: Operations abroad – 50% (includes foreign sales, employees and investments as a percentage of total amounts), Geographical coverage – 20% (amount of countries and regions in which the company has a presence), and International growth potential – 30% (built considering the company size and liquidity, and a qualitative assessment on its investment plans and the sector/market perspectives). The 2013 Ranking shows an overall progress in the companies’ globalization process compared to the previous year, which is mainly explained through an increase in both the first and the last indicators. While the average percentages of sales, employees and investments abroad of the 65 companies listed in the 2012 Ranking were 48.2%, 37.5% and 37.4% respectively, these values for the first 65 companies in the 2013 Ranking raised to 55.4%, 40.2% and 40.1%. The average international growth potential also increased year over year, from 64.8 in 2012 to 76.9 in 2013 (Index base: 100), which creates excellent perspectives for the Multilatinas for 2014.
The top five companies in the 2013 Ranking are, from first to fifth, Cemex (Mexico), Grupo JBS – Friboi (Brazil), Brightstar (Bolivia-USA), Tenaris (Argentina) and Grupo Alfa (Mexico). Of the 80 companies listed in this Ranking, 31% are from Brazil, 23% from Chile and 22% from Mexico. There is a wide variety of sectors present in the Ranking, being the Foods, Beverages and Retail the most relevant (26% of the companies belong to these sectors), alongside an important presence of the steel, chemical, oiling and manufactures’ industries. The companies that managed to move the furthest up in the 2013 Ranking from previous years’ positions were those that put forward the most ambitious investment plans, increasing their liquidity, and, in most cases, strengthening their positions in the region. Such is the case of Cemex that moved from the fourth to the first place, after a management restructuring process, by increasing its sales in the region by 12%, achieving a stocks placement of US$1,150 million for its Colombian subsidiary, and raising some additional US$600 million for the sale of Cemex Venezuela assets, all of which maximized its expansion capacity. Another firm that took an important leap in the top of the Ranking was IMPSA, a company from Argentina dedicated to green energy generation, moving from the 11th to the 7th position. In this case, even though IMPSA has broadened its international presence accessing some new national markets, the fact that the company is seeking regional consolidation as its main strategic goal also stands out as a key factor. It has signed one of the biggest contracts in its history with the Government of Brazil in order to develop a wind farm there, and another with the Government of Uruguay with the same purpose, for all of which is planning a financial restructuring that allows the company some debt placements in Brazil and the US to be able to sustain its regional expansion.
The 2013 Ranking is marked by a general increase in the globalization indicators and by some highlights in the companies listed and their performances, but also for having become considerably more competitive than in previous years. If we consider the 65 companies listed in the 2012 Ranking and the first 65 of the 2013 Ranking, and we take a look at the average Multilatinas Index of the top five companies and the bottom five of each year, a much smaller gap is observed. In both cases the average Multilatinas Index of the top five companies is 79. However, while in the 2012 Ranking the bottom five companies score an average 35.4, in the 2013 edition this value rises up to 44.7, reducing the gap and showing a higher level of competition between companies.
The Multilatinas have already established themselves as relevant magnets for investments from around the globe, and, as it has been showed, they present excellent perspectives for the next few years. Please contact us if you wish to obtain further information on these companies and the opportunities they offer for investors. Many Multilatinas will be present in the Latin American Investment Forum next May, 6th in London, the forum that gathers top Latin-American and British businessmen and investors, as well as Ministers, Ambassadors & trade attachés from the countries of the region.
It will be a unique opportunity for representatives from the Multilatinas to showcase their experiences and to create and expand investment possibilities. For further information please visit www.latia.org or contact us.
*AméricaEconomía is a specialised publication with more than 25 years of experience, 100,000 magazines distributed and 700,000 unique web users every month, presence in 19 Latin-American countries, in the US, and representation in Europe and Asia. Its Intelligence unit is in charge of analysis and research since 1993.