Multilatinas: Titans Coming North

Despite the current financial crisis, multilatinas are poised for continued expansion in pan-regional Latin markets and internationally.

As Latin American economies grew up to 2008, companies in the region have been expanding their businesses from their home countries into other Latin American countries. Now, these companies, so-called "multilatinas," are competing with other multinational companies as never before by expanding outside Latin America into other emerging markets, as well as First World countries. A multilatina is a multinational company based in a Latin American country that has become an economic titan in its home country, dominated its domestic market and sought additional markets in additional countries to facilitate its growth.

Multilatinas are now being managed and led by a new generation of better-trained and educated executives. They are now as prepared as their counterparts in North America, Europe or Asia to lead their companies and their growth. Banco Itau, Grupo Bimbo, FEMSA, Vale, Tenaris and many others are clear examples of multilatinas with world-class management teams.

They have expanded from their home countries to other countries in Latin America, and, significantly, to international markets outside Latin America. Multilatinas, which in the past may have restricted their growth to only neighboring countries, have also expanded throughout all of Latin America and into North America, Europe and emerging markets worldwide.

For example, the leading Mexican baking company Grupo Bimbo has been so successful in dominating the Mexican marketplace that no major competitor has survived. A company like this, very efficient and capable, can continue to grow only by going to other countries. They went to Central and South America and have become a major or dominant force in every country they've entered. Today, they have approximately 40 percent of the marketplace in Brazil. They entered the United States market and acquired Entenmann’s and Thomas's. They also sold their “nostalgia brands” to Americans of Hispanic heritage. Recently, they also entered the China and Czech Republic markets as well. They are truly multinational company.

China's domestic market is becoming more attractive to certain kinds of multilatinas, as is India’s, given the growth of their middle class markets. Multilatinas are also expanding into Europe, as demonstrated by the merger of the Brazilian beer and beverage company Ambev with the Belgian beer company Interbrew. The merged company, InBev, recently acquired Anheuser Busch in the United States, to form Anheuser-Busch InBev, the largest beer company in the world. Other examples of expansions by multilatinas are the acquisition of US and Canadian companies by Grupo Comex, a Mexican paint manufacture, and its rapid expansion in China; the acquisition of Canada’s second largest mining company by the Brazilian mining company, Vale, now the largest iron-ore producer in the world, and its acquisitions of other assets in countries as varied as South Africa and Australia.