Crisis creates growth opportunities for Brazilian multinationals
O Estado de S. Paulo
The international financial crisis is opening room for the growth of the Brazilian multinationals. Protected by a strong domestic market and "trained" to go through rough periods, because of the several regional crisis they have already faced, Brazilian multinationals have already started taking advantage of the good opportunities that are arising. According to Spanish Lourdes Casanova, professor of the Insead business school and specialist in Latin-American companies, the disinvestment made by multinationals from developed countries - the ones which were most severely affected by the crisis - has already been transformed into good deals in Brazil and also in other Latin-American countries, like Chile.
"They are cutting down on expenses and investments in more distant places which are harder to manage", affirms Casanova. A "disinvestment" that benefited a Brazilian multinational was carried out by the British-Australian mining company Rio Tinto, which sold its assets in Mato Grosso do Sul to Vale, in January. A business of the same kind was closed by banker André Esteves, from BTG, who managed to regain control of his Pactual bank, years after having sold it by US$ 2.5 billion to Swiss UBS. The Brazilian companies also gain in other places. With the prices of the assets overseas relatively low, opportunities for international expansion have appeared. Last week, the President of the Petrochemical company Braskem Bernardo Gradin reaffirmed his interest in the acquisition of a company in the United States and said a deal may be closed still this year.
Last year, the Brazilian multinationals had strong growth in the global markets, according to a study made by the Dom Cabral Foundation. According to the study, despite the crisis, the 20 biggest Brazilian multinationals were able to increase their levels of internationalization. The revenues of these companies with operations overseas started to represent 25.3% of the total in 2008, compared to 24.1% in 2007. The foreign assets corresponded to 27% of the total assets of the Brazilian multinationals last year, compared to 24% in the previous year.