As a long-time specialist in Latin America business I can tell you without a doubt that the changes in Latin America over the past few years have been astounding. Today's Wall Street Journal for example calls out some of the historical trends, pan-regionally, and the effect of U.S. policies on trade.
From my point of view, the real mover and shaker in the region (and I'm not talking about samba or capoeira) is Brazil (or as they spell it, Brasil). This country has moved inexorably from a backwaters, wannna-be, to a real player on the world stage. In recent months these kinds of developments are taking place, increasing the movement from south to north:
1) Brazilian mining companies are going "vertical", meaning they not only mine the iron ore that is shipped worldwide to make steel for autos, washing machines and the like, but they are now creating totally integrated operations to mine the ore, refine it, and create the steel products for domestic and international use. This is BIG news for steelmakers in other parts of the world, not all of it pleasant for those mills that only produce steel, after sourcing the iron ore from Brazilian miners.
2) U.S. companies are seeking and finding financial support from Brazilian investors - this is really something, when a "3rd World" country can generate enough free cash flow to offer investments into US or European-based companies. Case in point, a firm in the US that specializes in retail solutions for grocery companies and other retailers, recently turned to Brazilian investors to expand and grow its business. Not only will there be Brazilian money helping the U.S. firm grow, but Brazilian management expertise will be there, as well.
3) For those who drink beer, and enjoy regional varieties, a recent mega-investment by InBev (Brazilian/Belgian brewer) in taking over Anheuser Busch in the USA is BIG news. This is not just a question of consolidation in the brewing industry (a phenomenon that has been taking place for some time in the US and other markets), but it's another huge indicator of the sophistication of Brazilian management talent, as well as money. Watch what happens to Bud and the rest of the Anheuser Busch line of products.
4) Major IT/Computer companies, such as IBM, Dell and others are all setting up or have already done so, major installations in Brazil to satisfy that market, now the 5th largest in the world for PC's. Naturally, this appears as a movement of capital and smarts from the north to the south, but in this writer's opinion, the effect is inverse: Brazil as a major consumer of IT products will begin shifting the way all types of companies set up and operate for the benefit of that country and its consumers and by extension, the rest of Latin America. Auto makers, as well, are redefining their product for Brazil, and when it comes to ethanol, the Brazilians have superior experience, cheaper prices and far wider abilities to plant, grow and process bio-fuels for the auto industry or other consumers. The U.S. and other countries have a lot to learn from the folks down south.
5) Oil companies and deep water drilling are going to find that Petrobras, the Brazilian national oil company is showing the way on how to find, drill for and extract major oil fields that are deep under the ocean, and deeper still under the rocks or sea bed that lies below thousands of feet of saltwater. For a U.S. that is nearly surrounded on three sides by ocean water, with vast petroleum and natural gas fields yet to be exploited, this Brazilian expertise will become a resource to learn from in the deep water exploration that will lead to new sources of energy off the shores of the United States. Hands down, the Brazilians are some of the world's best when it comes to this kind of oil field capability.
So, apart from the traditional exports that are famous from Brasil (coffee, bossa nova, soccer (futbol) and the Girl from Ipanema), the trends are strongly moving in ways that give Brazil a lot more influence while operating on the world stage. This will continue well into the future, and will continue to have significant impact on all parts of the "North". Stay tuned for more on this compelling topic.
If you or someone you know needs help with growing any part of your business in Latin America, including Brazil, contact me. It's what I do, and fluently in both Portuguese (the language of Brazil) and Spanish (the language of most of the rest of the region).
Thanks for reading. If you find this useful, please comment and share it with a friend. As they say in Brasil: "Chau!"
© Daniel A. Cabrera, TopExec.org, All Rights Reserved, 2008
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