../Morning Post
Posted September 30 , 2010

Brazilian multinationals positive after the global crisis

São Paulo and New York - The 2010 survey of outward investors from Brazil by Sociedade Brasileira de Estudos e Empresas Transnacionais e da Globalização Econômica (SOBEET), Valor Econômico, and the Vale Columbia Center on Sustainable International Investment (VCC) finds that, although 2009 was a difficult year for many companies, most firms are upbeat about opportunities abroad from 2010 onwards.

The report identifies 30 large multinationals and ranks them on the basis of their foreign assets – see list below. These 30 companies are among the largest outward investors from Brazil, which in 2009 jointly accounted for about:

- USD 87 billion in foreign assets,
- USD 61 billion in foreign sales, and
- 160,000 employees abroad.

The leading company on the list of 30 is Vale, which had nearly USD 35 billion in foreign assets. It alone accounted for 40% of the total foreign assets on the list. The next two firms, Petrobras and Gerdau, between them accounted for a further USD 30 billion in foreign assets, i.e., just over 34% of the total foreign assets of the top 30. Only six other firms had foreign assets exceeding USD 1 billion. Eleven firms at the bottom of the list had less than USD 100 million each.

The highest foreign sales were recorded by JBS-Friboi, a food products firm (nearly USD 17 billion), which also had half the total foreign employees (80,000). The leading industry on the list (well over half the firms) is manufacturing, although the top two firms are in natural resources (mining and oil & gas). Services accounted for only four firms.

SOBEET-VCC ranking of the top 30 Brazilian multinationals, 2009 (USD million)

Source: SOBEET-Valor-VCC survey of leading Brazilian multinationals.

Despite the crisis, nearly half the firms surveyed intend to increase their outward investment in 2010-2011, with a third of these (12%) planning to increase it by more than 30%. Of the remainder, most plan to maintain investment abroad at their current levels, with only 5% of all firms planning to reduce their investment. In the view of many companies, the economic recovery is leading to new business opportunities and increasing overseas demand. It is interesting to note that Argentina still remains the preferred destination for Brazilian firms. Other destinations cited were China, South Africa and India.

A variety of factors were cited by companies as motivations for overseas investment. The reason most mentioned, by 26% of respondents, was the company’s international competitive position. A further 20% cited growing world demand and 13-15% cited each of the following: gaining economies of scale, reducing dependence on the domestic market, and establishing export platforms abroad.

The full report on the survey, which will include data on individual companies as well as other information on Brazilian investment abroad, will be available shortly.

Submit press release to pressrelease@exchangemagazine.com - Editor Jon Rohr - Content published on this site represents the opinion of the individual/organization and/or source provider of the Content. ExchangeMagazine.com is non-partisan, online journal. Privacy Policy. Copyright of Exchange produced editorial is the copyright of Exchange Business Communications Inc. 2010/*.*. Additional editorials, comments and releases are copyright of respective source(s) and/or institutions or organizations.


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