Spanish firms seeking to escape a sluggish eurozone are heading in ever greater numbers to reap the financial benefits of doing business in the faster-paced economies of Latin America.
However, the corporate business traffic now runs in both directions: Latin American groups are building business links with Spain as a gateway to entering the rest of Europe.
For example, on a visit to Madrid this month by Mexican President Enrique Pena Nieto, Spanish business executives, from the leaders of major bank BBVA to energy giant Iberdrola, lined up to meet with him.
Indeed, Spain’s firms fall easily for Mexico’s charms: an economy expected to grow 5 percent annually in the years ahead and which plans to invest 440 billion euros (US$600 billion) up to the end of 2018, notably in energy and telecommunications.
More generally, “We are witnessing a major boom in infrastructure construction in Latin America for the next decade,” IE Business School lecturer Juan Carlos Martinez Lazaro said.
“We can see it from Mexico to Chile, where almost everything is yet to be done,” he added, citing Brazil, which is hosting the FIFA World Cup and is also to put on the 2016 Olympics.
With its cultural and linguistic affinity, Latin America became a natural destination in the 1990s for Spanish companies seeking to spread internationally.
In that period, construction and public works group FCC set foot in the region, first in Costa Rica and Mexico, said Vicente Mohedano, regional director for the group’s construction branch.
FCC enjoyed “the same culture, the same language and practically identical values,” he said.
That offered it a competitive advantage that has led to FCC now undertaking about 40 percent of its construction activity in Latin America.
Eurozone financial woes sent more Spanish firms to the region, particularly Brazil and Mexico.
In March, FCC in a consortium with Spanish construction group ACS won a 3.9 billion euro contract to build part of the metro system in Lima, Peru.
Brazil became Spanish telecommunications group Telefonica’s top market at the start of last year. In Panama, another Spanish firm, Sacyr, is overseeing the enlargement of the Panama Canal.
In Mexico, Iberdrola plans to invest 3.5 billion euros over six years.
The roles are being switched, too: Spain is now a target for Latin American companies, especially those from Mexico and Venezuela.
“There are more and more companies we call ‘multilatinas,’ which are Latin American multinationals that have begun to have a presence not just in Latin America, but also on a global scale, in Europe in Asia or the United States,” said Carlos Malamud, Latin American research chief for the El Cano research institute.
They are investing in all sectors, the analyst said.
“For example, Mexican investment in Spain is about 20 billion euros, and we have recently seen investment in the banking sector,” an easy target since the collapse of a property boom in 2008, he said.
Banco Popular, Liberbank and Banco Sabadell have all opened up their capital to Mexican investors.
However, it was Venezuela’s Banesco that scored the biggest coup by swiping the nationalized NovaGalicia bank in December last year for 1 billion euros.
“Spain, as well as being the mother country, is an attractive country in a period of recovery,” said Banesco president Juan Carlos Escotet in the daily El Pais.
Banks are not the only targets.
Mexican group Sigma, in an alliance with China’s Shuanghui International (雙匯國際), took control of Spanish food group Campofrio. Mexican oil giant Pemex did the same with the Barreras shipyards.
“I would not say that the investment flow between Spain and Latin America has completely reversed, but it is clear that the wind has turned recently, with Latin American groups beginning to invest in Spain,” Mohedano said.
“Numerous companies are using Spain as a bridgehead, the gateway to Europe,” profiting from the two sides’ cultural links, said Juan Carlos Martinez Lazaro of the IE Business School.
“It’s a phenomenon that is going to grow as Latin American businesses gain strength, and financial and managerial capacity,” he added.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained