TRENDSETTERS: THE RISE OF THE MULTILATINAS

While the advertising world turns its attention to the Cannes Ad Festival, a two-day Davos-style event is taking place across the Atlantic where global business leaders, policy makers and C-Suite executives are discussing ways to reinvent business growth and redefine innovation. In just its second year, the New York Forum, created by Richard Attias with the Boston Consulting Group, is bridging internationally-minded companies from fast-growth economies with the US by using New York as the center of global finance, business thinking, market understanding and media power.

Among the trends being discussed is the rise of Multilatinas or those companies from Latin America that are not only taking advantage of regional opportunities, but are creating new business models that can apply to other parts of the world. Given the fast rise of so many Latin American economies, the advice of Multilatinas panel moderator Luis Alberto Moreno, President of the Inter-American Development Bank, includes: "Go south, go south and go fast!"

Despite their fast-growth economies, many Latin American companies have not forgotten the lessons learned from several decades of instability. As a result, they have created world-class management teams and are looking outside their home countries for balanced growth. In fact, today there is $43 billion in outflows from Latin American countries-- particularly Brazil, Chile, Mexico and Colombia; while much of this money is invested within the region, more is reaching the rest of the world.

Cinépolis, the Mexican-based chain of movie theaters is one such example. (Its name means City of Cinema and its tagline translates to "The Capital of Cinema.") CEO Alejandro Ramírez described how the company evolved to be the largest Cineplex chain in Mexico through technology, innovation and solid marketing strategies, and then grew to become the leader within Latin America with 2300+ screens in over 240 multiplexes in Guatemala, Costa Rica, Panama, El Salvador, Honduras, Colombia and Peru, in addition to its Mexican home base.

Cinépolis also made the transition from the Spanish-speaking world to the Portuguese one by beginning operations in Brazil. The company has also entered the Asian market by initiating operations in India, and has now created more than 16,000 jobs in the world. Its next expansion project will be the launch of top-quality movie theaters in California--complete with luxury seating, waiter service, and elegant food and beverage choices.The company now ranks fourth in the world and has assumed a socially-responsible role with a focus on adding value to the communities in which it operates.

Brazilian-based Odebrecht is another example of a pioneering Multilatina giant with 120,000 employees and diversified operations throughout Latin America, as well as the US, Europe, Asia and Africa.

Felipe Jens, President of Odebrecht Participações e Investimentos, discussed how his company initially recognized that no single model could be applied to the diverse countries of Latin America, each with varying governments, regulations and societies. He also emphasized how each investment in any market should lead to a self-sustaining enterprise.

Today Odebrecht is Brazil’s largest service exporter, and among its many businesses are: engineering and construction, petrochemicals, bioenergy, oil and gas, defense and technology, infrastructure, and real estate.

Federico Restrepo, CEO of Empresas Públicos de Medellín (EPM), the state-owned multi-utility company in Colombia, shares Felipe’s Jens views on local trust. Although his company has grown by acquisition outside of Colombia, they do so by trusting in local talent, and a key part of their due diligence process is determining the credentials of the management team.

Currently EPM is the second biggest energy distributor in Central America with presence in Guatemala, El Salvador and Panamá. It is the second largest company in Colombia, and among the Top 10 in corporate reputation. Although owned by the Municipality of Medellín, EPM has been run like a private enterprise since its inception in the 1950’s, and is admired for its corporate governance and corporate social responsibility standards.

When these growing Multilatinas see challenges, it is largely in the form of new talent. They agree that there is a lack of qualified people in their local markets to keep up with the growth levels they are now achieving—whether at the C-Suite or within the labor force to work with investment and infrastructure. They acknowledge that education is a long-term solution, but they still need to find new answers to the talent question in this current decade of growth.