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Latin America’s best-managed companies are making healthy profits and are on the acquisition trail in the region and globally. For the seventh year, Euromoney has produced a Latin American company ranking based on a survey of market analysts at the main banks and research institutes in Latin America. Respondents were asked to nominate the top-three companies in each of the countries or sectors they covered, bearing in mind market strength, profitability, growth potential, quality of management and earnings. This year’s overall best-managed company was AmBev, the Brazilian food and drinks company. Itaú Unibanco, the Brazilian bank, and Vale, a Brazilian metals and mining group, achieved joint second place. Last year, Vale was also ranked in second place and Itaú Unibanco took the fourth spot.
This year Ecopetrol, a Colombian oil and gas group, was ranked number four and Bancolombia, a Colombian bank, was placed number five.
“A lot of Latin American companies are expanding in the region,” says David Bojanini, chief executive of Grupo de Inversiones Suramericana (Sura), the Colombian holding company strong in banking and financial services (it owns Bancolombia) that is ranked in overall joint ninth place, along with LAN, a Chilean airline operator, and Ultrapar, a Brazilian conglomerate. “One of the keys to successful international expansion is good local management. It is very important to retain local managers that have an excellent knowledge of the local marketplace. You have to try to share your values and culture with them, you cannot impose anything on them. The main asset is people. Good management means treating people well.”
In July, Grupo Sura agreed to acquire ING’s pensions, life insurance and investment management operations in Chile, Colombia, Mexico, Uruguay and Peru for $3.6 billion. In November, Grupo Sura undertook a $1.8 billion share offering – the biggest offering by a Colombian company in four years – mainly to finance the purchase of the ING assets. Swiss bank UBS purchased shares in the group valued at $506 million.
Brasil Foods, a listed company resulting from the 2009 merger between Perdigão and Sadia, both large Brazilian-owned food corporations, achieved overall eighth place in the rankings this year.
“BF was founded with the aim of exceeding the best of both companies of origin: Perdigão and Sadia,” says Wilson Mello, vice-president of corporate affairs at Brasil Foods. “We conducted one of the largest mergers in the food industry anywhere in the world. Although working under some operating constraints, we can be proud of the progress and the results that have been achieved. Its shareholders and the already integrated producers have benefited from the merger, with BF obtaining a higher market value.”
Brasil Foods has 61 domestic plants and seven abroad (five in Argentina and units of Plusfood in the UK and the Netherlands). It operates 24 overseas commercial offices and has a relationship with more than 5,000 clients in 140 countries.
Mello adds: “We are at a unique and special moment, one in which efforts are focused on the consolidation of a company with a vocation and culture for performing the role of global leader in the food business. BF wants to be consumers’ first choice in regions where it has a strong presence, whether in Brazil or abroad, offering products suited to local habits and customs and with the support of a global distribution platform.”
Wal-Mart de México, the Mexican supermarket operator 68% owned by Wal-Mart of the US with the other 32% of its equity listed on the Mexico Stock Exchange, was ranked in sixth place this year. On February 20, Wal-Mart de México published its fourth-quarter results, which showed that net sales increased by 13.3% last year. Net income for the year was Ps22.25 billion ($1.74 billion) and represented 5.8% of total revenues, a growth of 13.8% over last year’s levels.
Last year, Wal-Mart de México opened 365 units, including 310 Bodegas Aurrerá, 42 Bodegas, 60 Mi Bodegas, 208 Bodegas Express and 21 Wal-Mart stores.
“Wal-Mart de México had a very solid financial performance last year,” says Antonio Ocaranza Fernández, the company’s director of corporate communications. “One of the main reasons why analysts rate us highly is the company’s respect for its stock holders. This is reflected in our share price, which has risen markedly this year and hit no highs.”
Latin American corporates are taking advantage of the fast economic growth in most Latin American countries. This has enabled them to increase their sales and profits dramatically during the past five years. Many Latin American companies are expanding in the region and even into Europe and the US, where company valuations are comparatively low.
