The rise of the multilatinas
INSIDE LATIN AMERICA
BY ROBERTO TOLEDO, PMP
Over most of the 20th century, corporations based in the United States, Japan and the European Union were almost exclusively the only ones expanding into other countries and markets. In recent years, we've seen a surprising change on this front. Supported by strong local markets, as well as better access to capital markets to leverage mergers and acquisitions, companies from emerging countries have been aggressively moving into new turf. Companies such as Tata from India, Huawei from China, as well as Latin American firms including Gerdau, Vale or Odebrecht from Brazil, Cemex or Gruma from Mexico or Ternium from Argentina have been expanding around the globe—either by establishing operations on the ground or by making bold acquisitions.
Beside these admired and respected giants, there has been another group of Latin American companies, often referred to as the multilatinas, that have expanded into other countries within the region. According to Booz Allen Hamilton, multilatinas now make up close to 60 percent of the top 500 companies in Latin America. Another report from Funda^ao Dom Cabral in Brazil says that in 2006 more than 50 percent of acquisitions in the region were made by companies from other Latin American countries. The study also revealed that investments from Latin American countries grew by 115 percent over the previous year to reach an all-time high value of $41 billion.
Project management competencies will play a key role in helping multilatinas expand their operations.
Telecommunications, mining, steel, food and beverage, retail, airlines and media are some of the main fields where multilatinas have expanded their operations, from the Rio Bravo to the Patagonia. The big economies—Argentina, Brazil, Chile and Mexico—account for most of the action, but even corporations from small countries such as Costa Rica and El Salvador are finding opportunities in neighboring regions.
This surprising trend represents a much more dynamic regional market in which project management competencies, both at the organizational and personal levels, will play a key role in helping multilatinas expand their operations across the region.
Already, Latin America is seeing a surge in the need for project managers. Job opportunities open up every day. But with roughly 5,000 Project Management Professional (PMP®) certification holders in the region, recruiters have a hard time filling those positions with truly experienced and trained candidates.
We're also likely to see much more mobility for project managers going from one country to another in the region, reinforcing the importance of a common project management language in tackling regional endeavors.
Working with many subsidiaries in different countries calls for a structured project management methodology, which most Latin American companies currently do not have. In addition, methodologies customized to the region's needs and realities and developed in Spanish or Portuguese are scarce.
At the same time, companies are looking for more down-to-earth, practical project management training instead of formal university-style courses, which are the norm in the region. The fast pace of the growth requires practical tools that can be put to immediate use.
Multilatinas traditionally face smaller revenue margins and have built their efficiencies in very rigid and frugal cost structures. The need for state-of-the-art project management is still not quite understood, though. CEOs and decision-makers have yet to understand the value project management gives to the business drivers.
The Latin American project management community has one of its biggest growth opportunities ever. But the challenges call for hard work, professional development, standardization, and stressing the importance and value of the project management profession in all of our communities. PM
Roberto Toledo, PMP, managing director of Alpha Consultoria, is a trainer and consultant who works across Latin America. He can be reached at [email protected].
PM NETWORK SEPTEMBER 2008 WWW.PMI.ORG