MercoPress. South Atlantic News Agency

Asian and Latinamerican corporations buying Argentine assets

The few Argentine corporations with muscle have been slow in expanding internationally

In the nineties most Argentine companies were purchased by companies with headquarters in New York or Madrid but in this decade they come from less glamorous countries: China, India, Brazil, Russia and unsuspected places such as Mexico, Peru and Colombia.

Only five months ago the Chinese government corporation Cnooc purchased half of Bridas, one of Argentina’s main private hydrocarbons company and thus becoming a relevant player in Argentina’s energy development.

According to a report from Argentina’s consultants abeceb.com, Chinese and Indian companies have already invested over 3.5 billion US dollars in the country confirming what seems to be the “new world economic order” with Asian and Latinamerican companies playing relevant roles when not so long ago it was almost the private turf of US and European corporations.

“The need for these emerging powers to ensure the future provision of commodities and basic inputs to continue to support industrial development as well as feeding their growing populations is pushing them to invest in strategic sectors such as mining, oil, gas, steel and foodstuff”, says Dante Sica abeceb.com director.

At local level businessmen and analysts acknowledge that beyond cultural differences with Asia, Chinese and Indian businessmen have a certain edge when operating in emerging markets.

“Emerging markets’ entrepreneurs share a greater capacity to adapt to local conditions than their peers from Europe or the US. Since they emerged on their own, with no government support and under tougher competition conditions, they are naturally forced to be more ingenious and creative to survive”, explains Alfredo Paredes, from Capitol City Latinamerica consultants.

Such a case is the Peruvian firm Alicopr that in the last two years has managed to corner and take control of several brands with a long tradition in the Argentine market.

“Our great advantage over the US or European businessman is that we know the turf. For any Latinamerican the problems of the Argentine economy are not new, and beyond the fact that we know they are not models to be followed, we nevertheless do not fear to invest in such a business scenario. We know the idiosyncrasy of South Americans”, said Leslie Pierce from Alicorp.

The report however points out that in spite of the new tendency few, very few Argentine corporations have taken advantage of that know-how or/and capacity to expand internationally. The few are Techint, Arcor, Bagó, Roemmers.

But the Argentines argue there are good reasons to explain the poor performance and put the blame on the lack of financing. “When Brazilians come and buy Quickfood they do so with funds from Bndes, (Brazil’s development bank) and this is a historic deficit suffered by the Argentine business community” says Marcelo Elizondo, the former CEO of the Exportar Foundation.