MercoPress. South Atlantic News Agency

Venezuelan billionaire teams up with Chinese banks to invest in Latam

Gustavo Cisneros and daughter Adriana, owners of an empire worth 2.4 billion dollars

Venezuelan billionaire Gustavo Cisneros is setting up joint ventures with Chinese banks to carry out investment in Latin American commodities industries.

The chairman of Cisneros Group of Companies, who is relinquishing operations of the firm to his youngest daughter Adriana, said he aims to push through projects delayed by state inefficiencies through partnerships in energy, agriculture and metals. Deals may take place in countries including Brazil, Colombia, Mexico and Panama, Cisneros said.

“You’ll probably see in the next year or two a lot of Cisneros China or China Cisneros in Latin America and it’s going to be whatever comes, whether it’s oil, gold or big cattle operations,” Cisneros, 66, said in an interview at Bloomberg’s headquarters in New York. “They understand they don’t have the knowledge to run these businesses. They need results now and we can provide results.”

Cisneros, who first travelled to China about 30 years ago with billionaire philanthropist David Rockefeller, is expanding into deals with the Chinese after shedding beverage and consumer-goods companies and America Online Latin America since the early 1990s to focus on his Venevision television network. Banks in China, the third-largest source of foreign direct investment in Latin America, lent Brazil’s state-run Petrobras 10 billion US dollars in 2009 in exchange for oil supplies, among credit provided to secure resources from the region.

Since 2007, government-owned China Development Bank has lent more than 68 billion USD to Venezuela, Turkmenistan, Ecuador, Brazil and Russia in exchange for crude and gas shipments.

China Investment Corp., the country’s $300 billion sovereign wealth fund, is targeting mining, real estate and infrastructure investments in the Americas, Felix Chee, the fund’s representative in Canada, said at a CFA Society Conference in Toronto. The fund has three “active deals” under consideration, he said.

Export-Import Bank of China Ltd., the nation’s policy lender specializing in cross-border trade and investment, and Agricultural Bank of China Ltd. agreed last year to tie up with Inter-American Development Bank to expand their trade finance activities in Latin America.

Industrial and Commercial Bank of China Ltd., the nation’s largest commercial lender, said in April it intends to set up a full-service bank in Sao Paulo and become the second Chinese lender after Bank of China Ltd. to have a branch in Brazil.

“The fact is, China needs to do heavy investments,” said Cisneros, who has homes in New York, Miami, the Dominican Republic and Spain. “If we put together our talents for new businesses in Brazil, Colombia, Mexico -- something that has an interest for China -- we can match those interests and do very well.”

China accounts for 9% of foreign direct investment in Latin America, trailing only the U.S. and Holland, according to the United Nations’ Economic Commission for Latin America and the Caribbean.

Cisneros also is operating in the world’s fastest-growing major economy in a partnership with China Central Television to broadcast original television content and to provide expertise in producing local programs.

The Cisneros Group, which took in $1.5 billion of revenue in 2010 and has its headquarters in Miami, also is expanding businesses aimed at the U.S. Hispanic market as well as in nations across Africa and the Middle East. Telenovelas, a type of Spanish-language soap opera, produced by Cisneros will begin to air in Iran and Afghanistan this year, said Adriana Cisneros de Griffin, who sat next to her father during the hour-long interview.

Cisneros Group provides Univision, the leading Spanish- language broadcaster in the US, with 40% of its content, and the airing of the Eva Luna telenovela in 2010 was more successful than the company anticipated, she said.

“There were more people seeing TV in Spanish, our soap operas in the U.S., at moments than seeing NBC, CBS or Fox,” said the 31-year-old vice chairwoman and director of strategy. “With Univision we designed an interactive strategy that resulted in our last show having 9.7 million viewers; we thought our audience was 7 million.”

Cisneros’ youngest daughter, who spent hours as a child in Venevision television studios and travelled with her father to bring Direct TV to Latin America when she was 13, handles the company’s Brazilian business while her father focuses on China and long-term strategy. A graduate of Columbia University and New York University who resides in Manhattan, the younger Cisneros is creating interactive online programs and working with Sprint Nextel Corp on mobile programming.

“Media has become a really interesting part of the market to be in, everything happening with digital interaction is fascinating, everyone trying to make a business model around all of that” said Adriana. “But it’s fast-changing and we keep changing our strategy for interactive and digital on a monthly basis and I think we have to because that’s the new nature of the beast. What we’ll be able to do with our content in the coming years is amazing.”
 

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