São Paulo – Tunisia, Morocco, Cape Verde and Ghana are countries in which Brazilian companies with foreign operations expanded their businesses in 2012, according to the Ranking das Multinacionais Brasileiras 2013 (Ranking of Brazilian Multinational Corporations 2013), released this Wednesday (28th), in São Paulo, by the business school of Fundação Dom Cabral (FDC). The 8th edition of the survey also shows that for the fourth straight year, meat packing company JBS is the most international Brazilian company, out of 63 enterprises polled.
The study shows that last year, the companies polled have exited Bahrain, Norway, and Curaçao, and this year they plan on entering markets in South America, Canada, Southeast Asia, China and Russia. The study does not disclose which enterprises expanded into Tunisia, Morocco, Cape Verde and Ghana in 2012, but the international business coordinator at FDC, Serban Cretoiu, said the increase in diplomatic ties between Brazil and African countries may have been a factor.
“Brazil enjoys a very positive image abroad, particularly in Africa and the Middle East, because Brazil does not get involved in domestic issues and conflicts. In Africa, the technical cooperation implemented over the past ten years has promoted the image of Brazil, and even opened doors in trade,” said Cretoiu, noting that cultural proximity is another factor that brings the countries together.
According to the survey, 67.39% of the companies polled plan on expanding their operations in countries they are active in, and 42.55% plan on entering new markets this year.
According to the survey coordinator, Vanessa Nogueira, approximately 200 companies were contacted during the ranking’s compilation. Of the 63 businesses that took the poll, 47 are Brazilian multinational corporations with representations abroad, and 16 are franchise-based companies.
Largest
The most international Brazilian multinational company is the meat packing company JBS, with an internationalization rate of 58.9%. The second in the ranking is steel company Gerdau (54.2%), followed by Stefanini (information technology), Magnesita (refracting materials and industrial mining), Marfrig (meat), Ibope (research), Odebrecht (civil construction), Sabó (auto parts) and Minerva Foods (meat). Regarding franchises, Showcolate (sweets) is the most international, followed by Linkwell (graphic design) and Localiza (car rental).
The study also shows Brazilian companies tend to go international in the next few years. In 2010, the rate of transnationality was 16%, then 17% in 2011 and 18% in 2012. Profit margins abroad are lower than domestic ones, but they are growing. In 2010, the domestic profit margin was 15.5%, as against 11.82% in foreign countries. In 2012, the domestic margin was 13.85%, while the foreign margin was 13.75%.
The FDC’s calculations for determining the rate of internationalization of companies followed the method adopted by the United Nations Conference on Trade and Development (Unctad). As per the method, companies’ assets, income, and number of employees abroad are divded by the same data in Brazil to obtain the rate of internationalization. The higher the index, the more international a company is.
The study also features a ranking of companies based on the number of countries they operate in. The ranking is topped by mining company Vale, which is active in 31 countries. South America is the leading target of international companies: 77.78% of them are active in the region; 69.4% are in North America; 53.97% are in Europe; 41.27% are in Asia; 33.33% are in Central America and the Caribbean; 30.16% are in Africa; 23.81% are in the Middle East; and 11.11% are in Oceania.
Foreign policy
This year’s edition of the ranking also covered the effects of Brazilian foreign policy on companies’ performances. Most companies said that lines of credit for funding foreign projects, negotiation of customs barriers reduction, and promoting Brazil overseas are the most important factors in the internationalization process.
On the other hand, obtaining a permanent seat at the United Nations Security Council, or serving as an international conflict mediator, which are actions deemed relevant to Brazil’s foreign policy, do not affect the internationalization process of Brazilian companies, according to the poll.
*Translated by Gabriel Pomerancblum
