Francisco Corredor

Universidad del Rosario

Current Affairs in Latam
Multilatinas

1. Explain the meaning of multilatina.

Multilatinas are large companies that are born in Latin America and whose capital originates
in one of the region's countries and exercise their economic activity prioritizing outward
investment over reinvestment in the country of origin.

2. What are the benefits that the multilatinas are bringing to latinamerica
Multilatinas have become "anchor companies", facilitating integration processes in the region
thanks to their ability to read the language of the region. Knowing the Latin American
idiosyncrasy can be an advantage over other multinationals when it comes to creating
networks.

Aspects such as the country and the sector of the economy. With regard to the extractive
sector, which has a significant presence among the multi-Latinas, he considers that the
participation of small and medium enterprises "is very limited, if not non-existent", so it would
be "difficult to venture a growth leverage" of these thanks to the large regional companies.

3. Explain the performance and characteristics of multilatinas in the region

From 2008 to 2016, multi-Latinas registered an annual revenue growth of 5.2%, nearly three
times more than the average of all large Latin American companies. The average job
creation of these companies, 2.6% between 2013 and 2016, also exceeded the regional
average of 0.3%, according to the study.

The growth of these multilatinas, particularly those in services, which increased 39% from
the BCG list in 2009, is related to a middle class that has also been growing in Latin
America. Multilatinas are at the forefront when it comes to creating new value in services,
responding to the demands of a growing middle class, reaching out to borderless
communities of connected customers.

4. Explain the five factors that have enabled the multilatinas performance

Multilatinas have become strong by dominating local markets, with an average market share
in their home countries of 71% and competing against global multinationals.

According to information from the IDB (Inter-American Development Bank), 56% of the top
500 Multilatinas have privileged access to natural resources. Of this 56%, 22% have
activities related to extraction (mining, gas, oil...) and 34% to manufacturing industry closely
linked to natural resources (agro-food, steel...).

Many of these companies have their origin in state enterprises that have been privatized,
that have developed and that perfectly dominate the sectors in which they operate.
Attracting and retaining the best talent

Both multi-Latinas and global Latinas (multinationals originating in Latin America, with the
characteristics of any other global multinational), seek to attract and retain the best talent.

The best talent not only seeks the best revenues, but also companies with best practices in
corporate governance and personal and organizational development. The best talent knows
the importance of these best practices.

Multilatinas should not be left behind in attracting and developing the best talent; at a
regional level, investment in talent is seen as a priority in the design of corporate strategy,
but it ends up being postponed in the face of other needs that arise from time to time in
companies.

Access to the capital market

Access to the global capital market is more restricted for multi-Latinas, both because of their
geographical limitations and because of the structure of the company itself. We are talking
about family businesses, with governments and corporate policies (such as diversity
policies) that are not very professional. These aspects cause less interest than other
multinationals when it comes to investment.