Expansion Beyond National Borders Often Means Miami Base
Written by Candi Calkins on June 29, 2000
By Candi Calkins
The Venezuelan conglomerate Cisneros Group’s selection of South Florida for its operating headquarters demonstrates a growing ongoing trend where Latin American firms expand beyond national borders.
"What happens is you find some corporations that have reached a certain level of sophistication and volume of operations," said Mario Sacasa, vice president of international business development for the Beacon Council. "Their next step is to go out and explore markets.
"The US market is very attractive to some companies from Latin America," Mr. Sacasa said. "This is part of this globalization process that is going on that is basically erasing some boundaries and making the world very small in relative terms."
In March the Cisneros Group announced plans to run its worldwide operations from a Coral Gables office. A subsidiary, Cisneros Television Group, already was based in Miami Beach.
Mr. Sacasa said the Beacon Council is working with Cisneros on relocation of some of the company’s New York-based operations. The Cisneros Group also is a partner with America Online on AOL Latin America.
"We anticipate that they are going to have, once they are ready to be announced, a significant economic impact in our area," Mr. Sacasa said.
He said the Beacon Council is also working with other companies from Venezuela, Colombia, Argentina and Brazil interested in opening Miami operations.
He said Beacon Council representatives will attend the governor’s trade mission to Brazil in July, hoping to meet with prospective Brazilian firms.
In the past three years, Latin American firms moving to Miami included a Peruvian transportation company, Bus 1, that located on LeJeune Road.
Hydro-Grubert USA, an Argentine distributor of hydraulic lift equipment, moved to Miami-Dade County’s northwest sector in 1998. Miami Depot, manufacturer of polishing compounds, moved to the Kendall area from Venezuela. Save the Children Foundation moved to the Miami Free Zone from El Salvador.
"More and more, yes, I think there will be a trend of companies setting up operations at different levels," Mr. Sacasa said. "Some are just a few people. They coordinate all their purchases and all their financial arrangements from here. Others are more aggressive and sophisticated."
Some companies, he said, come to Miami to set up distribution channels or manufacturing operations.
"I don’t see this as a wave but as a medium- to long-term trend because of the advantages that Miami offers multinational regional companies in terms of the access to both markets, North America and South America," said Manuel Lasaga, president of Strat Info.
"As some of the regional companies begin to expand," Mr. Sacasa said, "Miami can be viewed more as a neutral location in terms of a regional headquarters rather than establishing the regional offices in one of the countries themselves."
Miami’s advantages as a regional center include transportation through both airport and seaport connections, telecommunications and international financial infrastructure, he said.
"I think that increasingly as you have other groups in Latin America beginning to take on a hemispheric view in terms of their marketplace, I think you’re going to see more of them setting up shop in Miami," Mr. Lasaga said. "Setting up a regional headquarters here, basically they are establishing themselves in the biggest market that they are likely to have. This gives them a definite advantage in terms of distribution of their products as well as being able to oversee the other markets in Latin America.
"It’s hard for them to go beyond their borders residing mainly in their own economy. Establishing a major regional presence in a place like Miami gives them a better view of opportunities in other markets," he said.
"There are," said Manuel Mencia, senior vice president of international trade for Enterprise Florida, "some significant companies from Latin America that either made a decision or are seriously considering establishing an operation here.
"Some are sales, logistics and distribution operations. At least one is a purchasing operation. I think this has been a growing trend through the years."
"There’s a significant hub of Latin American multinationals that have some sort of presence here, although oftentimes their presence is very discreet," Mr. Mencia said.
Because governments and the press in Latin America tend to have a negative view of companies leaving the country and taking away jobs, Mr. Mencia said Latin American companies tend to avoid publicity when making relocation decisions.
"In the past it has been frowned upon, so companies tend to be subtle and oftentimes establish communication through a third party," he said.
Because Latin American companies are less likely to seek assistance from government agencies such as Enterprise Florida or the Beacon Council, "it’s important to go to them, to go knocking on doors."
Despite the growing trend, a corporate move by a company such as the Cisneros Group is still a unique event, Mr. Mencia said. Even in the US domestic market, he said, corporations rarely move their corporate headquarters from one state to another.
He said it’s more common to see North American companies opening Latin American headquarters or marketing and logistics operations in Miami.
"It’s very rare," Mr. Mencia said, "to see one company pick up and move from one country to another."