Latin America as an investment alternative to Asia
European companies with a wish to invest in and win markets have alternatives to India and China, one of them being Latin America
The economy is growing, the market is large and the area borders on the world's largest economy - USA. Latin America as an investment opportunity has plenty of advantages. And Latin America and Europe have significant common characteristics in terms of language and culture.
Who can keep up with Asia?
India and China is setting the investment agenda to a degree, and when it comes to growth, no other economy in the world can keep up with these two large and populous countries that just power ahead.
An inviting alternative is Latin America, but what are the challenges when a European company wants to make investments in the area? And how do the European companies, which are already present in the area, act? And why have they decided to set up a business right here?
The book European & Latin American Caribbean Strategic Partnerships: Unleashing the Potential has the answers. Two of the editors of the book are from CBS; Maribel Blasco and Jacobo Ramirez. Ramirez knows what makes this area attractive to European investors.
- Latin America and Europe have numerous common features. We share the same history, many of us speak the same language and we have a lot of common values. In certain areas, all of this means that it is more easy for Europeans to invest in Latin America than in Asia, says Jacobo Ramirez.
Toy expansion in Mexico
The short distance to the lucrative market in USA and the North American Free Trade Agreement (NAFTA) between Mexico, USA and Canada are playing an important part when the companies decide where they should place their investments.
For instance, the company Lego has chosen to set up a business in Mexico.
The purpose of the Mexican Lego-factory was to provide the American consumers with Danish toys, but the plans have been changed. Lego are so enthusiastic about the production possibilities offered by the region, that the factory in Monterrey will be delivering toys to large parts of the world.
- At first, it was the short distance to USA that made Mexico attractive for the European companies. But now the companies have discovered other qualities, one of which is productivity. Some of the Mexican factories are simply some of the most productive in the world, explains Jacobo Ramirez.
Therefore, Lego is expanding their involvement in the country. They are hard at work building a factory, which will become their largest production facility in the world. This means that the 2,000 employees will increase to 3,000 in 2015.
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