Latin America

Latin America

 

Bekaert in Latin America 

Combined sales:                                                   € 1645 million
Consolidated sales(*):                                            € 372 million
Capital expenditures
(PP&E):(*)                                                                    € 11 million
Total assets:(*)                                                          € 232 million
Employees:                                                                          7 633

(*) Consolidated entities

Steady growth

In general, the economic performance of the Latin American region was good in 2011. The overall GDP growth in the region was 4.5%, with Chile and Peru recording the strongest growth rates and Venezuela’s GDP turning positive again.
In Latin America, a well balanced mix of markets and products resulted in good performance for Bekaert throughout the entire region in 2011. Venezuelan markets in particular showed strong recovery after a period of energy and raw material restrictions, weak economic demand and heavily negative foreign exchange effects in 2010. Our business in the region achieved robust sales growth across all sectors. Sales and margins of the Brazilian joint ventures were adjusted downward to compensate for the effect of the strong local currency in competing with Asian imports.

Subsidiaries under the Bekaert Ideal Holding

Bekaert holds 80% of the shares in Ideal Alambrec (Ecuador), Vicson (Venezuela) and Proalco (Colombia).

Ecuador

The Ecuadorian economy grew by 6% in 2011, driven by the increased activity in construction and oil sectors.
The wire activities serving construction markets recorded robust growth in our subsidiary Ideal Alambrec. Fencing solutions for agriculture markets noted weaker market conditions. Overall, the domestic market demand performed solidly.  

Venezuela

GDP grew by almost 3% in Venezuela after two consecutive years of negative growth.

Bekaert’s subsidiary Vicson recorded exceptionally strong growth and results in most markets served, with the construction markets and industrial sectors accounting for the largest share. A steady supply of local wire rod could not always be ensured, but this did not result in activity and volume losses of the kind experienced in 2010.

Bekaert’s subsidiary Vicson recorded exceptionally strong growth and results in most markets served.


Colombia

GDP grew by almost 5% in 2011. Driving Colombia's economy was crude oil production as well as public works.
Proalco’s sales were slightly below 2010 due to a rather weak demand for products by agriculture markets and continued price pressure in a rather high competitive environment.

Peru - Chile - Brazil

Peru

The Peruvian economy continued to grow at a fast pace in 2011, as illustrated by a GDP growth of more than 6%.

Business was strong throughout the year, especially in the construction and industrial sectors. Margins were under pressure though, due to increased competition from imports as a result of the continued appreciation of Peru's currency, the sol.

Chile

GDP grew by approximately 6.5% in 2011 and ended the year as one of the most dynamic economies in Latin America. Sound economic policies, openness to trade and investment and a well-developed financial system have contributed to Chile’s strong economic performance.

The Chilean joint ventures noted robust demand in steel wires, mesh and ropes for construction, mining and industrial markets.

On 22 December 2011, Bekaert and its Chilean partners signed an agreement to restructure the shareholding of their joint venture operations in Chile, Peru and Canada. The deal was successfully closed on 12 March 2012. As a consequence, Bekaert becomes the principal shareholder (52%) in the partnership, and will consolidate the results of all respective entities as of 2012 in the Group’s financial statements.

Until year-end 2011, Bekaert accounted for all respective entities using the equity method. As of 2012, the financial records of the entities will be recognized in the consolidated statements.

Bekaert’s presence in Chile dates back to 1950 with a first investment in Inchalam and the start of a joint venture with the families Matetic and Conrads, now Bekaert’s partners for more than 60 years.

Brazil

GDP growth in Brazil was about 3% in 2011, or half of last year’s growth rate. The Brazilian government adopted tighter economic policies at the beginning of 2011 by holding back on public spending and by raising interest rates. While still strong, the Brazilian currency began to fluctuate in the last quarter of 2011 after a long period of sharp increase against the US dollar. Meanwhile, with the approach of the 2014 World Cup in several Brazilian cities and the 2016 Olympic Games in Rio de Janeiro, Brazil is in the midst of an investment boom.

Bekaert has been actively supporting a strong position in Brazil for many years. The company operates, in partnership with ArcelorMittal, 9 manufacturing units in 3 States and serves markets in the industrial, construction and infrastructure, energy and oil extraction, automotive, mining and agriculture sectors. 2011 was marked by a rather difficult economic climate. The strong real forced us to adjust prices downward to compete with cheap imports. This had its effect on the margins of the Brazilian activities. In order to recover profitability, a cost structure improvement project was installed including a thorough restructuring in all plants.

In doing so, Bekaert’s Brazilian operations aim at bridging a more difficult economic period and preparing for future growth.

A spectacular example of civil engineering is the 3 595 meter long Rio Negro bridge in Amazônia, the second largest river bridge in the world. It is tensioned by stay cable and prestressed strands from Bekaert’s joint venture plants.

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