Latin America

Latin America/Bekaert Ideal Holding

Latin America combined sales per quarter 2013 

Combined sales: € 1 690 million
Consolidated sales(*): € 812 million
Capital expenditures (PP&E)(*): € 29 million
Total assets(*): € 480 million
Employees: 7 700
(*) Consolidated entities

Continued consolidation in Latin America 

In Latin America, a well balanced mix of markets and products resulted in solid performance for the region in 2012. Peruvian and Venezuelan markets in particular showed robust growth, while the business environment in Colombia and Brazil continued to be highly competitive.

Early 2012 Bekaert and its Chilean partners announced the successful closing of their shareholding transaction by which Bekaert became the principal shareholder (52%) in the partnership with operations in Chile, Peru and Canada. As a consequence, Bekaert consolidates the results of all respective entities since the start of 2012 in the Group’s financial statements. In support of the growing importance of the region in the Bekaert Group’s strategy and results, Bekaert has established a regional management office in Bogotá, Colombia in 2012.

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 is characterized by steady GDP growth, mainly driven by the country’s strong oil extraction industry. Public spending continued to be high in 2012 with social and logistic investments including infrastructure and housing projects.

Bekaert’s subsidiary in Ecuador recorded stable sales volumes in 2012. After a difficult first half, sales picked up, especially in construction markets.

The Ideal Alambrec plant invested in cut & bend equipment to further broaden its product offering in the construction market.

Venezuela

Heavily driven by the oil sector, which accounts for 95 percent of exports, and stimulated through public investments preceding the presidential elections in October of 2012, Venezuela's economic growth ended above the regional average. Persisting economic imbalances and political risks associated with the country are elements of uncertainty in assessing future economic developments.

Bekaert’s subsidiary Vicson recorded exceptionally strong growth in most markets served. However, a lack of wire rod supplies led to activity losses and temporary production shutdowns in the last quarter of 2012. Bekaert ensured continuity of operations as much as possible, but carefully watches the evolutions in this business environment which is characterized by major currency-related uncertainties and a regulated but instable supply of raw materials.

Bekaert continues to pursue solutions to optimally cover the business continuity and currency risks, in full support of its customers and of its dedicated team of 682 employees in the country.

Colombia

The Colombian economy’s growth has slowed somewhat due to a demand decline in export markets and a delay in mining and energy investments.

Bekaert’ subsidiary, Proalco, saw its sales and results under pressure from continued weak demand in agriculture markets and the highly competitive and very fragmented business environment.

Peru - Chile - Brazil

Peru

The Peruvian economic growth outpaced the regional average with an annual GDP growth above 6% in 2012. Especially construction markets were very strong throughout the year, owing to the numerous mining projects taking place across the country. Several industrial sectors also rebounded after a slow start at the beginning of the year. 

Bekaert’s major production facility in Peru, Prodac, achieved a strong performance in 2012. In order to support further growth opportunities and continued improvement of the entity’s operational excellence, Prodac invested in a new galvanizing plant which was inaugurated in December 2012. The 240 meters long, lead-free galvanization line was developed by Bekaert Engineering in cooperation with Bekaert’s applied technology teams and extends Prodac’s production capacity materially.

Chile

The Chilean economy remained among the strongest in the region. The main drivers were continued investments in mining driven by the high price for copper, the country’s main export product, and strong retail sales growth. Industrial production, however, grew modestly in 2012.

Bekaert continued its consolidation in the region by taking a majority share in the Chilean partnership which stands since more than 60 years.

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, Bekaert’s partners for more than 60 years now.


Bekaert’s activities in Chile reported higher sales volumes and revenue in 2012 compared with 2011, but saw increased pressure on margins as a result of strong competition from imports and unfavorable raw materials price trends.

Brazil

The global economic downturn and a reduced competitive position of the local industries on both domestic and export markets, have, since 2011, interrupted the long growth cycle that Brazil had experienced since 2004. Brazil’s GDP growth further declined in 2012, despite monetary easing and tax breaks granted to a number of industries and consumers. 

Bekaert has been actively supporting a strong position in Brazil for many years. The company operates, in partnership with ArcelorMittal, 9 manufacturing units in three States and serves customers in a very wide range of sectors. Actions were taken in the past years to gradually recover the profitability impact of aggressive competition with cheap imports. These came in as a result of the ever increasing Brazilian Real throughout 2010-2011.

The Federal Government of Brazil has acknowledged the need to support the competitiveness of its domestic industry. The effects of the gradually being implemented “Greater Brazil Plan” started to show in the second half of 2012, with export incentives and other favorable fiscal measures. Further effects are expected as a result of the recently announced energy tariff reductions. The Bekaert joint ventures welcome these measures in support of more equal competition with imports.

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