Some 77% of Spanish companies with a presence in Iberoamerica plan to increase their investments in the region by 2022, according to report by IE University, LLYC and Iberia
Fifty two percent of the companies will grow in the region organically and through acquisitions. Another 47% will do so only organically.
Latin America is consolidating its position as a destination for Spanish investment. That’s the main conclusion of the Report on Spanish Investment in Ibero-America, drawn up by IE University, LLYC and Iberia in collaboration with Casa de América for the 14th consecutive year.
“Seventy-seven percent of Spanish companies present in Ibero-America plan to increase their investments in the region during 2022. Among SMEs, the percentages are very similar, 79% increasing their investments in 2022, compared to 18% that will maintain them.”
Juan Carlos Martinez Lázaro, Director of the report
The report was presented at an event held in Madrid’s Casa de América, in a ceremony presided over by Juan Fernández Trigo, Spain’s Secretary of State for Ibero-America and the Caribbean and Spanish in the World, and Angel Alonso, Vice Dean of IE School of Global and Public Affairs at IE University. Also participating were José Antonio Llorente, founding partner and president of LLYC, Enrique Ojeda, the Director of Casa de América, María Jimena Durán, Senior Executive for Europe, Asia and Middle East Management at CAF, Development Bank of Latin America, and Víctor Moneo, Director of LATAM and Institutional Agreements.
The report notes that Spanish business leaders’s perceptions about the economic situation facing Ibero-American economies has declined in the case of some countries. Panama will be the country with the best economic situation in 2022, followed by Costa Rica, the Dominican Republic and Uruguay. The opinion of Colombia’s performance, which was the best in 2020, drops to fifth position, probably due to the uncertainties created by its upcoming elections. Mexico is once again the country where most Spanish companies plan to increase their investments during 2022, followed by Peru, Brazil, Chile.
José Antonio Llorente, Founding Partner and President of LLYC, points out: “The data provided by the report suggests optimism because, compared to the previous report, the percentage of companies planning to increase their investments in the region has increased by more than 10 points. However, the great challenge that remains is for Latin America to jump on the bandwagon of digitalization and artificial intelligence. It has the right conditions. Technology will be a catalyst for new opportunities for the region.”
Víctor Moneo added: “The decision of Spanish companies to invest in Latin America has always been influenced, as is to be expected, by historical and cultural ties that go far beyond sharing the same language. Many companies, like Iberia, have made Latin America our raison d’être. Despite 2021 being a turbulent year, we have operated at around 60% of our capacity compared to 2019 and, within our network, Latin America has been one of the markets that has recovered the fastest. This year, moreover, we are celebrating 76 years of flying to this region and we want to continue doing so for many more years to come.”
Spanish SMEs play an increasingly prominent role in Latin America
According to the Report on Spanish Investment in Ibero-America by IE University, LLYC and IBERIA, most new investments (52%) will be made by combining organic growth with acquisitions, compared to 47% that will be made solely on the basis of organic growth. A very similar percentage to that observed in SMEs: 50% compared to 49% among large companies.
The 2022 edition confirms the investment tendencies of Spanish SMEs to invest increasingly in Latin America. Some 43% of Spanish companies with a presence in Ibero-America expect their turnover in the region to exceed that of Spain within three years. Of these, 86% expect to increase their turnover in the region, surpassing other regions such as the USA and Canada (77%) and even the European Union (67%).