by Ana Diaz, Head of Latin America Global Commercial Banking (GCB), Bank of America Merrill Lynch
US middle market companies are eager to take advantage of growing opportunities in Latin America but need to prepare their expansion to the region carefully.
Middle market companies (typically companies having annual revenue below $2 bn a year), make up a huge part of the global economy. Given their size, they are typically more nimble than multinationals – and, globally, they have enjoyed rapid expansion in recent years. In Latin America, US middle market companies are becoming an increasingly important force in many countries as their economies open up.
While some middle market companies have put in place aggressive expansion plans to leverage the benefits of globalisation, expanding to Latin America represents an enormous challenge. For many, there is little knowledge of how countries within the region differ from one another, or from the US. To achieve their goals, companies need advice not just on treasury practicalities, but also on countries’ banking systems, the economy, political risk and even the cultural differences that affect how businesses operate.
Middle market companies tend to have different characteristics and attitudes to risk. Often they are less bureaucratic, more flexible in how they adapt to new situations and opportunities, and less set in their ways. Many such companies have proved themselves willing to change rapidly in order to capture growth opportunities in Latin America.