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Billionaire Cisneros to Team With Chinese Banks in Latin America Oil, Gold
By Daniel Cancel - Jun 17, 2011 3:09 PM GMT+1000
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http://www.bloomberg.com/news/2011-06-17/billionaire-cisneros-to-team-with-china-banks-in-latin-america.html
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Venezuelan billionaire Gustavo Cisneros is setting up joint ventures
with Chinese banks to carry out investment in Latin American commodities
industries.
The chairman of Cisneros Group of Companies <http://www.cisneros.com/>,
who is relinquishing operations of the firm to his youngest daughter
Adriana, said he aims to push through projects delayed by state
inefficiencies through partnerships in energy, agriculture and metals.
Deals may take place in countries including Brazil
<http://topics.bloomberg.com/brazil/>, Colombia
<http://topics.bloomberg.com/colombia/>, Mexico
<http://topics.bloomberg.com/mexico/> and Panama, Cisneros said.
“You’ll probably see in the next year or two a lot of Cisneros China or
China Cisneros in Latin America
<http://topics.bloomberg.com/latin-america/> and it’s going to be
whatever comes, whether it’s oil, gold or big cattle operations,”
Cisneros, 66, said yesterday in an interview at Bloomberg’s headquarters
in New York <http://topics.bloomberg.com/new-york/>. “They understand
they don’t have the knowledge to run these businesses. They need results
now and we can provide results.”
Cisneros, who first traveled to China about 30 years ago with
billionaire philanthropist David Rockefeller, is expanding into deals
with the Chinese after shedding beverage and consumer-goods companies
and America Online Latin America since the early 1990s to focus on his
Venevision <http://www.venevision.net/> television network. Banks in
China, the third-largest source of foreign direct investment in Latin
America, lent Brazil’s state-run Petroleo Brasileiro SA (PETR4)
<http://www.bloomberg.com/apps/quote?ticker=PETR4:BZ> $10 billion in
2009 in exchange for oil supplies, among credit provided to secure
resources from the region.
China Development Bank
<http://topics.bloomberg.com/china-development-bank/>
Since 2007, government-owned China Development Bank has lent more than
$68 billion to Venezuela <http://topics.bloomberg.com/venezuela/>,
Turkmenistan, Ecuador, Brazil and Russia
<http://topics.bloomberg.com/russia/> in exchange for crude and gas
shipments. Liu Kegu, a bank adviser, said in a Jan. 15 interview that
the lender would extend credit to Chile, Peru and some African nations.
Export-Import Bank of China Ltd. <http://www.eximbank.gov.cn/>, the
nation’s policy lender specializing in cross-border trade and
investment, and Agricultural Bank of China Ltd. last year agreed
<http://www.iadb.org/en/news/news-releases/2010-03-23/idb-strengthens-its-partnership-with-china,6853.html>
to tie up with Inter-American Development Bank to expand their trade
finance activities in Latin America.
Industrial & Commercial Bank of China (1398)
<http://www.bloomberg.com/apps/quote?ticker=1398:HK> Ltd., the nation’s
largest commercial lender, said in April it intends to set up a
full-service bank in Sao Paulo and become the second Chinese lender
after Bank of China Ltd. to have a branch in Brazil.
Beijing-based spokespeople at China Development Bank, Export-Import Bank
and Bank of China didn’t answer calls to their offices, while ICBC’s
Beijing-based press officer Wang Zhenning declined to comment.
Needs ‘Heavy Investments’
“The fact is, China needs to do heavy investments,” said Cisneros, who
has homes in New York, Miami, the Dominican Republic
<http://topics.bloomberg.com/dominican-republic/> and Spain
<http://topics.bloomberg.com/spain/>. “If we put together our talents
for new businesses in Brazil, Colombia, Mexico -- something that has an
interest for China <http://topics.bloomberg.com/china/> -- we can match
those interests and do very well.”
China accounts for 9 percent of foreign direct investment in Latin
America, trailing only the U.S. and Holland, according to the United
Nations <http://topics.bloomberg.com/united-nations/>’ Economic
Commission for Latin America and the Caribbean.
Cisneros also is operating in the world’s fastest-growing major economy
in a partnership with China Central Television
<http://english.cntv.cn/01/index.shtml> to broadcast original television
content and to provide expertise in producing local programs.
Hispanic Market
The Cisneros Group, which took in $1.5 billion of revenue in 2010 and
has its headquarters in Miami, also is expanding businesses aimed at the
U.S. Hispanic market as well as in nations across Africa
<http://topics.bloomberg.com/africa/> and the Middle East
<http://topics.bloomberg.com/middle-east/>. Telenovelas, a type of
Spanish-language soap opera, produced by Cisneros will begin to air in
Iran and Afghanistan this year, said Adriana Cisneros de Griffin, who
sat next to her father during the hour-long interview.
Cisneros Group provides Univision, the leading Spanish- language
broadcaster in the U.S., with 40 percent of its content, and the airing
of the Eva Luna telenovela in 2010 was more successful than the company
anticipated, she said.
“There were more people seeing TV in Spanish, our soap operas in the
U.S., at moments than seeing NBC, CBS or Fox,” said the 31-year-old vice
chairwoman and director of strategy. “With Univision we designed an
interactive strategy that resulted in our last show having 9.7 million
viewers; we thought our audience was 7 million.”
Brazil Business
Cisneros’ youngest daughter, who spent hours as a child in Venevision
television studios and traveled with her father to bring DirecTV (DTV)
<http://www.bloomberg.com/apps/quote?ticker=DTV:US> to Latin America
when she was 13, handles the company’s Brazilian business while her
father focuses on China and long-term strategy. A graduate of Columbia
University and New York University who resides in Manhattan
<http://topics.bloomberg.com/manhattan/>, the younger Cisneros is
creating interactive online programs and working with Sprint Nextel
Corp. (S) <http://www.bloomberg.com/apps/quote?ticker=S:US> on mobile
programming.
“Media has become a really interesting part of the market to be in,
everything happening with digital interaction is fascinating, everyone
trying to make a business model around all of that,” she said. “But it’s
fast-changing and we keep changing our strategy for interactive and
digital on a monthly basis and I think we have to because that’s the new
nature of the beast. What we’ll be able to do with our content in the
coming years is amazing.”
Gustavo Cisneros inherited the company from his father in 1970 and a
fortune built from expanding Venevision and representing U.S. brands
such as Studebaker, PepsiCo and Burger King in Venezuela. Cisneros and
his family are worth $4.2 billion, according to Forbes magazine. The
58-year-old company employs about 8,000 workers.
Coca-Cola
The group was one of the largest bottlers of Purchase, New York-based
PepsiCo Inc. products outside the U.S. until the 1990s, when Cisneros
and his brother Ricardo decided to switch to Atlanta-based Coca-Cola Co.
(KO) <http://www.bloomberg.com/apps/quote?ticker=KO:US> They sold the
carbonated beverage business a year later.
In Venezuela, Cisneros Group has the largest privately owned television
network, a local baseball team and through Cerveceria Regional SA
continues to compete with the largest brewer, Caracas-based Empresas
Polar SA <http://www.empresas-polar.com/>, for market share. Polar now
has a joint venture with PepsiCo.
Cisneros said he chose his youngest daughter to succeed him because she
showed an interest in media and a passion for trying to run the
business. The elder daughter, Carolina, has dedicated herself to her
five children, while his son Guillermo handles family finances, Cisneros
said.
Sense of Duty
Adriana said she always knew she wanted to be in media, “but I thought I
would come work for my family when I was 40 and not 25. When I saw my
brother didn’t want to take the position that he was groomed for, out of
sense of duty I said let’s do it sooner than later.”
Both are optimistic about the outlook for their business in Latin America.
“We have the best decade of Latin America ahead of us, of course this or
that happening, but the numbers objectively,” Cisneros said before being
interrupted by his daughter.
“It’s our decade,” she said.
“It’s going to be fantastic,” Cisneros continued. “Any way you look at
it, politically, economically, culturally, Latin America has come into
its own.”
To contact the reporter on this story: Daniel Cancel in New York at
dcan...@bloomberg.net <mailto:dcan...@bloomberg.net>.
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---------------------
Michael A. Lebowitz
Professor Emeritus
Economics Department
Simon Fraser University
8888 University Drive
Burnaby, B.C., Canada V5A 1S6
Home: Phone 604-689-9510
Cell: 778-230-6137
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