Managing the managing of the business
SÃO PAULO — The global economy may be grinding to a halt, but Odebrecht, one of Brazil’s largest conglomerates, is still experiencing some overheating. Business is brisk from infrastructure to petrochemical plants. And then there is new business, from oil rigs to soccer stadiums ahead of the 2014 World Cup.
Marcelo Odebrecht, the 42-year-old CEO of the conglomerate, has a full plate before him. He hires 3,000 employees every month and still finds it hard to keep up with demand. Last year Odebrecht registered sales of $32.3 billion (net earnings of $1.7 billion), and double-digit growth is on the horizon again this year.
Yet, Marcelo Odebrecht, who was promoted to the leadership of the holding company in 2008 after running the engineering company Construtora Norberto Odebrecht (CNO) for six years, would rather adopt a low profile.
“I like to say that the CEO of Odebrecht is more like the Queen of England,” he tells Latin Trade during an interview on the 32nd floor of a modern business tower overlooking the Marginal Pinheiros in São Paulo. “My role is more related to the preservation of the culture of the group, and [to] make sure we have the right people in the right place.”
Odebrecht is now involved in ethanol biofuels and large defense contracts, such as a new shipyard for submarines near Rio de Janeiro, in partnership with France’s DCNS; but also in retailing activities in Angola, at the request of the government there.
“Diversification did not result from some strategic plan that was decided in some office in São Paulo,” Odebrecht says. “We are a very decentralized organization. Decisions are being taken by executives in every country.”
The company is increasingly investing directly in new projects. “In Peru, we have already invested more than $2 billion in public-private partnerships in various concessions in the past five years, as well as $1 billion in a road concession in Colombia, and more than $3 billion in a Braskem petrochemical plant in Mexico. In the U.S., we have become the leader in polypropylene following the acquisition of some of Dow’s assets [in August 2011],” Odebrecht says. “Our 30-year experience is enabling us to take advantage of the current situation to internationalize our business not only as a service provider, but also in our investment capacity.”
Odebrecht, which was founded by Marcelo’s grandfather Norberto in 1945 and later run by his father, Emilio, became one the first multilatinas to internationalize its operations in the late 1970s. It has a large experience in conflict-ridden countries, as it started to operate in civil-war-afflicted Angola, in southern Africa, in the mid-1980s. But in Libya, where the company is in charge of the construction of two new airport terminals and a ring-road stretch in the capital, Tripoli, it was taken by surprise. When civil war broke out earlier this year, Odebrecht had to launch a large logistics operation to repatriate 200 Brazilian workers.
“It was more a human drama rather than an economic one,” Odebrecht says, as Libya accounts for “less than 2 percent of sales of CNO.”
“Economic losses were not relevant,” he says.
But now, large infrastructure programs and oil and gas investment plans in Brazil have again captured Odebrecht’s attention. Its global business is being rebalanced. Brazil accounted for nearly 65 percent of the company’s gross sales last year. Engineering and infrastructure construction (which accounts for about a third of its business) is the most internationalized business, but Brazil already accounts for about 40 percent of gross sales in this segment (it used to be 30 percent a few years ago), and the share will tend to grow in the coming years.
Odebrecht won large infrastructure contracts that have been included in the government’s flagship growth acceleration program since 2007, such as the Santo Antonio dam on the Amazon River. Moreover, it also is currently responsible for the construction or modernization of four of the 12 soccer stadiums that will host the 2014 World Cup, including the legendary Maracanã in Rio.
But Marcelo Odebrecht sometimes finds it hard to deal with the passion that surrounds the soccer environment in Brazil. “I would not have imagined that this would give us so much headache,” he says in reference to the controversial $500 million stadium being built in São Paulo. Odebrecht also is in charge of the soccer stadiums in Recife and Salvador, in northeastern Brazil — which, incidentally, is where Odebrecht’s origins lie.
“I have always liked [soccer], but we cannot mix business with pleasure,” he says. “Building stadiums became a much greater challenge than we imagined. Dealing with such passion and the whole process to prepare the World Cup, the questioning … We still have a kind of culture of mistrust here in Brazil. Often you are guilty until proved innocent. Some people are more concerned about the cost, whether it is expensive, than the deadline — is it going to be ready on time?”
Indeed, it may be hard to get the ball rolling if stadiums are not available. And Marcelo Odebrecht knows that there will be no extra time to deliver.
Filed Under: BRAVO 2011
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