Source: http://worldcityweb.com/home/MIA/publications/magazine/53/878/

(3) "Who's Here" - South Florida's Global Companies: Part 2

by WC

Multinational Muscle”

In part two of this two-part series, we take a closer look at Regional HQ companies and map out the 1, 183 multinationals companies in South Florida

In the January issue of WORLDCITY, we published the first half of our multinational directory. We also revealed a figure for the combined annual revenue managed by the offices multinational companies located in South Florida. That figure, while it incorporates revenue data from only 728 of the nearly 1,200 multinational companies in our directory, is impressive nevertheless $203 billion. It reflects the considerable economic muscle and decision-making power of the South Florida international business community.

This issue includes part II of the directory, some 600 multinational companies from the J-Z end of the alphabet, a list that includes plenty of global brands. And we take a closer look at firms that have chosen South Florida as their base of regional operations. These companies account for the largest contingent of companies in our multinational community, with 420, or 36 percent of the total.

First, lets define what we mean by 20 WORLDCITY FEBRUARY 2008 regional. To most people, the default definition of regional operations is Latin America and the Caribbean, or some subset thereof.

Not all the Latin American headquarters located in South Florida manage the entire region from here. Some, like VW Latin America, manage only the small and medium-sized markets of Latin America (Colombia, Peru, Venezuela, etc), while the larger markets of Brazil, Argentina and Mexico are managed from offices in each of those countries. Other companies, such as the Swiss executive search firm Egon Zehnder, handle a specific slice of the region, in EZs case, Central America and the Caribbean.

But for some companies, the term regional has more far-reaching implications. From its Miramar office, for example, General Motors oversees the carmakers operations not only in Latin America, but also in the Middle East and Africa, a territory that last year generated nearly $15 billion in sales. There are plenty of other examples. General Mills oversees operations in Latin America and South Africa from its Miami office.

Still, the majority of regional headquarters located in South Florida such as Kraft, MasterCard, Microsoft, Nokia, Nortel, SAP and Unisys, all of which are listed in the pages that follow manage their Latin America and Caribbean operations from here.

By taking a sample of more than 60 companies that have similar geographical responsibilities for all Latin American and Caribbean markets, we find that the South Florida operations account, on average, for approximately 5 percent of the companies global business. This provides a useful
benchmark when trying to measure the importance of South Florida as an international business hub, as well as the impact of attracting new multinational operations to the area.

As you can see in this table, however, the relative significance of the Latin American operation varies significantly from one company to the next. For Intelsat, the largest global satellite communications operator, for example, Latin America represents nearly 20 percent of the companys total worldwide sales. This is due, in large part, to Intelsats acquisition in 2005 of PanAmSat. Other companies with large Latin American operations, including IT giant Unisys, which has its regional headquarters in Boca Raton, have a long history in region.

Others, such as Germanys SAP and MasterCard, which both have significant Latin American operations, have been enjoying rapid growth across the region, especially in the last five years, which have been characterized by solid economic growth in most markets, as well as the appreciation of several of the regions currencies.

At the lower end of the scale are a number of information technology firms, such as Microsoft and Symantec. This is not surprising, as investment in IT and technology in general in Latin America has traditionally been lower than in other parts of the world. For global IT firms, a general rule of thumb is that Latin American sales represent around 2.0 percent of global sales. There are exceptions to that rule, however. For the German enterprise software giant SAP, which has a dominant market share among medium and large-size firms across Latin America, the region accounts for 8.0 percent of global sales. Also at the lower end of the scale are companies that are new to Latin America, such as Hewitt Associates and Tuthill Corporation, two Chicago-based companies. Tuthill, which manufactures pumps, blowers, cables and other products to a variety of industries, first ventured into Latin America nine years ago. While, Latin America only accounts for 3 percent of total sales worldwide, it is the companys fastest growing and most profitable market.

HR consulting firm Hewitt is also a relative newcomer, having established their regional office in Miami only five years ago. Latin America currently accounts for less than 1 percent of global revenue.

Whos Where

So where are the multinational companies located in South Florida? Given the fact that the majority of multinational companies here manage territories that stretch well beyond Florida, most of the top executives at these companies spend a great deal of time traveling, often more than 50 percent of the time. It is no wonder then, that majority of companies have located their offices close to Miami International Airport.

As you can see from the table on the following page, the highest concentrations of multinational offices are in Brickell/Downtown Miami (33131), in Doral, south and west of the airport (33126) and in Coral Gables (33134). Altogether, there are close to 900 multinational companies located in Miami-Dade County, about 250 in Broward County and about 75 in Palm Beach County.

Editors Notes:

Since we published our January issue with listings and revenues figures for about 600 multinational companies in the first half of the alphabet, we have continued our research, adding new companies to the list and updating the revenue figures. In most cases, we adjusted revenues upward. For example, we listed the annual revenue managed by the Miami office of the global real estate firm Cushman & Wakefield at $5 million. That figure, from Hoovers, was way off the mark. We have revised our estimate to $38 million. Similarly, in the case of the website design firm Hostopia.com, we revised their revenue figure from $9 million to $30 million, after we discovered that it manages its global operations from its Fort Lauderdale office.

Complete and up-to-date information on South Floridas multinational companies is included in our Whos Here database. Online subscriptions are available at www.worldcityweb.com. A complete copy of our South Florida Global Economic Impact Study can be also be downloaded free of charge from the home page of the WORLDCITY website.