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Six Companies You've Never Heard Of That Are Taking On American Rivals

This article is more than 5 years old.

Remember when Dell and HP were the laptop leaders? Now it’s Lenovo. Made in China.

What about Jaguar and Land Rover? Remember when they were British brands? Now they are owned by India’s Tata Group. Mexico’s Grupo Bimbo owns the low-cost snack and bread aisle in your supermarket. Sara Lee es Mexicana ahora. 

There are dozens of major corporations around the world that none of us have heard of, but if they are not in our kitchen cupboard, then they are competing with old-school rivals in major markets around the world. By 2022, emerging market countries will account for over 80% of the global population, and 40% of global GDP in nominal U.S. dollar terms, according to the Economist Intelligence Unit (EIU), the business intel division of The Economist magazine. Their data indicates that real growth in consumer spending in developing countries will average 4.8% per year in 2018-2022, compared with 1.8% per year for advanced economies like the U.S.

Here’s a look at six companies from the biggest and most liquid emerging markets that the EIU thinks are ripe to take market share from global rivals. Some will challenge (or acquire) American companies, while others will play larger roles in Asian countries, a prized market for any multinational.

A new generation of local companies are forecast by the EIU to benefit from higher tariffs in the U.S. and China, or in Russia’s case—sanctions. These companies are determined not only to benefit from growth in their home markets but are also expanding internationally. The following names were chosen from roughly 1,500 emerging market companies covered by the EIU’s recently launched Competitor Intelligence service.

Os Brasileiros

Notre Dame Intermedica:

This Brazilian healthcare juggernaut acquired four hospital groups in the country in 2017. It captured the interest of American investment firm Bain Capital, and that capital will help Notre Dame expand into Peru and Chile next, though no date has been given for that. Since they issued shares on the Bovespa stock exchange in São Paulo back in May, their stock price has gone up 30.22%.

The Russkiyas

Kamaz:

The global commercial vehicle market is mainly dominated by Volvo Trucks and Scania, but Kamaz is targeting countries where the Europeans, in particular, are largely absent. In August 2018 they set up a subsidiary in Indonesia to import and sell trucks. They began selling in India last year and are opening markets in South Africa.

Kamaz has a stronghold in the Russian market for agricultural vehicles and is now seeking to replicate this success abroad, EIU analysts wrote. To keep up with its global competitors, the Russian company is investing in newer technology in automation and industrial robotics. Kamaz has also benefited locally by sanctions against Russian rival GAZ, which was sanctioned by the U.S. GAZ Group is owned by Oleg Deripaska. Kamaz shares are up 21% this year in rubles. The company is 49%-owned by state-controlled conglomerate Rostec.

Rosatom:

These guys are old-school, state-run nuclear power plants. Their biggest rivals are the Chinese and Westinghouse, though over the last couple of years it has mainly been the Chinese as Westinghouse has been dealing with its own bankruptcy.

Rosatom is building six facilities in Russia and 35 nuclear power plants overseas while competitors like France’s Orano and South Korea’s Korea Electric Power Corp are getting beat. Rosatom will install reactors in the Middle East and Asia, notably by tying up with state-owned companies in China and India—countries that will account for most of the global nuclear capacity expansion in 2018-2022. Westinghouse won’t get that market. The Russians won’t get all of it, though. The China National Nuclear Corp is breathing down their necks. Rosatom has so far partnered with CNNC to build nuclear plants, but this is a double-edged sword as Westinghouse has learned. CNNC is Rosatom’s biggest rival nowadays while historic U.S. electric power guys at Westinghouse will have to play catch up.

इंडिया

Oil and Natural Gas Corporation:

ONGC is one of India’s biggest energy companies, now investing worldwide in Brazil, Colombia, and Russia. Their gas output, according to the EIU, is set for a twofold increase by 2022. Their stock is down 6% this year. The market doesn’t seem as impressed with ONGC as are the people over at the EIU. The stock is up 0.5% over the last five years. But that may be because of a general lack of interest in emerging markets on the part of foreign investors. Everybody knows that the U.S. has been the place to be, and the market to beat since around 2009.

ONGC would be competing with U.S. firms for oil tenders in countries like Brazil and Colombia.

中国

JAC Motors:

JAC has started manufacturing many of its vehicles in countries such as Kazakhstan, Algeria, Vietnam and Paraguay both to cut down on raw material costs and to enter new markets. JAC plans to continue cutting costs by setting up factories in Mexico to export to countries in Latin America. Americans won’t allow Chinese automakers in Mexico to benefit from the new U.S. Mexico Canada Agreement, formerly known as NAFTA. In May 2018, JAC Motors announced China’s first EV joint venture with Germany’s Volkswagen to produce an electric sports utility vehicle.

JAC Motors may become a competitor to American, Japanese, European and South Korean producers. But its shares this year are in bear territory. The stock has been a dud all year for Chinese investors. It’s down over 34% on the Shenzhen Stock Exchange.

Mexico

Grupo Bimbo:

Entenmann's and Sara Lee are owned by the Mexicans.

Last year the Mexican bakery acquired East Balt Bakeries, a U.S.-based maker of muffins and tortillas with a presence in 11 countries. They also bought Mankattan, a Chinese bakery. (No, it is not Manhattan.) Grupo Bimbo has also invested in India, France, Portugal and Russia by picking up stakes in several local bakeries, EIU notes. In 2017, they took a 65% stake in Ready Roti India, an Indian bakery. Since 2015 Grupo Bimbo has also acquired Panrico from Europe, and the Argentine bakery business of General Mills. The stock is underperforming the MSCI Mexico, down 1.1% this year.

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The EIU report reviewed 12 companies. The six not listed here were from Qatar, United Arab Emirates, Nigeria, Malaysia, and Indonesia. Brazil also had a small, privately held telecom on the list which was more of a domestic story.

Five of the top 20 largest corporations in the world, as listed on the recent Forbes Global 2000, are Chinese. Over the next five years, the EIU expects more developing countries to climb the rankings of the world’s biggest corporations. They singled out sectors like consumer retail, healthcare, telecom, energy and automotive. This year marked the second time since 2015 that China and the U.S. split the top 10 largest corporations, according to Forbes. China is clearly the biggest threat to American firms abroad in terms of competition. The world's No. 2 economy is now home to 291 Global 2000 companies. The U.S. is still high on top with 560 companies on the list, making for more than a third of the world's biggest corporations.

 

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