The internationalisation of Vale in some slides

The dissertation summary:

The internationalisation of companies located in developing countries is a feature of contemporary globalization. Inverting the trend of capital flows, they represent what the Boston Consulting Group calls the global challengers: “a group of emerging challengers that are becoming important players in both developing and developed countries around the globe.”

This dissertation examines the case of one of these challengers: the Brazilian mining company Vale. In the beginning of 2000s, Vale was already a leader in the global production of iron ore, thanks to high quality and low cost reserves in Brazil. But its ability to face growing international competition was in question due to its local profile. After the acquisition of the Canadian giant Inco in 2006, Vale jumped from the sixth to the second position among global mining producers.

Such a drastic move elicits a number of questions. What reasons led this unknown emerging company to venture in an international environment? How successful was Vale in this endeavor? What are the effects of Vale’s internationalization on the Brazilian economy? Since its creation in 1942 as a state-controlled company, Vale had no choice but to turn to international markets. At the same time, as a fundamental part of the mining-steel sector, Vale plays a leading role in Brazil’s economic development.

After its privatization, the company defines the goal of becoming a global player with an aggressive plan for national and international acquisitions. Results are expressive. Vale succeds in expanding both its international presence and its product portfolio. The share of its workforce abroad rose from 1% in 2005 to 26% in 2010. Nevertheless, the becoming a global player ambition is not completely achieved. In 2010, Vale remains a company that suffers from Brazilian political interference and cost of doing business.