“The international expansion of companies is key if we are to weather the current economic storm,” IBERDROLA's chairman, Ignacio Galán, informed the CEDE Management Convention this morning in Bilbao.

During his address to the VII CEDE Management Convention at the Palacio Euskalduna entitled Managing for Growth, Galán said that “thanks to the international expansion process on which Spanish companies embarked in the early nineties, our country now boasts global leaders in key sectors such as tourism, energy, telecommunications, textiles, machine tool manufacturing and financial services.”

“And what's more, these major companies are now driving the growth and internationalisation of other smaller companies which are accompanying them around the globe,” IBERDROLA's most senior executive continued.

This is why, Ignacio Galán continued, “it is essential to continue down this path” and “ensure that the major Spanish players maintain strong roots in our country and prevent their delocalisation, as has happened in many other sectors.”

He cautioned that, at present, “there are aspects of our economy that jeopardise this situation”, something that is reflected in a progressive loss of competitiveness: since 2006, Spain has fallen 31 places in the global rankings and eight places in relation to the other countries in the European Union.

According to Galán: “Spanish companies are finding it harder to obtain financing in international markets than their competitors due to the higher risk premium; productivity has been falling as a result of the inflexibility of the labour market; the tax regime is unattractive, as corporation tax demonstrates, and there is a growing perception of legal insecurity.”

IBERDROLA's chairman stressed that Spain “is at an especially delicate juncture, given that legislative measures have been enacted which increase the risk of Spanish companies relocating their decision-making centres. It is therefore essential that remedial action is taken to ensure that this does not happen.”

During his speech, Ignacio Galán also pushed for the development of “robust government policies that foster the international expansion of companies into markets with the strongest growth prospects," adding that: "We must also ease red tape, make it easier for Spanish companies to secure financing and provide the necessary legal security.”

A decade of international expansion

Over the last ten years, IBERDROLA has undertaken an expansion and growth project that has seen the company rise from nineteenth position in the international ranking of power companies to become one of the five largest sector players by market capitalisation (the second-largest private power company) and the world's largest wind power player.

Over the course of a decade IBERDROLA has become a global leader with a presence in over 40 countries, supplying energy to more than 120 million people and industries worldwide: it is the largest energy company in Spain, the number one producer of wind energy and the third-ranked distributor in the UK, the number two wind energy producer in the US, the largest private power generator in Mexico and the top distributor in Brazil by customer numbers.

Galán explained that “this entire expansion process is driven by a strategy underpinned by very clear aims: to strengthen our core business; to focus on economically stable countries which are predictable from a regulatory standpoint and which focus on the development of clean energies; to show complete respect for the society of each country and the local workforce and to improve efficiency and best practice.”

But “over and above respecting cultural diversity”, IBERDROLA's chairman continued, “underlining the common values that we all share based on effort, teamwork, commitment to the company, ethics and honesty.”

Galán concluded his speech by pointing out that the internationalisation of companies, as exemplified by the process undertaken by IBERDROLA, “is not just advisable strategically but an unavoidable necessity, especially amid the current economic crisis and growing globalisation”. There are, he continued “no magic formulas, just vision, determination, hard work and confidence, boundless confidence, in our own potential.”

In this regard, he said that “IBERDROLA was determined to achieve its objectives and, with huge effort and conviction, succeeded in doing so. Our company today is the sum of talents from different cultures, with a broad range of languages and customs, but who face the future as what they are: a single, fantastic team.”

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