Foreign business currently contributes an annual turnover of 3.4 billion to the Basque Group, but its executives want more, aware that future growth will come from emerging countries. Industrial estates in these markets is the formula Mondragon Corporation has chosen to facilitate the implementation of its cooperatives, as the majority of them are SMEs . Only a few, such as Fagor Electrodomésticos or Orona, have the appropriate business volume to grow overseas on the basis of their own strengths.
In line with this strategy, the Basque multinational is preparing for the opening of two separate industrial estates in Morocco and Russia. Of the two countries, the group only has a manufacturing presence on North African soil, through a subsidiary of Fagor Electrodomésticos . Russia is still an untapped market for the corporation, especially considering forecasts in growth for its automotive and white goods markets, but corruption in the country and the global crisis have put their plans, and those of other Spanish groups, on hold. The corporation from Arrasate-Mondragon inaugurated its first industrial estate overseas in the Chinese city of Kunshan in 2007.
Heavy investments
With an investment of 100 million, the industrial estate presently covers an area exceeding a half a million square metres, with more available space for future expansion. Its factories give employment to 2,000 people, and industrial estate management would like another six companies set up business in the industrial premises by 2014, bringing the number of employees to 2,500. China is Mondragon Corporation´s main base overseas, as it has seventeen factories located in the communist country, more than in France . Basque companies Batz, Fagor Industrial and Fagor Arrasate also manufacture in Kunshan. Other companies, such as Gestamp Automoción, which are outside Mondragon´s scope of business activity, have also set up in business there. With regards to India, the business park, which has still yet to be built, will be located in the city of Pune, in an area covering 220,000 square metres. The cooperatives Danobat, Kide and Fagor Industrial have already confirmed they will be setting up there.
´In five years, we will see the fruits of the seeds that we are planting at the present time´ Josu Ugarte, president of Mondragon International, made a resounding statement yesterday on the group´s future: ´Within five years, we will see the fruits of the seeds that we are planting at the present time,´ in defence of setting up overseas in order to save jobs in Spain. Ugarte participated in a conference on globalization organized by Banco Sabadell in Bilbao, in its first corporate event in the Basque Country, following the takeover of Banco Guipuzcoano. Ugarte encouraged companies to compete in the international arena, since the markets that will experience the most growth in the coming years are overseas. Based on his calculations, GDP in emerging countries will increase by 47.1% during the 2010-2015 period in particular and China´s GDP is set to increase by 74.4%, compared with an increase of 6.6% in Spain. This is why Mondragon Corporation, chaired by José María Aldecoa, has seventy-five factories overseas.
