CII delegation in Buenos Aires 13 December 2007

A delegation of the Confederation of Indian Industries (CII) was in Buenos Aires on 13 December. An India- Argentina Business Meet was organised at the Indian restaurant Katmandu from1230 to 1800 hrs. It was attended by about 70 Argentine businessmen. The speakers at the Meet included Mr Stancanelli, Director general of Foreign office, Osvaldo Rial, President of the Industrial Union of Buenos Aires province, Jorge Zorreguieta President of the Food Industries association and Neville mevawala, leader of the CII delegation.

In my welcome speech in Spanish, I highlighted
-the short term ( 3 year) goal to take bilateral trade from 1.2 billion to 3 billion dollars and Indian investment from 800 million to 2 billion dollars.
-long term goal to build partnership in which India ( with its large and growing market ) could contribute to Argentine exports, growth and prosperity while Argentina could contribute to India's food and energy security.




In the morning, the delegation visited the Industrial Union of Buenos Aires province and had meetings with their members. This Association is planning to take a delegation to India in the first half of 2008.

The delegation had a meeting with the Governor of Buenos Aires Province Mr Daniel Scioli, who spoke in English about the opportunities for business with his province.

The CII delegation was impressed with the enthusiastic response of the Argentine business and government and the business opportunities. They plan to organise the next Indo- Latin American Business Conclave in Argentina in the second quarter of 2008.

Business with Uruguay

During my trip to Uruguay last week, I had a meeting with the uruguay-India chamber of Commerce in Montevideo. The Chamber is vibrant and has an elegant office and the members of the chamber are enthusiastic about business with India. India's exports in the first ten months of 2007 were 39 million dollars and imports 7 million dollars. There is scope to increase the trade to 100 million dollars in the next 3-4 years.
TCS, Mahindra and Mahindra and Biotech international have operations in Montevideo. Our Honorary Consul Daniel Bajuk has an agency selling Bajaj and Hero motorcycles.Indian vegetable oil producers' consortium is seriously looking into the possibility of investment in agribusiness including soya farming in uruguay.
Martin de Castro, the Montevideo-based Commercial officer of our embassy is dynamic, knowledgeable and is commited to assisting indian business. his contact decastromartin@gmail.com


meeting with the Chamber


I visited the bonded warehouse of Grupo Ras in Montevideo Port, where the Central Warehousing Corporation of India has rented 2000 sq metres for use by Indian exporters. The bonded ware house of Grupo Ras has 40,000 sq metres of modern space and moves 100 containers a week. They have offices in other South American countries. Ruben Azar, the young, energetic and dynamic owner of this company with turnover of 40 million dollars has been biten by the India bug. He has been to india several times and sees great potential for business with India. His facility has been used by Reliance, Aurobindo and other Indian companies. Grupo Ras is not only offering warehousing facility but also marketing of indian products in the region. More info www.gruporas.com




here is a picture of the bonded warehouse





below is the CWC space and Ruben Azar

I attended the inaguration of the new building of TCS at Zona Americas in Montevideo. The inaguration of this 4 million dollar building was done by the Uruguyan vice president. The new building will house 250 professionals out of the 800 being employed by TCS in Uruguay. They have plans to increase staff. TCS has also set up a regional IT training centre in Montevideo for candidates from all over Latin America. the credit for success of TCS in latin America goes to Gabriel Rozman.

This is the new building of TCS.

Indian BPO firms see growth in Latin Americanoperations

here is the story from Times of India of 19 November

After making a splash in US, European and Japanese markets, Indian ITeS companies are now ready to do Samba in Latin America.

The past two years have seen many of them set up shop in countries like Chile, Brazil, Argentina, Uruguay and Mexico. From TCS to Satyam, Evalueserve to 24/7, Indian companies have now opened development centres or acquired companies all across Latin America.

And what's driving them is the fact that the continent is one of the fastest-growing region for contact centres. Experts say, expansion to Latin America is a logical step for Indian companies looking to globalise their operations. Two main reasons are driving the growth, says Ameet Nivsarkar, V-P, Nasscom. "It helps Indian ITeS companies to service the larger Spanish speaking population in the US. They find it easier to attract Spanish speaking talent in Latin America compared to India. Also, even though Latin America does not have the depth of talent like India, it has sufficient expertise to complement the India story."

In fact, research done by ValueNotes reveals, the number of call centre agents working for outsourcers in Mexico will grow to 85,000 by 2010, and in Brazil it will increase to 12,000 in the same period. Already, Indian companies working there are scaling up operations. Evalueserve's Chilean delivery centre which started with approximately 15 employees, is expected to employ a few hundreds in the next two to three years. Subsequently, they will add around 60 professionals every year. The company believes the country could represent 10% of global revenues by 2008, and also add business for the India and China operations, said Robert Daigle, V-P at Evalueserve.

Nearness to US is a major attraction for Indians. "For us Chilean centre helps in dealing with workload for it is in the same time zone. Besides, Chile is a part of the global delivery platform for our clients," says Ashish Gupta, COO, Evalueserve. While costs (especially salary costs) in the region are higher compared to India, they are still lower than those in the US. Besides, bandwidth costs in Latin America are lower than in even India because of its proximity to the US. "Although the market may not be as big as the US or Europe, it's still big enough to keep Indian companies engaged," says Nivsarkar. Also, lower valuations of Latin American companies make the entry of Indian vendors relatively easier. Since economies there are 'yet to arrive,' it creates good acquisition opportunities for cash-rich Indian vendors.

OECD report on Latn America - 7 November 2007

This is the first time OECD has brought out a report "Latin American Economic Outlook". From now on, they plan to bring out an annual report. Mexico is a member of OECD since 1994 and Chile is in the process of joining.

Highlights of the report:
- Latin America is showing the world a face with new attractive features: more stability in its macroeconomic fundamentals and greater pragmatism in policy and instituitional reform.
-Consistently positive growth rates and democratic stability are now the norms in the region, rather than the exception. Pragmatism has replaced as the guide for governments for sustained economic development instead of dogma.
- Latin America leads the developing world in pension reforms. Of course, Chile was the pioneer and role model for the reforms in the region.

What struck me in the report ( in the introduction itself) is the new link between China-India and Latin America. In fact, they have one separate chapter with the title " Latin America's Asian opportunity." They have concluded that the two Asian giants represent trade opportunities rather than competition for majority of the Latin American countries. Secondly, they show India-China as examples to follow by the Latin Americans in terms of growth, innovation and global competitivity.

It has now become a standard feature of any report on latin america to talk about the linkage to India and and China.

The report has the views of Javier Santiso, the chief development economist of OECD,who wrote the book "The political economy of the emerging markets". I agree with his analysis and optimism. My blog review of his book:

http://latinamericanaffairs.blogspot.com/search?q=the+political+economy+of+the+possible )

TCS wins $200million dollar deal in Mexico

Tata Consultancy Services (TCS) has won a four- year contract of over $200 million from Social Security Institute of Mexico (IMSS), which is the largest organisation of its kind in Latin America. TCS won the contract following a public bid process based on technology and financial parameters over three other leading global and local technology companies.

In its role as the strategic IT services partner for IMSS, TCS will provide end-to-end IT services including application maintenance and support, custom software development, business analysis services, management of strategic IT programs and value added initiatives for the organisation’s affiliates.

This is the largest deal for TCS in Latin America. TCS had earlier secured a 200 million dollar deal with ABN Amro of Brazil and a 170 million dollar contract with Banco Pichincha of Ecuador.

TCS employs over 5000 young Latin Americans in Brazil, mexico, Uruguay, Argentina, Ecuador and Chile. TCS has a regional training centre in Montevideo.

IMF report of 9 November on Latin America

In the semiannual report of 9 Nov 2007, IMF says "Latin America is poised for its fifth consecutive year of strong economic growth in 2008."
Highlights of the report:
- growth in the region will be about 5 percent in 2007, moderating to about 4¼ percent in 2008. This will be the fifth consequent year of growth over 4 percent since 2003.
-average inflation in 2007 is 5.4% and projected to be 5.7% in 2008.
-The region has weathered the recent market turbulence. The solid fiscal and monetary policies have made the region more resilient than it was in the past to changes in the external environment. Instituitional reforms and stronger policy frameworks have made the region better prepared to face times of global turbulence.
-poverty, unemployment and inequality have declined since 2003.
-While the growth of the region has been partly due to the favourable external environment such as increase in demand and prices of commodities, the internal reforms and policy framework of the governments of the region are the most important.

International Monetary Fund Director for the Western Hemisphere Mr Anoop Singh said in a conference in Brazil on 9 Nov "I think Latin America has moved into a new era without the traditional cycle of boom and bust". This confirms my own assessment based on my study of the changes in the markets of the region and the mindset of the Latin Americans.

On Argentina, Mr Anoop Singh said that President-elect Cristina Fernandez had what he called "a strong electoral mandate from the people of Argentina to continue existing economic policies." He said that, through such policies, Argentina was progressing toward more stable economic fundamentals.

Speech in Spanish at the Argentine Chamber of Importers 7 November

video of the speech can be seen in

http://www.youtube.com/watch?v=yJYHdS2gaEw

I was invited by the Argentine Chamber of Importers, a hundred year old instituition to speak on " how to do business with India". This was my second speech in Spanish in Argentina.

I gave an overview of the new market of India and mindset of the new generation of Indians who are not afraid of globalisation. On the contrary, they want to take advantage of the opportunities arising from globalisation and even seek to Indianise the globe. Indira Nooyi's ascent as CEO of Pepsicola company is the symbol of the new paradigm. This new market and mindset are keen to do business with Argentina and latin america.

I expressed optimism for the future of Argentina which has natural, mineral and energy as well as human resources( which won the Singapore and US Open golf, ATP tennis title, Rugby and Polo). Just as the 1991 foreign exchange crisis was a turning point for India, the 2001-2 crisis of Argentina has created a new mindset. The Argentines are now determined that they would never allow a repetition of the crisis. This is reflected in the monetary and fiscal discipline in the last five years. The Argentine economy has been growing at a high rate of over 8 percent in the last five years and is poised to continue the growth in the coming years.

The emerging new Argentina and India are discovering the complimentaries of their industry and business and are moving towards a long term partnership. I was stuck by the enthusiasm and seriousness shown by Argentine importers for India. This is matched by the interest being shown by Indian businessmen for Argentina.

Indian BPO of First Source in Buenos Aires

Raul Martinez, Tarak Ghosh and Myriam Cunningham with me

I visited the Indian BPO of First Source (ICICI group) in Buenos Aires. It is the largest among the Indian IT/BPO/KPO units in Argentina employing 400 young Argentines. They do the backend work for the American telecom giant Verizon and recently they have got a financial job from the Citi Bank.

The BPO is in the heart of Buenos Aires city, amidst elegant cafes, bars, restaurants and shopping.

Raul Martinez is the country manager of the BPO. Tarak Ghosh from India has been taking care from the Indian side. Both are upbeat about more business opportunities and expansion of the BPO.

All the Argentines work in English language. The Indian company is happy with the skills and talents and quality and output of the Argentine staff.

Argentina offers competitive advantages for IT/BPO/ KPO business with its high literacy rate and relatively low salaries in dollar terms. Argentina is a lower cost location than Chile, Mexico, Brazil and Mexico.

The entry of Indian IT, BPO and KPOs contribute to the human resource development of Argentine society and enrich the evolving partnership between the two countries.

Peru - the next rising star in Latin America

My friend Andres Oppenheimer, who writes 'oppenheimer report" in Miami Herald has concluded that Peru is the emerging new star in Latin America. He has come to this conclusion, based this on his interview with a World Bank economist and his own analysis. Following are points he has cited:

• Peru's economy has been growing at about 6 percent a year for the past six years, a longer period of steady growth than most countries in the region. The United Nations Economic Commission for Latin America is projecting a 7.3 percent growth for 2007, and a 6 percent increase for 2008.
• Poverty has fallen from 54 percent of the population in 2001 to about 44 percent, according to official figures.
• Inflation is at about 2.8 percent, one of the lowest rates in the region.
• Exports have risen at an average annual rate of 24 percent since 2001, including an 18 percent annual rise in nontraditional exports, mostly agricultural goods and textiles.
• Foreign direct investment has soared from $810 million in 2000 to $3.5 billion last year.

His write up in
http://thecolourofhope.blogspot.com/2007/11/oppenheimer-report-peru-may-be-next.html

Los Angeles Times article on Argentine economy

I agree with the analysis of this article and that is why i am reproducing it here

How Argentina jump-started its economy

Buenos Aires' first couple revived the economy -- despite, not because of, the IMF.
By Mark Weisbrot October 30, 2007

Cristina Fernandez de Kirchner on Sunday became the first woman elected to the presidency of Argentina. Her victory is not difficult to explain. Her political party, under President Nestor Kirchner (her husband), led a dramatic economic turnaround that made Argentina the fastest-growing economy in the Western Hemisphere over the last 5 1/2 years.
More than 11 million people, or 28% of the population, were pulled above the poverty line as Argentina's economy grew by more than 50%. Its 8.2% annual economic growth was more than twice the average for Latin America. Unemployment has dropped from 21.5% to 8.5%, and real (inflation-adjusted) wages have grown by more than 40%.
Fernandez's victory was thus predictable and relatively easy. But the economic recovery that drove it was not so simple, and the people who led it deserve more credit than they have generally received. The Kirchners and their allies had to take on not only the conventional wisdom of the economics profession but also powerful international institutions such as the International Monetary Fund. Argentina's success may have some important implications for other developing countries.
When Argentina defaulted on a record $100 billion of debt at the end of 2001, almost all of the experts predicted that this would be the beginning of a long period of punishment. International financial markets and foreign investors would shun the nation, they said, and this would be very damaging. The government had better reach an agreement with the IMF and follow its advice. And it had better play nice with the defaulted foreign creditors.
The experts could hardly have been more wrong. The economy contracted for just three months after the default and then began to grow. It hasn't stopped since.
Contrary to a common belief, Argentina's expansion was not based on exports or high commodity prices: Only about 13% of the growth during the expansion was because of exports.
What did Argentina do right? Most important, the government got its basic macroeconomic policies right. After years of seeing its domestic economy crippled by an overvalued currency that made imports artificially cheap, the Argentine central bank targeted a stable and competitive real exchange rate.
In other words, the authorities made sure that their currency didn't rise too high and didn't swing wildly as a result of movements in financial markets. (Here in the U.S., where we have shed more than 3 million manufacturing jobs since 2001 -- the bulk of them lost because of an overvalued dollar -- we might take note.) They also kept interest rates low and made growth, rather than the lowest possible inflation, the top priority.
These policies are mostly a no-no among central bankers and economists, and Argentina had a few showdowns with the IMF, including a brief temporary default to the fund in September 2003. But the fund backed down, and most of the defaulted international creditors ended up settling for 35 cents on the dollar in 2005.
Of course, Argentina hasn't gotten a lot of foreign direct investment in the last five years, and it cannot directly borrow in international bond markets. But these handicaps -- which if you read the business press should spell doom -- turned out not to be all that important. Nor are they permanent. In time, foreign investors and lenders will find their way back to a fast-growing economy.
The lesson? Just as "all politics are local," so too are the most important economic policies for most countries. Getting basic macroeconomic policies right for your own economy is a lot more important than pleasing international financial markets. That goes double for failed international financial institutions like the IMF. The fund not only oversaw the train wreck that collapsed Argentina's economy from 1998 to 2002, it opposed the major policies that drove Argentina's remarkable recovery.
The fact that Argentina's break with the IMF and its policies was key to the country's economic success also has implications for other countries. Over the last quarter of a century, the fund and its allied institutions -- run from Washington -- have presided over Latin America's worst long-term growth performance in more than a century. As a result, most governments in the region have moved away from the IMF. Its loan portfolio in the region has shrunk from $49 billion just four years ago to less than $1 billion today. But it still holds sway in many poor countries.
Argentina's new government will face challenges, the kind brought about by a fast-growing economy: keeping inflation in check and assuring adequate supplies of energy. But these problems are manageable. Of course, there are analysts who argue otherwise, but their forecasts over the last five years have not been very accurate.

Mark Weisbrot is co-director of the Center for Economic and Policy Research in Washington. Website: cepr.net

My interview to an Argentine Business Daily on 24 October

This is the text of interview published by Infobaeprofesional.com ( a virtual business daily ) on 24 October. This interview was conducted in spanish. Readers can use the translation tool given in the right side of the blog for English.

India busca triplicar el comercio con la Argentina y apurar un TLC
Infobaeprofesional.com entrevistó al nuevo embajador de la India en el país. Aseguró que en tres años, de los poco más de u$s1.000 M en intercambio se pasará a u$s3.000 M. Además, pugnará en el Congreso por la ratificación de un acuerdo parcial de preferencias, con vistas a un TLC con el Mercosur.
Hoy en día, India se posiciona como una de las economías de crecimiento más rápido del mundo. Con una tasa récord del 9,3% durante el año pasado, superó las expectativas de los analistas internacionales. En los últimos diez años, el país tuvo un crecimiento promedio de 7%, sustentado por una mejora constante del sector agrícola y por una expansión en el sector manufacturero y, sobre todo, del de servicios. India es la potencia indiscutida en la industria del call center, por ejemplo, donde emplea a 350 mil personas, siete veces más que lo proyectado por la Argentina para este año.

A nivel comercial, desde 2001, las exportaciones crecieron 180% hasta alcanzar en 2006 una cifra superior a los u$s120 mil millones, según datos del Centro de Economía Internacional (CEI). Las importaciones, por su parte, ese mismo año alcanzaron los u$s174.000 M, casi 250% más que cinco años atrás.

Como contrapartida, si bien la relación comercial entre la India y la Argentina está creciendo, aún se trata de cifras chicas comparadas con el potencial que encierra el mercado indio.

Visto desde la Argentina, el año pasado las exportaciones alcanzaron los u$s909 M, mientras que las importaciones sumaron poco más de u$s303 M, según Abeceb.com.

En este contexto, el 10 de octubre pasado, llegó al país el nuevo embajador de la India, Rengaraj Viswanathan. Es especialista en temas Latinoamericanos y llegó a la Argentina con tres metas concretas: incrementar los niveles de comercio, promover inversiones de compañías indias en el país y organizar visitas de alto nivel entre ambos mercados para los próximos meses. De este y otros temas, el diplomático dialogó con infobaeprofesional.com.

-El comercio es bastante limitado para lo que es la india ¿coincide en esto?

-La relación comercial entre ambos países el año pasado arrojó una cifra de u$s1.200 M, es una cifra interesante pero está por debajo del verdadero potencial. Esto se debe a que la India recién en los últimos diez años enfocó sus fuerzas en América Latina y los empresarios en particular recién comenzaron a mirar a la región más seriamente en los últimos cinco años.

-Las proyecciones que manejan son ambiciosas...

-Sí. Estamos empezando a entrar al mercado de la Argentina. Tenemos optimismo en este país porque se recuperó de la crisis y esta estabilidad va a garantizar más crecimiento. Esto genera que sea un mercado muy atractivo para nosotros, de hecho, es el tercero más importante en la región para India. Esto es una visión que comparten tanto los empresarios como el gobierno. Por eso, nuestra meta es pasar de los u$s1.200 M a u$s3.000 M en tres años.

-En esto seguramente influirán mucho las inversiones...

-Exacto. Hoy contamos con cuatro empresas de la India del sector de Tecnologías de la Información que invierten en la Argentina, entre ellas, la número uno, que emplea a 150 personas en el país. También tenemos empresas en otras áreas como outsorcing, agroquímicos, genética y agrobusiness. Pero esto no va a quedar aquí. Constantemente estamos recibiendo a empresarios indios que están interesados en invertir en el país o que quieren realizar un joint-venture. Esto va a ser bueno para el futuro de la Argentina.

-Por otra parte, también anunció la realización de misiones comerciales para potenciar la relación bilateral.

-Estamos planeando recibir delegaciones de la India, realizar seminarios sobre áreas claves como TICs o la industria química. Además, personalmente me voy a encargar de realizar una campaña entre los empresarios argentinos para que vayan a la India, para que aprovechen un mercado que ofrece grandes oportunidades.

-Sin embargo, en la Argentina deberán lidiar con una imagen muy difundida entre algunos sectores industriales: la de una India que, como sucede con China, es vista en gran medida como una amenaza.

-Aquí se confunde a la India con China y se trata de cosas muy distintas. China es más grande, comercia más, es un gran jugador mundial. Por otra parte, nosotros apuntamos a exportar productos con muy alto valor agregado, y nuestras empresas son transparentes, no hay secretos, todo está abierto, no ocultamos los costos de producción. Además, no somos una amenaza porque nuestra expectativa es llevar estos u$s300 M que vendimos a la Argentina en 2006 a un máximo de u$s1.000 M. No hay una política del gobierno de la India de invadir el mercado argentino. Por eso, nadie tiene que tener miedo de la India.

-En los últimos días, Lula quiso reencausar el TLC entre la India y el Mercosur,¿cómo cree que evolucionará esto?

-Estamos descubriendo complementariedades entre países en desarrollo. Queremos facilitar el intercambio mediante un TLC. En este sentido, hemos concluido un acuerdo parcial de comercio (PTA, por sus siglas en inglés) entre la India y el Mercosur en el 2005 pero estamos esperando desde hace casi tres años la ratificación de los congresos de la Argentina y de Brasil. Uruguay y Paraguay ya lo ratificaron.

-¿Va a hacer algún tipo de gestión por este tema?-

Si, voy a ir personalmente al Congreso y a reunirme con autoridades del gobierno porque esto no tiene sentido. El PTA no es un acuerdo controversial, va a mejorar el comercio, no estamos abriendo totalmente el mercado, tendríamos algunas preferencias arancelarias para sólo 450 productos.

-¿Y en el caso del TLC?

Tenemos otra agenda para ese acuerdo entre la India, la Unión Aduanera del Sur de África (SACU) y el Mercosur. Pero esto necesita mucho más tiempo, recién se puede hablar de una acuerdo de aquí a cinco o seis años.

Juan Diego Wasilevskyjuandiego@infobae.com(c) Infobaeproesional.com

Biodiesel production in Argentina and its implications for India

Last week one of the world’s biggest biodiesel plants with an annual capacity of 230,000 tons was inaugurated in the city of Rosario. The media highlighted the fact that the day of the inauguration of this plant coincided with the historic high price of crude oil at US $ 88 per barrel. The Rosario plant uses soya as the raw material and it belongs to an Argentine company Renova. A Swiss company Glencore has stake in this plant, which uses Belgian technology.

2. There are at present seven plants producing 400,000 tons of biodiesel. Other biodiesel plants coming up in the near future are: i), A joint venture plant of Bunge and AGT with a capacity of 250,000 tons, ii) Plant of Dreyfus - 300,000 tons, and iii) Molinos plant - 100,000 tons. Besides these, there are a number of other projects under various stages of planning. If all these materialise, the production capacity of biodiesel will reach around 1.7 million tons. According to a report, Argentina is the third largest producer of biofuel in the world after Brazil and USA.

3. The Argentine biodiesel industry is preparing for the growth in domestic demand to a small extent but is more interested in exports . Local demand will go up consequent to the new Argentine law which stipulates that biodiesel will account for 5% of all the diesel in the market by 2010 and also biofuel to account for 5% of all fuels consumed. This will mean domestic consumption of 600,000 tons of biodiesel. The industry’s main focus is exports in the light of the general global trend of increasing use of biofuels in view of the high crude oil prices as well as for sustainable development. Moreover, since the Argentine energy prices have been artificially suppressed by the government at low levels, the bio diesel producers would prefer exports to the international market which offer lucrative prices. The global biofuel market of US $ 15 billion in 2006 is expected to triple by 2015.

5. Argentina has a globally competitive advantage for large production and exports of biodiesel because of the following factors :

- Argentina is the third largest soybean producer and exporter in the world and the largest soyoil and soymeal exporter.

Top soybean producers of the world :

USA - 86 million tons
Brazil - 59 million tons
Argentina - 47 million tons
China - 17 million tons
India - 8 million tons
Paraguay - 6 million tons

- Argentina uses 16.8 million hectares of land for growing soya which occupies the largest cultivated area among other crops. If the prices are favourable, the Argentines have the flexibility to increase the area, given the availability of large arable land area.
- Argentina has favourable soil and climate for growing soya besides other crops.
- The Argentine farming is modern, large-scale and technologically advanced supported by research and development. A number of multinational corporations are in the Argentine market introducing the latest technologies for growing and processing soya.
- Cost of production is low and yield per hectare is high (2.3 tons per hectare)
- The infrastructure for storage, transportation and shipping is modern and is being further expanded.

Implications for India

6. The Argentine production of biodiesel and edible oil from soya has implications for India. Our annual requirement of edible oil is 12 million tons and it is expected to increase to 15 million tons by 2010 and 21 million tons by 2015. Out of the current requirement of 12 million tons, 5 million tons is imported. This includes 2.8 to 3 million tons of palm oil from Indonesia and Malaysia and 1.5 to 2 million tons of soybean oil from Argentina (80%) and Brazil (20%). In 2006 soyoil imports accounted for US $ 700 million out of our total imports of US $ 950 million from Argentina.

7. Besides soy, Argentina grows a number of other oilseed crops which can be used for producing biofuels. Diversion of edible oil crops to biodiesel will cause shortage of edible oils increasing their international prices. At the same time, Argentina has also the potential to grow Jatropha and other non-edible oilseeds to make biofules. In any case, there is no domestic debate about the food versus fuel competition, since their focus is mainly exports. Local consumption by the 40 million Argentines is a small proportion of the production of both fuels and food crops.

8. A delegation of Solvent Extractors’ Association of India (SEA) visited Argentina, Paraguay and Brazil in May-June 2007. This was sponsored by our Commerce Ministry. The SEA delegates have been impressed by the farming techniques and crushing technology. They have praised the crushing technology used in Argentina as the best in the world including in USA, Brazil and China. Some of the members of the SEA have formed a Consortium to buy a soy farm of 12,000 hectares in Paraguay at a cost of US $ 40 million. Due diligence for this purchase is currently going on. Argentina offers even greater opportunities for investment in soy farming and processing. There is no restriction on foreign investment in land or plants.

FDI inflow into and outflow from Latin America in 2006

The following information about Foreign Direct Investment ( FDI) inflow into and outflow from
Latin America and Caribbean should be of interest to Indian companies which are exploring opportunities for investment in the region.

-FDI inflow into Latin America and caribbean in 2006 was 84 billion dollars, increasing by 11% from 2005.
- 70 billion$ was pure FDI while 14 bn went into offshore financial centres.
-Top recepients of FDI : Mexico-19 bn, Brazil - 18.8 bn, Chile- 8 bn, Colombia-6.3 bn, Argentina-5 bn, Peru-3.5 bn, Panama-3 bn, Ecuador-2 bn.
-Manufacturing received the largest share of FDI at 41%, followed by services 37% and primary sector 21%.
- notable investments: In Peru investment is taking place in oil and gas development. 31 contracts have been signed in the last 2 yrs by Petroperu.. There is a 2.8 bn$ project for development of a petrochemical complex to produce fertilisers and polyethylene. Colombia attracted FDI of 1.8 bn in oil and gas sectorin 2006. In Chile mining investment in 2006 was 2 billion while Peruvian mining sector attracted 1.6 bn. Argentine automobile industry got new investment of 800 million$ in 2006. Volkswagon has announced ( oct 2007) invetsment of a billion dollars in a new pick-up truck plant.

-recent history of FDI in the region: It started increasing from 30 billion in 1995 and reached a peak of over 100 billion in 1999. It declined thereafter dropping to 40 billion in 2003. It went up to 90 bn in 2004, declined to 70 bn in 2005 and had increased to 84 bn in 2006.

- FDI in 2007 is expected to increase moderately, helped by high commodity prices, trade surplus and increase in foreign exchange reserves.- FDI in 2007 is expected to increase moderately, helped by high commodity prices, trade surplus and increase in foreign exchange reserves.

- FDI outflow from Latin America was an impressive 43 bn $ in 2006. Top investor was Brazil with 28 bn followed by Mexico with 5 bn, Chile- 3 bn, Argentina-2 bn and venezuela-2 bn.

- Brazil's outward investment of 28 bn $ was the highest-ever in its history. It was more than the FDI inflow in 2006. The largest contributor to this record was CVRD through its acquisition of the Canadian Nickel producer Inco for 17 bn $ . After this, CVRD has become the largest metal mining company in the world in terms of value of production. This is the largest-ever acquisition by a Latin American company.

source: UNCTAD 2007 report

Chennai seminar and talk on business with latin America 24-25 sept

CII Chennai office invited me to give a talk to the Chennai Chapter of the " Young Indians" at their impressive new building on 24 sept. I gave a general talk about the competitive advantage of young Indians in this fast changing globalising world in this Age of Information and Era of Knowledge Society. I spoke about how the new mindest of the young Indians has transformed Indian economy and society and raised the image of India and Indians. Halfway through my speech, the Young Indians stopped me and said" we want to know about business opportunities in Latin America". I was pleasantly surprised by their interest and also by the specific questions they had on investment opportunities. They are planning to visit Brazil and I invited them to come to Argentina also.

seated from left- Dr Ravichandran, Canela, Balasubramanyam president SICCI, Ramasundaram MD, TIDCO, Mutha of EEPC, Muthukumaran Eximbank,Sarkar from Bank of Baroda and Luis from Mexico.

I was the chief guest and keynote speaker at the Seminar on Business with Latin America on 25 sept at GRT Grand Hotel, Chennai. The event was jointly organised by EEPC, Indo-LAC Chamber of commerce and Southern India Chamber of Commerce. I was joined by Canela of the Dominican Republic Embassy and Luis Gerardo of Mexican Embassy.

I spoke about the success stories of Indian business entry in less well known countries such as Bolivia, Ecuador, Peru, Uruguay, Paraguay and Guatemala. I highlighted the fundamental change in the market and mindset of Latin America, which is favourable for Indian business.

Clearly, the interest in latin America has grown significantly as i could see from the enthusiasm shown by the participants. Ganesan of EEPC ,who took a delegation to Argentina recently, spoke about the interest shown by Argentines in sourcing engineering goods from India.

Dr Ravichandran, president of the Indo-Lac Chamber is going to do a post-doctoral research in the topic of India-latin america trade and investment. The first post-doc research in this topic ! Congrats Dr Ravi !

CII is also passionate about Latin America

Gunveena Chadha on the left. DG,CII Mr Mehta speaking

Ambassador of Argentina extreme right, the new JS(LAC) Ravi Thapar, Ambassador of Suriname and DG, CII, Mr Mehta

In my speech at the lunch hosted by the Confederation of Indian Industry on 13 September, I expressed thanks to the proactive role played by them in promoting business with Latin America. It has been a pleasant and rewarding experience for me to have worked with the committed and competent young professional executives of CII.

Hmm .. it is more than that. These executives have also displayed a passion for my querida america latina. It started with Subha, who visited Latin America in 1997 and came to Sao Paulo when I was there. I took her to a samba school .. caramba ! she danced like a mulatta ! Although she no longer deals with the region she has retained her passion and attends Latin America meetings, asking me to quote latino poems, being a poet herself. Then came Indrani, La Reina da Salsa ( the salsa queen), who organised many business events and arranged exchanges of delegations. She created history in CII by making it a party to partying at the night clubs " Just my kind of place " and " F- Bar" where CII co-hosted the salsa parties for the launching of my book on latin america and later my website.

And now we have Gunveena, who has started greeting in spanish and is becoming younger by 5 years after her each trip to latin america. She has developed a passion for Latin America and is very enthusiastic in promoting business with the region. She has taken delegations to countries such as Ecuador and Bolivia, the first-ever business delegations from India.

I should also pay tribute to Vidya and Deepa, the two sweet ladies who have been working at the backend quietly but efficiently to make every event a success. They remind me of the poem " Quisera oir tu silencio.. quisera callar mis palabras" ( I want to listen to your silence and silence my words ). And of course, Mr Mehta, the DG of CII and the charming Supriya have been supportive of latin America activities. They were always willing to host meetings for the Latin American delegations, even at short notice.

In June 2007, CII organised the first ever Indo- Latin American Business Conclave in Delhi. They are going to do the second edition in Sao Paulo in December 2007.

Mexican visa and business delegation 7-12 september

the more exciting news first...The Mexican embassy has started issuing five year multi entry business visas. Earlier they were issuing three year visa. You all know how it was three years back.
Credit for this goes to Ambassador Rogelio, who has moved heaven and the immigration dept for this.He got a four member delegation of the Immigration Dept here to look into the visa issues. In their meeting with me on 29 August, they took me by surprise asking me "what else they could do to attract Indian business visitors and make their visit more pleasant". They are going to liberalise the sytem further and faciliate work permits specially for the IT professionals.

The Ambassador is also organising the visit of a 103 member business delegation. List in the attachment. areas of interest include IT, callcentres, food products, pharma, chemicals, construction, textiles and giftitems. Delegation will arrive in delhi on friday 7 sept evening and be in delhi till 11th morning at Hotel Taj Palace. on 10 sept they will be in the bz seminar (CII- FICCI- Assocham) from 10.30am to 3 pm followed by individual bz meetings at Maurya Sheraton. President of mexico will addrss the seminar at 1300 hrs. IT part of the delegation will be in bangalore on 11th at Leela Hotel. Rest will be in Mumbai on 11-12 at Oberoi. 12th morning seminar by Assocham. for further info and contactVidya and Gunveena at CII and Luis Gerardo ( first secy) at the mexicanembassy

Our exports to mexico in 2006 were 1125 million dollars and imports 454million. I, the optimist, expect bilateral trade to touch 5 billion by 2010.Indian cos hv already invested 3 billion dollars in mexico. Besides its ownlarge mkt, mexico is the gateway to NAFTA and central American mkts. more details in my website.

Here is the list of the delegation ( name of delegate, name of company and and their areas and products of interest in that order). bit clumsy.. please bear with me


1
Alejandro
Artifibras, S.A. de C.V.
Food Products
2
Lorenzo
Asociación Mexicana de Parques Industriales
Association/Chamber/organization
3
Aurelio
Atento México
Call Center
4
Miguel
Bicicletas y Motocicletas Mercurio
Transportation
5
Nicolas
Bimbo
Food Products
6
Juan
Cámara nacional de la Industria Tequilera
Food Products
7
Juan Carlos
Caza Trading Co., S.A. de C.V.
Medical / Medicines
8
Sergio
Centro de Agronegocios de Colima
Food Products
9
Alejandro
Cinépolis
Entertainment
10
Sergio
COESA Ingenieria y Servicio, S.A. de C.V.
Information technology
11
Alejandro
COFOCE
Govt.
12
Luis
COMCE Nacional
COMCE/ Chamber of Commerce
13
Domingo
COMCE Sur
Construction Material
14
José Arturo

Food Products
15
Alejandro
Comex
Chemicals
16
José Andrés
Consorcio DMX
Food Products/ Beverages
17
Xavier
Constructuroa DMX
Construction
18
Victor Manuel
Controladora de Negocios, S.A. de C.V.
Construction
19
Enrique
Desarrolladora Espacio 5, S.A. de C.V.
Construction
20
Ricardo
Dulces Anahuac
Processed Food
21
Ernesto José
Eficasia
Call Center
22
Mauricio
Emwa
Gift Articles
23
Sócrates Alfredo
Exe Consultores
Information technology
24
José
Explosivos Asturión, S.A. de C.V.
Metal work (manufacturing of tractors, and other machinery)
25
Mateo Daniel
Fantasías Miguel, S.A. de C.V.
Gift Articles
26
Sergio
Frutas Tropicales de México, SPR de R:L.
Food Products
27
Guillermo
FUNTEC
Technological assistance / Foundation
28
Rodrigo
Genomma Lab
Pharma
29
Joaquín
Globe-Chemicals
Chemicals, Pharma
30
Gerardo
Gomex Termoplásticos, S.A. de C.V.
Chemicals
31
Abel
Grupo Corporativo AB-HU
Others
32
Roberto
Grupo Eiffel
Construction
33
Carlos Alberto
Grupo Grisi
Cosmetics and beauty products
34
Marco Tulio
Grupo Gylsa
Chemicals, Pharma
35
José Luis
Grupo IDESA
Petrochemicals
36
Francisco
Grupo Incom
Information technology
37
Rafael
Grupo Industrial Zaga
Textile
38
Lilia Judith
Grupo Loma
Gift Articles
39
Juan Carlos
Grupo Piagui
Footwear / Gift Articles
40
Francisco
Grupo Profusa
Construction
41
Elías
Grupo Toymark
Toys
42
Rodrigo
Has-it,, S.C.
Information technology
43
Gerardo
Homex
Home Construction/real estate (like DLF in India)
44
Alberto
Icorp
Information technology
45
Alejandra
IMBC
Services / Promotion
46
Jacinto
Importaciones y Exportaciones Jazen, S.A. de C.V.
Food products
47
Raymundo
Indigo
Others
48
María Eugenia
Instituto Mexicano de Teleservicios
Call Centers / BPO
49
Miguel
Insumos Internacionales GC
Plastic
50
Jorge
Inteqsoft
Information technology
51
Gonzalo
ITSON
Information technology
52
José J.
Jacob & Jacob
Energy
53
Vicente
Johnstone & Co.
Services
54
Luis
Laboratorios Pargon
Medical / Medicines
55
Carlos
Laboratorios Senosian
Pharma
56
Patricia
M & A Oil Co.
Petrochemicals
57
Vinod Kumar
Macroproyectos Inmobiliarios FAMA
Construction /Hotels
58
Richard
Maquitex
Textile/ Plastic
59
Roberto
Marquez Alonso Abogados
Services / Consultancy
60
Mauricio
Máxima Distinción (Emwa)
Gift Articles
61
Klaus Juerguen
Mediaccess, S.A. de C.V.
Medical / Medicines
62
Eduardo
Mega Direct
Call Center
63
Guillermo
Multiservices for Food Process, S.A.deC.V.
Food products
64
Alejandro Jorge
Nissan Autotal
Spare parts
65
Pablo
Nortel de México
Telecommunications
66
Antonio
Nova Chemical
Chemicals
67
José Oscar
Novaaire, S.A.
Tourism
68
Jorge
Omnilife
Food supplements
69
Rivelino
Philip International, S.A. de C.V.
Chemicals and processed food
70
Eduardo
Plastisor
Plastic
71
Eduardo
Polidi
Plastic
72
José Antonio
Poliformas
Chemicals
73
Mario
Polímeros y Derivados
Chemicals
74
Rafael

Information technology
75
Laura Adriana
Procesadora de Jaiba de Tampico, S.A. de C.V.
Food products
76
Manuel
Prodin Transformadores, S.A. de C.V.
Electricity
77
Jacobo
Proepta, S.A. de C.V.
Consumers goods
78
Ricardo
ProMéxico
Govt.
79
Luis
Prosaco / Protermo
Textile/ Plastic
80
Cesar
Quarksoft
Information technology
81
William
Rafisacos
Textile/ Plastic
82
Miguel
Rafitek
Textile
83
Alejandro
Resinas Sintéticas Oroz
Chemicals
84
Alejandro
Revita Group
Services
85
Rudolf
RH Shipping & Chartering, S.A. de C.V.
Transportation
86
Gerardo
Satarquim, S. de R.L. M.I.
Chemicals
87
Jesús

Govt.
88
Renato

Govt.
89
Ariadne Selene
Serral, S.A.de C.V.
Chemicals, Pharma
90
José Rolando Miguel
Servicios Rotativos de Calidad, S.A. de C.V.
Metal work (manufacturing of tractors, and other machinery)
91
Gerardo
Starquim, S. de R.L. M.I.
Chemicals
92
Roberto
Taiwán Mayorista, S.A. de C.V.
Home appliances and furniture
93
Pedro Miguel
Tatung México, S.A. de C.V.
Home appliances
94
Ilangovan
Tecnológico de Monterrey
Technology
95
Higinio
Telvista
Call Center
96
Justin
Tiba
Services / Logistics
97
Jorge
Total Energy Systems
Energy
98
Héctor
Valvulas Worcester de México, S.A. de C.V.
Metal work (manufacturing of tractors, and other machinery)
99
Enrique
Vignette de México S de RL de CV
Information technology
100
José Miguel
Windsor Ciclismo, S.A. de C.V.
Transportation
101
Eugenio
Xignux
Information technology
102
Raymundo
ZacSoft
Information technology
103
Elías

Construction

Indian firms acquire agrochemical companies of Argentina

United Phosphorus Ltd (UPL) of Mumbai has acquired three Argentinian agrochem and seeds companies. The first acquisition was Reposo SA in 2005, the second was ICONA in 2007 and the third Advanta a Dutch company( 2006) which has Argentine units. With these, UPL now has four manufacturing units and a R and D unit (employing 100 Argentines). The R and D unit is bringing out a new sunflower oil branded as Nutrisun, a high-stearic oil, as an alternative to transfat edible oils.

UPL is a global crop protection,seeds and chemical company with a turnover of 408 million dollars in 2006 which is expected to go up to 561 million dollars in 2007. Market cap of the group is 2 billion dollars. It has been on acquisition spree, having acquired 20 companies from around the world including in Japan and UK. UPL ranks as the third largest generic agrochemical company in the world.

I met Rajju Shroff ( the senior) and Jai Shroff (the junior, globe-trotting and ambitious young man, typical of the go-getter, new generation of globalised Indian enterpreneurs) recently. They are upbeat about their Argentine operations. They are also doing business in Brazil, Mexico and the rest of Latin America.

Later, I met Hariharan, chief of the international operations of Excel Group from Mumbai, which is exporting agro chemicals to Argentina. This group is also planning acqusitions in Argentina.

Another company Punjab Chemicals and Crop Protection Ltd ( PCCPL) has acquired an Argentine company " Sintesis quimica " for 10 million dollars, recently.

Being an agro power, Argentina is a natural and large market for Indian cos doing business in agro inputs such as chemicals and machinery. Besides exports, Indian cos can also explore imports and tech transfer from Argentina, which is advanced technologically and commerically in agri and food processing business. Our import of soy oil from argentina was over 800 million dollars in 2006 !

Guess what is common between the three Indian companies, apart from their Argentine acquistions !
The owners of all the three companise are "Shroffs".. related by blood but competitors in business !.. Viva el mundo de Shroffs !

Indian KPO unit in Argentina

The Indian company CRISIL- IREVNA has opened a KPO ( Knowledege Process Outsourcing) unit in Buenos Aires. This unit does equity research and offers investment research services to the world's leading investment banks and financial institutions. They work with Standard and Poor and other companies.The unit is operational since June 2007.

Crisil is the leader in credit rating business in India and one of the top rated in the world. Crisil acquired IREVNA and later Standard and Poor has acquired stake in Crisil. more at http://www.irevna.com/

The unit in Buenos Aires employs 25 Argentine staff and has plans to expand the strength. It is being run by Mr Chetan Majithia.

I spoke to Chetan this week about his experience. He is there for the last one year. He is happy with the quality of Argentine professionals and the low cost of talents there. Crisil had done market research about other countries and decided to open unit in Argentina, because of the cost advantage and availability of professionals. We are not talking about spanish speaking professionals here. The KPO work is done in English.

Chetan had two problems: getting visa for Argentina (one of his colleagues was given a 15 day single entry visa! this is surprising and shocking. The government of argentina has signed an Agreement with India under which they give three year multi entry visa ) ; secondly the legal procedure for establishment of companies is complicated and time consuming.. as it was in the pre-reform days of india ! Chetan's work permit application is pending for the last four months.
These are, of course, minor and solvable problems.

It is worthwhile for other Indian IT and BPO companies to explore the opportunities for IT, BPO and KPO operations. ICICI from India has already established a BPO in Buenos Aires employing 36o staff... in my 19 July blog story

Infosys sets up subsidiary in Mexico

Infosys today announced the creation of its first Latin American subsidiary, and the opening of the development center and office for the region based in Monterrey, Mexico.
The subsidiary, Infosys Technologies S. De RL De CV, provides the company’s full range of business consulting and information technology services for clients in all industries including banking, financial services, retail, consumer packaged goods, resource, energy and utilities.

The Monterrey facility provides Infosys with the dedicated resources to service clients in North America, Latin America and Europe with bi-lingual talent.

After examining several countries in the region, Infosys chose to establish a presence in Mexico because of the broad language skills available in the region, its geographical proximity to Canada, the U.S. and Europe. Latin America is a strong emerging market and one where many of Infosys’ clients have operations already.

For the first year, Infosys Technologies S. De RL De CV will have more than 250 seats. By its third year of operation, the Monterrey facility is expected to employ nearly 1,000 employees. Local and international hires will participate in the standard Infosys training programs to ensure global consistency.

Infosys has appointed Mohit Joshi to head the new subsidiary. Joshi, formerly a group engagement manager with the company’s banking and capital markets organization, has more than 12 years of client and leadership experience. Congrats Mohit !

TCS has already inagurated a Global delivery Centre at Gudalajara.

Pidilite India acquires Pulvitec of Brazil

Pulvitec do Brasil (http://www.pulvitec.com.br/) has been acquired by Pidilite do Brasil, a subsidiary of Pidilite Industries India. Pulvitec has consistently maintained its number 2 position in Brasil market for the product segments of consumer adhesives and maintenance products catering to construction, and industrial segments. The company is operational since 1972. Pulvitec has one of the largest distribution networks in Brasil, with its products available/sold at over appx 50,000 number of sales points. The turnover of the company in 2006 was about 29 million dollars. Pulvitec has its own manufacturing plant in the city of Sao Paulo in the neighborhood of Jaguare. The company has over 180 employees. With this acquisition Pidilite now has a significant market presence in Brasil, and is in 2nd position in most of its product segments. Pulvitec will provide a launch pad for Pidilite to capture significant market share in its segment of products in entire Latin American market.

Pidlite India has a turnover of over 350 million dollars and has presence in USA, Singapore and Middle east, Russia, Indonesia and south africa.
The acquisition was completed on 3 July 2007. Credit for this goes to Satya Muley, chief of Latin American operations in Brazil, who has worked on this acquisition for the last several months.
Congrats Satya !

agribusiness opportunities in Paraguay

On sunday 5 August, there is a presentation on the agribz opportunities in Paraguay
venue- Chandigarh at Hotel Shivalik View at 7.30 pm. Presentation will be made by Mr Papalardo, Ambassador of paraguay and Dr S.Yaadav, who is developing agribz projects in Paraguay. dr Yaadav (agri scientist turned enterpreneur, mobile 9911110397) has been to paraguay 4 times since 2005. He, along with other investors is planning to buy land, grow soya and biofuel plants and process them. Land cost, according to him is about 800 dollars per hectare.

The solvent extractors association of india, which sent a delegation to paraguay recently, is also pursuing a proposal to buy 15000 hectares of soya farm for about 40 million dollars.

Paraguay is among the top ten producers of soya and the price of land and labour cost are relatively low. no restriction on foreign investment in land and farm sector.

My article on Argentina in today's Business Line

Advantage Argentina

While Indian companies in recent years have established their presence in Brazil, Mexico and other Latin American countries, Argentina, the third largest market, has missed their attention. The main reason is the negative perception after the Argentine economic crisis and debt default of 2001. However, in the last four years, the Argentine economy has recovered, stabilised and turned around remarkably. Remarkable recovery
The cumulative growth since 2003 has been over 40 per cent. The growth projection for 2007 is 7.5 per cent and for 2008 over six per cent. This growth is comprehensive and inclusive; unemployment and poverty rates have fallen.
External debt has been brought down to a manageable $113 billion in June 2007 from $171 billion in 2004. In January 2006, Argentina paid its entire $9 billion IMF debt ahead of schedule and freed itself of external policy prescriptions.
Exports have been booming, touching a record $46 billion in 2006, and are set to cross $50 billion in 2007. Since 2002, the country has been recording trade surpluses of over $10 billion annually. Foreign exchange reserves have been growing steadily; they touched $43 billionin July 2007.
The devaluation of the currency from one peso to a dollar in 2001 to 3.07 pesos to a dollar in July 2007 has made exports competitive and attracted more tourists. Inflation was contained at 9 per cent in 2006 and is likely to decline in 2007.Recovery after crisis?
This is not yet another cycle of recovery after crisis, as has happened many times in the past. This time around there seems to be a paradigm shift in mindset. Politicians, business leaders and the public seem determined to create a new future. This is evident from the new economic trends.
Since 2003, and for the first time in four decades, Argentina has posted current account and fiscal surpluses every year. Investment rate reached 23.5 per cent of GDP in 2006, a record in the country’s economic history. Also, the domestic savings rate of 26.5 per cent of GDP in 2006 was unprecedented. These are clear signs of the new discipline and determination, which have been complemented by an increasingly stable political set-up that is providing a conducive environment.Historic turning point
The 2001 crisis was a historic turning point for Argentina not only economically but also politically and culturally. It shook the fundamental psyche of the Argentines. They learnt an unforgettable lesson. No country or financial institution was willing to help them during their most difficult period. They saw the contrasting cases of Mexico, Thailand and Korea which were promptly rescued by the financial powers and institutions. The Argentines had to suffer and resolve the crisis on their own. Driven to the wall, they managed to settle the bond repayment of $80 billion , offering an audacious 30 cents to a dollar. No one expected this to succeed and many thought it was a bluff. But Argentina managed to pull it off. This has given the Argentines a new sense of achievement, pride and responsibility. And has established a solid foundation for a new future based on realism, pragmatism, discipline and self-reliance.
Indian businesses need to understand this paradigm shift and focus on the future. They should look at the opportunities offered by this large market, of 40 million people, a GDP of $290 billion and a land area of 2.7 million sq km, almost equivalent to that of India. It is an agricultural powerhouse and a large exporter of wheat, corn, soya, edible oils and meat.
Argentina is self-sufficient in energy. It has 31 billion barrels of oil reserves and produces 800,000 bpd (barrels per day), of which, 300,000 bpd is exported. It is the second largest gas producer in Latin America and exports to Chile. It is rich in mineral resources such as iron, bauxite, zinc, lead, copper, potassium, silver and gold. The manufacturing industry is relatively large and diversified and is strong in automobiles, auto parts, consumer goods, pharmaceuticals, paper, cosmetics and food processing. Besides its own market, Argentina has duty-free access to the larger market of Mercosur as a member of this customs union. India has concluded a PTA (Preferential Trade Agreement) with Mercosur for 450 items of exports and an equal number for imports.
In 2006, India’s trade with Argentina was $1,239 million, of which, $290 million constituted exports and $949 million imports. Argentina was the largest source of imports of India in Latin America in 2000, 2001 and 2003 and is now the second largest. India’s main exports are chemicals, vehicles, engineering products, textiles and traditional items. Edible oil accounts for 75 per cent of imports, and the others include paper pulp, leather, wool and minerals. Business deals
Indian companies have started exploring investment and joint venture opportunities. United Phosporous has acquired an agrochemical plant. Glenmark took over Argentine pharma company Servycal SA in November 2005. Tata Motors is in a joint venture with Fiat in Argentina for production of small cars. ICICI has a BPO in Buenos Aires and other Indian IT companies are looking at the possibility of BPO and ITES operations making use of the high literacy rate and low cost of operations.
Indian companies are pursuing mining and railway projects and are also looking at agribusiness. They can buy soya farms and produce soya oil to supply to India, which imports edible oils worth $12 billion annually. This is a good time to buy assets, factories and farms, as the prices now are half of what they were before the devaluation in 2002.

Link
http://www.thehindubusinessline.com/2007/08/02/stories/2007080250220800.htm

Colon Free Zone- market study

Colon Free Zone- market study, commissioned by the Embassy of India, Panama, has been circulated to export promotion councils and chambers.
Highlights:
the largest Free Trade Zone in the western hemisphere and the second largest in the world. It has an area of 400 hectares and has 2000 companies. US Dollar circulates freely.
The zone offers free movement of goods and complete exemption from taxation on imports and exports. no corporate income tax, dividend tax,customs duty or federal or municipal taxes.

Trade in 2006 in the zone

total trade 14.5 billion dollars. imports 6.8 billion and reexports 7.6 billion dollars.

source of imports: 63% of total imports come from far east. China 1.9 billion$, Hongkong-1.2 bn$, Taiwan-0.7 bn $, Japan-250 million$ and South Korea-166 million$.

destination of reexports: south america-3.75 bn$ and central america-3.2 bn$
venezuela- 1.58 billion$, Colombia-1.24 bn$, Ecuador-341 million$, Brazil- 145 m$, Peru- 136 m$,Chile-140m$, Guatemala-411m$, Honduras-235 m$, El Salvador-209m$, Costa Rica-359 m$, Dominican Republic-404 m$, Cuba-215m$, Nicaragua-122 m$, Haiti-129 m$, Jamaica-110 m$, Trinidad and Tobago-91 m$, Mexico-170 m$ and USA-275 m$
Imports from India -57 million$

main items of trade: textiles, electronics,shoes,pharma and cosmetics

Indian companies are invited to take advantage of this Zone for their exports to central and south american regions.

Jindal group gets 2.1 billion Dollar contract in Bolivia

The Indian company Jindal Steel and Power Ltd. signed an agreement on 18th July 2007 with the Government of Bolivia for an integrated project involving mining of iron ore and a steel plant. The iron ore will be mined from “El Mutun” which has one of the biggest reserves (40 billion tons) in the world. Jindal group will exploit 50% of the oron ore and will export about 10 million tons per year. They will put up a steel plant in Bolivia to produce 1.5 million tons of steel products. They will also put up a 450 MW gas power plant as part of the project. The investment of 2.1 billion dollars will be spread over a period of 8 years and the contract is for a period of 40 years.

The Government of Bolivia will earn 200 million Dollars annually from this project, which will generate 12000 jobs. President Evo Morales himself announced the signing of this largest investment project in Bolivia.

This is the biggest ever contract secured by an Indian company in Latin America. The fact that an Indian company has got such a big contract in a small, poor and less well known country, such as Bolivia, should now send a strong signal to the Indian corporate sector who have started looking at opportunities in Latin America in recent years. The Jindal project would also have other spin-off opportunities in railways, infrastructure, etc., for other Indian companies in Bolivia.

Congrats Jindals !

Indian BPO venture in Argentina

First Source, the BPO wing of ICICI bank has established a BPO in Buenos Aires since october 2006. This is their first-ever venture in Latin America. They employ 360 Argentines and do work in telecom sector mainly. They have plans to expand and diversify operations including in financial services and increase staff strength to 500. There is only one Indian , Mr Tarak Ghosh, who is the chief of the BPO operations.

Argentina has one of the highest literacy rates ( 97%) and low cost of operations. The Argentinian industry and business are diversified and have depth. The economy has turned around and has been growing around 9 % in the last four years. These strengths make it an ideal country for entry of more Indian IT companies, who are now entering Latin America seriously.

Chile has joined Andean Community as Associate member

Chile became an Associate member of Andean Community (CAN) on 8 June 2007.

Hmmm.. how did i miss this and discovered only now?

The Associate membership is important for both CAN and Chile. The exit of Venezuela from CAN in 2006 has now been compensated. CAN was in a depressed mood when Venezuela, the richest member left the club to join Mercosur. The Chilean economic stability, growth and success will now inject new life into CAN and make it more vibrant besides inspiring the other members namely peru, bolivia, colombia and ecuador. Chile will be able to use this Association to improve its relations with Bolivia and Peru with whom it has historical border problems. The Chilean president Madam Bachelet attended the CAN summit on 11-14 june in Tarija, Bolivia.
It may be recalled that Chile had left CAN in 1976 when it came under military dictatorship.

Chile is now Associate member both in Mercosur and CAN. It is the only Latin American country which has signed a FTA with China. Chile has signed FTAs with about 40 countries and is pursuing more. No wonder Ambassador Jorge Heine said the other day in his speech in Calcutta that India is conservative in its approach to FTAs.

This Associate membership of Chile in CAN is good news for Indian business for their Pan- Andean strategy.

IBSA Ministerial meeting 17 July 2007

Foreign Ministers of India- Brazil-South Africa(IBSA) met today in delhi. This trilateral partnership , formed in 2003 is becoming stronger and stronger. The three cooperate in a number of areas and take common positions on WTO, intellectural property and other issues of common interest.

In the first IBSA meeting in delhi in 2004, they had set a trilateral trade target of 10 billion dollars in 2007, which is being exceeded. They are facilitating trade between the three through harmonisation of standards, customs cooperation and participation in trade fairs. They are trying to improve air connectivity and shipping.

IBSA has decided to initiate talks for a FTA between India, Mercosur and SACU. When this comes about, it will become one of the largest economic spaces in the world with a GDP of 3 trillion dollars and 1.3 billion people.

The next IBSA summit will be held in South Africa in october 2007. During the last IBSA summit in sept 2006 in Brazil, there was a summit of IBSA businessmen.

I call the IBSA alliance as a " cafe con leche" ( coffee with milk) partnership.

Brazilian bank fraud

Recently some Indian exporters have been cheated by a non-existent Brazilian bank called as

BRISTOL & WEST,
RUE ESCOBAR NUMBERO 53,CHUI,
BRAZILTEL Nos. 651207, 651698 & 651236TELEX No : 40349BRSTLWE BREmail : bristolwest@bristolwest.com bristolwestmix@mixmail.com

MR. SAUCEDO(CHIEF FOREIGN DIVISION DEPT.)BRISTOL WESTBRAZILEvery mail Bank indicated : WHOLESALE PRIVATE BANKINGBuyer's Business Account No. : 0 1 6 9 0 4 3 9 9 (Martin Internacional)

Indian exporters should cross check with the embassies in such cases of unknown and small banks.

Latin American pharma market is worth 41 billion$ and growing

It is expected to grow to a market value of USD63 billion at retail prices by 2012.
Highlights of the leading markets:
ARGENTINA
The pharmaceutical market is valued at USD4.7 billion at retail prices in 2007. Pharmaceutical production, distribution and sales are dominated by the leading 20 pharmaceutical manufacturers. Loca accounts for 51% of the market. Foreign producers of branded pharmaceuticals are still recovering from the peso’s devaluation and some have sold their manufacturing plants. In 2005, generic prescribing represented 79% of the total in the federal capital and Gran Buenos Aires, and 71% in the rest of the country.
BRAZIL
The pharmaceutical market is rapidly recovering, with 18% growth in net dollar values in 2006. Including taxes, the market is estimated at USD13.6 billion in 2007, equivalent to USD72 per capita. Generics are expected to represent 20% of the pharmacy sector by 2009.

CHILE
The pharmaceutical market is valued at USD1.5 billion at retail prices in 2007. The pharmacy sector was estimated to be USD735 million at manufacturers’ prices by August 2005. By value, domestic manufacturers have 60% of the pharmacy sector and 90% of the hospital sector. Tough competition arises from the three pharmacy chains controlling 90% of the pharmacy sector. Most of the international producers are importers in Chile. The Ministry of Health and the Institute of Public Health are performing bioequivalence tests in selected active ingredients.
COLOMBIA
The pharmaceutical market is estimated at USD1.8 billion in 2007. At manufacturers’ prices, the pharmacy sector was valued at USD891 million and the institutional sector at USD410 million in 2004. The healthcare reform programme has been instrumental in boosting consumption of pharmaceuticals, but growth has been largely in volume terms. The majority of the market is supplied by the relatively well-developed domestic industry. If ratified, the Free Trade Agreement (FTA) between the USA and Colombia will result in further intellectual property enforcements which might affect the indigenous industry.
MEXICO
The pharmaceutical market is the leading Latin American market, valued at USD14.1 billion at retail prices in 2007. In 2005, the Senate approved the reform of Article 376 of the General Health Law, which means that product registrations are valid for a five-year period. Only a few products are registered as interchangeable generics, but there is a wave of generic producers looking for business opportunities in Mexico. As the market is becoming less competitive, distributors are demanding higher wholesale margins. The retail pharmacy sector, traditionally highly fragmented, is being consolidated by large pharmacy chains.
PERU
The pharmaceutical market is valued at USD1.0 billion at retail prices in 2007. At manufacturers' prices, the pharmacy sector accounts for 72% of the market in 2007, equal to USD562 million, and the hospital sector for 28%, equal to USD219 million. Preferential customs duties and product registration continue towards Latin American countries. The market is still dominated by imports of original drugs, almost exclusively consumed by the pharmacy sector, and locally produced branded generics and generics under International Common Denomination (ICD), consumed by the pharmacy and hospital sectors. The FTA with the USA will result in further intellectual property standards for the pharmaceutical industry.
VENEZUELA
Venezuela is the fourth largest market in the region, valued at USD4.0 billion at retail prices in 2007. In spite of price controls, the pharmacy sector grew by 18.8% in 2005, reaching USD2.1 billion at manufacturers’ prices. Future market expansion will depend heavily on imports, which are controlled. As a percentage of the pharmacy market, domestic production has decreased in recent years, from representing 95% in 1995 to 55% in 2004. In the hospital sector, domestic production accounts for 60% of the total. GMP standards, under WHO Technical Report Series No. 823, were expected to be enforced in February 2005, but the domestic industry has asked for a transition period of three to five years.

For the full research report
(http://www.researchandmarkets.com/reports/c62096)

Latin America turns into magnet for outsourcing-More outsourcing jobs going to Latin America

This is an article by Tom McGhee in The Denver Post. This would be of interest to Indian IT companies who are exploring Latin American markets.
Cheap labor and a Spanish-speaking population are making Argentina and other Latin American countries rising stars among companies looking to save money by sending jobs overseas. South America is an ideal base for services targeting the Latino population in the U.S., said Probir Ghosh, president of Denver-based Virtual Source Networking, a consulting company that helps companies outsource. ''Many countries like Colombia, Venezuela . . . still depend mainly on language-related work. A good amount of business that goes to South America would have a direct or indirect connection to language,'' Ghosh said. Colorado-based outsourcing provider TeleTech Holdings, which has worked for Latin American companies in Argentina, Brazil and elsewhere for at least a decade, has seen demand from U.S. companies for services in those countries rise, said KC Higgins, a Teletech spokeswoman. American companies, which rushed to India - a 600-pound gorilla among offshoring destinations - over the past 10 years, are looking elsewhere as wages have risen in that country, said Peter Ryan, senior analyst at market research company Datamonitor. India and China still lead the pack as locations for offshore jobs, but other countries are emerging as alternatives. Health care and financial services are among a host of industries that are sending jobs to such far-flung locations as Brazil,
Colombia, Ireland, Israel, Hungary, South Africa and Egypt.

Argentina has been aggressive in seeking trade agreements that have enhanced its ability to win work from American companies, said Marcus Courtney, president of WashTech CWA, the Communications Workers of America's organizing arm for tech workers. Industry ''wants to develop a global supply chain of labor; they are equating offshoring to an assembly line. More and more workers are competing for fewer and fewer jobs, and this drives down wages,'' Courtney said.

The collapse of the peso in 2002 sent Argentine wages plummeting below the level paid in India and helped to attract U.S. business to the South American country. TeleTech's Latin American revenue rose from $91.7 million in 2004 to $171.7 million in 2006. Much of the new work is in Argentina, Higgins said. ''In 1997, 100 percent of the work we did in Argentina was for Argentine companies, and that is no longer the case. We started with one site; now we have three, and we continue to expand,'' Higgins said. TeleTech also is expanding into other emerging nations. The company recently opened its first Costa Rican ''delivery center,'' where workers provide both front- and back-office functions, and expects to begin operating another in South Africa soon.

import enquiry from ecuador

Medibac of ecuador is interested in importing from India:

- Clinical Laboratory Equipment, instruments and products: Microbiology, sensitivity discs, consumables, microscopes, centrifuges, etc.
- Medical Equipment and products
- Biotechnology products
- Cancer products.
(Products with respective ISOs, CE, FDA and/or quality control specifications)

The CEO of the company Arturo Echeverria met me in Quito during my tour last week and was very enthusiastic. Interested and reputed companies can contact him directly

contact
Arturo Echeverria
MEDIBAC Inc. S.A. www.medibac.com Av. Las Aguas 1111 y Laureles (Urdesa Central) Guayaquil - Ecuador Phone: (593 4) 288 1414, 238 8597 Fax: (593 4) 238 3116 Cellular: (593 8) 574 8298

Business with Ecuador

Quito was my last stop in the Latin American tour last week. I was impressed by the historic part of the city, which has been preserved aesthetically.

Of course, Ecuador is in a state of political transition. A constituent assembly is going to draw up a new constituition. Political turmoil is inevitable. But the business prospects are good.
India's exports were 50 million dollars in 2006 and imports also 50 million $. There is scope to increase. The Ecuadorian bzmen i interacted were keen.

But my most memorable meeting was with Krishnan Santa Ruben.. sounds spanish. but he is from the land of iddly sambar. He and his wife Karthikeyini are in charge of the 140 million dollar TCS contract with Pichincha bank. It is the largest pvt bank in Ecuador and has branches in other countries. The Ruben couple have adapted well and have established their professional reputation.

The government of India has announced a 20 million dollar line of credit for a railway project in Ecuador to be done by IRCON.

OVL is trying for oil fields and has signed a MOU with Petroecudor.

India is donating one million dollar worth medicines.

The Ecuadorian authorities have promised to liberalise business visas.

Business with Colombia

I am in Bogota on the second leg of my tour this week.
The Colombian economy is doing well with growth over six percent. The local businessmen are upbeat. FDI in 2006 was six billion dollars and is expected to increase to 8 billion in 2007.
India's exports to Colombia in 2006 were 364 million dollars. This makes Colombia the third largest destination for India's exports to Latin America.

OVL has bought a oil field ( 420 million dollars) which produces 20000 barrels per day. They plan to increase production to 60000 bpd by 2010. They are also looking for more oil fields and joint venture with Ecopetrol, the Colombian natinal oil company.
What makes the OVL venture interesting is that theirs is a 50:50 joint venture with Sinopec, the Chinese oil company. If you cannot beat them.. join them.

I met this young Indian engineer who was earlier in Caracas. He told me that his company Schlumburger does more work in Colombia than in Venezuela.

I also met in Ambassador Bhojwani's reception a number of India pharma reps and IT professionals. There was Ashok yadav from Strides Arcolabs, kamlesh Thakkar of IPCA Labs and Sreenathan Kavunkal of Claris Life sciences.

The Government of Colombia is rolling out a new FDI policy to attract foreign investment. Under the new policy, if a company invests 32 million dollars providing 500 jobs, the venture will be considered as a free trade zone by itself. This means the co can import and export without duties. What if a new government wants to change this status. Hmm.. The Colombians provide an innovative insurance. The co can pay one percent of their investment and get a 'stability pact" which ensures that the status cannot be altered for the next 20 years.
The brain behind is the young Minister of Commerce Mr Luis Guillermo Plata, MBA from Harvard business school, who remembered his Indian buddies from the school. He has done a one month trekking from Srinagar to kargil to leh and Dharamsala

A Colombian business delegation is expected to visit India by end 2007.

Visit to Guatemala

Business opportunities for Indian cos in Guatemala is more than what i had imagined. This was what I discovered in my first ever visit to this country from 17 to 19 June. India´s exports in 2006 were an impressive 73 million dollars. This can be doubled in the next three years.

Here r the Indian companies already established in Guatemalan market.

-Intas, the Indian pharma company is well established under the dynamic Nilesh Ambre, a Latin American veteran and ex' Ranbaxy.
-Senthil Kumar from Chennai is here exporting pharma in collaboration with a local partner.
-Praj Industries of Pune has got contracts for new ethanol plants
-Himalaya Drugs has a local distributor
- Bajaj has a local distributor
- Maruti and Tata vehicles are seen in the roads

The Indian IT company 24/ 7 has a majority controlled jv BPO employing 1200 people speaking English and Spanish. The local partner Guilermo Montano is proud and has plans to expand operations in El Slavador and Panama.

Mr Guha is president of the Indo Guatemalan chamber of commerce. He has been here for the last 40 years.

Gutamelan authorities have invited Indian companies for a 5 billion dollar refinery project, Offshore oil exploration and biodiesel projects

India´s honorary consul Verena Rasch is doing a commendable job promoting India. Verena has been a valuable source of information and help to Indian delegations and bzmen. Alan Rasch, her son has imported sugar machinery, switch gear ( from L and T ) and other machineries.

The Guatemalan city is elegant and modern with a pleasant climate round the year. It is a gateway to the rest of Central America.

Guatemala is the largest exporter of cardamom in the world. It is the second largest exporter of sugar from Latin America. Also a large exporter of coffee and bananas.

The Guatemalan authorities have promised to liberalise business visas for Indians. They are going to open a embassy in Delhi soon.

Los Angeles Times article on Indian investment in Latin America

Look out ... who has shown interest in the subject of Indian investment in latin America....
..Los Angeles Times...
Marla Dickerson, their correspondent in Mexico wrote this story and she spoke to me on Skype for 30 minutes.
Here is her story

Latin America attracting investors from India
Similarities in consumer bases help make the region a natural market.
By Marla Dickerson, Times Staff WriterJune 9, 2007

JUITEPEC, MEXICO — Ask for directions to Dr. Reddy's Laboratories Ltd. in this industrial city in central Mexico and locals will give you a curious look.Many are unfamiliar with the drug maker, one of India's largest pharmaceutical companies, which purchased a production facility here in late 2005 for about $59 million. It may be the first time they've heard of an Indian company doing business in Mexico, but it won't be the last.Indian investment in Latin America is relatively small, but it's growing quickly.

Indian firms have invested about $7 billion in the region over the last decade, said Rengaraj Viswanathan, head of the Latin American division of India's Ministry of External Affairs in New Delhi. He figures that amount will easily double in the next five years.While India has become a magnet for foreign investment, Indian companies are looking abroad for opportunities, motivated by declining global trade barriers and fierce competition at home. Their gaze is falling on Latin America, where hyperinflation and currency devaluation no longer dominate headlines."Latin America is becoming a stable and increasingly growing and prosperous market that offers opportunities for our companies," Viswanathan said.

Like China, India is trying to lock up supplies of energy and minerals to feed its roaring economy. Indian firms have stakes in oil and natural gas ventures in Colombia, Venezuela and Cuba. Bolivia last year signed a deal with New Delhi-based Jindal Steel and Power Ltd., which plans to invest $2.3 billion to extract iron ore and build a steel mill in that South American nation. At the same time, Indian information technology companies are setting up outsourcing facilities to be closer to their customers in the West. Tata Consultancy Services is the leader, employing 5,000 tech workers in more than a dozen Latin American countries. Last month it inaugurated an office in Guadalajara, Mexico, that company officials said would soon employ about 500 people and as many as 10 times that within five years. Competition for tech workers in India has driven up costs there, as has the rupee's rise against the U.S. dollar, enhancing the attractiveness of Latin America.Indian manufacturing firms, accustomed to catering to low-income consumers at home, are finding Latin America a natural market. Mumbai-based Tata Motors Ltd. has formed a joint venture with Italy's Fiat to produce small pickup trucks in Argentina. Generic drug makers such as Dr. Reddy's are offering low-cost alternatives in a region where U.S. and European multinationals have long dominated."We are looking at markets to grow," said Puvvala Yugandhar, senior director of business development at Dr. Reddy's. By sharing technology and employing chemists, engineers and programmers, Indian companies are helping to develop Latin America's human resources — and not just extract its natural ones. That's boosting the nation's standing among the region's leaders. Some see India as a partner rather than a rival that's out to steal their resources and jobs, a common worry here about China.Brazilian President Luiz Ignacio Lula da Silva this month traveled to India with a contingent of entrepreneurs looking to forge stronger ties. Mexico sent its biggest-ever business delegation to India in March, and the two nations recently signed an economic cooperation accord. Mexican President Felipe Calderon in May snipped the ribbon inaugurating Tata Consultancy Services' Guadalajara facility."He knows that the way to compete with China is in services," said Ankur Prakash, general manager of Tata Consultancy Services in Mexico. He said 98% of his company's employees in Latin America were locals."We are not sending 747s full of Indians to this part of the world to work," Prakash said. "We are here to create jobs, not to gobble things up."Mexico has been particularly hard-hit by China's rise. The Asian nation's exports of textiles, shoes, electronics and other consumer goods have cost Mexico tens of thousands of manufacturing jobs, displaced it as the United States' second-largest trading partner and flooded its domestic market with imported merchandise. Mexico's trade deficit with China was a record $22.7 billion last year. China has invested less than $100 million here since 1994, according to figures from the Bank of Mexico.Mexico's trading relationship with India, albeit small, is much more balanced. Mexico's trade deficit with India was just under half a billion dollars last year. Indian companies have invested $1.6 billion here since 1994 — about 17 times more than China — according to Mexico's central bank. Viswanathan of India's Ministry of External Affairs calculates Indian investment in Mexico to be around $3 billion.Some of that is in basic industries and traditional maquiladora factories making goods for export. Mexico's biggest steel plant is owned by ArcelorMittal, whose president and chief executive is Indian tycoon Lakshmi Mittal, founder of Mittal Steel. Mittal merged with Luxembourg-based Arcelor last year to form the world's largest steel company.Consumer electronics firm Videocon, based in Mumbai, owns a factory in Mexicali, Mexico, that produces television picture tubes.
But IT companies, including Sasken Communication Technologies Inc. and Hexaware Technologies, also are setting up operations in Mexico. Bangalore-based Infosys Technologies Ltd. is building a service center in northern Mexico that will open this summer and employ 1,000 people within five years, company spokesman Peter McLaughlin said. It will provide consulting and back-office services such as accounting for corporate clients in the U.S. and Latin America.McLaughlin said the company chose Monterrey because it liked the city's modern infrastructure, educated workforce, abundance of bilingual talent and proximity to the U.S."It's imperative to serve our clients in the time zone that's convenient to their businesses," he said.Indian pharmaceutical companies, too, are finding Latin America to be healthy territory for expansion. Firms including Ranbaxy Laboratories Ltd., Aurobindo Pharma Ltd. and Cadila Pharmaceuticals Ltd. have sales or manufacturing operations in the region.Based in Hyderabad, India, Dr. Reddy's sells its antibiotics, stomach remedies and allergy medications throughout Latin America. But the Mexican plant, purchased from Switzerland-based Roche in late 2005, is its first venture in manufacturing in the region. The factory's main product is naproxen. That's the active ingredient in over-the-counter painkillers such as Aleve, which is manufactured by Bayer, a major customer of Dr. Reddy's. Yugandhar, Dr. Reddy's business development director, said the purchase was attractive for a variety of reasons. The plant, which employs 340 people, is approved by the U.S. Food and Drug Administration for exports to the United States. It has positioned the company to expand in Mexico, and the purchase overnight turned Dr. Reddy's into the world's No. 1 supplier of naproxen. "We wanted to be in the top 10 players in the world … in generics," Yugandhar said. "You can't do that [by growing] organically."Yugandhar is the sole Indian at the plant, but says he has had little trouble fitting in. Although there are no Indian restaurants near him, spicy Mexican food has helped fill the void. He is working on his Spanish, but most high-level meetings take place in English, the company's official language. Mexicans handle the day-to-day operations at the plant.Plant director Francisco Casillas said the Indian owners were first-rate scientists who were highly cost-conscious, a legacy of the hotly competitive, low-margin Indian market. He misses the abundant resources the facility had under its European owners. But he has developed respect for the Indian approach on his travels to headquarters in Hyderabad. "They are always looking for more efficiency, productivity and cost savings," said Casillas, who keeps a figure of the elephant-headed Ganesh, Hindu god of good luck, on his desk. "They have taught us a lot."
marla.dickerson@latimes.com