Thursday, June 28, 2007

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

Arturo Echeverria
MEDIBAC Inc. S.A. 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

Tuesday, June 26, 2007

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.

Thursday, June 21, 2007

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.

Tuesday, June 19, 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.

Tuesday, June 12, 2007

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."

Monday, June 04, 2007

What does President Lula's visit mean for India's business with Brazil

President Lula and PM Manmohna Singh with the CEOs

President Lula addressing the business meet

President Lula was accompanied by over 100 businessmen, the largest-ever bz delegation to have visited India.The delegates were busy with meetings and deal-makings and some of them are staying behind and visiting other cities. In his speeches, President Lula inspired confidence and optimism among Indian businessmen.

A Brazil- India CEOs Forum was formed and had its first meeting on 4 June. The Forum had a meeting with President Lula and PM Dr Manmohan Singh together. The Forum consists of 17 CEOs from India and 14 from Brazil. List attached. Cochairman from India is Rattan Tata and from Brazil it is Sergio Gabrielli, CEO of Petrobras. The Forum will meet once a year and suggest to the governments their ideas for more trade and investment. But more than that, the CEOs Forum has elevated the level of understanding and dealing to the top level. Earlier the interest in Indo- Brazil business was at the level of middle managers and Vice presidents. This means billions of dollars of deals from the earlier millions !

The governments and business of the two countries have set an ambitious goal of 10 billion dollars of bilateral trade by 2010.

The fact that both the Indian and Brazilian economies joined the trillion dollar ( GDP) economies almost around the same time( Brazil in April and India in May 2007) have given a new confidence boost.
Some of the deals made or in the making
- Petrobras is getting into 3 offshore blocks in India in joint venture with OVL. In return Petrobras has given equity to OVL in 3 offshore blocks in Brazil.
- HCL is gearing up enter Brazil.
-CVRD has already set up an office in Delhi and is doing bz with no of Indian companies. They are looking for investment opportunities.
- Essar is exploring mining opps in Brazil.
- BPCL is getting into a jv with Petrobras for ethanol in Brazil
I am more than ever optimistic and confident that the business with Brazil is going to make quantum leap in the coming years.
India-Brazil CEOs Forum

Mr. Ratan Tata (Co-chair),
Chairman, Tata Sons Ltd
Mr. Subodh Bhargava,
Chairman, VSNL
Dr. Surinder Kapur,
Chairman & Managing Director, Sona Koyo Steering Systems Ltd
Mr. V.R.S. Natarajan,
Chairman & Managing Director, Bharat Earth Movers Limited
Mr. R. S. Sharma,
Chairman and MD / Mr. R.S. Butola, Managing Director, OVL
Mr. Dhruv Sawhney,
Chairman & Managing Director,
Triveni Engineering & Industries Ltd
Mr. Malvinder Singh,
CEO & Managing Director, Ranbaxy Laboratories Ltd
Mr. Pramod Chaudhari,
Chairman, Praj Industries Limited
Mr. Ramalinga Raju,
Chairman, Satyam Computers
Mr. S. Ramadorai,
Chief Executive Officer, Tata Consultancy Services
Mr. Gautam Thapar,
Chairman, Ballarpur Industries Ltd.
Mr. Jamshyd Godrej,
Chairman & Managing Director, Godrej & Boyce Mfg Co. Ltd.
Mr. Sunil Kant Munjal,
Managing Director & CEO, Hero Corporate Services Ltd.
Mr. K.V. Kamath,
Managing Director & CEO, ICICI Bank Ltd.
Mr. Mukesh Ambani,
Chairman, Reliance Industries Ltd.
Mr. Deepak Parekh,
Chairman, IDFC
Mr. Tarun Das,
Chairman, Haldia Petrochemicals Ltd & Chief Mentor, Confederation of Indian Industry
Brazilian side

Mr. José Sérgio Gabrielli (Co-chair),
CEO, Petrobrás (Energy)
Mr. Armando Monteiro,
Chairman, Confederation of Brazilian Industry Mr.
Vitor Hallack,
Chairman, Camargo Correa S.A. (Civil Construction, Textiles, Logistics, Energy, Construction material)
Mr. Paulo Godoy,
CEO, Alusa Holding (Energy Transmission, Construction and Cable TV)
Mr. Deonísio Petry,
Managing Director, Figwal Transportes Internacionais Ltd.(Transport)
Mr. Flávio Machado Filho,
Vice-Chairman, Andrade Gutierrez (Construction)

Mr. José Antonio Martins,
Vice-Chairman, Marcopolo S.A. (Commercial Vehicles and Transportation)
Mr. Nilo Jose Panazzolo,
Managing Director International Affairs, Banco do Brasil S.A.
Mr. Giacomo Feres Staniscia,
CIO-CTO, Atech Tecnologias Críticas (Software)
Mr. Rúbio Fernal, Director for Business Development, Odebrecht (Construction)
Mr. Nestor Giacomin, Managing Director, Randon (Transport equipment)
Mr. Orlando José Ferreira Neto, Managing Director, Embraer (aircraft)
Mr. Rui Lopes, Vice-President, Grupo Gerdau, (steel)
Mr. Hermelindo Ruete de Oliveira, Managing Director, Copersucar (sugar and ethanol)

Friday, June 01, 2007

My article in Business Line of today on Brazil

Brazil — the emerging bio-fuel power

The pioneer in the use of ethanol as an alternative fuel, Brazil could soon become a bio-fuel power with its ability to grow a variety of vegetables and oilseeds on large tracts of arid land unsuitable for other crops. India, which relies much on imported crude oil, has much to learn from the Brazilian success story and the way it was achieved, through public-private partnership, says R. VISWANATHAN.

Brazil is the pioneer, and world leader, in the use of ethanol as an alternative fuel in automobiles. It introduced ethanol-driven cars in 1975 after the first oil price shock. Today 80 per cent of the two million cars made in Brazil have flexi-fuel engines — introduced since 2003 — which can use either petrol or alcohol or a combination of the two. Besides cars, the Brazilians have started using ethanol in small non-passenger aircraft. A Brazilian air-taxi service company, which operates crop-duster planes, has cut its fuel bill by a third by using ethanol.

With the ethanol fuel programme, Brazil has reduced substantially its requirement of petrol. Instead of paying the high prices in dollars to the crude oil exporting countries, Brazil is paying its own sugarcane farmers, adding to domestic wealth and creating jobs. Equally important is the reduction in pollution by the use of ethanol, which is a cleaner and renewable source unlike the fast depleting petroleum.

Inspiring Example
The success of Brazil has inspired the United States, the European Union, Japan, China, India and many other countries to opt for the ethanol route. The US President, Mr George Bush, has called for a reduction in the consumption of petrol by 20 per cent in the next decade mainly by substituting it with ethanol and other bio-fuels. Seeing this favourable trend, Brazil took the initiative in the launching of an "International Bio-fuel Forum" at New York on March 2, along with the US, the EU, China, South Africa and India. Their objective is to commoditise fuel ethanol in the same way as crude oil is being globally traded.

According to a McKinsey study, global exports of fuel ethanol by 2020 will be a minimum of 50 billion litres with the potential to go even up to 200 billion litres. This has opened a golden opportunity for Brazil, which has many natural advantages to raise production and export of ethanol. Brazilians are aggressively positioning themselves to be a leading supplier and a global player as a "Saudi Arabia of fuel ethanol". Here are the competitive advantages of Brazil to become an ethanol power:

Brazil is the lowest cost producer of fuel ethanol in the world. Its cost of production is 23 cents per litre compared to 39 cents for the ethanol produced from corn in the US and 52 cents for the wheat-based fuel-additive in Europe. Brazilian farmers do not receive any government subsidy unlike their American and European counterparts.

Brazil is the leading exporter of fuel ethanol, accounting for almost 50 per cent of the global exports of 6.5 billion litres in 2006. Brazil exports ethanol to the US, Europe, Japan, Sweden, China and even India. Petrobras, the Brazilian state oil company, is gearing up to export eight billion litres of ethanol by 2010.

Brazil is the world's second largest producer of ethanol after the US. Its production in 2006 was 17 billion litres, of which it consumed 14 billion litres and exported the rest.
Brazil is the world's largest sugarcane producer. The production in 2006 was 460 million tonnes, of which 55 per cent was converted directly into alcohol and the rest for producing sugar. The yield per acre of sugarcane in Brazil is one of the highest in the world, thanks to the cutting-edge research and development by their agro research institute EMBRAPA.
Brazil can increase the sugarcane acreage from the current six million hectares. Brazil uses only 47 million hectares for crops at the moment and can add 100 million hectares easily, without touching the Amazon or affecting the environment. Perhaps no other country has so much unused arable land. Brazil also has the ideal climate for sugarcane and abundant water resources.

Sugarcane is a more efficient source of fermentable carbohydrates than corn. Sugarcane-based ethanol returns four times more energy than the corn-based fuelcounterpart and produces less carbon-dioxide. Ethanol production in Brazil becomes even more cost-effective as many Brazilian ethanol plants are self-sufficient in power with their own captive plants which use bagasse as fuel and get even extra revenue by selling power to the grid.
Over the next five years, Brazilians plan to invest $12 billion to set up 77 ethanol plants and another $2.4 billion to expand the existing 360 units. By 2012, the production capacity will reach 9.5 billion litres. They are also investing in logistics such as pipelines and storage.

Beyond ethanol
Brazil is looking beyond ethanol and is pursuing other options of bio-fuels as well. It has already started producing bio-diesel from soybeans and reduced diesel consumption by 15 per cent. It now mixes diesel with 2 per cent vegetable oil but plans to increase this to 20 per cent by 2020. Again, Brazil has the natural advantage to grow dozens of vegetables and oilseeds for bio-diesel, in the large tracts of arid land unsuitable for other crops.
A Brazilian beef export company is building a plant to make bio-diesel from animal fat. Here also Brazil has an advantage with its large cattle population and competitive meat industry. Brazil is thus well positioned to become a bio-diesel power as well.
India has much to learn from the Brazilian success story and the way it was achieved through public-private partnership as a national priority. India can benefit through intergovernmental cooperation and business alliance with Brazil. Indian sugar companies are exploring opportunities for acquisition of sugarcane acreage and plants for sugar and ethanol production in Brazil. One company has already set up a subsidiary in Brazil and earmarked $500 million for investment.
(The author is with the Ministry of External Affairs. The views are personal. E-mail:

Link to the article: