Wednesday, July 29, 2009

Confident Indian company achieves success in Latin America

Confident is both adjective and noun in this story.

It is the name of a small but confident company from Coimbatore which has inspired confidence among Latin American clients and got 500,000 dollars of orders for its textile machinery in Peru, Ecuador, Dominican Republic and Argentina.

Confidence is embedded in the name of the company itself.
It is Confident Engineering Pvt Ltd.
Their email is

More precisely it is the self confidence of Rathnakumar, the Managing Director of the company who has managed to inspire the confidence of the textile companies of South America.

Hardwork and perseverance have complemented the confidence of Rathnakumar in bringing about success in Latin America. He has spent the last one month in Argentina, Peru and Ecuador. He came with the CII delegation on 28 June and is leaving from Buenos Aires on 31 July. He spent ten days in each country. He is planning to come back to the region in the next three months and target Brazil and Colombia.

Rathnakumar has appointed dynamic and proactive agents in these three countries. These agents had taken him to visit over 30 textile plants. He convinced the technical staff and management of some of these companies that he could help them reduce their cost of production with his dyeing and finishing and effluent treatment machinery which costs just half the price of those which they import from Europe.He carried a small prototype of his Effluent water treatment plant and gave demonstration to the clients using their plant waste water. Confident Engineering has innovated a new technology to treat waste water of dyeing plants through an electrocoagulation method without the use of chemicals. They are applying for patent for this.

Rathnakumar wanted to participate in an exihibition in Buenos Aires in 2008 and paid 1500 dollars for the stall. But the Argentine embassy in Delhi did not give him visa. He lost the money and the opportunity. The Embassy wanted him to produce a original invitation from an Argentine client attested by an Argentine notary public. This is an unauthorised procedure being adopted by some corrupt elements in the Argentine embassy in Delhi, in violation of the Argentine government procedure. Was Rathna Kumar deterred. No! He waited and got the visa now without an invitation letter. He does not have any rancour. He is focussed on the future potential and does not bother about past setbacks.

In Peru, he got order for 70.000 dollars for a machine which he has never made so far. He showed the client a French machine in a Peruvian plant and told him he could make a similiar one. The client was convinced by the confident competence of Rathnakumar and gave him the order.

What difference did he find in business with South American clients? He says here they dont want to open LC . Most of them prefer to deal in cash. They pay an advance amount by TT and the rest they pay later. They retain a percentage of payment as guarantee for performance of his machine. Of course, Latin American importers open LCs for large orders.

Confident Engineering is a small scale enterprise with a turnover of just 1.5 million dollars and 40 employees. Their machines cost from 20,000 to 100,000 dollars. The company was started by Rathnakumar, an electronics engineer and his partner in 2003 with an investment of 20,000 dollars. Rathnakumar had worked with Larsen and Tubro for six years but left it to follow his enterpreunerial instinct. He got a breakthrough in Bangladesh for his dyeing and finishing machines. Now he has set up a fullfledged office in Dhaka to manage supply of machines and service them. Then he got some orders from Indonesia and Srilanka.

Now his focus is on Latin America. He expects to get orders worth five million dollars in the next few years. He has already established his reputation in Peru, Ecuador and Dominican Republic and now in Argentina. His next targets are Colombia and Brazil.

How did the Latin Americans treat Rathnakumar in his business and personal interactions in the last one month, I asked him. He found the Latin Americans pleasant and friendly. Of course, they needed to be convinced that they could risk their money with a small company in a remote corner of India. But they were willing to listen to him with open mind.

The Latin American textile industry had been importing from Europe and Japan. But now they want to try lesser expensive sources such as China and India. In these days of global financial crisis, local credit crunch, tough market conditions and globalised competition, the Latin Americans are focussing on cutting the cost of production. For this, they are turning to ess expensive import sources such as China and India. They mentioned to him about their preference for India over China beacuse of cultural reasons. They told him that they could understand and communicate and trust the Indians better. They looked at him as a person from the well-known land of Yoga, Meditation, Sai Baba, Hare krishna, Mahatma Gandhi....

What about language and food? I ask him.
This mild mannered Sambar- Idly South Indian smiles and says ¨No problem. I have already picked up some basic spanish in my two trips. I can understand the technical and price parts of the negotiations. Now I plan to take a crash course for a couple of weeks.¨I advised him to try the Instituto Hispania in Chennai.

Food. He eats whatever Latin America offers except beef. He does not miss Iddly Sambar in this one month absence from India. He liked the ceviche of Peru and empanada ( latino samosa ) of the region.

In my last blog story I wrote about the Latin American success of TCS, which is a big company. But in the case of Confident Engineering, it is the story of success of a small Indian company. I hope this will inspire and motivate the small and medium exporters of India.

What our exporters need for business with Latin America is ....Confidence ! Confidence in Latin America !

Indian exports to Latin America increased by 50 percent in 2008 to 7.5 billion dollars from 5 billion in 2007. What else is needed to inspire confidence?

Friday, July 17, 2009

Gabriel Rozman… Uruguyan Wizard of TCS

During the India- Latin America Business Seminar in Buenos Aires on 2 July, when it was announced that a Senior Vice President of Tata Consultancy Services ( TCS) in charge of Latin America, Spain, Portugal, Middle East, Africa and East Europe, would make a presentation, the audience expected to see a Chandrashekar or Srinivasan. They were surprised and puzzled when Gabriel Rozman, a Uruguyan came on the stage. The Argentine dignitary sitting on the stage next to me shrugged his shoulders,raised his eyebrows and looked at me. I told him Gabriel Rozman is a Uruguyan of Hungarian origin, holding a US passport. Most of the time he is up in the sky in planes crisscrossing the oceans. Even when he is next to you, he is constantly fiddling with his Blackberry. He has houses in Punta de Leste, Buenos Aires and NewYork and may be he is buying one in Mumbai.

Picture above: Rozman speaking at the Seminar.

It is not only the audience in Argentina who are puzzled by the unexpected Rozman-TCS combination. Clients in Latin America, US, Europe and the emerging markets are also taken aback when Rozman markets TCS services to them. He reels off the history and reputation of TCS and Tata Group with passion and pride. His opening line is ¨somos el grupo mas importante de la India - We are the most important group of India¨. Rozman is a regular speaker on India and IT at the international and regional business conferences in Latin America.

Rozman joined TCS in 2001 and started the company´s operations in Uruguay in 2002 with 15 staff. Today the company employs 800 Uruguyans and plans to expand and double the strength in the next few years. The Uruguay Center of TCS provides offshore IT services to US, Europe and Latin America. Being a small country, Uruguyan IT human resources are obviously limited. To meet this challenge, TCS has started a Regional Training Center in Montevideo for Uruguyans and Latin Americans. This has already trained over 500 professionals and the target is 3000 within the next two years.

When Rozman proposed to TCS that Montevideo would be the launching pad for Latin America, the bosses in Mumbai were skeptical. They knew Brazil, Argentina and Mexico. But Uruguay.... hmm... such a small country with a tiny amount of human resources and unviable local market ! To answer these questions and convince the company, Gabriel arranged the visit of Ratan Tata, the Chairman of the Tata Group to Uruguay in January 2004. Tata had readily agreed after seeing the business climate of Uruguay and the seriousness of the Uruguyans.

Picture above: from left to right, Rozman, Ramadorai CEO of TCS, Rattan Tata and Battle President of Uruguay.
To my knowledege, this was the first ever business visit of Ratan Tata to Latin America. It was after this visit that the Tata group has started taking Latin America seriously.

From Uruguay, Rozman expanded the TCS operations to Brazil, Argentina, Mexico, Ecuador, Colombia and Chile through the organic as well as the inorganic route. Rozman managed to get President Felipe Calderon himself to inagurate the Mexican centre of TCS in 2007. Rozman got two large contracts of more than 150 million dollars each from Banco Pichincha in Ecuador and the Mexican pension fund system. Six percent of the global revenue of TCS comes from Latin America.
Currently, TCS employs around 6000 Latin Americans including 2000 Chileans, 1700 Brazilians, 1000 Mexicans, , 800 Uruguayans, 150 Argentines and a few hundred Ecuadorians and Colombians. Latin Americans form 48% of the non-Indian staff of TCS, whose total strength is close to 100,000.

Rozman´s conquest of Latin America lead to his promotion in January 2008 from Head of Iberoamerica to the next level of Executive Vice President for Emerging Markets. As part of TCS’ Executive Leadership team, he is responsible for leading the company’s strategy to enter new markets and other strategic corporate initiatives.

Rozman is undoubtedly the secret behind the success of TCS in Latin America. I remember when I was Consul General in Sao Paulo, TCS was struggling to enter Latin America through Brazil. The Indian representative of TCS who was working on the Latin America entry strategy in SaoPaulo was frustrated that despite the impeccable reputation and competitive pricing the Latin Americans did not take TCS seriously. The Latin American clients were willing to pay more to North American IT companies who would in turn outsource the job to India. It was Rozman, with his multicultural skills, who changed their mindset and made them feel confident and comfortable in dealing directly with Indian IT companies. Rozman´s Latino charm, understanding of Indian culture and American style of aggressive marketing paid off. It was only after his success in opening Latin America for TCS that other Indian IT companies including Infosys, WIPRO have started entering this region. But the business of other Indian IT companies is a very small fraction of the turnover of TCS in the region even now.

Rozman has used diplomacy too. He has succeeded in convincing Ramadorai, the CEO of TCS to become the Honorary Consul of Uruguay in Mumbai. I guess the patriotism of Rozman is also behind the success of a Uruguyan architect Carlos Ott who got a contract to build the 250 million dollar IT complex of TCS in Chennai. It will be one of the largest IT complexes in the world with 30,000 staff .

The TCS success in Latin America has pioneered a new 12/ 12 business model for Indian IT companies for delivery of offshore services to North American clients. Twelve hours of service from Latin America ( the same time zone as that of North America) and twelve hours from India. This is better than the 24/7 model in which Indians dont get time to sleep. In the 12/12 model. the Indians get time to sleep while the Latin Americans work !
The second advantage is the multilingual skills of the Latin Americans. They are proficient in Spanish, Portuguese,Italian, French and German since their grandparents or great parents came from Europe. Of course, many graduates speak English. One should also remember that USA has about 50 million Hispanics who have become the largest minority there and Latin America is a base from which to reach out to the US Hispanic market.
Latin America, like India, has lot of young people. They are better tuned to American and European culture, fashion and mindset than the Indians. They are also creative, imaginative and free-spirited. These traits are especially useful for design and creative work.
Gabriel Rozman-TCS success is an example of the emerging strategic win-win partnership between India and Latin America in the IT sector. I hope this will be an inspiration for more Latino Rozmans and Indian companies.

Tuesday, July 14, 2009

cost of living in Latin American cities

According to a Mercer survey, quoted by Latin Business Chronicle of July 2009,

Caracas has replaced Sao Paulo as the most expensive city in Latin America for foreign executives. Caracas is now more expensive than cities like London and Helsinki.

The survey looks at the comparative cost of over 200 items, including housing, transport, food, clothing, household goods and entertainment in 143 cities worldwide, including 16 in Latin America.

Other cities that became more expensive since the last year survey include Buenos Aires, Panama City, Santo Domingo and Quito.

Monterrey in Mexico has replaced Paraguay's capital Asuncion as the least expensive city in Latin America.
Cities that became less expensive include Sao Paulo, Rio de Janeiro, Guatemala City, Bogota, Lima, Santiago, Montevideo, San Jose, Mexico City, Asuncion and Monterrey.

Here is the list of Latin American cities with their world ranking in terms of cost of living:

World Rank - City

15 -Caracas, Venezuela
72 -Sao Paulo, Brazil
73 -Rio de Janeiro, Brazil
93-Panama City, Panama
104-Santo Domingo, Dom. Rep.
112-Buenos Aires, Argentina
119-Guatemala City, Guatemala
120-Bogota, Colombia
122-Lima, Peru
128-Santiago, Chile
131-Montevideo, Uruguay
132-San Jose, Costa Rica
136-Quito, Ecuador
137- Mexico City, Mexico
141-Asuncion, Paraguay
143-Monterrey, Mexico