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

Elgi launches 100% subsidiary in Brazil

Elgi Equipments, a leading manufacturer of compressors in India has launched a 100% subsidiary at Sao Paolo in Brazil to directly market its products. It would also start manufacturing the products in the country soon.

Elgi is based in Coimbatore in the state of Tamilnadu.

"Initially, the new company would concentrate on marketing our products in Brazil. We would import the products from India and then stock them in a warehouse and make it available off-the-shelf," said Elgi Equipments MD Jairam Varadaraj.

Elgi has made the first stage investment of around two million dollars. After an 18-24 months gestation period, the new company would set up a manufacturing plant and commence commercial production, he said. ‘Elgi Compressores Do Brazil’ would engage in marketing of electric and diesel screw compressors. It would also set up a wide network of distributors with main focus on service and after marketproducts.

"So far, we sold close to 100 pieces in Brazil through distributors. Since we find acceptance for our products, we decided to start a new company to sell our products there," V T Govindarajan, Director – Global Business, Elgi Equipments told Economic Times of India.

He said Brazil accounts for about 4% share of the global market for industrial compressors. "We are aiming to capture 10% of the Brazil market for screw compressors within a period of four years" Mr Govindarajan added.

Last year, Elgi established two overseas subsidiaries, one in Sharjah in the Gulf and ‘ a wholly owned manufacturing plant at Jiaxing in China with a marketing office in Shanghai. In 2008-09, Elgi’s compressor segment posted a turnover of Rs 471 crores, of which 17 % was from international operations.

Patni Computer Systems Opens First Delivery Center in Latin America- June 2009

Patni Computer Systems of India announced the opening of a new delivery center in Queretaro,Mexico to augment its global delivery capabilities and serve the North American and Latin American markets. The Center will offer Patni’s full range of services and solutions covering IT consulting, software development outsourcing, contact center operations and business process outsourcing.

Patni is opening the delivery center in a temporary facility in Tecnologico de Monterrey’s Queretaro campus with an initial seating capacity of about 100 full-time workers. The center will move to a permanent location at Technology Park of Tech De Monterrey in October this year. Patni is planning to gradually expand employment to about 300, with the bulk of the jobs being filled with local workers.

With an employee strength of over 14,500; multiple global delivery centers spread across 12 cities worldwide; 27 international offices across the Americas, Europe and Asia-Pacific; Patni has registered revenues of US$ 719 million for the year 2008.

TCS opens third Global Delivery centre in Mexico

Tata Consultancy Services (TCS) has opened its third global delivery centre in Queretaro, Mexico and seventh in Latin America. The other two Mexican centres are in Mexico City and Guadalajara in Jalisco state.

The company expects to hire 500 professionals during the current financial year for its new centre. With over 1,000 people in Mexico alone, TCS plans to take the headcount to 5,000 by 2012.

TCS has a presence in Brazil, Chile, Argentina, Uruguay and Mexico. The total headcount in Latin America is over 5,000. Contribution from Ibero America, which covers Latin America, was 4.7 per cent of the company’s revenue for 2008-9.

The new delivery centre in Mexico will provide advanced IT services, consultancy, test factory, business process outsourcing, contact center, IT infrastructure solutions, industrial & engineering services and solutions based on exclusive TCS products to existing and potential customers.

TCS established its operations in Mexico in 2003 and already serves more than 30 local clients in addition to international clients across various industries, including telecom, finance, banking, manufacture and retail.

Infosys Opening unit in Brazil

India’s second biggest software exporter Infosys Technologies plans to open a software development and back office centre in Brazil later this year, as the company seeks to serve its US customers better by establishing a near-shore presence.

Apart from being a local delivery centre, the new unit will also help Infosys gain more business from the regional market, V Balakrishnan, chief financial officer of Infosys, told Economic Tiems of India in an interview. “Some of our US customers asked for a centre in Brazil, as the country falls in the same time zone,” Mr Balakrishnan said. The centre is expected to begin its operations within next three-four months, and is expected to employ around 100 professionals initially across the functions of IT and back office projects.

TCS and Wipro already have centres in Brazil. While TCS has around 1,700 people in Brazil with development centres in Brasilia and Sao Paulo servicing around 30 clients, Wipro has a BPO centre in Curitiba providing shared services to AmBev, a leading brewery company.

Brazil recorded IT exports worth $1.4 billion for 2008 registering 75% percent growth and employs around 1.7 million people in the sector. Infosys joins the likes of TCS and Wipro Technologies in having their operations in Brazil.

Simmar Pal Singh - Peanut Prince in Argentina

During my golf game at the Rio Cuarto Country Club on 16 May, the Argentine players asked me where they could buy a Turban and how to wear it. I asked them the reason for this special interest. They showed me a villa within the country club complex and said ¨Here lives an Indian Maharaja. He looks handsome with his Turban. When he goes to the night clubs , he gets premium service and gets it free because they think he is a Maharaja.¨ The Argentines wanted to wear Turbans and get the same special treatment at the night clubs.

The envy of the Argentines is Simmar Pal Singh, a Sikh from India. I clarified to the Argentines that Turbans do not mean Maharajas. They asked me to shut up and not to reveal this secret at the night clubs ! I told them that Simmar Pal is not a Maharaja by birth but has become a Peanut Prince of Argentina.

Here is Simmar Pal in dark suit on the left. In the middle is Nityanand, from Coimbatore, who is the manager of the peanut processing plant. On the right is Narinder Pal Singh, Olam manager in Brazil.

Simmar Pal Singh cultivates 12,000 hectares of peanut farms and another 5000 hectares of soya and corn in Rio Cuarto area in Cordoba province, about one thousand kms from Buenos Aires. His target is to take his company Olam among Argentina´s top three peanut players in the next few years. When he came to Argentina in 2005, his company was 28th in ranking in peanuts and he has already made it as sixth this year. Argentina is the second largest exporter of peanuts after China, accounting for 25% of the world trade in kernels. Rio Cuarto region produces high-quality peanuts with its ideal soil and agroclimatic conditions.

During the dinner at his home, Simmar Pal's wife Harpreet Kaur, an architect with an M.Tech from IIT Delhi, laughed when I told her about the Argentine interest in Turbans. She said that Simmar Pal might have gone to the night club to check the peanuts his company had supplied to the club to serve with the drinks. I believe her. Simmar Pal works sixteen hours a day and has no time for night clubs. This modest young man from Amritsar has fiery ambitions, exceptional talents and is motivated by his success in the last five years. Simmar Pal did his B.Sc Honours in Agriculture from Guru Nanak Dev University and Masters degree in Rural Management from IRMA, Anand. He has worked in Mozambique, Ivory Coast and Ghana before coming to Argentina. He speaks Spanish fluently and his wife and two children have adopted to the life in Rio Cuarto, a small city of 140,000 people.

Simmar Pal works for Olam, the 5.6 - billion dollar Non-Resident Indian company headquarterd in Singapore. It is a leading global supply chain manager of agricultural products and food ingredients. Their 9000 employees worldwide operate an integrated supply chain for 20 products in 60 countries. It is a global leader in many of these businesses including Cocoa, Coffee, Cashew, Sheanuts, Sesame, Rice, Cotton and Teak Wood. Olam has a turnover of 500 million dollars in Brazil and employs 930 Brazilians. In their operations in Colombia and Peru they have sixty employees. More info http://www.olamonline.com

Simmar Pal came to Argentina in 2005 for buying peanuts for the company. When he found that the farmers preferred to sell their products to established companies and were hesitant to deal with new buyers, he proposed to his company that they should go into farming themselves. This was something new for the company which had been operating only in the field of trading and processing. Seeing the fire in Simmarpal´s belly and shine in his eyes, they wanted to give him a chance. He started off with leasing of 700 hectares of land and grew peanuts. It was a sucess. The company let him lease additional acreage. This year he has cultivated 17000 hectares including 2000 hectares in the province of salta about 700 kms away from Rio Cuarto. He has plans to continue the increase in acreage and grow other crops such as wheat, soya and pulses. Some of these and especially pulses could be exported to India.

Picture below is Peanut harvesting by the machine in Simmar Pal´s farm:

Olam has acquired two peanut processing plants. When I went to visit one of the plants, the mayor of the village Dalmacio Velez, of 2000 people, was there. He made a speech expressing his happiness with Olam which has turned around the factory and has given jobs to his village people.

Simmar Pal employs 140 Argentines, most of them in the processing plants. In the farm, he has very few people since the farming in Argentina is mechanised and everything is outsourced. Simmarpal contracts other companies for seeding, spraying of pesticides, harvesting etc. I did not mention ploughing because, in Argentina they dont plough the land anymore. They practise what is called as Direct Seeding ( siembre directa) which means they dont prepare the land with ploughing after the previous harvest. They let the residues from the previous harvest to rot and become manure. Seeding is done with a special machine which puts the seed inside the earth along with fertilisers without opening the earth around the seed.The land retains its moisture and organic materials. This is environment-friendly and sustainable agriculture.

The farming in Argentina is done in large scale, technology-driven and is globally competetive. It is done commercially, scientifically and professionally. The farmers consider 2000 hectares as the minimum land holding necessary to do cultivation on their own. When they have less, or when they dont want to dirty their hands, they rent out their land to companies and individuals who do professional cultivation in large scale. Seventy percent of the cultivation in Argentina is on rented land. Simmarpal paid last year 700 dollars per hectare. He has rented the 17000 hectares from 40 owners with holdings ranging from 40 hectares to 3000 hectares.

An Argentine company called as Los Grobo Group cultivates over 200,000 hectares with its professional management. I told the owner of this company, who has got his own aircraft, that the secret of his success is his previous incarnation in Gujarat. His name is Grobocopatel.... Patel is the last part of his name and the gene behind his entrepreunerial talent! No wonder, he is a follower of Saibaba and practises meditation and yoga.

Simmar Pal employs four agronomists and pays them 45,000 dollars each per year. He uses the consultancy services of four more agronomists. The Argentine agronomists get as much salary and prestige as the software specialists. Last week, I visited the farm of a friend Francisco Okecki in Buenos Aires. He is an agronomist who manages 20,000 hectares including 1000 hecatres which belong to him. He is so passionate about agriculture as much as as I am about Latin America.

What Simmar Pal Singh is doing in Argentina has a lesson for India, which is going to face in the long term shortage of agricultural land and water for irrigation for its population which is increasing by 15 million per year and a population equal to Argentina every 32 months ! But Argentina, which has almost the same area as that of India has a small population of 4o million and plenty of land and water. Argentina is an agricultural power house. It exports 50% of its agriproduction of 100 million tons. It is the world’s largest exporter of soy oil and sunflower oil, the second largest exporter of corn, third largest producer of beef , soyabeans and biodiesel and fourth largest of wheat. Argentina is the fifth largest producer of wine in the world. It has significant potential to increase its area under cultivation ( from the mere 32 million hectares at present, in contrast to India´s 130 million hectares ) and production.

In India, we have irrigation canals, dams, ground water pumps and issues of water table going down and free electricity for farmers. Argentines are free from these issues since their agriculture is almost entirely rain-fed. There is irrigation only for a few specialist farms and some vineyards. Indra, the Rain God takes care of the rest !

Argentina has developed an efficient infrastructure, logistics and network for transportation and shipping. The food processing industries of Argentina are one of the most advanced in the world and globally competitive. For example, the oil crushing capacity of Argentina is the third highest in the world- even ahead of Brazil- with the latest technology and plants.

The Argentines have innovated a new system of storage of grains in open air instead of expensive concrete and steel silos. They have developed polythene silobags which can store 200-400 tons on the field itself. The grains are pumped into the bag by a machine and can be stored for upto 15 months. The bag is ripped open at the time of transfer to the trucks. The Argentines have exported this new technology and bags to a number of countries and want to export to India too. Cost of this new type of storage is four dollars per ton.

Argentina could be a longterm source of supply of grains, oil seeds and pulses to India. Already India is importing from Argentina soya and sunflower oil for about 700 million dollars a year. There are occasional imports of wheat.

The Indians could go beyond imports and invest in Agribusiness in Argentina. There is no restriction on foreign investment in agriculture in Argentina. A number of foreign companies and individuals own land here. Cost of the most productive land is 15,000 dollars, which, I am told is cheaper than in Punjab. The Argentine yield per hectare is about three times higher than that of India in soya, peanuts and some other crops. The Solvent Extractors Association of India has formed a Consortium of companies interested in investment in agribusiness in South America.

I hope the Indian enterpreneurs will come to invest in Argentina, inspired by the successful example of Peanut Prince.... Simmar Pal Singh !

They should not forget the Turbans...

China becomes the biggest trading partner of Brazil

In the first four months of 2009, China, overtook USA, as the biggest trading partner of Brazil. The bilateral trade will increse more with the following two agreements signed during the visit of President Lula to China last week:

Beijing announced a 10 billion dollar loan to Petrobras in exchange for supply of 200,000 barrels of crude oil over the next ten years.

The Chinese agreed to lift restrictions on import of Brazilian chicken and agreed to import more meat from Brazil.

Incidentally, Brazil is the largest exporter of chicken in the world. Their exprts in 2007 were 3.2 million tons

Agreements were also signed for supply of bio fuel to China, joint launch of two satellites etc.

Mexican multiplex chain to invest in India

Mexican global multiplex operator Cinepolis plans to invest 340 million dollars in India for its film exhibition business over the next seven years. It has already established an Indian subsidiary that is in talks with mall developers for opening 500 movie screens by 2016. In the first phase of expansion, the company will open 110 screens across eight locations. The company said it will open its first multiplex in India by the second half of this year.

A $675 million film exhibition company, Cinepolis operates over 2,000 screens globally, 90 per cent of which are located in Mexico. The company, which is currently the fifth largest theatre chain in the world, is aiming to move up in the ladder to the fourth slot and its India venture is part of the company's plans to expand its global footprint.

Cinepolis also plans to introduce the concept of a megaplex where each theatre will have up to 14 screens. "We will make India the country with our largest presence outside Mexico. We will open around 500 screens in the next seven years and for every screen, we will be spending around $700,000," Cinepolis India country head Milan Saini said today at the launch. "We are also looking at launching our operations at a smaller scales, whereby we may convert some of the single screens into multi-screen property. There is a space constraint issue here and we have to adjust our business plans accordingly," Saini said. Most of the fund would go in rentals and developing of screens and the amount would be funded by internal accruals, he added.

Source- IBEF

Latin American economies expected to contract in 2009

According to the April 2009 World Economic Outlook issued by IMF, the Latin American region will suffer GDP contraction of 1.5 % in 2009. The region grew by 4.2 % in 2008.

Mexico will be the worst hit with a contraction of 3.7%, while Brazil´s GDP will reduce by 1.3% and that of Argentina by 1.5%.

Bucking the trend, Peru will see a GDP growth of 3.5%, followed by Uruguay with 1.3% and Central America by 1.1%.

Average inflation of the region in 2009 is forecast to decline to 6.6% from 7.9% in 2008.

The region’s current account deficit will widen to 2.2 percent of gross domestic product in 2009, from about 0.75 percent in 2008.

The IMF predicts the region’s economy will rebound in 2010, expanding 1.6 percent. In 2009, Mexico will see a 3.7 percent contraction in GDP, while Venezuela’s economy will shrink 2.2 percent, the report said.

New Flight connection from India to South America

South African Airways is starting direct flights from Johannesburg to Buenos Aires from 1 April 2009. Here are the schedules:

From Buenos Aires – J-burg – Mumbai
Weds and Fridays :
Buenos Aires – J’burg 1930 – 0855 hrsJ’Burg – Mumbai – 1130 – 0030 hrs

From Mumbai- J’burg – Buenos Aires
Weds-Fridays and Sundays:
Mumbai-J’burg 0230 -0755 hrs J’Burg – Buenos Aires 0950-1730 hrs

This connection has two advantages over connection through Europe. It is cheaper. Secondly there is no need for transit visa in Johannesberg. In the case of Europe, transit visa is needed to pass through airports such as Paris, Frankfurt and London.

Similiar advantage is there in the case of the Emirates direct flight between Dubai and Sao Paulo.

Latin America and the financial crisis - Article by Jorge Heine

Here is the Article of Prof Jorge Heine published in Hindu newspaper of 4 feb 09.

Jorge Heine holds the Chair in Global Governance at the Balsillie School of International Affairs and is a Distinguished Fellow at the Centre for International Governance Innovation in Waterloo, Ontario. He serves currently as Vice-President of the International Political Science Association.

He was earlier the Ambassor of Chile to India. He is the top India expert from Latin America

Latin America and the financial crisis

For the first time in a century, Latin America has managed to at least partially “cushion” itself from the seismic waves of economic turmoil in the U.S. and Europe.
The United Kingdom will face a 2.8 per cent negative growth rate in 2009, the worst economic performance since World War II (in fact, the British economy has already shrunk by 2.7 per cent since last April). In Spain, unemployment has reached 14 per cent, and the government is offering a “golden handshake” to recent immigrants to leave the country for three years. Ireland, so often held up as an example for the developing world because of its relentless tax-cut ting, is in dire straits, and Iceland is bankrupt.
In the United States, Dow Jones slipped below 8000 in the very week President Barack Obama took office, the automobile industry continues its downward spiral (Toyota has already displaced GM as the world’s largest automaker) and in one day in January, some leading companies announced shedding 72,000 jobs. In California, unemployment is just below 10 per cent, and the State faces a staggering deficit. In Canada, which lost 34,000 in December, Ontario, the nation’s industrial heartland (40 per cent of Canada’s GDP), is in trouble and looking for ways to renegotiate existing financial arrangements with Ottawa.
Projections indicate that the developed world will have a negative growth in 2009. What about Latin America?
The standard line is that “when the United States sneezes, Latin America catches a cold.” And that was exactly what happened in the past. The Great Depression had a devastating effect on Latin America — so much so that in the late 1930s and early 1940s, it begot the import-substitution-industrialisation (ISI) strategy, as governments realised that in times of global slowdowns they could not be left at the mercy of having enough hard currency to buy essential goods from the industrialised North; they needed some installed capacity of their own.
Something similar happened in the early 1980s when rising interest rates in the U.S. pushed the region into its worst debt crisis and a “lost decade,” in which countries like Chile saw 14 per cent negative growth in 1982 and unemployment rates of 30 to 35 per cent for several years. According to the conventional wisdom, Latin American economies should be in the doldrums, with the Northern recessionary waves hitting Southern shores with a multiplier effect leading to an even deeper economic downturn there.
Yet, this isn’t happening. Yes, this is a global recession and the region has not been spared. Growth will be cut in half; commodity prices have dropped and so have export volumes, thus affecting regional exports which reached a record $902 billion in 2008. International credit has tightened, and some projected FDI is not materialising. Remittances to the region, which also reached a record ($67 billion) in 2008, will take a hit.
After six consecutive years of over 4 per cent economic growth rates, the region is projected to grow 1.9 per cent in 2009. Unemployment, at 7.5 per cent in 2008, is projected to rise to between 7.8 and 8.1 per cent. Whatever else it may be, this is not a recession.
Countries like Peru, the star economic performer over the past few years, may grow as much as 5 per cent in 2009, with smaller economies like Cuba, Panama and Uruguay clocking 4 per cent or more. And the larger economies like Argentina (2.6 per cent), Brazil (2.1 per cent), Chile (2 per cent) and Venezuela (3 per cent) should perform quite respectably. In fact, South America as a whole, according to ECLAC, will grow at 2.4 per cent. It is Mexico (0.5 per cent) and many Central American and Caribbean nations that will be especially affected by the drop in tourism and in remittances and by lower demand in the U.S. market.
This does not mean that if the financial meltdown continues to wreak havoc on the North and the economic wreckage is extended over time, it will not eventually have a greater impact in Latin America. My point is a different one. For the first time in a century, Latin America has managed, if not totally, to “decouple,” at least to partially “cushion” itself from the seismic waves of economic turmoil in the U.S. and Europe, markets on which it traditionally depended. The fact that several countries from the region (Brazil, Mexico and Colombia) are placing bonds in international markets in these difficult times speaks for itself.
That this should happen at a time when eight of ten countries in South America are ruled by Left or Left-of-Centre parties is ironic. For much of this decade, we have repeatedly been told how Latin America, by veering towards the Left, was once again “missing the boat” on economic development, and how it risked being caught in a time warp, left behind by the twin imperatives of globalisation and economic interdependence, beholden to outmoded ideologies at a time of the end of ideology.
Instead of dollarising their economies (as Ecuador did in 2000, much to its subsequent chagrin) and opening themselves up to whatever Washington demanded, many countries (led by Brazil) preferred a different path, one that turned out to be not so misguided after all. If anything, many Latin American governments seem to have shown a better understanding of the perils of unfettered globalisation and “casino capitalism” than several of their counterparts in the North.
What does the Latin American Left stand for today and what has it done in government?
Far from the “populism” so much of the Western media labels it with, the modern Left in the region today embodies a set of beliefs very different from the mid-20th century populist movements associated with this term.
It is fully democratic, believing in free and fair elections, having strongly opposed the military regimes supported by the Right in the 1970s and 1980s; it is secular, standing apart from the integrista Catholicism of so many conservative forces in the region; it is committed to greater social equality in a region with the dubious distinction of having the highest economic inequality; it believes in diversifying trading and investment partners, as well as the number and variety of export products, thus moving away from the econom’a monoexportadora syndrome of the past; finally, it is fiscally responsible — starting from the premise that only by having macroeconomic equilibria (that is, if the government balances the books) and tackling inflation will you be able to make progress. Prudent economic policies combined with aggressive social programmes — like Brazil’s Bolsa de Familia or Chile‘s recent pension reform — are at the heart of this approach.
It is these principles and the policies that flow from them that have allowed the countries in the region to bring down their foreign debt from 37 per cent of the GDP in 2000 to 20 per cent today. They have permitted Brazil to start a $48-billion infrastructure programme, and Chile to launch a $4-billion stimulus package to deal with the global slowdown.
But the region being partially cushioned from the worst effects of the latter is also due to something else. For large export-oriented economies today, diversifying their export markets means targeting Asia. This is what South America’s leading economies have done. China, Japan, South Korea and India are the prize markets. For Chile, in 2007, China was its number one export market (displacing the U.S.), Japan was number three, South Korea six and India 10 (displacing Germany). Asia received 43 per cent of Chile’s exports that year; not surprisingly, a dip in the U.S. market, which gets a little over 20 per cent of Chilean exports, is not a major blow to its economy. Though Chile, because of its Asia-Pacific orientation, is a bit of an extreme case, for Argentina, Brazil and Peru the pattern is not too different.
In this context, a critical question is whether the “Asian giants,” China and India, will also be dragged down by the recession in North America and Western Europe. Initial indications are that they have already been, with their growth projections going down from double digits to 6-7 per cent. A second question is to what extent this growth will be export- or internal demand-driven. China’s $ 600-billion stimulus package is designed to pump up domestic demand in an economy that until now has been largely driven by exports. India, on the other hand, has based its high growth mostly on its internal market.
These are, make no mistake about it, perilous times, and the treacherous waters of the world economy need to be navigated with a steady compass. Nonetheless, it is refreshing to see, for once, that Latin America may well grow its way through a global recession, as opposed to being once again the region most seriously affected by it.

Brazil emerging as a major oil producer

Petrobras, the national oil company of Brazil has announced( January 2009) plans for investment of 174 billion dollars in the period 2009-13 in exploration and production of its newly discovered oil fields. The scale of investment is a confirmation of the emerging new status of Brazil as a major oil producer in the region and in the world.

production in 2008 was 2.18 million barrels per day and the target is 3.31 million by 2013 and 5.1 million by 2020.

Oil reserves in the new fields discovered in 2007 are said to be 100 billion barrels. The current level of proven reserves is 14 billion barrels.

This development is of direct interest to India and Indian business. We have been importing crude oil from Brazil for the last 4-5 years regularly.This can increase in the years to come and Brazil could be a regular source in Latin America besides venezuela, mexico and ecuador.

ONGC Videsh Ltd ( OVL) has already acquired some oil concessions in Brazil and has invested around a billion dollars.

Brazil has one of the best technologies and expertise for deep sea exploration and production.

Reliance which has been importing crude oil from Brazil has also been exporting diesel oil to Brazil regularly. In 2008 their exports of diesel oil was around 1.8 billion dollars, half of our total exports to Brazil last year. This is likey to continue for some more years since Brazilian refining capacity does not yet match its crude production or requirement of refined products.

More immediately, the massive Brazilian investment in the oil sector offers opportunities for our companies to supply equipments and machinery to the new projects.