Aegis group of India acquires BPO firm in Argentina

Aegis of India has acquired Argentine BPO company Actionline from Young and Rubicam Inversiones Publicitárias, S.A. and its business partner.

Founded in 1994, Actionline is one of the largest BPOs in Argentina with about 5,000 associates, spread across seven centres in five cities and has a turnover of around $50 Million dollars per year. It is domestic market focussed, serving leading telecom, banking, insurance, and energy clients in the region. It has operations in Brazil and Chile also. Actionline has expanded at a healthy pace, registering a compounded annual growth rate of 65 per cent from 2003-2009. Actionline Argentina's senior management, lead by CEO Fernando Pedron will continue to spearhead the business.

Actionline has become the largest Indian BPO in Latin America

With this entry Aegis joins the other Indian companies which have BPOs in Argentina. These are TCS, Cognizant, Irevna, HCL, Global Sourcing Solutions, Cellent and other BPOs owned by Indians from USA. Aegis stands out , of course, as the largest among them.

Aegis is part of the 15 billion dollar Essar group of India. This is the 16th acquisition for Aegis over the last five years. It is one of the fastest growing BPO companies in the world. With workforce of 5,000 that Actionline has, Aegis' total headcount goes up to 47,000. The company has a target of 50,000 workforce and is looking to expand its footprint in various markets including America, Latin America, Africa and Middle East. Aegis serves more than 135 clients from 42 delivery centers with more than 39,000 employees across India, Philippines,United States, Costa Rica, New Zealand, SriLanka, Australia, Kenya and South Africa. In United States Aegis employs 4000 Americans.

The Essar Group is a multinational conglomerate and a leading player in the sectors of Steel, Oil & Gas, Power, Communications, Shipping Ports & Logistics, Construction and Minerals. With operations in more than 20 countries across five continents, the group employs 60,000 people, with revenues of about USD 15 billion. They have acquired a Canadian steel mill, a iron ore mine in Minnesota and a coal mine in USA for over two billion dollars. They have a project to build a Steel plant in Trinidad and Tobago with an investment of 1.5 billion dollars.

Mercosur ...GDP champion in 2010

Readers of my blogs will recall my euphoria and celebration when the four member countries of Mercosur reached the quarter finals of the 2010 World Cup.

Don’t ask me what happened afterwards. I had to drown my sorrow with lots of Brazilian Caipirinha and Brahma and Argentine Malbec.

Ask me now about the economy. Mercosur has emerged as the GDP growth champion in 2010. Brazil and Argentina will have 7.5% growth each, Paraguay will grow by 9% and Uruguay by 8.5%. These figures put the four Mercosur members among the top five in the whole region of Latin America and Caribbean.

The country which is projected to have the highest growth in Latin America and Caribbean in 2010 is… hold on… a surprise… even for me. It is Paraguay ...with 9%. Viva Paraguay !!!.

These are the figures mentioned in the World Economic Outlook report released by the International Monetary Fund on 6 October. According to this report, the economies of Latin America and the Caribbean will grow by 5.7% in 2010. This is higher than earlier predictions. The IMF has said, ¨ the LAC region is exiting the global crisis at a faster pace than anticipated. This reflects solid macroeconomic policy fundamentals, sizeable policy support, favourable external financial conditions and strong commodity revenues¨.
The July 2010 report of the UN Economic Commission for Latin America and Caribbean( ECLAC) had predicted GDP growth of 5.2 % for the region while its December 2009 report had predicted 4.3%. Here is what ECLAC says in its September2010 report ¨Output and trade in Latin America and the Caribbean have recovered more quickly than expected. This solid revival is largely based on the dynamism of domestic demand, a pick-up in investment and robust exports driven by demand from China and the rest of Asia, and by the normalization of demand in the United States¨.
As part of the current fashion to group countries into G-20, G-8 etc, the IMF has labelled Brazil, Chile, Colombia and Peru as " LA-4 " This foursome's policy framework is described as more market-friendly than the others in the region.
"Impressive improvements in macroeconomic policy frameworks over the past two decades, combined with accommodative policies, easy external financing conditions, and strong commodity prices, are driving a robust recovery in the LA-4," the report said.

The IMF forecast of GDP growth for other countries and sub-regions are: Chile - 5 %, Peru- 8.3% Colombia - 4.7%, Mexico - 5%, Central America -3.1% and Caribbean 2.4%. South America is projected to grow by 6.3%. Of course, South America, which is rich in natural resources has benefitted from its commodity exports.
The only country in the region which has gone against the growth trend is Venezuela which faces an ecoonomic contraction of 1.3%. The consolation is that this is better than the contraction of 3.3% in 2009.

The IMF has projected that the average inflation of the region in 2010 would be 6.1% which is up slightly from 6% last year. The inflation in 2011 is projected to decline to 5.8%. The average inflation of the region has remained in single digit in the last ten years.

But again Venezuela is an exception. It has the highest inflation of 29.2% this year. This is said to be the highest in the world this year. Venezuela is projected to carry on this distinction in 2011 too with 32%. The only other country in the region with a double digit inflation is Argentina with 10.6%. But the good news is that these are just small double digits. The region will not go back to hyper inflation in four digits as it happened in some countries till 1990.

Brazil adds one more superlative....

Brazil,the largest market of Latin America is on a roll these days adding one superlative after another. Here is the latest one. Petrobras raised $70 billion in the world’s largest share sale last week. With this, Petrobras has become the fourth-biggest company in the world, behind Exxon Mobil , Apple and PetroChina . Petrobras now has a market value of $214 billion, which is more than that of Microsoft and Wal-Mart.

Sao Paulo which has been the financial capital of Latin America, has now become a super capital with this deal. It was with justifiable pride that President Lula said ¨It wasn’t in Frankfurt, it wasn’t in New York, it was in our Sao Paulo exchange that we carried out the biggest capitalization in the history of capitalism,”

Petrobras has budgetted $224 billion of spending over the next five years in exploration and production. This is the largest corporate investment plan in the world at this moment.

With this investment, Brazil aims to increase its production to 5.38 million barrels a day and overtake Venezuela and Mexico. Brazil will add the most oil production of any country outside of the Organization of Petroleum Exporting Countries ( OPEC) over the next 25 years

Petroleum is only one part of the story. Brazil is all set to become an agricultural superpower too. It has the largest surplus land that can be brought under cultivation to feed the growing population of the world. It can add atleast 130 million hectares of land which is equal to the total area cultivated by India to feed its one billion population.

Here is the leadership position of Brazil in the global food sector:
Chickens: 1st in the world, 41% of export market share

Coffee: 1st in the world, 27% of export market

Orange juice: 1st in the world, 82% of export market

Soybeans: 1st in the world, 38% of export market

Beef: 1st in the world, 26% of export market

Sugar: 1st in the world, 39% of export market

Ethanol: 1st in the world, 52% of export market

Tobacco: 2nd in the world, 17% of export market

Bananas: 2nd in the world, behind India

Pork: 3rd in the world, 15% of export market

Corn: 3rd in the world (behind USA and Argentina)

Black pepper: 3rd in the world (behind Vietnam and Indonesia)

Cotton: 5th in the world (USA is the leader)

Brazil is a pioneer and global leader in fuel ethanol. Most of the cars produced in Brazil have flexifuel engines which can use etahnol or/and petrol. Brazil is thus straddling the two worlds of conventional fuels and biofuels. Brazil has a secure and enviable position in the world which is increasingly concerned with food and energy security.

Brazil has plenty of water resources and the largest forest cover in the world. It is not prone to natural disasters. It has a agreeable climate and does not suffer from extreme heat or cold.

Brazil is embarking on massive investment to prepare for the World Cup football in 2014 and Olympics in 2016.

Brazil which used to be an IMF case is now a net creditor to IMF. Brazilian market now has Investment Grade rating.

Here are the other factors which distinguishes it from the other members of BRIC.

- Democracy has been instituitionalised irreversibly and strongly

- free from terrorism .. no ethnic , linguistic or religious conflicts. One language, religion and one skin colour of cafe con leite ( coffee with milk- some have more milk ...others have less..)

- free from unstable and evil neighbours who can pull it down and hurt.

Skeptics used to say Brazil was always a country with a future and will remain as a country with future. It was also called as a sleeping giant. But now Brazil has become a country of the ¨present¨and a giant who has woken up. What makes the Brazil story different this time is the paradigm shift in the politics and mindset of the Brazilians. Brazil follows a new pragmatic policy which pleases the Wall Street and at the same time has brought hope and smiles in the Favelas ( slums) with its Inclusive Agenda and market- friendly policies. This is what makes Brazil as the moral leader and role model for Latin America. Brazilians now have a strong conviction that their time has come…..

pharmaceutical market of Central America

The pharma sales of the seven countries of central america are expected to reach US$2.53bn in 2010, a 7.9% increase from US$2.35bn in 2009. The sales are expected to maintain a compound annual growth rate (CAGR) of 8.6% over a five-year period, and 8.4% over a ten-year period. The pharmaceutical sales are expected to reach US$5.27bn by 2019. This is according to a report of CompaniesandMarkets.com
For more info on the Central America Pharmaceuticals and Healthcare Report Q4 2010: http://www.companiesandmarkets.com/r.ashx?id=852G62254342128&prk=dc9464d426ba854d3af301ceab8fa0e4

World cup and Olympics - Game Changers for Brazil

Brazil is going to host the World Cup football in 2014 and Olympics in 2016. These are not just games... but are game changers for the New Brazil. The Brazilians are using these two events to build the foundations for a New Brazil and showcase their arrival as a global economic and political power.

Brazil is the eighth largest economy in the world with a GDP of 1.5 trillion dollars and is expected to climb up to the fifth rank by 2016. In the first quarter of 2010, the Brazilian GDP grew by a record 9% and the estimated growth in 2010 is 7.6%, the highest in Latin America. Brazil is a superpower in agriculture with its growing output, exports and increase in the area of production. With the recent discoveries of large new off-shore oil fields, Brazil is emerging as an important global supplier of petroleum. Brazil is already a pioneer and leader in fuel ethanol programme with 90% of cars running with flexi fuels of petrol and ethanol.

The preparation for the games opens up projects worth $220 billion from 2011 to 2014.
Here are some samples:
-US$ 5.5 billion to improve transportation in Rio in preparation for the Olympic games
-A high speed bullet train at a cost of 18.7 billion $ is being developed and is expected to be completed in time for the World Cup
-plans for 11,700 miles of railroads facilitating improved access to the 12 cities hosting the World Cup
- US$ 43 billion will be spent on commercial and tourism construction in preparation for the 2014 World Cup
-US$ 3 billion in airport expansion and improvement.
-restoration of historic buildings and renovation of Rio de Janeiro city
- budget for the Games alone will be about $15 billion

A Conference is being organised in Sheraton Hotel, Rio de Janeiro on 31 August- 1 September on the infrastructure projects for the two events. Federal and provincial authorities, bankers and local and foreign companies will participate in the conference.

President Luiz Inacio Lula da Silva launched on 29 March 2010, a $878 billion program to upgrade Brazil's infrastructure in the period 2011-2014. The plan will improve access to clean water, medical posts and energy as well as modernize the country's air, road and rail system.

The energy part of the plan envisages investment of 257 billion dollars. This includes the five year plan of Petrobras, the Brazilian energy giant to invest 220 billion dollars, the largest corporate investment in the whole world at this time. In 2010, Petrobras will invest 20 billion dollars in exploration and production and 17 billion dollars in refining and petrochemicals, with the remainder going toward areas such as distribution and biofuels.

Some of the other infrastructure projects are:
-construction of Angra III nuclear power plant
- construction of The Belo Monte 11.2GW, US$ 4.1 billion hydropower plant
- Jirau hydropower plant costing US$ 3.1 billion
- US$ 152 billion for the construction of low income housing over the next 15 years

The Indian exporters and business houses should focus on Brazil for exports and projects for the games projects. India´s exports were 2.19 billion dollars in 2009. The target should be atleast 7 billion dollars by 2014.

Colombia bullish on foreign investment

Colombia has become a favorite destination for foreign investment in Latin America. The foreign investors are getting into petroleum, mining, services and manufacturing. Colombia's foreign trade ministry expects $10 billion in foreign investment this year, approaching the record $10.6 billion of 2008. In 2009 FDI was 7.2 billion dollars.

The Colombian Minister of Energy and Mining announced on 15 August 2010 that he expected investment of 28 billion dollars in oil exploration and production in the next four years and increse the oil production to 1.4 million bpd by 2014 from 963,000 bpd in June 2010. Colombia is emerging as South America's third-largest oil producer behind Brazil and Venezuela. About 5.6 billion dollars of direct foreign investment went into petroleum and mining in 2009. Colombia's known oil reserves rose 22 percent in the last eight years to 1.9 billion barrels with production jumping 45 percent.

The foreign investors who were deterred by the internal problems of Colombia in the past are now encouraged by the improving siuation of the country. Farc is irreversibly fading out. There is steady reduction in kidnapping, crime and narcotraffic. In any case, the Colombian economy has been stable and growing even despite those challenges. Politics has also been mature and there is a general political and economic consensus on the future of the country. The election of Manuel Santos, the new president , who had earlier served in the cabinet of Uribe means continuation of the policies of crackdown on crime and market-friendly approach.

Colombia is the only Latin American country to have an Investment Promotion Officer (Alejandro Pelaez) in their embassy in Delhi. Mr Juan Alfredo Pinto Saavedra, the Colombian Ambassador is one of the most active Latin American diplomats, reaching out to Indian business and media.

OVL and Reliance have already invested in the petroleum sector of Colombia. TCS, Infosys, United Phosporous, NIIT, Bajaj, TVS, Hero Honda, Havells, Essel Propack and Praj have operations in Colombia. In 2009 India´s exports to Colombia reached 504 million dollars. Colombia is the third largest destination of India´s exports to latin America. More Indian companies should enter this market which offers lot of potential for India´s investment and trade.

Agriculture Process Outsourcing by an Argentine Patel

This article was published by Financial Express of 1 August 2010
http://www.financialexpress.com/news/agri-process-outsourcing-by-an-argentine-patel/654277/

During my meeting with Gustavo Grobocopatel, the founder President of the Argentine farming company Los Grobo which cultivates 270,000 hectares, I told him that I came from a small farming family which owned just an acre of land. Gustavo responded, ¨Lucky you…. I am a landless farmer ¨. He is right. He does not own a single hectare. It is all leased land.

Los Grobo does not own any tractor or harvester either. They outsource all the operations such as planting, fertiliser spraying, weeding, harvesting, storage and transportation to contractors who own the machineries. The firm has a system of technical leaders each of whom manage 7000 hectares. They are not employees but are partners who share the profit and risk. Even the agronomists who work with the company are contractors, who get a share of the crops they raise.

The 270, 000 hectares of land spread over Argentina, Brazil, Paraguay and Uruguay are managed by the headquarters staff of about 100 people who are connected in a network with the land owners, agronomists, the international traders and the 4000 service providers. Grobocopatel who believes in social capital says, ¨We are not big… but many¨

Here is Mr Patel working on the fields with his laptop...

Grobocopatel´s Agriculture Process Outsourcing (APO) is similar to the BPO (Business Process Outsourcing) and Knowledge Process Outsourcing (KPO) operations of the Indian IT companies. Los Grobo office looks like a BPO of Infosys with young people in casual dress glued to their computer screens and working with their blackberries. The only difference with the Infosys office is that Los Grobo is located in a remote rural area in the middle of soya and wheat fields near Carlos Casares, a small village 300 km from Buenos Aires city....seen in the foto below...
Los Grobo office ...like a BPO of Infosys...

Grobocopatel says he was inspired by ¨Information Age¨, the book of the Spanish sociologist Manuel Castells which helped him to understand how networks could be used to generate wealth with the least investment. Grobocopatel describes his new model of farming as ¨Agribusiness in the new era of Knowledge Society¨. He points out at the young people behind the computers and says proudly that the human resources are the main asset of his company. Training and empowerment of the employees, the service providers and partners is an integral part of the value creation of the company. Los Grobo has arrangements with universities to give courses in agribusiness and management of small and medium family-owned companies at their headquarters in Carlos Casares. Los Grobo encourages its employees to become enterpreuners and even provides seed funding. Through its Rural Entrepreneurship Foundation, the company participates in projects to improve the standard of living in villages and small towns. Los Grobo, together with other partners, has created Bioceres, a biotechnology research and development organization.

Los Grobo farms scientifically by satellite mapping of every hectare of the land using a vast database of agricultural metrics. They do ¨Precision Farming¨ in which monitors are used to control input distribution of seeds and different fertilisers for each parcel of land on the basis of information generated by software calculating the dosage needed, depending on satellite location of the seeding and sprayer machines. The best practices of Los Grobo include ¨No-Till Farming ¨ (direct seeding) in which the crop residues are left to decompose and enrich the organic matter and maintain soil moisture. The land is always covered by straw and residues. There is no ploughing of the land and exposing it to sun and wind and erosion and degradation. This method improves physical and chemical soil structure, reduces carbon emission, cost of production and labour and increases productivity and helps in the conservation of soil.

The innovative business model of Los Grobo has been studied and commended by Harvard University, among others. Los Grobo has been sought out for consultancies by other countries. It is the first company worldwide to obtain ISO 9001 certification on grain production processes. It is establishing its APO business model in Brazil, Paraguay and Uruguay. Other Argentine farming companies are following the example of Los Grobo. This includes the company El Tejar which has emerged as the largest farming company in the world with cultivation of one million hectares this year. Such scale does not exist even in Brazil or USA. El Tejar´s goal is to reach two million hectares in the next five years. Out of the one million, 800,000 hectares are leased and 200,000 owned. El Tejar operates in Uruguay, Paraguay, Bolivia and Brazil where they cultivate 600,000 hectares. With such emerging global pioneering leaders in farming, best practices, advanced technologies and abundance of water and fertile land, Argentina is set to become a significant global player in the future when the world is going to be more concerned about food security.

I call Grobocopatel as ¨Senor Patel¨. He has no connection to Gujrat. He is of East European origin and his grandfather had emigrated to Argentina in 1912. Grobocopatel founded the company in 1984 and has achieved a turnover of 700 million dollars in 2009-10. His target is 1.5 billion dollars in the next five years. Grobocopatel is an agronomist and had taught the subject in the Buenos Aires University before becoming an enterpreneur. His agronomist wife is also a director in the company. For them, farming is not just business. It is passion. Grobocopatel has admiration for Indian culture and practises meditation and yoga. He is planning to visit India for a month in December. He has agreed to give talks in India on his new business model and also meet Indian companies interested in strategic partnership with his company.

South America offers opportunities for Indian companies to invest in farmland and source edible oil, pulses, sugar and biofuels needed in India for the growing population and consumption. The Indian investors do not need farming expertise or invest in machinery since they can outsource all the farming operations to local service providers. A Non-Resident Indian company Olam is at present cultivating 30,000 hectares in Argentina growing peanuts, soya and beans and are planning to double the acreage in the next three years. All of their land is leased and their operations outsourced. Simmarpal Singh is the young country manager behind this success of Olam. I told Grobocopatel that we have an Indian Singh following in the footsteps of the Argentine Patel.

TCS plans for increase in Latin America business

Tata Consultancy Services (TCS) plans to increase its turnover in Latin America to one billion dollars in the medium term , according to a statement by Chandrashekar, CEO of the company in July2010. At present their annual revenue is over 300 million dollars. They have close to 8000 Latin American employees in eight Latin American countries: Argentina, Brazil, Uruguay, Chile, Mexico, Ecuador, Peru and Colombia.
TCS will recruit 40,000 more staff this year around the world to increase its global staff strength to 200,000.

Mid-year review of Latin American markets

The July 2010 report of the UN Economic Commission for Latin America and Caribbean( ECLAC) has revised its estimate of the 2010 GDP growth of the region upwards to 5.2 % from its earlier projection of 4.3% in its December 2009 report. The highlights of the report are:

• Brazil will be the top performer in the region with GDP growth of 7.6%. Parabens Brasil !!
• Uruguay and Paraguay will grow by 7% and Argentina by 6.8%. The Mercosur countries are the top four performers of the region as a whole. Oops.. it is like the 2010 World Cup quarter finals in which all the four were in.
• Mexico will grow by 4.1%, Colombia- 3.7%, Peru-6.7%, Chile-4.3%
• Venezuela will be the only country which will go against the trend. No surprise...Its GDP is expected to suffer contraction of 3%.

The credit for the quick and robust recovery from the economic contraction of 1.9% in 2009 goes to the resilience and strong macroeconomic fundamentals of the markets and the pragmatic policies and prudent fiscal and monetary management by the governments. Following are some of the examples:

- Gross public debt of the region as a percentage of GDP has been brought down to 30.2% in 2009 from 58.2% in 2002. The highest is Argentina with 48.5% which is very low in comparison to the situation in USA and Europe. Credit should be given to Argentina which had brought down the percentage from 145.9% in 2002.

-The governments rely less on external resources and have been raising more funds from domestic sources. They have been reducing external debt burden consciously.

-The current account deficit of the region was brought down to 0.4% in 2009 from 0.6% in 2008.

-Flexible exchange rates, inflation targetting and sound financial regulations of the banking sector helped the region to withstand the global crisis of 2008-9 better than during the previous global downturns.

-Gross international reserves of the region has been steadily increasing from 163 billion dollars in 2001 to 563 billion in the second quarter of 2010. The reserves of Brazil are 253 billion dollars, Mexico- 104 billion and Argentina -49 billion.

-Inflation was brought down to 4.7% in 2009 from 8.2% in 2009. The average inflation rate of the region has stayed in single digit every year since 2003. Venezuela stands out as the only country with double digit inflation. It was 26.9% in 2009.

-Five countries namely Chile, Mexico, Brazil, Peru and Panama have been upgraded in recent years to investment grade by the Sovereign Rating Agencies.

Of course, the growth of China, India and Asia and the high commodity prices also contributed to the growth of Latin America.

-

Lupin looking for acquisitions in Latin America

According to newspaper reports Lupin Ltd., the Indian generic-drug maker, is looking for acquisitions in Brazil and Mexico to expand its revenue from the Latin American region.
The company plans to spend $50 million to $75 million on each purchase, according to S. Ramesh, president of finance and planning. Lupin is looking for companies that have a strong marketing relationship with physicians and will make the acquisitions soon, he said, without providing a more specific timeframe.
Lupin generates 10 percent of revenue from a sales region that includes Latin America and Europe. Ramesh was quoted as saying “Latin America is the next stop for us, in so far as of acquisitions...Recognition with the doctor is the most important consideration for the purchases¨.

panama gets investment grade rating

Panama’s credit rating has just been raised to investment grade by Moody’s Investors Service, which cited “significant improvement” in the country’s fiscal policies and strong economic growth.
Moody’s upgraded the country’s debt ratings to Baa3 from Ba1, matching moves that Fitch Ratings made in March and Standard & Poor’s made in May. The outlook on Panama’s rating is stable, Moody’s said.
With this Panama joins the club of investment grade Latin American countries Brazil, Chile, Mexico and Peru.
GDP of Panama is expected to grow by 6% this year. The Panama Canal expansion project and investment in infrastructure add to long term prosperity.

Enlightening interview of Kapil Gulati

The conventional wisdom is that Brazil, Mexico or Argentina are the platforms to launch pan-latin american business. Kapil Gulati loves defying conventions. He is the new breed of Indian executives with a new mindset. He operates from the small country of Costa Rica and manages a business of 160 million dollars in 13 Latin American countries as well as in USA. And he wants to expand the business with new acquisitions.

During our lunch in Buenos Aires last month, I found him sharing my optimism and confidence about the prospects of Latin America for Indian business. He has adapted well to the Costa Rican ¨Pura Vida ¨. http://latinamericanaffairs.blogspot.com/2009/05/costa-rica-pura-vida-country.html#links

Here is Gulati´s enlightening ( ... his company Havells is in the lighting business..) interview in Financial Express of today.

INTERVIEW: KAPIL GULATI
We are scouting for acquisitions & tie-ups in Latin America.

Costa Rica is the America headquarters of Indian company, Havells Sylvania. Kapil Gulati, the company’s director of America, manages the $160-million operations in the region, including the US. Havells had bought the lighting and fixtures business of American firm Sylvania worldwide and Gulati is in the process of consolidating and streamlining the business. He discusses the company’s inorganic growth strategy for the region with FE’s Huma Siddiqui. Excerpts:
How do you plan to expand in the region?
Havells Sylvania is among the top-four lighting companies in the world owned by Havells India since 2007. In Latin America, we now have two manufacturing plants, in Colombia and in Costa Rica. We have local operations in 13 Latin American countries, from Mexico to Chile. We employ more than 750 locals and generate about $200mn revenue, 16% of the business of Havells India.
After India, Latin America has highest growth for the corporation. Chile is a developed and stable country with highest per capita GDP ($15,000). Peru is among the highest growth rate countries of the region. The countries touched 9.8% real GDP growth in 2008. These were a perfect fit in our phase-1 regional geographical expansion. In phase-II, besides improving our reach within the existing countries, we are improving our export business in Uruguay, Paraguay, The Caribbean & other Central American countries (Nicaragua & Honduras).
Last year, we formed local companies in Chile & Peru, but due to the global economic situation decided to put the process on slow track. This year in Q1, we started team building activity and local product validation process. In May, our local business in Chile was started.We are scouting for strategic tie ups, joint ventures and acquisitions to strengthen our position, especially in the biggest Latin American economies — Brazil, Mexico and Argentina.
What are the opportunities available to Indian companies in the region?
Over the last seven-10 years, the Indian business community has increased its participation in Latin America. The region has stabilised economically. With success stories like Havells, other Indian business houses can keep Latin America on their high-priority expansion list.
What is your company’s participation in energysaving programmes?
Some of the Latin American countries (Ecuador, Colombia, Argentina, Brazil) have announced banning and phase-out schedule for high-energy consumption products like incandescent lamps. Most Latin American countries are now giving subsidy or even distributing free compact fluorescent lamps.
Have you identified partners for joint ventures in the region?
We are looking at local companies, with the objective of expanding our manufacturing base for energy-efficient products. Since we are a public-listed company, we have to follow certain guidelines, therefore cannot give more details.