Argentine President´s Visit to India 14-15 october- outcome for Indian business

Liberalisation of Argentine Visa
Under the visa Agreement signed on 14 october during the visit of President of Argentina to Delhi, the Argentine government has agreed to grant five year multientry business visas to Indian visitors....and that too free of cost. Stay during each visit is 90 days extendable by another ninety days. Fantastic... Let us thank the President and the Foreign Ministry of Argentina. The embassy of India in Buenos Aires will do the same thing for Argentine business visitors ...plus give free coffee under their Cafe con Visa system



Trade target of 3 billion dolars for 2012
The two governments have set 3 billion dollars as the target. The exports of India should double to one billion dollars from 492 million in 2008 and Argentine exports to reach 2 billion by 2012 from 836 million in 2008.

Invitation to invest in Argentina
The Argentine President in her adddress at the busines seminars and meetings in Delhi and Mumbai invited Indian cos to invest in Argentina. She spoke of the new paradigm of stability and growth of the economy, availability of natural resources and creative human resources of Argentina.

She had a meeting with Rattan Tata in Mumbai and in this meeting also the discussion focussed on investment in Argentina.

Joint Ventures
During the business seminar in Delhi, Ashok Leyland signed a JV with TBA of Argentina for making buses and trucks.

Sonali Tractors of India signed agreement with Apache of Argentina for collaboration in assembling agro machinery in India.

Pharma issue
This was taken up strongly by the Prime Minister of India himself with the Argentine President that India should be included in the list of 26 countries from which Argentina allows imports of pharmaceuticals. This is mentioned in the joint statement too.

Inflation in Latin America

Inflation used to be a curse in Latin America. Many countires of the region have suffered Hyperinflation in four digits and three digits. The joke in those days was that one could never tell the exact figure of Latin American inflation and Indian population. By the time one finishes the sentence, both would have gone up !

The governments of the region have tamed it decisively in the last decade. The average inflation of the region has remained in single digit in this decade.

The projection of average inflation in 2009 is 6.1% and in 2010 it is 5.2%, by Latin Business Chronicle and IMF. In an act of extraordinary courage they have even projected the inflation for the period 2010-14 as 5. 2%. This is remarkable. This is the twenty first century Latin America, which I call as the New Latin America, in which things have become predictable. No one would have dared to do such a five year projection even as lates as 1989, when the Argentine inflation was over 3000 percent.
There are , of course, exceptions to the single digit inflationary trend in the region. Venezuela is on the top with the highest inflation in the region with 29.5%. It is expected to increase to 30% in 2010 and more to 32.4% in 2010-14.
Argentina has the second highest inflation with 20%. Costa Rica is third with 8.4%.
Brazil is little over 4 percent in the next five years.
Mexico´s inflation of 5.4% this year is projected to go towards 3 percent in the coming years.
Colombia´s inflation of 4.6% this year is expected to decline to slightly over 3% in the next five years.
Besides inflation, the Latin American governments have also brought under control external debt and exchange rates which have also become predictable.

Gaturro - Cartoon film - Argentine humour with Indian technology

Gaturro is the product of Argentine humour and imagination combined with Indian ingenuity and technology. It is a 90 minute 3D animated cartoon film.

Gaturro is a popular comic character created by the famous Argentine cartoonist Christian Dzwonik (Nik ). He has used Gaturro to make jokes on Argentine politics, society and everyday life. Gaturro is an ingenious cat, with interesting and funny perspectives of the world and the Argentine political situation. Gaturro is presented as an antihero, observer of the world and eternally in unrequited love with Agatha, the female cat character. Some say that Gaturro is like a typical Argentine macho.... lot of show and lot more madness !! There are more than 30 Gaturro books. They have become popular not only in Latin America but even in France, Norway and Spain. Gaturro has its own website http://www.gaturro.com/

Here is the 39 year-old Nik

Here is a sample of Gaturro cartoon, in which the change of his mood from Tuesday to Monday is depicted. Monday at the end is the dead day !!

The Gaturro film is the story of his love with Agatha. Since Agatha is hard-to-get, Gaturro tries all kinds of brave and foolish tricks to catch her attention. In this pursuit, Gaturro makes a mess of himself, gets into all kinds of troubles, passes through hilarious situations and finally realises that it is better to be oneself rather than role playing.

Here is Gaturro, the showman..

Illusion Studios of Argentina are coproducing this six million dollar film in collaboration with Toonz Animation of India. They signed the coproduction agreement in May 2009. The production has already started and the movie will be released in 2010. Jose Luis Massa CEO of Illusion Studios, the two-year old firm of Buenos Aires , is excited like Gaturro with the Indian collaboration. It has ambitious plans to be a major player in Latin America
http://www.illusionstudios.com/

For Jayakumar, CEO of Toonz Animation, Trivandrum-based company, this is the first joint venture with Latin America. Toonz Animation is an established global player and has a staff of over 500.
More http://www.toonzanimationindia.com/

I am sure Gaturro is going to inspire more such joint ventures between the Argentine talents and Indian technology. The Argentine human resources are very creative, imaginative and inventive. This is the assessment of the seven Indian IT companies which employ 800 Argentine staff in Buenos Aires. The city of Buenos Aires inspires imagination with its the largest number of theatres, music concerts, literary and cultural activities in Latin America. The Colon Theatre of Buenos Aires is one of the best in the world.

I hope Nik will start a new series of Gaturro going to India in search of a Bollywood actress......

Mexican company invests in Indian cinema halls

Mexican cinema chain Cinépolis will invest 160 million dollars in south India for setting up multiplexes across the four states. This will make India the country with their largest market outside Mexico. They will open around 500 screens, 50 per cent of which will be in the southern cities, in the next seven years and for every screen, they will be spending around $700,000.” Most of the funds would go in rentals and in developing screens. The amount would be funded through internal accruals. Cinépolis is in talks with 200 mall developers and had signed up for around 110 screens in eight cities, of which 62 per cent are in the south. It would commence operations by the second half of 2009. Its first screen is scheduled to be launched in November at Amristar. The company, the fifth largest theatre chain in the world, is aiming to move up to the fourth slot. It operates more than 2,000 screens in six countries.

Brazil ...out of the crisis induced by global meltdown

According to a cover story in Exame magazine (one of Brazil´s main business publications) Brazil is getting out of the crisis. Various key indicators confirm that economic activity and job creation have already undertaken a recovery process.

While in the United States General Motors is facing all kinds of problems, and selling part of their European assets, in Brazil a R$ 2 billion investment plan is in place to expand production. The Brazilian auto industry expects to sell 3 million units in 2009, a historic record in a year in which everyone expected the worst.

A recessionary scenario was looming in the last 6 months, with reduction of the GDP, absence of credit, lack of confidence, production interruption and slowing of sales. This reality is now only seen in the rearview mirror. Brazil is, in fact, experiencing the next phase: recovery and growth.

Employment is also entering a considerable recovery process, after predictions pictured a dark. 300,000 new jobs were created on the first 6 months of 2009, in the economy as a whole. In the end of last year 800,000 jobs were lost in the country, but in 2009 a positive balance of 600,000 is expected.

It is interesting to note that a country that has always been hit hard by the world´s economic turmoils, this time is keeping its head out of the water based mostly on internal demand. In the survey conducted by the magazine, most businessmen have expressed optimism about growth.

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. http://www.confidentengineering.com/
Their email is confidentindia@gmail.com

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?

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.

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.