Monday, October 31, 2011

Gammon India invests in Ecuador

I had known Gammon India as an engineering and construction company when I was posted in Libya in 1983-85. I was pleasantly surprised to see that they have diversified into petroleum and other sectors and have even entered Latin America.
Gammon has established a subsidiary company Campo Puma Oriente SA ( based in Panama ) which operates the Puma oil fields in Ecuador which consists of eleven wells with proven reserves of 8 million barrels. So far, they have drilled seven wells which produce 1,500 bpd. The contract for the 20-year lease of Puma fields was signed in March 2008.
The Puma field investment is a joint venture with Joshi Technology International of USA. Gammon has 66.4% and Joshi 33.6%. The joint venture company in Ecuador is called as Consorcio Pegaso They have invested 50 million dollars till December 2010 and plan to invest 51 million dollars more in the next five years.
Joshi company, founded by Dr Joshi produces 5000 bpd of oil in Colombia. They also have oil fields in India and USA.
The Puma block is in the orient basin located 400 km from the capital Quito. The block has an area of 166 sq kms.
According to a June 2011 Reserve Bank of India report, Gammon has invested 1.8 billion dollars in their Panama subsidiary which will diversify into agriculture, fishing, hunting and forestry. Hmm.... Interesting ...

Saturday, October 29, 2011

Argentine company Arcor entering India

Last April, when I was in Trichy, the nearest town to my village, I went to a small supermarket to buy chocolates for the kids in my place. The kids liked the chocolates and thanked me for bringing them all the way from Argentina. I was taken aback and sheepishly confessed that I had bought them in Trichy. But they showed me the label ¨Made in Argentina¨. Yes. These were in fact made in Argentina and exported to India by an Argentine company Arcor. Last year their exports to India were 10 million dollars.
The CEO of Arcor Mr Luis Pagani is right now in India on a two-week tour. He had an interactive meeting organised by CII in Delhi. He is also visiting Mumbai and Bangalore. The purpose of his visit is to open an office in Delhi in the next few months. Later, Arcor is planning to establish a plant in India to manufacture for the Indian market and for exports to rest of Asia. They are looking for a site in India to put up the plant. This will be the first ever Argentine investment in India.
Arcor is an Argentine multinational company exporting to 120 countries. They are a leader in Latin America and have 41 plants in five countries of the region.It is a family-owned company with a turnover of 2.5 billion dollars.
Wipro of India had done some IT work for Arcor.
Mr Pagani has two guides to show him around in India. His sister and daughter. Both have travelled to India many times and like Indian culture and spiritualism.

Wednesday, October 26, 2011

Argentine hair colour for Indian men

Last year Godrej bought two Argentine hair colour companies ( Issue Group and Argencos ) for about 50 million dollars. These two companies are doing well in the local market and are also exporting their products to other Latin American markets. The entry of Godrej into Latin America is not surprising, given the global ambitions of this large and established firm.

What took me by surprise was when I came to know that a small Argentine company Plumari has entered the Indian market with men's hair colour products. The Plumari products are sold in the Mens & Boys retail stores in India. At the moment, the Indian company has six retail outlets but is planning to open 100 stores by 2016. Plumari is keen to market their products for women also in India. They are excited by their entry into the large, growing and promising market of India.

Plumari is a family-run company with a turnover of 30 million dollars. They specialise in hair colour and export their products to over 30 countries. . More information in

The success of Plumari should be an inspiration for other small Argentine and Latin American companies. This should also be seen in the context of the comments by some Latin American and other economists that Latin America is dependent upon exports of primary commodities. The Latin American companies which have consumer products should explore the large Indian market seriously and systematically.

A Brazilian company Surya Brasil is already exporting their Henna products to India. My blog on this

Saturday, October 08, 2011

Brazil and India - Synergy between Bikini and Bindi

A Brazilian firm with an Indian name ¨Surya¨ is marketing its henna products in India. Renuka, an Indian company is a major producer of sugar in Brazil.

Clélia Cecilia Angelon, the president of Surya Brasil and Narendra Murkumbi, vice chairman of Renuka Sugars are the trendsetters in the new paradigm of synergy between the New Brazil and the New India. Economists of the old school used to consider Brazil and pre-reform India as more competitive than complementary to each other.

Cecilia started off with a shop in Sao Paulo selling henna powder made with raw materials imported from India. To make it look authentic she named her company Surya Henna. She had once invited me to her stall in a Cosmetics Fair which drew large crowds attracted by the scantily clad Brazilian beauties tattooed all over their bodies with henna. I realised then that India not only stirred the Brazilian soul with spiritualism but also gave a touch to their bodies as well. This combination convinced me that it was going to be a winner in business and win-win for India and Brazil. The turnover of the company, which changed its name to Surya Henna, has now reached twenty million dollars. They export to twenty countries including USA, Australia, UK and France. In an audacious move, Cecilia decided to export her henna products to India. The marketing team of the company thought this was like a Brazilian trying to teach an Indian Guru. How would the Indian consumers living with a long tradition of henna accept a Brazilian henna product? How could a Brazilian company find a place in the space crowded by so many Indian companies in their home market? Cecilia would not take no for an answer. She opened an office in India in 2005 and sent a marketing executive Fernanda Drumond who spent four years to study and understand the Indian market. She has achieved sales of 1.5 million dollars in 2010 and plans to double it in 2011. She has placed the products in beauty parlours and stores in shopping malls in the major cities. Now she is reaching out to the smaller towns. Surya Brasil plans to open a production plant in India from which it will export to Japan, Korea, Taiwan, Australia and other Asian countries. They also plan to open an organic SPA in India like the one they have in Brazil. Besides henna Surya uses in their cosmetic products other Indian ingredients such as Amla.

Surya goes beyond henna in its India connection. The company´s website says ¨Surya is guided by Ayurvedic principles: know and respect individuality; pursue well being with emotional and physical balance¨. The website of Surya has a section, ¨moment of meditation ¨.

How does one explain the success of Surya in India and in the world? The answer lies in the fact that the Brazilians, with their sensual expertise, understand and practice body care better than the Indians whose focus is more on the spirit and the soul.

Cecilia’s interest in henna started with her love for an Indian Raj Malhotra who had employed her as a salesperson in his shop in London. Raj could not resist the Brazilian charm and married her. She became Cecilia Malhotra. They had a daughter Vandana. Raj lived for some time in Sao Paulo. After a few years, Raj and Cecilia separated. Later, she had relationship with another Indian Kanwaljit Singh.

When Murkumbi wanted to enter the Brazilian sugar sector, it was like Cecilia trying to penetrate the Indian henna market. Sugar industry was the holy cow of Brazil. It was controlled by the sugar barons and traditional families of Brazil. They were formidable as the global leaders in sugarcane farming, sugar and ethanol production and the pioneers in the use of fuel ethanol and flexifuel vehicles. But Murkumbi who believes in ¨Rewriting rules and Reinventing paradigms ¨ and ¨contrarian philosophy in a conventional business¨ ventured boldly . He has acquired two Brazilian sugar groups with an investment of 350 million dollars. Renuka is now the seventh largest producer of sugar in Brazil with a cane-crushing capacity of 14 million tons a year in its four sugar mills. It is also a leading producer of ethanol (one million litres) and co-generated power (221 MW). Renuka is investing 70 million dollars in 2011-12 more to expand the capacity. The goal of Murkumbi is to take the company from seventh to third rank in Brazil.

Murkumbi sees strategic synergy between India, the largest sugar consumer and Brazil, the largest sugar producer in the world. He believes in the complementarity between India whose sugar production faces increasing challenges of agricultural land and water scarcity and the advantage of Brazil with ample land and water resources, conducive climate and efficient farming and manufacturing, low operating cost and high scalability. Murkumbi has also become successful in marketing the Brazilian sugar in many countries besides India.

From time to time Indian domestic production goes down due to weather and other cyclical circumstances which make India import sugar. In 2009-10 India imported 2 billion dollars of sugar from Brazil.

The success of Cecilia and Murkumbi have become inspiration for other Indian and Brazilian entrepreneurs to seek such win-win opportunities.

India imported from Brazil soya oil worth 71 million dollars and pulses worth a few million dollars in 2010. These two imports are likely to increase in the coming years since India's production of these two items are inadequate to cope with the growing demand.

There is an evolving agricultural complementarity between Brazil which is poised to become a global agricultural powerhouse and India which is likely to face more challenges arising from increasing food demand and decreasing agricultural land and depleting water resources. According to a statement in March 2011 by the Brazilian Agriculture minister Wagner Rossi, Brazil has 120 million hectares of degraded land that could be converted to agriculture, which would triple the total area under cultivation.

In 2010, Reliance, the top Indian company accounted for about 38% of the Indo- Brazil trade. They exported 1.7 billion dollars of diesel and imported 1.25 billon dollars of petroleum crude. While India imports about 70 percent of its crude oil requirements, Brazil has become a net exporter. With the recently discovered pre-salt reserves, Brazil is expected to produce 6 million barrels per day by 2020. Given the need to fuel the projected high growth rate, India would import more Brazilian crude in the future. Besides imports, Indian companies have invested in oil exploration and production in Brazil.

Hopefully India will learn from Brazil's successful experience of fuel ethanol and flexifuel vehicles to meet the rising need for fuels. Brazil is also a source of minerals and timber and manufactured products as well as regional jets made by Embraer which are needed by the fast growing Indian market.

Renuka and Reliance have positioned themselves in the middle of the complementary partnership between India and Brazil in food and fuel. Brazil is becoming important for India's food and energy security.

What does India contribute to Brazil? There are several Indian IT and BPO companies which operate in Brazil employing 3000 Brazilians. This is more than employment. The Indian companies train and prepare these young Brazilians for the new Age of Information and Knowledge society. The Brazilians working in the Indian IT and BPO companies acquire multicultural skills through their interaction with US and European clients besides Indians. Fabio from Curitiba has become the regional manager of WIPRO for the whole of Latin America. Guess who is the new country manager of WIPRO in Argentina. Another Brazilian, Valdo.

The Indian pharmaceutical companies have helped the government and people of Brazil to reduce their cost of health care. In the nineties, Jose Serra, the Brazilian health minister invited the Indian companies to enter the Brazilian market and facilitated registration of their products. Thanks to this wise initiative, there are twenty Indian pharma companies which sell their products in Brazil through local production and distribuition besides exports. The low cost generic medicines from India have put pressure on the multinationals and local companies of Brazil to lower their prices and to increase the volume of less expensive generic products. The success of the Indian companies have inspired the Brazilian pharma companies which are aggressively expanding their domestic production and also extending their presence in the rest of Latin America and Africa.

India supplies embryos to the Brazilian cattle industry. Brazil has a large stock of cattle developed as a cross between Indian and European breeds. They had to do this cross breeding since the original cattle brought from Europe could not survive the hot and tropical climate of Brazil. The Brazilians had earlier imported cattle from Ongole, Gir and Nellore in India and named the cross breed as Nelore and Indubrasil. About 90% of Brazilian cattle meat production comes from Nelore. The Brazilians have also exported this Nelore breed to Paraguay, Argentina, Venezuela, Mexico, Central America and to USA.

The Indian manufacturers who make low cost products for the price sensitive Indian masses using ¨frugal engineering¨ (a term coined by Carlos Ghosn, the Brazilian who is the CEO of Renault and Nissan) and ¨reverse innovation¨ can supply such products to the Brazilians with low income. Micromax, a low cost Indian cellphone maker has just started marketing its products in north eastern Brazil. Tata has announced plans to assemble their Nano cars in Brazil.

The trade between India and Brazil have more than tripled in the last five years from 2.3 billion dollars in 2005 to 7.7 billion in 2010. This is set to increase significantly given the complementarity in food and energy security and the change in the mindset of Indian and Brazilian businessmen who have started taking each other’s markets more seriously.

Around 40 Indian companies have invested in Brazil in IT, BPO, pharmaceuticals, agribusiness, agrochemicals, oil, mining and manufacturing. On the other hand, eight Brazilian companies have invested in India in sectors such as assembly of buses, steel, electrical motors and shoes.

The 2014 World Cup, the 2016 Olympics, the 224 billion dollar investment plan of Petrobras in this decade and the 270 bn $ investment planned in the mining sector in the next 20 years in Brazil offer unprecedented opportunities for exports and contracts for Indian companies. The Brazilian companies too can take advantage of the huge investment opportunities and the growing size of the large consumer market of India.

The Indians admire and cheer the Brazilian football team during world cups. With more exchanges with Brazilian clubs, training and getting more Brazilians to play in Indian teams, there is hope and scope for Indian football which is becoming more popular.

The air-connectivity problem between the two countries has been partly solved with the flights of Qatar Airways and Emirates Airlines who link Sao Paulo with Indian cities through Doha and Dubai. Besides providing better service, these airlines have spared the Indians the need for transit visas at European airports.

The academic world too is catching up and has started focussing on the evolving partnership between the two countries. India has established a chair in Getulio Vargas Foundation, Sao Paulo and there is a Brazilian professor in Jawaharlal Nehru University. The centre for Latin American Studies at the University of Goa is organising a major conference on Brazil on 28-30 October 2011.

The governments of India and Brazil have a number of programmes of bilateral cooperation. Faced with similiar developmental challenges such as poverty alleviation and improvement in education and health care, the two governments could learn from the best practices of each other. A number of Indian delegations have visited Curitiba city which is a role model for urban bus transportation service. On the other hand Brazilian delegations visit Bangalore to get inspiration from the Indian IT companies.

India and Brazil are part of the trilateral alliance of IBSA alongwith South Africa. They are members of BRICS, G-20 and take common stand in a number of multilateral fora. The two countries work together to realize their aspiration to become permanent members of the UN security council.

Some might say that India's trade with Brazil was just 13% of China's trade with Brazil which reached 56.6 billion dollars in 2010. Chinese companies have invested much more than Indian firms in Brazil. But India is different. It is more than a commercial partner. India and Brazil share common values of democracy, freedom and culture.

At the level of people, there is cultural complementarity between the two countries. The Brazilians admire the culture and spirituality of India. There are thousands of Brazilian followers of Sai Baba and other such Indian Gurus. Yoga and meditation are no longer passing fads. They have become part of everyday life for several million Brazilians. While Sri Sri Ravi Shankar's Art of Living is popular in Brazil, the Indians admire the way the Brazilians have made enjoyment of life as an art. The new generation of Indians are attracted to the Brazilian spirit of samba and carnival.

¨Camino das Indias¨, the Globo TV soap opera based on an Indian theme topped the viewer ratings in 2009 and has stimulated the interest of the Brazilian masses in India. This Indian story with Brazilian actors had a profound impact. Indians are greeted with Namaste and are asked if they are Brahmins or Dalits. Ganesh idols for good luck adorn the offices and homes of many Brazilians. Exports of Indian ethnic dress and handicrafts have skyrocketed. The number of Brazilian tourists to India have gone up.

There are a number of Brazilians who perform Indian classical music and dances. One of them, called as Juliana has even come to teach in Buenos Aires. Her interest in Indian dance was inspired by Father Joachim Andrade, a catholic priest in Curitiba. Father Andrade himself had learnt classical dances in India. In Brazil, he did his masters in Anthropology on the topic “Dance as a ritual: a case study of Indian Dance”. For his doctorate, he chose the topic of “Bharatnatyam as the medium of diffusion of Hinduism in Brazil ¨.

Brazilians are embracing the principles of Non-Violence of Mahatama Gandhi as a preventive remedy for the young minds which are being infected by the serious crime and violence in their cities. Palas Atena, a NGO from Sao Paulo is celebrating the birth anniversary of Gandhi every year for the last 30 years and spreading Gandhi’s teachings on non-violence among children and youth in particular.

Romance is in the air between Bollywood and Brazil. The Indian film Dhoom II was shot in Rio de Janeiro. Some Indian Reality TV shows were also filmed there. There is a Brazilian model Giselle Monteiro who has taken new avatar as a Bollywood actress. She acted in two films ¨Love Aaj Kal¨ and ¨Always Kabhi kabhie¨. She has featured on the covers of Indian women's and fashion magazines and is the Brand Ambassador for some Indian products including jewellery. Her success has inspired a number of Brazilian girls and boys who are queuing up at the Indian consulate in Sao Paulo for visa to go to Mumbai for modelling and to have a shot at Bollywood. One of the reasons for the acceptability and success of the Brazilians in Bollywood is their café con leite (coffee with milk) complexion in which they look like Indians with the same blend of coffee and milk colour in their skin. Many Indians who saw Giselle in the Bollywood films mistook her as a Punjabi. Does'nt she look like one?

Giselle is romancing a Punjabi in the Bollywood film in the picture below

Brazilians have taken to Indian fashion too. Indian ethnic dress, jewellery and accessories are popular in Brazil. Girls from Ipanema are putting bindis in their foreheads matching with their bikinis. This Bikini-Bindi combination is the symbol of the synergy between the sensual Brazil and the spiritual India. This is more than synergy. Bindi is an auspicious sign of marriage.