EMBA 2012 International Trip

Santiago, Chile

Starting with Santiago, the group was immediately welcomed to the city with signs of autumn, a gentle reminder of those primary school geography lessons of life on the other side of the equator.  With an estimated population of approximately seven million people, highlights of this historic city presented by our tour guides, Claudia and Roberto, included the country’s capital and other government buildings, embassies, beautiful parks, statues, and universities –with the magnificent Andes Mountains serving as the backdrop. “There was almost no discernible culture shock or transition required in coming here.  Most of us could speak enough Spanish to at least get around in restaurants and town and many Chileans spoke enough English to reciprocate.  It would be very easy for an American to transition here and live in Santiago making it an attractive city for foreign investment, at least from the U.S. perspective.” (Rob Crofoot)

Our company visits in Chile included time with an official from the Chilean Foreign Investment Committee whose mission is to promote and position Chile as a desirable destination for foreign investment in their most common exports of copper, produce, wine, salmon, and olive oil.  In addition, we learned from a development manager at Minera Los Pelambres about copper mining conditions in Chile – the 33 trapped Chilean miners that captured world-wide attention nearly two years ago are responsible for the upgrade of safety requirements industry-wide.

We also visited the Santiago Chamber of Commerce, and learned a bit about the issues facing Santiago and Chile in tourism and exchange rates.  Although an average citizen in Chile works 45 hours per week, and the average income is equivalent to $16,000 USD per year, the cost of living is similar to the US – so very few people have cars and rely on public transportation (bus, subway) to travel to and from work.

A trip to Chile would not be complete without spending time in the historic port of Valparaiso (approximately 2 hours from Santiago).  The students had a presentation and tour of the port area from the perspective of SAAM, a Chilean multinational shipping company which operates ports in Chile, Uruguay, Columbia, Peru, Brazil, Ecuador, Mexico, and the United States.  The town of Valparaiso has seen better days. They have lost most of the cruise-line business due to taxes and limited frontage.  Power lines are hanging everywhere because they are so expensive to take down that when they are no longer serviceable they just put a new one next to it.

In contrast, our visit to a vineyard in Casablanca had us feeling as though we were in the thick of California wine country.  Casas del Bosque, a boutique winery specializing in Sauvignon Blanc, Pinot Noir, and Carmenere (a grape exclusive to the region), provided a glimpse into the life of a simple grape.  Our speaker, Anthony Crew, explained how complicated the business and marketing side of wine production is for a specialized brand. Ever mindful of the exchange rates, Casas del Bosque looks to distribute its limited production of 75,000 cases per year to select audiences in the U.S. and Europe while also providing an exceptional product to their loyal clientele in Chile. “”The Casas del Bosque visit really illustrated the challenges of a small business in an international market”. (T. Brian Lassiter)

With free time over the weekend to explore the city, some took advantage of an optional trip to the foothills of the Andes Mountains, while others ventured into the local culture via subway to take in the sights of the city.  The absence of an ASPCA or Humane Society was evident as stray dogs were everywhere.   These docile animals are well fed and cared for by the street vendors and local restaurants.

Sao Paulo, Brazil

“Bright lights, big city” was the theme of our visit to Sao Paulo. With a bustling metropolis of approximately 19 million in the metro area, Sao Paulo is not only the biggest city in Brazil, it is also the largest in Latin America. Most estimates rank Sao Paulo with Mexico City, Seoul, New York City, Los Angeles and Mumbai all competing for spots in the top 7 behind Tokyo – which is first with over 34 million. “First impressions of Sao Paulo are that this is where the money is located.  Some very nice areas but some bad ones as well. This is a massive, sprawling city.  What money is here is established money, whereas in comparison, the money in Santiago was relatively new money except for the 5 main wealthiest families. It appears that the European influence is stronger here with Italian and French being dominant.  I was surprised to learn and see that there is a large Japanese population.  The TV channels include a Japanese channel, a German channel, BBC, Al Jazeera, and CNN.” (Rob Crofoot)

Our city tour was slow-going as the bus maneuvered the noticeably inadequate infrastructure of city streets and highways.  The historic downtown area tour included the Sao Paulo Cathedral, Museum of Art, the Bandieras Monument, beautiful parks, Paulista Avenue, and of course – soccer stadiums.  Zoning laws appear non-existent as cathedrals, car dealerships and residential mansions share proverbial white-picket fences, or in this case – iron gates. As we made our way through the city, we all wondered out loud how the infrastructure could possibly handle the increase demand when the state of Sao Paulo hosts the World Cup in 2014, and the Summer Olympics in 2016.

Our first site visit: Unica – the Brazilian Sugarcane Industry Association.  Brazil boasts the #1 ranking for sugar production in the world, supplying 25% of the world production, and 50% of the world exports. Following the life-span of a typical stalk of sugarcane, we learned the many creative uses for sugar other than increasing our waistlines, including plastics that are biodegradable, and ethanol.   Brazil ranks 2nd in production of Ethanol, supplying 20% of the world production and an equal percentage of the world exports.  A full 50% of the Brazilian light vehicle fleet run on “flex fuel” which is a combination of ethanol and gas, and 90% of all new vehicles run on some form of ethanol – although they are quick to point out that sugarcane ethanol is not a final solution to the world’s oil consumption issues, it is an easy interim fix for now.

Next, the students were introduced to Colegio Banderiantes, a private secondary prep school in Sao Paulo.  This visit was particularly special, as we were guests of the family of Mason School of Business full-time MBA student, Helena Aguiar.  There, we learned about the educational system in Brazil from former Secretary of Education for the state of Sao Paulo, Dr. Guiomer Neno de Mello.  Dr. de Mello described the history of education in Brazil, and she carefully noted that education is the “business of the moment” in Brazil – with funding for public education at the primary, secondary, and university levels at the forefront of the discussion.  We later learned that Dr. de Mello was one of the writers of the constitution for Brazil in the 1985 Restoration of Democracy when the nation was returned from military to civilian rule.  Our visit to Colegio Baneriantes was followed by a briefing from the President of Barclays Capital, Ricardo Lanfranchi, who entertained and educated the group as he summed up the investment banking industry and economic conditions of Brazil.

Visits to AstraZenica (the British pharmaceutical and biologics company), and the United States General Consulate to Brazil further enhanced our understanding of diplomacy and global business relations between the U.S. and Brazil.

Dinner at an authentic Brazilian steakhouse, Vento Haragano, was yet another highlight for the group. With 27 different varieties of meat – all presented by carving chefs, it was all we could do to save room for dessert!

A long trip through the windy mountain roads brought us to the Port of Santos – the main port of Brazil and the busiest container port in all of Latin America.  There, we learned more about the major exports of sugar, coffee, citrus juices, soy, grains, and produce that permits us to feed our off-season appetites. A schooner tour through the Santos Bay allowed us to view the container ships, the charm of the islands and beaches, and the unforgettable shanty-towns that surround the port.

Our final business visit was to Natura, a direct sales cosmetic and skin care manufacturer – similar to Avon or Mary Kay in the states.  Natura prides itself on its eco-friendly, sustainable image and the factory tour was an important reminder that a workplace can be environmentally responsible and profitable, all while treating their employees as their most valuable resource.

A few thousand pesos, a couple of reals, and a new perspective on global business in Latin America accompany the wonderful memories of this truly unique educational learning experience.

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