India’s top software service exporter, Tata Consultancy Services Ltd (TCS), sees Latin American sales more than doubling by 2015 as the company targets one of the world’s fastest growing regions.
TCS, which is owned by India’s biggest industrial conglomerate, provides IT, consultancy and outsourcing services in Mexico, Argentina, Chile, Uruguay, Brazil, Ecuador and Peru.
“We have a very aggressive growth project in Latin America for the next five years, we want to more than double our sales to over USD 1 billion,” Alejandro Valenzuela, manager for Peru, Chile and Ecuador, told Reuters in an interview.
“Latin America is really relevant to TCS because it has one of the fastest rates of economic growth,” Valenzuela said.
The region will grow up to 5% this year, according to the International Monetary Fund (IMF).
Latin America gets almost zero coverage in the Indian media, who is affliced with extreme ‘SouthAsianitis’ in their news coverage. Many Indian executives have never seen a visual of the region. The occasional coverage is the annual carnaval in Rio, the World Cup every 4 years featuring plenty of LatAm teams, and the anti-yankee rants emanating from Venezuela and Cuba. From my experience, a number of Indian executives believe that Latin America is a disease-ravaged, war-torn place with a refugee problem! I have to disabuse them of this notion. Indian IT and pharma companies are also showing that this is far from the truth, and are the pioneers in opening these markets for further investment by Indian companies in other sectors.
Even from my experience in US media, Latin America is viewed through the composite lens of illegal Mexican immigration, the anti-Castro Florida lobby and narcotrafficking. As if nothing else exists. Latin American countries, with the exception of Chile, have not aggressively pushed positive P.R. to attract foreign investment. For a changes, here is a Canadian perspective on LatAm.
More and more Indian companies are looking to do business in Latin America as they seek exposure to growing markets. The ties are also manifesting themselves on a policy level with trade agreements between India and South American countries picking up.
Like those of its Asian neighbor, Indian companies are seeing Latin America as a more secure investment destination, thanks to broadly stable government and economic policies. These markets are also increasingly becoming a potential lifeline as India deals with food shortages and droughts.
“In India, consumption is growing while the land is diminishing but here in Latin America we don’t have any such land-shortage problems,” said Rengaraj Viswanathan, India’s ambassador to Argentina, Uruguay and Paraguay, who has been pushing for Indian companies to set up shop in the region.
Indian companies have invested around $9 billion in Latin America during the last several years, according to Viswanathan, and “that number is just going to keep on growing.” The next step in this trend is the agribusiness side, market watchers say.
Shree Renuka Sugars Ltd. (532670.BY) late last year became the first [Indian] agribusiness to enter South America with its takeover of Brazilian Vale Do Ivai SA Acucar E Alcool. The company is eyeing more acquisitions in Brazil, the world’s top sugar producer.
India’s recent transformation from an exporter into an importer of sugar, thanks to rapidly rising domestic consumption, has caused many companies to look outside the country in order to maintain supplies. Ethanol, too, is growing in importance as some Indian states have set mandatory guidelines on ethanol in the fuel supply.It’s a similar case for edible oils, where demand is outstripping domestic production.
As markets stabilized in the last few months of 2009, a series of Indian companies affirmed their plans to increase their exposure to Latin America. Tata Consultancy Services Ltd. which already has sizable operations throughout the region, said in September that it was eyeing several acquisition targets. And just recently at the World Economic Forum in Davos, Switzerland, Tech Mahindra Ltd. Chief Executive Sanjay Kalra said his firm is “very interested” in mergers and acquisitions in Latin America. Information-technology companies see plenty of opportunity in the region using service centers to tap local customers and also to serve clients in a slowly rebounding U.S. economy.
The information technology industry is constructing a new research and development hub for software: Santiago, Chile. The Latin American capital has the attributes that have made emerging markets attractive to outsourcers, such as cheap wages; dependable, state-of-the-art infrastructure; and government incentives. While Chile’s small labor force will hinder its rise, the country also boasts an outsize pool of highly educated computer engineers and a time zone that’s synchronous with the U.S. East Coast.
Tata Consultancy Services has increased its software application development in Chile by over 30% in the past three years. Another Indian company, Polaris Software Lab, which works with Hewlett-Packard (HPQ) and Microsoft (MSFT), among others, just opened a credit-card software development center in Santiago and expects to be up to 100 employees by yearend.
“We think of Chile as the specialized neurosurgeon of IT outsourcing,” says Douglas Gattuso, a managing director at Miami-based IT consultant Neoris USA, which has a 125-person office in Santiago. “Mexico, Argentina—they’re the general practitioners.”
As Indian firms fight the threat of H-1B restrictions, IT services companies might not leave their fate to politics. In an effort to reduce their need for visas, they may look to increase their presence south of the border.
Indian IT firms have boosted operations in Mexico in recent years to serve Latin American and U.S. customers. One advantage to doing so involves the North American Free Trade Agreement (NAFTA), which enables Mexican and Canadian professionals to work in the U.S. without an H-1B visa.
In other words, Indian firms could send employees to Mexico, and then move some of their Mexican workers to the U.S. under the auspices of the treaty. The Mexican workers would not need an H-1B visa to work in the U.S., though they would need what’s called a TN visa. That visa is available to Mexican and Canadian nationals who qualify under a number of professional categories and meet specific education and experience requirements.
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On the sixth floor of one of Managua’s only high rises, young men and women spend hours on the phone in fast-flowing English. Televisions flash MTV and soccer, and walls of windows give a sweeping view of the city’s volcano-rimmed lake.
Calling in are customers from across the U.S. with questions about their mobile phone service. Every day, the slick new contact center, run by Tennessee-based outsourcing vendor Sitel, takes 15,000 calls.
Offshoring has brought Latin America thousands of similar sites in the last few years, as multinational clients tap the region’s cheap labor, good English and newly stable economies.
Now, the world financial crisis is speeding that trend, driving companies to further cut costs while the resurgent dollar makes hiring overseas more affordable.
For Latin America, the sector’s rise promises to reduce reliance on volatile commodity exports and to generate seed money to fuel future growth. And the customer service, technology and administrative jobs it is creating offer many a new ticket to the middle class.
Ambassador Viswanathan writing about the “new paradigm of relations”, in advance of the upcoming Argentine presidential visit to India, which has been postponed in light of PM Singh’s heart surgery. Key takeaway is Argentina with almost the same land area as India (only about 10% less), and population equalling that of Delhi, Mumbai, Kolkata and Chennai is perfectly positioned to meet India’s growing imports of food. Argentina has the land area to feed at least 500 million people.
Columnistas – Perfil.com
El comercio de la Argentina con la India alcanzó los 1.300 millones de dólares en 2008. Las exportaciones argentinas a la India cruzaron el umbral de los mil millones de dólares en 2007.
Empresas indias ya operan en el mercado argentino con inversiones y joint ventures. Seis son del sector de la informática: Tata Consultancy Services (TCS), First Source, Cognizant, Irevna, Cellent y Aaliphta. Emplean a 800 jóvenes argentinos, capacitándolos y preparándolos para el mundo de los negocios globalizados.
Hay dos empresas indias agroquímicas (United Phosphorous Ltd. y Punjab Chemicals and Crop Protection Ltd.) operando en la Argentina. Glenmark de la India está produciendo y exportando drogas oncológicas en las plantas de su subsidiaria argentina Síntesis Química.
ArcelorMittal, la compañía del empresario indio Lakshmi Mittal, adquirió la siderúrgica argentina Acindar y la distribuidora de acero inoxidable Majdalani. Hay una empresa en minería y otra en agronegocios.
De parte argentina, IMPSA, la empresa de ingeniería, ya ha establecido oficinas en Delhi y explora oportunidades en el sector de la energía. Empresas farmacéuticas exportan productos de biotecnología y tienen planes de invertir allí. Empresas argentinas han sentado presencia en el sector de equipos y repuestos de GNC (gas natural comprimido) en la India.
Las principales exportaciones argentinas a la India de aceite de soja y de girasol continuarán aumentando en los años por venir.
Aquí vemos una complementariedad perfecta entre la India, con una numerosa población de más de mil millones de habitantes y recursos territoriales insuficientes, y la Argentina, que tiene apenas 40 millones de personas pero casi la misma superficie que la India.
Indian outsourcing industry has entered a new era of growth. Infosys (INFY), Satyam (SAY), HCL, and other IT outsourcing majors that once specialized in lower-value tasks such as application maintenance and business process outsourcing are seeing increasing success in providing outsourced high-value tasks such as total IT outsourcing, R&D, and business transformation services.
Here are six reasons why this is true.
1. Faced with high turnover, rising salaries, and a weak public education system, top Indian companies started investing heavily in workforce education and development.
2. Attrition rates have been remarkably low and are dropping.
3. Rising salaries in Indian IT shops are no longer a problem.
4. Faced with brutal cost-control pressures caused by the global economic downturn, many companies are more desperate to outsource than ever before.
5. There has always been a trickle of highly skilled [Indian] workers returning from the U.S. and Europe to their home countries for family reasons and because they felt homesick.
6. India has been dramatically increasing the output of its engineering colleges, and now quality is improving.
At a time when customers in the US and Europe are tightening their IT
budgets, leading Indian tech firms are betting on their huge pile of cash to steer through the global economic crisis and also to explore M&A opportunities in a world reeling under severe liquidity crunch.
Each of the top six Indian software services firms—TCS, Infosys, Wipro, Satyam, HCL Technologies and Cognizant—have cash reserves in excess of $500 million, with Infosys topping the list at $1.8 billion.
This gives these firms flexibility to invest in newer opportunities including M&A possibilities. “A strong liquidity position is a comfort factor not just for a company, but also for clients and employers,” says Infosys chief financial officer V Balakrishnan. “This also allows for making the right kind of investment
in the current context be it an acquisition, new services portfolio or creating technology solutions.”
CTT, a leader in talent development services for information and communication technology professionals, and CMC Limited, a Tata Consulting Services Ltd. Subsidiary, have signed an agreement to leverage their core strengths in Information Technology (IT) education. As a result of the alliance, CTT and CMC will jointly offer specialized professional advancement programs for software development specialists for the first time in Latin America.
“CTT’s mission is to help IT professionals in Latin America gain access to educational programs that will enable them to compete in the global IT job market,” said Hermann Gomez, President and General Manager of CTT. “By leveraging the best practices and core strengths in CMC’s education services, we are bringing the best and most innovative education programs in the world to Latin America.”
The specialized program entitled Next Generation Software Professional, which will be available as of December 1, 2008, is an alternative to traditional education that fills the gap between theory and practice and reduces time to job placement. Its courses integrate CMC coursework, which has been taught in more than 170 education centers in India, with CTT’s content and methodology in a portfolio of programs that are designed for career-minded IT professionals.
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