FAO and ERM brief by Dylan Conroy

Dylan has shared with us her experience in regards to the FAO and ERM presentation of January 12, 2012

“On the morning of January 12, 2012, me and my twenty fellow Poets had the distinct opportunity to speak with Dr. Alejandro Flores-Nava, a representative with a special background in aquaculture from the Food and Agriculture Organization, a specialized agency of the United Nations; and Dr. Alfrido Wagner-Manslau, the managing director of Argentina and Chile at ERM, a multinational environmental consultancy firm. These two visits were special for many different reasons. First off, this was the first and only times where representatives from a multinational organization came to us, the eager to learn, students of Whittier College at our hotel in the Congreso district of Buenos Aires, a hearty trek for both parties. Secondly, these were two organizations, one for-profit and one, not for-profit, that specifically tackled (or was at least primarily focused on) global social and environmental responsibility.

The idea of an international organization regulating and working towards sustainable
food and agricultural practices was first born in the late 1800s, leading to the creation of the International
Agricultural Institute in 1905 at an international conference held in Rome. It wasn’t until November, 1945 – with FDR’s support and encouragement, that the Food and Agriculture Organization held its first international conference. The FAO’s ultimate mission is to achieve food security for all, making sure that people have consistent access to “enough high-quality food to lead active, heathy lives” in an effort to defeat world hunger (http://www.fao.org/about/en/). To do this, the FAO focuses on improving
the levels of nutrition and the lives of rural populations, increasing agricultural productivity,
and play as much a part as possible to the growth of the world economy. The new General Director,
José Graziano da Silva, (appointed January 1, 2012) announced on Jan. 3 that his most important
consideration is the total eradication of world hunger and undernourishment
(http://www.fao.org/news/story/en/item/119343/icode/).

Dr. Flores-Nava broke down what FAO Argentina does at its most basic level: share best information and knowledge and use what limited resources are available (human capital and money) to minimize the worst case scenario and respond to current conditions of distress. Flores-Nava made it a point to say that the FAO doesn’t interfere with sovereignty of a country on the country’s beliefs on GMO’s or environmental regulations. The FAO is strictly an information based agency that labels access to food as the real problem with hunger and malnutrition worldwide. According to Flores-Nava, if all currently available foodstuffs was evenly distributed around the world, everyone would have the ability to eat. The FAO has two major tasks with regards to the information it collects and distributes and those are to generate the actual knowledge through research, statistics, and trends and to assist with technology for those countries in need. Overall, Flores-Nava’s visit helped us more fully understand the difficulties when a NGO deals with host country regulations, and definitely made me respect the role of the scientist in global operations. ERM was no different.

The Environmental Resources Management (ERM) is an environmental for-profit consulting firm that guides the world in its efforts to develop sustainably. They provide environmental, health, safety, risk, and social consulting services to various firms in key sectors such as oil and gas, mining, power, manufacturing, chemical, and pharmaceutical. The representative we had the pleasure to speak with was none other than the managing director of both Argentina and Chile, Alfrido Wagner-Manslau. Wagner-Manslau’s scientific background in geology really made it obvious that these weren’t just business men looking for the greatest profit margin, but the cool lab-geeks who want to do good in the world (and look good while doing it!).

Environmental Resource Management takes a geocentric approach to its business, addressing the different needs of different branches, but with an international perspective from a large full-service organization. For example, Argentines are in Argentina because they more fully understand the culture, environmental regulations, and environmental needs by their clients doing business in Argentina. What surprised me was that ERM isn’t just a consultancy firm that says ‘do x,y, and z to become more environmentally friendly/function more sustainably,’ but they actually diagnose the problem, offer treatments, and then treat. These are actual scientists carrying out projects. Manufacturing, chemical, and pharmaceutical firms are ERM’s best clients and make up 40% of sales, another extremely interesting tidbit of information considering how much more well-known oil and gas firms and mining firms are for environmental degradation.

All in all, a very interesting and busy morning, full of looking beyond the direct responsibility to the shareholder, and thinking about what it actually takes to feed and keep from further abusing the planet and the obstacles we, mankind, face to do so.”

VF Wrangler

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One of the MNC’s that our class had the pleasure and privilege to visit was VF’s Jeanswear headquarters located in Buenos Aires.  What made this particular visit so special was that not only did we get an excellent presentation and lecture from the President of VF Jeanswear Mr. Silverio Gomez, but we also were given a tour of a Wrangler Jeans outlet and UFO outlet by Country Sales Manager Frederico Bran.

The presentation given by Mr. Gomez was extremely insightful and intriguing.  It was most interesting to see the marketing development that had occurred in South America, such as the cultural differences and similarities between the US, Brazil, and Argentina.  It was very amazing to see that countries like Brazil and Argentina have a very similar cowboy culture in their own respected way, and that VF takes into account the the sports, foods, and drinks of a country and a culture when designing jeans.  Mr. Gomez also told us their company motto, “We don’t take ourselves seriously, but we take our business seriously.”  This was a great way to understand a jeanswear company, and more specifically Wrangler.

Our trip the Wrangler and UFO outlet stores, led by Frederico Bran, was a great tool into understanding the differences between clothing and retail stores between countries like Argentina and the US.  For instance, if there is a pair of jeans or a shirt you are interested in purchasing or trying on, you don’t just grab the one you see off the shelf like most stores in America.  In Argentina its customary to ask for the item you want, and they go to the back and grab it for you.  Further differences like the lack of hourly pay or commission also stood out as strong contrasts.  

Overall, this was an amazing visit for everyone involved.  It enlightened us on one of the biggest clothing based companies in the world of VF, and helped us better understand their strategy as a Multinational Corporation.

 

 

IBM in Buenos Aries

On the 18th we had the opportunity to visit the IBM Technology Campus in Martinez. IBM is an impressive company with an expansive list of accomplishments and products that have shaped the way we live our lives to this day. The presentation that we received gave us the history of IBM in Argentina. It was interesting to learn about how the factories in Argentina shifted from manufacturing sites, to sites in which IBM is able to provide services to its customers around the world. It is impressive to think that all of the IBM offices around the world are styled with the same furniture and ran in exactly the same way. I think that this truly gave us the opportunity to see how a true multinational corporation is ran.

We also had the opportunity to tour the facilities at the Technology Campus, learning a little bit about what they do at that site. Walking around the building really allows you to see how immense IBM as a company is. They have multiple floors of rooms dedicated to providing support to its customers, many of which were banks. To know that this is just one of the sites that IBM runs around the world really says something about the scope and depth of the company as a whole.

The speaker Mr. Fernando Pedemonte and his assistant Laura did an amazing job of answering all of the questions that we had about the company here in Buenos Aries and around the world as a whole. I believe that getting talk with representatives at such a well know and well establish company was truly an amazing experience and allowed us to learn a lot about the business world in Argentina.

Coca-Cola Thoughts

We had the opportunity to not only visit one of the Coca-Cola bottling plants in Argentina, but we also were able to visit the main headquarters of Coca-Cola Buenos Aires. Both of these meetings were such an honor for us as a college because Coca-Cola is the most recognized brand in the entire world! For them to take such valuable time out of their day to present to us for several hours was incredibly generous, and all of us students (and professors!) truly appreciated the well put together presentation and hospitality that we received.

While visiting the bottling plant, we were able to see the entire process that goes behind the creation of each bottle of Coca-Cola created in the Buenos Aires area. It was fascinating to see the different machines that moved along the assembly line, each moving closer toward the final product. They had also prepared a formal presentation for us, explaining the background of Coca-Cola’s South American bottling plants, as well as their strategic vision for the future. Their presentation and factory tour were incredibly insightful and thorough, leaving us wondering what else there was to learn!

Later on that week, we visited the corporate headquarters for Coca-Cola Buenos Aires. We were greeted with such overwhelming hospitality that we instantly knew that there had been an immense amount of preparation for our arrival. Our expectations were exceeded. There were four different presenters, each talking about different aspects of the company. We learned about all the different strategic thinking behind Coca-Cola’s marketing process, the thought process behind their strategic distribution, and their goals as a company to continue to make the world a better place. Each presenter spoke to us as if they had nothing else in the world to do. They answered our extensive questions, and made us feel as if we were their highest priority. It was an incredible feeling to know that they had put so much effort into giving us the best experience possible!

I know that I am speaking for the entire Whittier College class when I say that both Coca-Cola presentations were incredibly insightful and educational. We were left with a sense of awe for Coca-Cola as a company, and it was a much-talked about topic for the rest of the trip!

Inter-American Development Bank Thoughts

On Friday the 20th of January we visited the IDB, the penultimate visit of the trip. We learned that the IDB group consists of more than just the development bank, but also the Inter-American Investment Corporation and the Multilateral Investment Fund.

The meeting was a great follow up to a visit to the IFC the day before. The two firms had similar overall objectives, however the International Finance Corporation operates strictly with companies and private sector development whereas the IDB focuses on lending to governments with a small private sector window–infrastructure accounts for 50% of the IDB’s portfolio.

One of the firm’s most important achievements or milestones occurred in 2010 when the Board of Governors approved the Ninth General Capital Increase (IDB-9), which increased the Bank’s capital by $70 billion, raising it to more than $170 billion. This capital increase will enable the Bank to lend about $12 billion per year. The IDB-9 also includes an unprecedented relief package for Haiti, which includes the cancellation of the country’s outstanding debt and the provision of $2.2 billion in grants through 2020.

It was great to learn about this Multinational Financing Corporation and we were very grateful for their hospitality!

Repsol Reflection

On Tuesday January 17th, our group ascended to the 29th floor of the Repsol headquarters in Puerto Madero, Buenos Aires, which was perhaps the most amazing panoramic view of any building we visited. We Learned about the organization of YPF and their recent acquisition of the Argentinean Oil and Gas Refining company Repsol. During the presentation we learned that YPF is the largest company in Argentina, they employ over 40,000 people nationwide and account for 50% of Argentina’s Oil and Gas market. 

Repsol was one of the more interesting MNCs I researched because of their commitment to second generation fuels, reduced carbon emissions and investments in the research and development of renewable energy. The company has recently created a new business unit specifically for the identification of opportunities, promotion of projects and development of sustainable initiatives.

More Insight on the Buenos Aires Stock Exchange

Our first visit was a great way to start off our time in Argentina. By going to Merval, our group was given an inside look at the current economic situation in Argentina. This information was crucial to understanding business in the country and was foundational for all of our visits. Among some of our learning points:

  • MERVAL fist established in 1929 to governs performance of stockbrokers and act as an index.
  • Managed by the  Board of Directors,composed of nine permanent and nine alternate.
  • IAMC founded in 1984, and is the education branch that serves as the institution for R&D.

We concluded that Argentina’s economy has huge room for growth.  There is a crossroads for either putting in stronger policies against MNC’s, or creating a friendlier environment for them.  Standing as the breadbasket of the world, and having a huge amount of natural resources, there is huge room for the country to advance.  Europe does inadvertently have control over the economy of South America.  If there is another shock, there are three possible ways this could hurt the continent.  First, it will affect the confidence of foreign investors, making them less likely to take risks. Second Europe is one of South America’s best customers, and will likely need to turn internally or somewhere cheaper for resources.

All of this and more was a great way to start off a strong and informative string of visits!