- Growth Rate = 6%
- Unemployment = 9%
- Population = 16.5M (Santiago =6.5M)
- Inflation = 7.8%
- Corporate Tax = 17%
- Independence from Spain in 1810
- Exports = Copper, fruit, fish products, paper, wine
- Ranked 11th worldwide for freest nations (#1 in Latin America)
- Santiago ranks 48th in cost of living (BA = 70th)
- Chile is a very opened country
Our first visit was with a company called Enersis. Enersis is one of the main privately-owned multinational electric power corporations in Latin America. The presenter was the CFO. Highlights from this presentation below:
- Located in 5 countries in Latin America (Colombia, Peru, Argentina, Brazil, Chile)
- Largest power company in LA
- Impossible to replicate Enersis
- 2 sectors - Generation & Distribution
- Generation is much more risky, distribution is more stable
- Partnerships are key
- 2nd mover is ok
- Make your competitive advantage using/maximizing water, no coal or oil
- Southern Chile has lots of water with damns, easier to transport energy
- Emerging markets have more opportunity
- More cash flow and opportunity on the generation side
- ROI = Stakeholders & Cash flow = Bond holders
- Consumption is high in U.S. Lowest in LA. 75% increase in growth over next 20yrs in LA
- Hedge opportunities = Alternative fuels & long-term contracts with mining
- Customer gets affected by price fluctuation in generation energy. Change prices every 6 months
- Change in energy behavior is extremely low
- High liability to hire Americans
All in all, a great intense, interactive and informative presentation/meeting.
Lunch was in the Bellavista area where I had Salmon ceviche, Steak Tagliatta, and Thousand Layer Cake with caramel. It was pretty good, but the best part was the dessert, wow. The gelato is sooo good. After lunch we had a little time to roam the area again. This part of town is very quaint, with numerous restaurants, pubs, and shops.
The afternoon presentations were with Corfo, Orion, and ICS. Below is a picture of the company emblem. Here are the highlights from the afternoon meeting:
- Chile best attributes = 1) business environment (stability) 2) human capital 3) infrastructure 4) off-shoring. Also, low tax burden & clear rules
- Intel offered to put a facility in Chile, but Chile said no and they built it in Costa Rica. Not the best of decisions
- They want to go from $400M in service exports in '07 to $1B in 2010
- Challenges = convincing employees that they could play in the game & compete with the big boys
- Patents only happen for necessities (drugs, but not farm products)
- Mining processes are HUGE for protection
- Corfo helps Orion a lot in Chile
- Near-shoring
- Cost benefit and time zone are important factors
Dinner was @ Camino Real Restaurant. This restaurant was located at the top of San Cristobal Mountain with amazing views of all of downtown Santiago. To see the views, please see day 3 pictures link located on the blog. We started off with a wine tasting in the basement where the staff provided our group with a quick overview of 2 separate Chilean wines. Both were very tasty. It seemed that right before the staff member started his overview, Ameer got really excited for a glass of red wine that was sitting at the table in front of the group. I don't think the presenter appreciated it as Ameer reached for a glass, he asked him to "excuse me sir, please wait!" ha, classic. I probably would have tried too, but I was on the other side of the room.
Once the overview was complete, the group was escorted upstairs to the dining room where we split up in two separate tables. For starters we had pumpkin soup. Main course = chicken with champagne sauce. Dessert = mousse, and a lot of wine to wash it down with! Good wine too....Just ask Jay how good the wine was. Seemed he liked a certain kind of wine on the menu that called for all the waiters to come over and serve, $$$. This was only the beginning of the evening though. We continued this party at the local Irish Bar down the street from our hotel.......
Fran, our tour guide suggested a bar not far from our hotel that almost all the cohort went to after dinner. Seeing that this was about 4 hours into a large consumption of alcohol, the group began to open up a bit.....to say the least. Topic of conversations were very very funny. Not MBA student-like. TMP? THP? Anyone interested in getting some doughnuts? I bet the next time you have one, you will definitely think, day 3 of my MBA International Residency, good times had by all. Oh and yes, Chris was left at the bar because he couldn't stop talking to Juan Carlos or whatever the creepy guys name was that was starring over Deb's shoulder all night.
Quotes of the night:
"i know Swahili" - Drew
"You don't have a puma!" (like 4 times) - Drew
"I can't let the girls walk home by themselves" - Drew. This was very true and a nice gesture, but the sad thing is the girls called him out since he was more banged up then all them combined.
"Pachow" - Jessica
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