Transmission Towers export success to Latin America at this time of transmission of coronavirus

Karamtara is already executing another contract in Chile for the supply of towers worth 5 million dollars.

By R. Viswanathan

An Indian company, Karamtara Engineering Pvt Ltd, have just won a contract of USD 8 Million for the supply of Transmission Line Towers from ENDE the national electric utility company of Bolivia. The towers will be made at their plant in Tarapore, near Mumbai.

Karamtara is already executing another contract in Chile for the supply of towers worth 5 million dollars. Since 2014, Karamtara has supplied towers to the tune of 67 million dollars to Colombia and Peru.

The 80 million dollar supply contract to Latin America in the last five years is impressive in view of the fact that the region has been going through slow economic growth and political uncertainties.

So what is the secret behind this success?

The secret has a name. It is R L Keshwani, who has a rich experience of having dealt with Latin America for the last 23 years. He had lived for 14 years in the region, most of it in Brazil. He speaks fluent Brazilian Portuguese and manages Spanish spoken in the rest of the region. Before Karamtara, he had worked with KEC and Kaplatharu, which are bigger than Karamtara in the business of transmission lines. Keshwani has established a strong network of agents in the region to explore opportunities and follow up with clients.

KEC and Kalpatharu, which are more into EPC contracts, have done around 100 million dollars of business each in Latin America. KEC has invested about 80 million dollars in the acquisition of a Brazilian and another Mexican tower manufacturer. Another Kolkatta-based firm Skipper has supplied towers worth 70 million dollars to the region. Sterlite, of the Vedanta Group, is doing projects valued at 1.5 billion dollars in Brazil in the BOOT (Build, Own, Operate and Transfer) model for the thirty-year period.

Brazil, Mexico and Argentina which have their own tower making plants have, understandably, put up barriers against imports. But Keshwani keeps trying. According to him, the Indian towers are now competing against the Chinese which have become more expensive. The other major competitor is Turkey.

Keshwani has mastered the art of doing business with the Latin Americans. It is different from the science of business with US, Europe and Japan. He says that price and quality are not enough. Human touch is needed in the case of Latin Americans, who value friendship and personal rapport. According to Keshwani, the secret for success in Brazil is 3 Cs, Café, Carne e Caipirinha (coffee, meat and the potent signature cocktail of Caipirinha made from sugarcane spirit with sugar and lime). This is true of the whole region. The three Cs help in building trust and confidence.

Keshwani says fun does not come in the first visit. He agrees with the saying, “ Brazil is not for the beginners” and says it applies to the whole of Latin America. Some Indian businessmen go on a short tour of a few days trying to get contracts in the first visit itself. They come back frustrated when they do not get any orders on the first trip and give up. India being a relative newcomer for business for the Latin Americans, they take time to understand the complexities of India before entering into business. So the Indian businessmen need to be patient and give sufficient inputs to gain the confidence of the importers. Courtship requires many visits and personal interactions. Indian companies need to invest in executives who have the aptitude and skills to play the long game and become specialists in the region. Language certainly helps. There are many institutes in the major cities of India teaching Spanish and Portuguese and some of them provide special training for business executives.

When I met Keshwani for the first time in 1997 in Sao Paulo, he took me by surprise by speaking in pure Tamil. He was born and brought up in Chennai. Later, he became the president of the Indian Community organization in Sao Paulo and had organized a lot of activities. We have been in touch since then. The Latin American clients of Keshwani, some of whom I have met, respect Keshwani as a sincere, reliable and committed person. In the personality-driven business culture of Latin America, personal rapport and trust are more important. Keshwani has made so many friends in the region. He describes the Latin Americans as lively, warm and friendly.

Keshwani is bullish about getting more contracts in the region. He is of the view that the Indian exporters should not be unduly discouraged by the coronavirus and the GDP contraction of the region expected in 2020. He says it is important to keep online touch with the Latin American clients and maintain personal contacts, given the importance of human relationship in their business culture. According to him, the Latin Americans look at India more seriously during times of austerity seeking affordable products. Of course, there is always China at low prices. But the Latin American business wants to reduce their overdependence on China and diversify their sources, especially after the coronavirus which originated in Wuhan.

India’s exports to Latin America were 13.2 billion dollars in 2019. There is potential to double this figure in the next five years if the Indian exporters work on the region more seriously. In 2019, Latin America’s total global imports were 1.07 trillion dollars. Even after the predicted 10% reduction in imports in 2020, the region will import around 900 billion dollars. India can certainly increase its share.

Keshwani is looking forward to visiting the region as soon as the travel restrictions are relaxed. He is 70 years old. But he never complains about the long travel time to Latin America or jetlag. This reminds me of an External Affairs Minister of India, who told me when I was head of the Latin America Division in the Ministry, “ I will sign on any good proposal for strengthening relations with Latin America. But do not ever propose any visit for me to the region. I cannot take a long journey. It is too tiring”. As a strong and stubborn person, he never made any visit to the region as Minister. I dared not tell the Minister that those like Keshwani come back happier and younger after each visit to the region. Keshwani is a firm believer in the Latino wisdom, “ Don’t stop the fun when you are old. You become old only when you stop having fun”.

(The author is a Latin America expert. Views expressed are personal.)

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