Raibo do Brasil - 'We're a big
bank that acts like a small one'
3 International
Creative
Overbanked
Satisfying
Coffee in Brazil
Trade finance
Positive energy
ISSUE 25/24 JANUARY 1994
One of the major reasons for setting up operations in other countries is the value added
locai insight and expertise provides. Raibo do Brasil is perhaps a classic example of the
validity of that notion. For the past five years, Rabobank's activities in what is often
percieved as a very shaky and chaotic economy have been expanding vigourously. How
does Raibo do Brasil approach its very difficult market, what lessons has it learnt, and
where is it going next?
>- When Raibo (rabo means 'tail' in Portu-
guese, so the name was creatively adjusted)
first opened its doors in Sao Paulo almost five
years ago, the offices on the Av. Brigadeiro
Faria Lima in the city's banking district must
have seemed spacious to the original three-
person team-general manager Teun de Boon,
assistant GM Willy Castanheira Henriques
and secretary Astrid Callenbach.
Five years on and the difference is remarkable.
Today, the 19 staff often have to doublé up and
Raibo is hoping to acquire adjacent offices to ac-
commodate its rapid inroads not only into the
Brazilian, but also into the whole of the South
American market. Although the Sao Paulo ope-
ration remains officially an LPO or Loan Pro
duction Office, with most of its deals booked
elsewhere in the Rabo-network, it has achieved
some very impressive numbers through its
tailored approach to the local market.
Standard banking strategies common in
stable, First World environments tend to be
difficult to apply in a country that is often de-
signated as a Third and, at best, Second World
economy. So the (primarily locally recruited)
team have to be very creative when dealing
with a market where foreign-currency bor-
rowing is often out of reach of many com-
panies. Because of the instability of their own
currency, the Cruzeiro Real, many otherwise
Raibobankers (above and opposite page) -
lots of positive energy and team spirit have
made a real impact on what can only be
describes as a very difficult market.
successful and efficiënt exporting companies
cannot possibly earn sufficiënt foreign curren
cy to service extremely high real interest rates.
Yet, in spite of the difficulties, Raibo do Bra
sil is still doing very nicely, thank you. The
operations department alone has doubled its
L/C activites in the past year and accommo-
dated over US$ 67 million worth of business
in 1993, in cooperation with other Rabobank
offices. One of the reasons for Raibo's success
'is that we are a big bank that acts like a small
one,' says Willy Castanheira. 'Brazil is enor-
mously overbanked, but the majority still wait
for the business to come to them. We don't.
We get out there and get it.'
But the country itself - its sheer size and di-
versity - and its business and economie culture
impose limitations on the strategies that can
be used to approach the market. Inside know-
ledge of how Brazil works is essential. 'We
know colleagues at other banks who never
leave Sao Paulo,' says account manager Berry
Marttin, whose very Dutch name belies the
fact he was born and raised in Brazil. 'That's
where we're different. One of the most satis
fying relationships we've built up is with a
soya producer in the south. We first went
down there a couple of years ago and you
could see they were pretty sceptical about
what these Dutch 'new boys' were up to. Nor-
mally, bankers here don't get their feet dirty.
Now we're their number one bank and we do
a lot of business with them. They may not be
our biggest deals, but they're very satisfying
because they prove our approach works.'
Teun de Boon agrees: 'Clients are not used to
their bankers turning up on plantations or sites.
But by expressing our real interest in how
their operations work, we make an impres-
sion.' Óddly enough, the one sector where
Raibo has not attempted to make even a slight
impression is the coffee business. 'We made a
conscious choice to stay away from coffee,'
says De Boon, 'for the simple reason that the
industry is sick. There's huge overproduction,
so as the world's largest coffee producer, Bra
zil has really suffered. Quite a few companies
went broke and there's increased competition
from producers in Columbia and in Africa.
Add to that the fact consumption has de-
clined, and you'11 see why we've stayed out.'
However, in recent months Raibo's commercial
team, now headed up by John Clark Sepulveda,
and management decided to enter the coffee
sector, although they will go very slowly and
very cautiously until they have gained the kind
of expertise already accumulated in the soya
and citrus sectors. At the present time, 60 per
cent of Raibo's trade finance business is in soya
beans, but the balance is gradually changing.
'That is our strategy,' says De Boon. 'We go in
to a sector, learn all we can about it, get 10 to 15
percent market share and then enter our next
strategie area. We tackled soya first, then we
went into citrus, which is a real industry here.
We're currently looking at tobacco, this in
cooperation with our New York office, because
the major processors are American, and at
cotton.' Raibo has also done some interesting
business in paper and pulp, primarily longer
term structured finance deals that are labelled
'very nice, indeed' in Sao Paulo.
Although the office is growing rapidly, team
spirit and networking remain essential ele-
ments in the way Raibo works - the atmos-
phere of closeness in the office has little to do
the lack of physical space. Raibo-bankers ap-
pear to be in constant communication with
each other and the positive energy is almost
tangible as soon as you push open the outer
doors. And this sense of team-work extends
far beyond the Brazil's geographic borders.
Two of the staff are not even real Raibo
bankers. Senior investment advisor Pedro
Butignole and his secretary's main respons-
ibility is to promote international private
banking on behalf of the Zurich office - but
what's in a name? A lot, apparently. Teun de
Boon's official title is not Managing Director
Brazil, but Latin America, and it is this
broader view that lies at the heart of Raibo's
energetic and profitable approach to a region
which can only be described as difficult. -<
