CHILE - TRADING PLACES mm WHAT'S NEWS Issue 6 June 1997 info exchange 3 The Chilean economy continues to boom and to act as an example for its Latin American neighbours. Unsurprisingly, the bank, which has been invoived in Chile since the early 1990s, has been able to build business in this strong F&A oriented country. So much so, that we established a rep office in 1994, a presence which has grown dramatically over the past couple of years. 'In fact, we've grown very fast,' confirms Ronald Blok. 'As a rep, you're supposed to be a kind of forward sales office with a small staff. When we reached 17 people, we had to rethink what our direction should be.'The answer that the Santiago team have come up with is not only a real solution, it also looks to be extremely lucrative for both customers and Rl - and potentially for other offices around the network. straight-forward credit facility, we would have lost out anyway,' says Blok. 'First, we never buy anything without a firm sales contract with the customer. Let me give you an example. There's a lot of Canadian wheat coming into Chile. Our clients have been buying from these suppliers for years, they have strong relationships. Now, instead of our customer buying directly from the Canadian supplier, we buy it instead for him. He still pays for things like storage and so on, but this arrangement keeps the wheat off his balance sheet, a factor that is often reason enough to opt for a construction like this. And contpanies are willing to pay more for this kind of service.' SELECTED CLIENTS According the Chilean team, this new approach represents a very lucrative win- win situation. 'It's not completely new, adds Cristoffanini. 'Citibank has a more or less similar company but we adjusted the idea and made it accessible for Chilean food and agribusiness clients. They clearly see it at as higher value added product and are prepared to pay, especially as it enables them to beat the great discrepancy between local currency and foreign currency interest rates. We think that this could be applied in many different markets, depending on the local reality and, for example, on fiscal treaties and regulations. It could prove a very attractive option for tax optimization.' If you would like more information on Rabotrading Chili and how it is structured, please contact either Ronald Blok or Jorge Cristoffanini in Santiago de Chile, 56 2 633 1617. Ronald Blok and Jorge Cristoffanini (left). STEPS AHEAD The creative solution, it seents, is to ^hange you name. The former employees pf Rabobank International Representative Office in Chile, have now changed their employer, but not their jobs. They now work for Comercial Rabotrading Chile Limitada. But there is more to the name and legal status change. Rabotrading is actually a trading company and operates using a construction that both Blok and deputy general manager Jorge Cristoffanini are convinced could be useful for other offices in the network. 'Rabotrading Chili is basically a banking product,' Cristoffanini explains. 'Essentially, it is asset-based financing taken one step further. We buy agricultural commodities for our clients, either in the local market or we import them. It's like giving them a loan, but in this case we actually own the collateral.' OFF-BALANCE ASSET But we're bankers, not commodity traders, surely? What happens if the customer goes bust or the bottom falls out of the market? 'If we'd been in there for a (continued from page 2) Sylvia, who started work with Rabobank International in Utrecht in April 1996, studied business economics in Maastricht, and South American languages and culture and management for South America at the University of Leiden. This background made her a natural candidate for a posting to Sao Paulo, under the current F&A Research globalization programme. Her responsibility is the Mercosur economie region - Argentina, Brazil, Chile, Paraguay and Uruguay - a tremendous area which involves a lot of travelling. Reinforcement is planned later this year, when a second F&A Research team member will be added to the region, probably to be based in one of the adjacent countries. Next to the ongoing contribution to global studies of markets in which the South American countries play an important role - for example grain, meat, coffee, sugar, fruit and dairy products - special research projects are also carried out. A recent example was a Mercosur special covering developments in these sectors. Also on the agenda is ad hoe research to provide specific information as and when it is needed. Setting up the F&A Research presence fits in with the rapid growth of the Sao Paulo branch, which at present has a personnel strength of around 70. This development has been accelerated since Raibobank do Brasil gained a banking licence in its own right. "A good knowledge of the important South American markets is an essential part of Rabobank Internationa I's ambition to become the largest F&A bank on a global scale", according to Sylvia. "With our combination of a global presence and detailed knowledge of the key F&A regions and sectors around the world, we have a capability that few other banks can match."

Rabobank Bronnenarchief

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