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."