 |
| Big bright bubble |
Australia was the meeting point of three groups: India GFP, China GFP and Japan GFP. The programs are centered in Asia, and the next step was to leave to the continent towards the bubble called Singapore.
This city-State is a true example of urbanization combined with natural vegetation. Amazing buildings, temples, sumptuous hotels and much, much green. With a population of approximately 5.0 million people, about 2.0 million were born in other regions.
The city/country gets the bubble denomination thanks to the significant development compared to other Asian regions. Some comparative figures with two other great powers: the illiteracy rate in Singapore is 7.6%, while in India and China it corresponds to 22.5% and 15.1%, respectively. The Singaporean GDP per capita is USD 55.1 thousand, and USD 1.4 thousand and USD 6.8 thousand in the other two, respectively. The HDI of Singapore (Asia’s best and 9th in the world) is 0.90 (very high), while in India and China the numbers are 0.58 (average) and 0.71 (high), respectively. The Standard & Poor's Singaporean rate is equal to AAA (stable), and the Indian and the Chinese are BBB- (considered positive) and AA- (stable), respectively. I could talk about many other variables that illustrate the differential of Singapore, but probably "bubble" is what best describes this small country.
Day 1: Arrival, quick city tour and accommodation.
Day 2: excellent meetings in ANZ’s facilities, the largest financial group in New Zealand.
In the first hour we talked to John Baker, CEO of First Agricultural Holdings (1AG), investment holding company dedicated to the Asian agribusiness.
John questioned paradigms that are widely accepted, such as shortage of land, stating that it may take several years for us to really start worrying about the allocation of this resource (potential expansion in Russia, Brazil and others). The impending issues, whose consequences we are living, are on specialized workforce and water.
 |
| Happy Dan at ANZ |
Having this in mind, John talked about global agribusiness directions. The farmer finds himself inserted in a chain that, in linear sense, would have on his left some (big) agricultural input companies, and to his right a few (also large) traders. In the middle, the millions of farmer run their own small/medium businesses. Here we talk about a structure that John called few-many-few, which demonstrates the market polarization in large companies.
According to the CEO, we walk to a reality in which entire value chains will come down on a single, large business group. An example would be Apple (inevitable). Estimates for 2015 point to an accumulation of generated value that, if put as a country, it would be the 9th world economy.
We have consolidated a system in which companies become larger than their own industry, and even larger than countries. The most important consequence of this concentration might come from an information revolution. The way we receive information will definitely change. Information is what drives profits, and these mega companies possesses it.
Therefore, the structure few-many-few demands a kind of Ricardian adjustment from the market. Producers should not focus their efforts on dealing with land valuation, or property and maintenance of machinery. Producers should prioritize agricultural production. That’s where their comparative advantage is. Therefore, they guarantee autonomy and survival in the business, while the polarized forces continue to inevitably strengthen the extremes.
After this little scary (but so assertive) reflection, John deconstructed another paradigm: that mature markets will always provide commodities to emerging economies, such as China (and India, in a more distant future). In a real plot twist, 1AG predicts that new ports in southern Vietnam, exploring the Kra Isthmus canal, south of Thailand, will reduce the distance between Malaysia and Thailand in 2.0 thousand km, approaching new markets like Russia (self-sufficient in nutrients such as NPK, and large area of potential conversion) and China, close to that of traditional bidders such as Brazil and the United States.
A likely agreement between Russia and China would promote better distribution of origination risks and reduce costs, game change for major players in the global agribusiness. For us, Brazilians, there’s much to worry if this agreement gets firmed and if we don’t promote consistent improvements in the logistics tract. Agribusiness currently moves the national GDP, and the loss of competitiveness would bring serious consequences to our economy.
John's presentation was excellent, certainly one of the highlights of the program, a discussion that will reverberate for some time among us.
We then talked with the ANZ team on future trends and the Association of Southeast Asian Nations (ASEAN), economic bloc in Southeast Asia that aims to stimulate trade in goods and services between member countries and generate political and economic stability in the region. The organization has, in addition, a stamp of cultural and social development.
The ANZ believes that for the next ten years ASEAN will assume the position of "new Asian factory". What globalization promoted in large companies in recent decades, dropping continental borders and internationalizing production processes towards mainly China, is now being repeated in other Asian countries.
While many people (as I did) think that big companies still internationalize and transfer manual work steps in production to China, reducing costs, the hand-labor in the country is currently the most expensive of the continent. The aim now are countries that border the Mekong River, one of the world's largest: Cambodia, Laos, Myanmar, Vietnam, Indonesia and Thailand. The foreign direct investment (FDI) directed to the Mekong group is already larger than the one to China.
With great economic potential and attention of investors from around the world, the Mekong must develop three basic vectors to stimulate income generation in Asia, according to ANZ: demographics, urbanization and education. In 2020/25, a significant portion of the Asian population will be below 30 years of age, which is translated as a major consumer market. For this demand to be met, the axes mentioned above must receive the due attention.
In ten years, it is estimated that Indonesia, Cambodia and Laos will have the largest working population proportion in the world. As a consequence, note shall be the rapid growth of household income, enabling a significant expansion of the consumer class for the first time in ASEAN history.
The middle class and urbanization growth of these countries will generate increasing demand for food, tourism and education. Numerous new opportunities on the horizon...
In the afternoon we visited the incredible endeavor Sky Greens, the first vertical farm in the world. With a philosophy of green solutions in urban areas, the company produces up to a ton of vegetables daily, using minimal water consumption, energy and space.
 |
| Sky Greens |
We discussed with both the potential of emerging economies. In 2014, 53% of Syngenta sales originated in these countries, with best performance in South America (emphasis on Brazil). 80% of the current population growth also happens in those countries. It is believed that in 2050 they’ll represent more than 50% of the demand for food.
While large properties represent about 8.0 million agricultural establishments in developing countries, small-scale businesses total more than 450.0 million. To meet this large class, Syngenta developed the called "The good growth plan", a program that aims, among several objectives, to increase the efficiency of the world's agricultural crops by more than 20% without increasing the consumption of water, land and other inputs.
The assumptions are: more biodiversity and less degradation, better health and less poverty, more food and less waste, and strengthen of small producers. The company is committed to more than 20.0 million farmers around the world, aiming at a 50% productivity growth average.
In the near future, it is expected that the performance in big farmers be compared by small businesses, optimizing cultivation efficiency without increasing use of resources. Major challenge for the private sector.
 |
| Syngenta |
Singapore was as important stop to look at what is being developed on the continent to resolve agricultural and economic bottlenecks from emerging countries, and learn about their growth potential. The bubble Singapore is a catalytic force of investment to the region, with bright and enterprising minds.
After an excellent introduction to the mainland, it's time to hit the giant India.
Nenhum comentário:
Postar um comentário