More than Earthquakes and Resilient Miners

My name is Tanner Scott and I am a 2nd year MBA student at the University of Iowa’s Tippie School of Management where I am focusing in Finance. I recently was lucky enough to be a part of the Latin America Global Learning Opportunity (GLO) over winter break where a group of about 30 part-time and full-time MBA students traveled to Chile and Argentina in order to broaden our knowledge of global business.

Since we were already on winter break, nearly all full-time MBAs involved in the GLO went down early in order to take full advantage of our time in Chile. Some caught a bus to the coast and Valparaiso while another student and I rented a car and headed further south from Santiago to one of Chile’s oldest wine regions, the Colchagua Valley in order to get better acquainted with one of the country’s largest exports. We also had the chance to go on a six hour horseback ride in the Andes with a guide who spoke no English – and solo hablamos un poco espanol. Luckily we had great horses who knew their way around the mountains and it turned out to be an amazing adventure.

After working our way over to the coast, we headed back to Santiago to meet up with the rest of the group and begin our program. However, the fun wasn’t over. Since our program started on a Saturday, we weren’t able to begin company visits until the following Monday. So that Sunday we had a morning class session in the Maipo Canyon before the majority of us went white water rafting.

Kicking off our first day of company visits in Santiago, we met with Invest Chile – CORFO, the Chilean Economic Development Agency. The Invest Chile team walked us through their roles in attracting foreign capital and gave a great overview of the strength of the Chilean economy relative to its Latin American peers. It seems that Chile has done an excellent job of developing its vast collection of natural resources, and I was amazed at how developed the country really felt. Toward the end of the trip, the disparity in economic and political risk between Chile and Argentina became very apparent. Following this visit we caught the bus to Gerdau AZA, a Brazilian steel producer. After a short presentation, we were given a tour of the factory, and I now understand why those who work in the mill, which heats steel up to 1200 degrees Celsius, are paid twice as much but live ten years less.

The view at the family-owned winery near Isla de Maipo.

On our final day in Chile, we had a great meeting with Enersis (Chile’s largest private energy company) in the morning before spending the rest of the day at De Martino, a small family owned winery in Isla de Maipo. Our host, Export Director Guy Hooper, gave us the rundown of the company history and discussed many of the challenges he faces in getting De Martino wines to countries like China and the US. Throughout our trip it was interesting to hear how much China is investing in Latin America (and the rest of the world for that matter). With this in mind it was of no surprise to hear Guy speak about the growing demand for wine in China. Although it was pretty funny to see him cringe when pondering whether or not the Chinese had developed an appreciation for the beverage just yet as he recalled witnessing expensive bottles being ruined when mixed with Coke on his most recent trip to Asia.

Following this introduction, Guy led us through the vineyard to a beautiful yard and gazebo where we had one of the best meals of the entire trip. And that’s not just the wine talking. The Chileans and Argentineans both know how to grill some meat. No need to worry for you herbivores out there, with such a perfect climate, Chile also happens to be one of the largest producers/exporters of fruit in the world. In just about every fruit you can imagine, Chile is either number 1 or 2 in the Southern Hemisphere, and top 5 in the world when it comes to exports. For someone coming from Iowa, it was amazing to see corn growing across the road from grapes, olives, strawberries, and plums. Anyway, after several more glasses of carmenere (Chile’s own variety), Guy led us through the production side of the tour and then strategically back through the gift shop in case we felt the need to buy a bottle or six before saying farewell.

Enjoying fun and food at the winery.

After catching the short flight to Buenos Aires, we settled in for the evening and prepared for a full day of visits on Thursday. Early Thursday morning we took a bus to Rosario, Argentina where John Deere has been manufacturing tractors for more than 50 years. On this ride we got our first taste for the differences between Chile and Argentina. For a three hour ride we were required to have two bus drivers! While this seemed strange to us, it was very normal for them and I thought an interesting peek into the economy and culture of Argentina. During our visit to John Deere we had the opportunity to have lunch with and speak to Aaron Wetzel who is the VP of Sales & Marketing for all of South America. We learned that much like Chile, Argentina’s economy is largely driven by agriculture. However, unlike Chile, the Argentine government has really constrained this industry by not having favorable trade agreements with the outside world and using the industry’s profits to fill its coffers. Where Chile has an extensive number of free trade agreements, Argentina hampers their ag producers by imposing a 35% tax on any exports. Following this visit we made a stop at Cargill where we learned more about the difficulties in working with the government before heading back to Buenos Aires.

On our final day we toured Proctor & Gamble’s Argentina production facility where we again heard stories of a corrupt government and shockingly found out that in order to avoid heavy taxation; P&G actually runs their operation at a slight loss! That afternoon we fittingly wrapped things up with a representative of Citibank who was able to answer our many questions about the economy and widespread government corruption. It blew me away that everyone was so open to talk about their distrust and distaste for the current government. Although corrupt, Argentina really was a vibrant exciting place, and there seems to be huge potential there if the correct policies are ever put into place.

That evening we capped off the official portion of our trip with a great taste of Argentine culture at a tango show at Esquina Carlos Gardel.

The trip really has rounded out my education and I feel even more prepared to take on the global business world that waits when my time here is done in May.

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