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|November 10, 1998||
The Rediff Business Interview/ Richard Gilmore
'Indian agro industries are a bridgehead to the Asian food industry'
GIC Trade Inc, an American agribusiness company and part of the GIC group of Virginia, USA, that has operations in 12 countries, made its presence felt during the Agro Advantage Maharashtra by interacting with farmers in a big way. Richard Gilmore, one of the international invitees and president of GIC, offered the simple rural Indian farmer glimpses of the opportunities the developed economies had to offer the former.
GIC has been present in India for the last nine years as consultants or contractors for various agrarian projects including technical services, investment, financial assistance and feasibility studies. More importantly, as Gilmore says, ''We close deals. We always try to take on a project where we can finish with it on an actual transaction.'' Excerpts from an interview with
GIC has been present in India for the last nine years as consultants or contractors for various agrarian projects including technical services, investment, financial assistance and feasibility studies. More importantly, as Gilmore says, ''We close deals. We always try to take on a project where we can finish with it on an actual transaction.'' Excerpts from an interview withChris Ann Fichardo.
What brought GIC to India?
The truth is I am a Beatles generation man. What brought me to India was the cultural affinity to many things in India. What brought me here as a businessman is a very promising market.
I am in the business of making money and I think I can make money in India. Our first contract here was with the World Bank and we operated uniquely for two-and-a-half years in six different states and our client was the NDDB (the National Dairy Development Board), so that was a good way to start.
In 1995, I participated in President Bill Clinton's business development mission led by former secretary Brown. GIC was the only agri-business company on that mission. At that point I decided to launch our own business. Now 85 per cent of our business is in the private sector in India.
Is the global investor keen on the Indian agricultural sector?
There is interest and there has been for the last five years since liberalisation. However, at the same time one has to point out there are uncertainties about the Indian market and our job is to get investors over these uncertainties to know all the benefits and returns on investment projects.
There are several non-traditional, strategic projects in which we have investments worth $ 1.5 billion and most of these investments have an average 20 per cent return on investment. We estimate that these projects can offer returns between 20 to 35 per cent per annum. That's a competitive investment return.
Most farmers in India work on a small scale and the business is just passed down from one generation to the next. When the farmer does need money, he approaches the nearest co-operative bank to finance his needs. How well do you think is the concept of agri-business understood in India?
In India you have land control, so you have smaller units of production compared to other countries. In my view, that is not always a good thing. I know the reasons why that exists but it is not always a good thing from an agri-business point of view. But yes, there are some very blue chip agro-business companies in India, but there should be more. My view has been that Indian agro industries are a bridgehead to the Asian food industry.
What products will GIC promote in India?
One of our projects is called Market Information Systems. We propose to locate computer centres in collection areas throughout the countryside and then propose to have extension agents who will help growers have access to information on those computers. It will cost under $ 5,000 which is not expensive even by the Indian standard.
Indian standard? India is one of the largest producers of foodgrains in the world.
I don't think it's the biggest, but, yes, it's the best. Particular products in particular markets -- that is what India should strive for. You can't be all things at all times.
In my judgement, India never competes with the United States and Brazil in soyabean production. The whole infrastructural set-up and the scale in these two countries are unmatched anywhere else in the world.
Does India want to compete with that kind of investment? There are other investments like higher value products like horticultural products where the return to the grower is much greater. There are no simple products. All I am saying is look at the product and the market where you have an inherent strength.
But how receptive is the Indian farmer to all these big ideas?
In our NDDB contract experience, we had quite a bit of contact with all levels of farmers and it's one of the most innovative sectors in all of Indian society. It (the farming community) is a classless society, caste is not relevant in agriculture like in other societies. That's a big advantage! Secondly, the average Indian grower may be less educated but not less innovative and not less willing to learn.
Photographs: Jewella C Miranda
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