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EMERGING MARKETS
A new world order
By Peter Day, BBC Business Correspondent
To get an external view on economic growth
across the world, Rexam invited Peter Day,
a BBC Business correspondent to share his
thoughts.
Think of history: empires rise and fall,
civilisations flourish and decay. It is happening
again, now, in an extraordinary way. The
global economic landscape is radically
changing, and we had better get used to it.
What’s happening was summed up clearly
by the clever economists at the powerful
investment bank Goldman Sachs some three
year ago.
They summed up the story of the coming 50
years as the arrival of “BRICs” on the world
scene. BRICs stands for Brazil, Russia, India
and China. These four developing countries
(say Goldman Sachs) are going to grow until
their economies are bigger than anything in
the rest of the world. By 2035, say.
And then they will go on growing. The size
of their economy per head of population will
still even then be much smaller than Europe
or the USA. By 2050, they will be up at the
top table of the global economy, with the
USA and Japan.
An extraordinary momentum is building up.
Nothing like the rise of China as a modern
business power has ever happened in the
world before. India is following fast, with
a more youthful population not limited by
China’s one child policy.
responsibility
case study
Russia will benefit from its enormous oil and
gas reserves as the rest of the world gets ever
thirstier for energy. Russia, not just Moscow
and St Petersburg, is booming, as I saw for
myself on a journey across the whole width
of Russia last autumn.
Brazil too has vast natural resources, now
hugely needed. For more than a century,
visitors have described Brazil as the next
great country in the world. This time round,
it might be true.
Now you may think there is nothing new
about all this excitement. Don’t we already
know about the huge Chinese building boom
in Shanghai and Beijing, for example? I do
not think we know the half of it yet. China’s
vast manufacturing machine is going to seize
global markets in a way never seen before.
The export of Western jobs outsourced to
India (and probably many other places) will
jump up the skills chain year by year, as the
West learns how to use the torrent of educated
people pouring out of the BRICs universities.
Old industrial countries are going to have to
redefine what they are good at. Forget
commodity manufacturing. In the face of the
£30 or $30 DVD player, developed countries
will be able to make sustainable profits only
from bespoke goods and services delivered
with fabulous speed and accuracy to customers
close at hand, with an intimacy unimaginable
until now. (British on-line Grocery services
such as Ocado and Tesco.com are at the
very beginning of this).
It is said that the history of civilisation is the
long migration from the country to the cities.
It is being given a new impetus by the rise of
countries like Brazil, Russia, India and China.
Like globalisation, it brings a number of key
challenges. But if we can find a way of
coping with huge new demands for energy
and raw materials, there is also the prospect
that in the 2 st century the globe will become
a healthier, wealthier and wiser place.
Rexam’s growth across the globe
With high growth opportunities, emerging
markets are one of the corner stones of
Rexam’s growth strategy. Rexam’s plastic
business is widely dispersed across the globe
having a presence in many emerging markets
from Brazil to China. However, historically,
the can business has been concentrated in
Western Europe and the USA. This is now
changing with recent movements into the
Middle East, China and Brazil.
Rexam is constantly looking to strengthen its
position in emerging markets, either through
acquisitions or new plant builds.