Myanmar: A Lesson in Leapfrog

Facebook has become the internet of Myanmar

Over and over again, at each company we have visited, we hear the same story about the incredibly high penetration of smartphones in the Myanmar population. The figures shared with us have been astounding, all above the 90% mark. Thura Ko Ko, a senior adviser to TPG Capital and co-founder of YGA Capital, talked about the phenomenon. “Around 2014, the percentage of Myanmar citizens with cell phones was about 8%. From 2014 to 2018, that figure has risen to almost 100%. What is even more impressive is that over 85% of those who have a cell phone, own a smartphone,” Thura says as he leans against the podium at Myanmar Imperial University.

Thura Ko Ko, a Myanmar citizen, spent his early years as a telecommunications investment banker in London. After a successful career in private equity in the United Kingdom, he finally decided to move back home. Using his expertise, he has advised or individually invested in several projects in Myanmar over the last decade. He spoke about the smartphone penetration phenomenon as if it happened by accident. When the government realized they needed to catch-up to their neighboring countries, they passed a law allowing foreign companies to build and operate cell phone towers. This brought rapid investments with towers sprouting up all over Myanmar. Suddenly, there was 4G available wherever you went and citizens leapfrogged the normal progression of cell phone purchases of flip phones to smartphones. Furthermore, Facebook has become the go-to search engine or means for any internet use whatsoever. It has defined and molded the way citizens conduct modern business.

“It’s crazy. I walk out of the plane in Munich and pop in my SIM card and barely get 2G service if I’m lucky. I’ll fly back to Myanmar and literally everywhere I go, there is 4G service and you can download videos, movies, anything you want,” Alex Spitzy from JJ-PUN told our group.

This leapfrog effect that Myanmar has witnessed in smartphone technology is not isolated to just this industry. Thura Ko Ko believes it will also happen in healthcare, finance and retail as well. With regard to retail, he mentioned that only 30% of the population live in cities with malls and the current infrastructure issues deter those with access to traditional retail stores from shopping there.

Myanmar Imperial University, the first private university in Myanmar, hosted us for a discussion and networking event at their brand new campus

“E-commerce and Fin Tech should do well because of the large population…the big guys are coming. Alibaba, Baidu, they’re all on the doorstep,” he says as he answers questions from MBA candidates from Columbia Business School and Myanmar Imperial University, “Financial access to banking is incredibly low. You will see us bypass the normal banking branches and head straight to Fin Tech.”

That’s exactly what Brad Jones, CEO at Wave Money, is doing in Myanmar. With an incredible story of Fin Tech penetrating Myanmar of mobile banking, Brad and his team have captured 95% of the market share. Wave Money has essentially become a cash transport system that can send money across the country in minutes. A customer goes to a Wave Money agent, pays in cash, the Wave Money agent sends this to a customer’s account, and that customer can go to one of any 38,000 active shops to receive the money. In an economy where there is only about 6% formal banking penetration and cash is king, Wave Money has become the go-to solution for Myanmar citizens who need to send money to families back home after earning wages in the major cities.

With all this rapid growth and the leapfrog effect coming soon, coupled with the high transparency in the country because of high-speed internet and high smartphone penetration, it is imperative for companies to also develop their social and sustainability programs. Large multinational corporations like Unilever, and smaller companies like Arao Company, are doing exactly that.

Trisha answers questions after the formal presentation

Trisha Mukherjee, the marketing director at Unilever for Myanmar, Cambodia and Laos, talked about the importance of building the next generation of Myanmar leaders through their “Leaders Grow Leaders” campaign. From 2014-2017 they sent 4 employees to different countries to work and learn better practices to bring back to Myanmar. In 2019, they plan to expand the program and send 6 more. Of the over 1,500 employees they currently employ, there are 30 managerial roles. 11 of those roles have been localized by Myanmar citizens and they have a goal to double that number to 22 in the next few years.

When asked about the 2018 Myanmar minimum wage increase to $3.60 per day (up from $2.50) and how they were paying their factory workers, Trisha said that the Unilever-only factory workers are paid substantially above minimum wage and the two joint venture factories are slightly above with monthly incentives and benefits.

Smiles from the factory workers come across their faces as we walk through the floor

Khaing Mie Mie Win, a Burmese businesswoman with an incredible story from rags to riches (see link for full story), has built Arao Company from the ground up to several large garment factories with over 3,200 employees. The factories have been modernized and the working conditions are well above expectations. Some workers are paid minimum wage, but most above the new Myanmar standard and all with compensation incentive packages.

Khaing Mie Mie Win discusses her incredible story as a widowed tailor to the employer of over 3,200 people

Not only are the facilities being modernized, but the systems and operations are being optimized as well. “Last year we were producing 35 pieces of garment per hour. After our factory manager rearranged the floor with a new system, we are now producing around 55 pieces of garment per hour. Our goal for the next year is to get to 65,” Khaing Mie Mie Win tells us at her factory.

Both visits to Unilever and Arao Company opened the discussion about gender biases and what the companies are doing to correct them. Unilever has created ads that break down the cultural norms about patriarchy and empower women with the knowledge that they can compete with men on every level. Both companies employ majority women in their factories (Unilever over 60%; Arao Company almost 90%). Khaing Mie Mie Win told us as she finished her compelling story, “that [this] become my motivation, to help these women have better lives.”

A woman in the Arao Company factory marks fabric samples

Although it seems like operational efficiencies have developed in some factories, there is still substantial room for improvement. “There is a lot of hand holding that has to be done in Myanmar operations. A job that would usually be done by 1 [person] is done by 3. The level of skill needed is still far behind other countries,” says Trisha.

Operational inefficiencies don’t just occur on the individual level, but on the corporate level as well. When asked about the potential for good investments in the airline industry, Thura Ko Ko scoffed at the idea. “We had 8 airlines in the country. Last year, 5 of them went out of business. We have 23 private banks in Myanmar. Not all of them will survive. Consolidation is not easy and will be challenging going forward,” he says as he wraps up the optimistic discussion with a bitter reality.

There is much work needed for Myanmar to become a major player in Southeast Asia, but with each visit, we become more and more convinced of the potential for success.

Oliver Salman (’19) is an MBA Candidate at Columbia Business School

Trabi Safari and Final Thoughts

The final day in Berlin began with a late start in the afternoon. Having completed our company visits, we dedicated our remaining days to exploring the city.  A number of us went to watch a local soccer match and others went on their own to explore various museums and historical sights such as Checkpoint Charlie.

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The Trabant was once the most common car in East Germany

A small group decided to rent several east-German made communist era Trabant Cars for a tour around the city. With an ignition system resembling a motorcycle’s and an unconventional manual transmission, the Trabi was not only a vehicle of questionable safety but a moving piece of history.  While driving through the city we were educated on German history through walkie talkies provided to each car.

In the evening, to cap off our trip we all met for dinner at Spindler Klate- a waterside restaurant that turned into a night club.  After a series of toasts we had our final celebration before leaving for New York the next day.

As we boarded our respective flights back to New York, we began to reflect on the week long trip.   We were able to see German production excellence and innovation applied in different settings, we became familiar with several institutions (UnternehmerTUM) that were resulted in these products, and we learned how this commitment to excellence and process was applied to the world of startups.  Moreover, we learned how the German companies communicated their history and how they looked to the future.  Finally we were able to engage in open dialogue with very business leaders on issues ranging from corporote strategy to career paths.  While we all had different takeaways, it was clear that we all had learned a tremendous amount.

Starting in the industrial heartland of Bavaria and ending in the entrepreneurship capital in Berlin, we had lot of ground in a very short time (14 companies in 5 days).  I cant help but feel that my curiosity regarding this amazing country has only increased.  I leave Germany with memories to last a lifetime but armed with some new theories and techniques to apply to my own career.  Truly an unforgettable trip.

Diego Cuenca ’16

Chazen Germany 2016

 

CBS visits Bavaria’s Capital City

The CBS Chazen Germany tour started off with a Segway/electric bike tour through Munich. The group made its way through the city center and maxvorstadt.  During the tour they saw the Eisbach wave, various museums, TUM, and other landmarks. This was followed up by a three-course welcome dinner at Kafer Schanker.

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On Sunday, the group woke up bright and early to rent some BMW performance cars and drive out to the Neuschwantein Castle about 2 hours outside Munich. After a guided tour through the castle, the students then headed out for a tour of the BMW Welt and Museum- a multi functional customer experience exhibition facility where customers can experience the automaker’s various model lines and even take delivery of their cars.  The students learned more about BMW’s history, the company’s focus on design and the driver, as well as the architecture of the Welt itself.  The day was capped off by a visit to the Hofbrauhaus (Munich’s oldest beer hall).

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Professor Farrokhnia and Dr. Helmut Schonenberger speak to students before entering the Makerspace

The next day, began  with a morning trip to the Technical University of Munich’s Garching Campus for a visit to the UnternehmerTUM -the university’s center for innovation and entrepreneurship.  The students toured the Makerspace- a unique facility that allows the public to rapidly build and prototype.  The space features woodworking facilities, 3D printers, and textile stations. The Columbia students along with TUM Engineers then participated in a design sprint -led by Professor Farrokhnia-designing the perfect remote control in 2 hours.

 

 

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3D Printed Race Engine Mold at EOS

The group then visited EOS – a leader in 3D printing and additive manufacturing. The group learned more about the company from Head of Sales- Denis Demirtas- they sampled 3D printed items such as a titanium Formula 1 Pedal.  They then toured the company’s headquarters, and observed a range of polymer printers and metal 3D Printers before returning to Munich.

 

 

 

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Testing out the equipment at eGym

In the evening, the group visited eGYM- one of Europe’s fastest growing startups focused on the fitness hardware and software space. After a brief presentation by Chief Engineering Officer- Christian Schraml- the group tested out the gym’s tech-enabled gym equipment and enjoyed dinner while mingling with team members and investors.

Overall a great first city to visit during the trip. Now onward to Stuttgart

Diego Cuenca ’16 Germany 2016

Real Estate in China: Just Build It

Heavy mist and grey skies greeted us as we walked off the plane in Guangzhou, China. The same climate bid us goodbye as we drove to Shenzhen one day later.

The last two days in southern China, first in Guangzhou then in Shenzhen, have been fast-paced as we’ve visited 7 major leaders in the real estate landscape here. The contrast between Singapore and southern China is stark. Singapore is a small city-state with a population of 5.4 million people. Guangzhou, largely recognized as the world’s manufacturing center, boasts a current population of 14 million and is one of China’s 5 National Central Cities. Singapore is pristine. Guangzhou is noticeably a busy, less manicured manufacturing hub and exhibits signs of development. There is a far greater number of cranes in the sky in Guangzhou and Shenzhen than there are in Singapore. Construction is around every corner, largely because land owners must develop newly-purchased land within 2 years of purchase and understand that building income-producing real estate assets is a safe harbor compared to holding cash that may lose value against other international currencies.

We were fortunate enough to visit the the Ping An Financial Center – a 600-meter (1800-foot) Class A office building, which is soon to be completed. This building is the third largest in China and is due to open in April. It will house Ping An, a large regional life insurance company, and several high technology and finance companies. Most importantly, its construction marks the creation of a structural icon in southern China, much like the Empire State Building is in New York City. In fact, the building’s ownership originally requested it look identical to the Empire State Building and subsequently scrapped the idea after viewing the model and deciding that the scale and shape of the structure didn’t quite match the surrounding real estate. The building is 118 floors and boasts an observatory: the first in Guangzhou and undoubtedly a future major attraction and revenue source. We donned hard hats through the construction site, boarded one of 4 double-stacked elevators and travelled to the 56th floor where we experienced the leasing team’s impressive marketing video on floor-to-ceiling screens all around us. We were 1 of 15 tours that day.

On the social front, the LN Garden Hotel in Guangzhou hosted a happy hour for our group, complete with a live band, a dim sum bar, a noodle bar, a full dessert table and a party bus. After a long day of traveling from company to company, this was a welcome surprise! An even better surprise occurred when our resident singer requested Frank Sinatra’s New York, New York and took the stage to serenade us all for the next 5 songs. Dancing en masse ensued. Pictures are of course provided below. Who knew we had so much CBS talent in our group?

Nicole Atoyan ’17

Entrepreneurship and Innovation in Germany Trip is Underway

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Tour Leaders Misha and Manuel lead a Pre-Departure Meeting in Uris Hall

This spring, 32 students will embark on the inaugural Chazen Entrepreneurship and Innovation Trip to Germany.  The trip will be led by Professor R.A. Farrokhnia and three student organizers: Manuel Hein (a 2nd year CBS Student, Entrepreneur, and German native) , Diego Cuenca (Co-President of CEO and 2nd year student) , and Misha Ipatov (a 1st year student and entrepreneur).   The tour will begin in Munich then move on to Stuttgart and end in Berlin.   The goals of the tour are to explore the German business environment, compare the German and American models of innovation/entrepreneurship, and uncover the cultural factors that drive the German economy.

The planning for this trip began in late 2015 and has consisted of weekly meetings, outreach to a wide variety of companies, and soliciting student feedback.  The result is a tour that combines cultural sights, company visits/fireside chats, and social events to provide a complete immersion and facilitate learning.  Students will be visiting established companies that include BMW, Siemens, and Airbus in addition to startups such as Soundcloud, Number 26, and Coffee Circle as well as small medium enterprise “hidden champions” such as EOS.   Further, students will be participating in interactive experiences such as a design challenge with German students at the Technical University of Munich or driving the latest BMW performance vehicles to Neuschwanstein Castle.

The background of the students participating in the trip are varied with former media professionals, private equity analysts, engineers and entrepreneurs.    Their participation will play a key role in the success of this trip as we look not only to observe Germany but to compare its business/innovation environment and culture to that of other countries.   We look forward to starting strong on Sunday in Munich and updating the Columbia community along the way.

Diego Cuenca ’16

Germany 2016

Singapore, China & Hong Kong: the journey is upon us!

When I think of Singapore, skyscrapers and images of technological modernity immediately come to mind. I would be remiss by neglecting to mention the image of The Jetsons – a once popular American cartoon – that also comes to mind for me when this hyper-developed nation is mentioned. The trip will formally begin in two days, when 40 Columbia Business School students and two faculty members from the Paul Milstein Center for Real Estate depart for a study tour of Singapore and the Pearl River Delta region of China. The fortunate portion of our group that hasn’t endured an endless stream of final exams has already departed, visiting the beaches of the Far East before heading to Singapore.

Our first day will be filled with cultural visits: a visit to the Gardens by the Bay (pictured here), Chinatown and Little India. A riverboat tour and dinner at one of the most notable seafood restaurants will follow.

120607010620-gardens-bay-panoramic-horizontal-large-galleryWe’ll spend the next two days meeting with leaders in the real estate industry: multinational companies such as Blackstone Real Estate Partners, the largest real estate private equity company in the world, and Capitaland in addition to strong players in the regional market such as GIC. We’ll end our Singapore experience with an alumni reception at Spago.

Guangzhou, nicknamed the City of Flowers in southern China, is our first stop in the Pearl River Delta region. This area is considered the birthplace of the ancient maritime Silk Road, now used as a major trading and transportation hub.  This major city is an important commercial center in China and a focus for real estate development and investment.

The group will also explore Shenzhen – another major commercial center in the Pearl River Delta. Meetings with Vanke, Jones Lang LaSalle, Swire Properties, Fosun and site visits of the Ping An Finance Center and the Qianhai project await.

The trip will end with a day to explore Hong Kong before returning to New York City. I can’t wait for the adventure that lies ahead. I am, however, hoping to sleep for the duration of the 21-hour flight there!

Nicole Atoyan ’17

 

Kick-off: 2016 Chazen Korea Study Tour

Today marked the official launch of the 2016 Chazen Korea Study Tour, with a pre-departure meeting taking place in Uris Hall. For weeks, participants have been anxious to get all the juicy details on logistics, accommodation, company site visits, and (arguably most importantly) the food situation in South Korea.

Everyone was pumped up as they walked into the classroom to receive their Chazen track jackets and were welcomed with a diverse assortment of South Korean snacks. I must admit that I am usually accustomed to Strokos pizza, so it was a welcome surprise to see this rice punch:

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We covered all the basics such as things to pack, important phone numbers, the agenda, and transportation details. Among the companies we are scheduled to meet with: Kia, Samsung, and The LOTTE Group. There was particularly a LOT of excitement when we heard that we would be visiting the Korean Demilitarized Zone (DMZ), the buffer zone between North and South Korea. Students sat in groups according to the specific company they were assigned to; each group will deliver a short presentation on the respective companies we visit in order to enhance the Q&A discussion. Professor Wallen also encouraged students to reach out regarding preparing company specific questions.

The organizers have done an unbelievable job ensuring people are completely comfortable and all individual requests are addressed. From dietary restrictions to international visas, it’s challenging to accommodate every request and everyone has really appreciated all the hard work they have done thus far. There is no doubt students will be wearing their Chazen South Korea track jackets proudly in the coming weeks leading up to the trip!

– David Batt ‘16

 

Cuba in Pictures

Welcome dinner in Havana

Lunch at El Templete

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Old Havana

Enjoying the view at Hotel Nacional de Cuba

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Plaza Viejo

Dinner at El Cocinero

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Dinner and meeting with the owner of La Guarida

CBS at an Industriales baseball game in Havana

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CBS at Tropicana

Road trip to Trinidad, Cuba

Trinidad, Cuba

Topes de Collantes

Thank you all for an amazing week in Cuba!

-Michael Echemendia ’16

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The Spirit of Chazen #Brazil2016

What is Chazen? 

“In 1991, our founder, Jerome A. Chazen, MBA ’50, recognized the need for a new kind of leader: one who understands cross-cultural issues and their impact on business. That vision led to the creation of the Jerome A. Chazen Institute of International Business, which serves as the hub of global activity at Columbia Business School.”

(cheesy nationality jokes aside)

When I step back to reflect, it’s truly remarkable how globally diverse our cohort of 30 students were, representing 14 nationalities (here we go: Netherlands, Italy, India, Israel, Lebanon, Peru, China, Japan, Brazil, Turkey, Canada, Greece, Malaysia and good ol’ USA), but also surprisingly diverse business backgrounds: 

Visiting the Suzano Paper & Pulp factory – who knew that Martina Carbone CBS ’16 would pepper the speakers with R&D questions, given her chemical & bio-engineering background?

Who knew that Audrey Stewart CBS ’16 spent time in Taiwan working on nuclear weapon detection for the US Army?

Traveling abroad with a group as awesome as this is a natural catalyst for conversations about … religion, politics, family, and hey, even hair type (Beleza Natural, Operations Management 101); conversations too taboo within the confines of a classroom, yet somewhat organic and free-flowing when you’re chilling in a bus with the lush forest of Rio as your backdrop.

For me – these conversations are the ‘deep and meaningful’ that help us know each other better; the real forage for international and cross-cultural capital that makes us more informed and educated business people.

That’s the Spirit of Chazen.

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In 33 #pictures – São Paulo & Rio de Janeiro

Reuben Gan, CBS ’16

São Paulo (Jan 17-20, 2016)

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Day 0 – Visiting the quickly gentrifying neighbourhood of Vila Madalena.

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Pop-up block parties in the neighbourhood of Vila Madalena.

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Company #1 – Natura Cosmetico’s headquarters in Cajamar, Sao Paolo.

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Glass is abundant at Natura’s HQ, promoting one of the company’s key values & principles – Transparency.

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Laura Burkey, CBS ’16 tries on the Natura’s cosmetics line.

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Samar Estephan, CBS ’16 tries out a Natura hand lotion.

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Andy Zheng CBS ’16 browsing the fragrance section of Natura’s mock retail store.

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Men, a natural target market.

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Company Visit #2 – As we learnt, Azul’s competitive advantage as Brazil’s no.3 carrier is owning networks of connecting flights that GOL & TAM can’t compete with.

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Fun Fact – Azul is known for their gummy candy planes. Children often ask their parents for this when they know they’re flying. How is that for a cost-effective CRM strategy?

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Company #4: Donning safety hats & goggles to tour the Suzano Paper & Pulp factory, the global leader in producing Eucalyptus tree-based paper products.

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Company #5 – B2W, Brazil’s leading e-commerce company, furnished with plenty of entertainment.

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CBS-ers taking last shots at Sao Paolo. Will one of us win the Chazen Travel Photo contest?

Rio de Janeiro (Jan 20-22, 2016)

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Company #7 – BNDES takes us through what it takes to work at Brazil’s leading development bank.

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The Famous Cathedral de San Sebastian in Rio De Janeiro.

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The iconic PetroBras building in central Rio.

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Lunch at the historic Confeitaria Colombo, a taste of colonial Rio.

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Company #9 – The Operational Centre of Rio De Janeiro, a world class live database tracking weather, traffic and crime to mitigate tim-sensitive issues such as mudslides. (picture by Vitor Selles, CBS ’16)

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Company #10 – Beleza Natural prides itself for serving the needs of communities of Brazilian women with intensely curly hair, giving it their signature “relaxante” treatment for more relaxed, softer and shiner hair for better confidence 🙂

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Co-Founder of Beleza Natural, Leila Veliz – “Working at McDonald’s was my first MBA”, on understanding the need for a continuous flow system in running an operations-based service business.

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“Be beautiful and free!” Fun fact – All Beleza Natural models are either customers or staff; the company believes in realistic, everyday beauty. All smiles @ Erin Williams, CBS ’16

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Lesson #1 (from Core Operations Class) – An “assembly-line” (Ford model) process in action. In case recruiting doesn’t go according to plan…

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Operations Strategy lesson no.2 – some assembly lines are less efficient than others..

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And some others…

Bonus: Post-Chazen Hangout @ Rio de Janeiro (Jan 23-25, 2016)
(conveniently-timed as Hurricane Jonas hurled through NYC)

#Advice for future Chazen travelers – book the latest flight back! You won’t regret it 🙂

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The Christ Redeemer. Photo courtesy of Johnny Yaacoub, CBS ’16

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Panoramic chill by Ipanema beach.

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The Selaron Steps, the famous work of a Chilean-born artist in the artsy neighbourhood of Santa Teresa.

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Parque Lage. Brunch with a beautiful botanical backdrop.

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The Orquestra Voadora – world-renowned marching brass band practicing for the Rio Carnival. If we could only stay another week..

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Breathtaking view of Rio De Janeiro from Sugar Loaf mountain.

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On the very last day, with the Sugarloaf Mountain as the backdrop.

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Tchau Tchau! (bye bye)