International BS Blog goes to the movies

Anyone home tonight (Friday , October 17), might want to check out a documentary film on SBS titled End of the Rainbow. The film, made by an Australian team, follows an (unnamed) Australian mining firm who move their operations from Borneo to Africa.

The film highlights the enormous impact such projects have on the local people, with the relocation of villages, the privatising of land, the employment of some locals, the imposition of security measures, the environmental impact etc. Here is a trailer.

I saw this film at the Melbourne International Film Festival. It is beautifully shot, includes some intriguing characters (and great music), and hints at some highly relevant questions. There are some frustrating elements too. In trying to showcase the universal dimensions of such huge changes to lifestyle, the film deliberately keeps the corporation faceless and their agenda unspoken. As such, we gain too little insight into the motivations for being in this location, or the arrangements they have with government etc.

Nevertheless, it is well worth a look. Also, if want to know about how it was made, the film-maker’s experience and his interpretation of the work, you can hear an interview with him here.

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Big time vertical integration

Vertical integration is often a hard concept to get your head around. This article might help you understand the concept.

The world’s 4th largest steelmaker POSCO is bidding to purchase the world’s 3rd largest shipbuilding company Daewoo Shipping & Marine Engineering (DSME). While both firms are Korean, they are also multinationals (and therefore of interest to us). POSCO believes it can add considerable value to DSME by specifically tailoring its steel the specifications of the ships being built. Steel is a very significant input in ship building. As such, this can be seen as forward integration by POSCO into one of the activities where its major products are used.

The article also discusses the efforts by POSCO to buy iron-ore and coal mines in Australia. It has significant share-ownings in seven such Aussie firms. Both iron-ore and coal are major inputs in making steel, so this is backward integration. POSCO is looking at other mines in Africa, Siberia, Indonesia and Eastern Europe, and says it is looking to own 30% of its input supplies in the future.