KST Cover



Believing in Brazil

Believing in Brazil
Gold miner Dan Titcomb '82 helps make Brazilians a little bit richer

Drill core photoIntently watching his daughter Rachael convert two foul shots and a minute later bounce a perfect fast-break pass to a streaking teammate for an easy layup, Dan Titcomb '82 seems very far away from Brazil, where one of his four companies is extracting gold from its 50,000 acres of drilling rights.

His intense work schedule as CEO of Brazilian Resources Inc. often takes him to Minas Gerias province 500 miles inland in Brazil and to Toronto, where his companies are listed on the Toronto Stock Exchange, but Titcomb and his wife, Debbie Dow Titcomb '80, attend most of the school soccer, basketball, and baseball sporting events in which his four children excel. He also coaches his nine-year-old daughter's basketball team.

Shortly after graduating from KSC, Titcomb launched and operated a real estate company with his father, David – a partnership that later founded Brazilian Resources, Dan Titcomb and colleagues photowith Dan as the CEO. In the next decade the company, with central offices in Concord, N.H., spawned several subsidiary companies specializing in hydroelectric projects, fiber optic communications, gold mining, and, recently, the irradiation of fruits and vegetables.

Titcomb spends much of his time raising capital in North America and Europe and then investing it in start-up companies in Brazil, most of which are managed by Brazilian teams of executives, engineers, and other specialists. Or, as Titcomb succinctly sums it up: "My job has been to integrate and manage capital flows from North America to invest in Brazilian development."

‘We want to educate our work force for other occupations. We don't want to leave ghost towns like those in the American west after Silver City and other mines were exhausted.’It didn't take Titcomb very long to realize that running a successful business required paying close attention to the local Brazilian culture. He discovered that face-to-face contact is absolutely necessary and that "trust must develop through sustained personal involvement over a long period."

"Luckily I learned an important lesson early," he reports. "I found Brazilians to be dependable, hard working, and competent. Our success is, in large part, due to the talents and leadership of the Brazilians who work with us. We currently employ about 85 percent of our management and engineers from Brazil. The remaining 15 percent, who are North Americans, are engaged in managing the capital markets program and finding the most efficient ways to invest in Brazil."

Titcomb's reasoning seems convincing. Brazilians working for the big multinational companies often find that employment is unstable because the multinationals can suddenly move, downsize, or go into another product line. On the other hand, not many Brazilian companies had the investment capital to expand and create new jobs.

Drilling operation photo"We discovered through experience that if we could raise capital in North America and launch new business ventures in Brazil, relying on Brazilian management and expertise, we could all prosper," Titcomb explains. "I kept preaching to the teams we put together that all boats rise or fall together. We have to run an open system with no convoluted ownerships or local distributions. By giving everyone stock and options in the North American parent company we gradually created more mutual trust and faith that the system would work. Now most of our management teams are millionaires, and that helps belief a lot."

Relying on local talent to operate companies has worked out well for everyone involved, including the Brazilian economy itself. Titcomb speaks glowingly when he reviews his years of experiences with Brazilian colleagues: "When I am asked if I had to choose between taking the mines, equipment, land, and other physical assets we own or taking our Brazilian management team, I don't hesitate to answer, I would take the team every time."

In choosing the Brazilian sectors that seem attractive investments, Titcomb and his advisors have tried to seek out areas with solid growth potential. They have not always been right. The fiber optic enterprise that seemed a likely boom only four years ago has turned out so far to be a hollow promise.

Brazil sits on one of the half dozen gold belts in the world, but in 2000 mining prospects were so dismal, with gold selling for only $270 an ounce, that many large multinational mining companies in Brazil stopped mining and left the country. At that point, Titcomb decided to aggressively renew his company's mining efforts, which had been drastically curtailed a few years earlier. Brazilian Resources' subsidiary, Jaguar Mining, quickly hired some of Anglo Gold's top people and by 2003 Jaguar Mining had become one of the largest gold mining companies in Brazil.

This move proved golden. By early 2004 prices had surged to $410 an ounce. Jaguar's Sabra mine is currently producing at a rate of 30,000 ounces a year and by 2008 its output is projected to reach 200,000 ounces.

Gold processing plant photoIf Titcomb is enthusiastic when he talks about gold mining, his eyes light up and he edges forward in his chair when he begins to explain the many advantages of food irradiation, a process that keeps fruits and vegetables fresh for an additional fourteen days. This process, he explains, would dramatically extend the shelf life of these products in supermarkets and substantially reduce the current waste of valuable food. Brazilian Resources recently incorporated the Brazilian company Securefoods, a new enterprise devoted to food irradiation. Securefoods is currently building two irradiation factories and plans three more units over the next three years.

Irradiation, he explains, would dramatically extend the shelf life of these products in supermarkets and substantially reduce the current waste of valuable food.Titcomb is keenly aware that irradiated foods have a bad public image, not unlike a common view of microwave ovens when they first appeared. But he is quick to point out that the Food and Drug Administration recently approved the import of irradiated foods and that the American Medical Association, the World Health Organization, and most other U.N. agencies that deal with nutrition all approve of eating irradiated foods. Titcomb also points out that most spices we buy in the market have been irradiated, as have surgical sutures. Describing the process as "a promising new food safety technology that can eliminate disease-causing germs from foods," the Centers for Disease Control web site explains that, "like pasteurization of milk and pressure cooking of canned foods, treating food with ionizing radiation can kill bacteria and parasites that would otherwise cause foodborne disease."

Mine photoBecause the country has limited infrastructure and cannot get produce to market before it spoils, Brazilians are forced to throw out enough food to feed approximately thirty million people a year. Irradiation not only can feed the hungry but also can help cut down on nitrate fertilizers and the energy required for refrigeration. Titcomb argues that once the process becomes standard, the world can reduce its tilled land by 20 percent. He thinks the widespread use of irradiation is one of the most important steps in ending world hunger.

Titcomb has succeeded in large part because he uses age-old New Hampshire common sense, which taught him to watch closely what is actually going on rather than heeding preconceived notions or stereotypes. Recognizing that Brazilians are fully competent and hard working, he has built genuinely collaborative management teams. Believing that irradiation is an exciting, safe, and inexpensive method that can dramatically raise the world's net supply of food, he ignored the widely held suspicion of anything "radiated." In his overall approach to Brazilian development, he is also trying to demonstrate that American development projects do not have to be destructive to the environment.

Mining photoTitcomb is adamant when he explains that the Brazilian government and the vast majority of Brazilians are thoroughly conscious that their country is blessed with the largest rain forest in the world. Titcomb sums up his company's two major objectives as "workers' health and safety and protection of the environment." He is emotional when insisting, "There is no plundering here. Our companies share these values and exceed the standards. We believe in sustainable development that does not exploit and instead leaves lasting contributions to the local societies.

"We are also concerned what workers will do after the mines close. It is not enough to build a couple of soccer fields or a wing on a school. We have to take a longer view. We want to educate our work force for other occupations. We don't want to leave ghost towns like those in the American west after Silver City and other mines were exhausted."

Dan Titcomb has gone far since leaving KSC, but he has not forgotten his years there. When asked if he recalled a professor who brought out something in him that shaped his life, without a pause he says, "Tara Stuart was the most helpful to me. She taught me how to speak in public and, during the past fifteen years, I've made hundreds of presentations trying to sell my ideas to financiers, entrepreneurs, and other governments. As I make these presentations, I frequently remember what Professor Stuart taught me and have put her advice to use more times than I can count."

Mining photoAfter discussing his life as an international businessman and the challenges of raising large amounts of capital, selling his ideas to skeptical businessmen, politicians, and sometimes his own partners, Titcomb returns to the topic closest to his heart, his family. He recalls his daughter's basketball game the night before, when John Stark High won 73-48. "We beat Concord in the Christmas tournament and are now 15 and 2. We can't wait to get the state tournament next week."

Don Johnson, a member of the Keene State Today Advisory Board is professor emeritus of international education and Asian studies at New York University and former director of NYU's East Asian Studies Program. He reports that Rachael Titcomb's John Stark High School basketball team made it to the state semifinals and ended the year at 15-3.