Transcript Document

CONCEITO BRAZIL
São Paulo, Brazil
Top Exports from Brazil
Meat
Sugar cane
Orange
Oil
Corn
Soy
Coffee
Ethanol
Iron ore
Airplanes
Doing Business in Brazil
1.
Crisis and Recuperation
2. Economic Development
3. Trading Partners and Best Prospects
Industrial Production
During the Crisis
IBGE indicated growth of 0.7% in March
4
2
0
-2
-4
-6
-8
-10
-12
-14
Jan-08
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
By category, in 1st trimester 2009 compared to same period of 2008, in % :
General industry: - 14.7
Capital goods: - 20.8
Intermediate goods: - 18.1
Consumer goods: -8.0
Durables: - 22.5
Semi and non-durable: -3.0
Jan-09
Feb
Mar
Retail Growth
During the Crisis
Car Sales
During the Crisis
Car production increased 34.2% between February and March.
340
290
240
190
140
90
Mar
Apr
08
May
Jun
Jul
Aug
Sep
Car Production, in thousand
Oct
Nov
Dec
Car Sales, in thousand
Jan
Feb
09
Mar
Invest Confidence
• The main São Paulo Stock Exchange Index, the Bovespa, has risen more than 75%
from its low point last October.
• Since January, R$ 5.7 billion has been invested in the Bovespa from overseas
• Bovespa (Blue) vs. Dow Jones Industrial Average (Red).
Brazil’s Reaction to the Crisis
Government measures:
• Tax cuts such as IPI, the federal tax on domestic and
imported manufactured products.
• Interest rate reduction – 9.25% per year.
• Incentives for civil construction.
• Infrastructure development.
GDP growing projection for 2010
The world recovering
Source: Agencia Estado
Brazilian GDP
6.1%
6.2%
6.8%
6.5%
5.0%
1.3%
0.5%
1º Qtr 08 2º Qtr 08 3º Qtr 08 4º Qtr 08
3º Qtr 09 4º Qtr 09 1º Qtr 10
-1.8%
-1.6%
1º Qtr 09
2º Qtr 09
Source: IBGE
Economic Indicators
2010 Estimates
•
GDP: US$ 1.58 Trillion (IMF)
•
Growth Rate: 4.83 %
•
Inflation Rate: 4.60 % year
•
Foreign Direct Investment : US$ 35 Billion
•
Interest rates, SELIC at 8.75 % year
•
Foreign Exchange Rate: 1 USD = 1.75 Reais
•
Unemployment Rate: 7.42 %
•
190 Million Consumers with Increased Purchasing Power
Source: Central Bank Brazil
Brazil Compared - GDP
(US$ Billion)
Source: International Monetary Fund
Brazil’s Rate of Growth
8%
7%
Annual Percent
6%
5.7%
5%
4.3%
2.6% average
4.5%
4%
5.1 %
3.7%
3%
2.9%
2.7%
2%
1.3%
1%
1.1%
1%
0%
0.0%
1998
0.3%
1999
2000
2001
2002
2003
2004
2005
2006
2007 2008 2009
Source: IMF, Consensus Forecasts, IBGE
Inflation Rate
2,477%
7.75%
8.50%
6.00%
5.50%
4.50%
4.82%
3.50%
4.35%
4.60%
1.80%
1993
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010 BCB
est.
Source: Agência Estado
Foreign Direct Investment
(US$ Billion)
41.7
35.0
34.6
32.8
25.0
22.5
18.8
18.1
16.6
15.1
10.1
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010 est.
Source: Central Bank Brazil
Prime rate in Brazil has reached the
lowest historic level (in %)
Jul-01
19.0%
Jun-02
18.5%
Jan-03
25.5%
May-05
19.8%
Jul-06
14.8%
Jul-07
11.5%
Abr-08
11.8%
Jul-08
13.0%
Apr-09
Jun-09
Jul-09
Nov-09
10.3%
9.3%
8.8%
8.65%
Interest Rates
• The SELIC rate is currently 8.75 % (per year).
• Mortgage loans range from 8% to 12% per year for up to 25
year loans plus inflation.
• Businesses generally pay from 2% to 4.5% (per month),
depending on creditworthiness.
• Checking account rates are about 140 % year.
• Credit Card rates are 233 % per year.
Source: Central Bank Brazil
Foreign Exchange Rate
R$ 3.50
R$ 2.75
R$ 2.60
R$ 2.25
2002
2003
2004
2005
R$ 2.14
2006
R$ 2.30
R$ 1.95
2007
2008
R$ 1.74
R$ 1.75
2009
2010 est.
Source: BCB
Regional Disparities
GDP share - % of total GDP - 2008
North – 4,92
Northeast – 13,68
Center-West – 7,28
Southeast – 55,09
South – 19,03
Source: International Monetary Fund
Brazilian Imports
by Economic Blocks
36,187,476,416
29,216,602,946
25,625,203,865
20,041,091,354
15,990,157,812
20,182,730,487
15,911,145,829
11,530,564,312
3,710,477,153
2004
China
2008
United States (including Puerto Rico)
2009
European Union
Bilateral Trade
(US$ Thousands)
USA Exports
USA Imports
32.91
30.46
26.37
24.63
24.44
21.16
21.00
19.23
17.91
13.90
25.64
16.00
15.37
11.21
2003
2004
2005
2006
2007
2008
2009
Office of Trade and Industry Information (OTTI), U.S. Department of Commerce
Brazil Compared:
U.S. Exports to Latin America
160
140
120
U$ Thousand
100
80
60
40
20
0
2007
Mexico
Brazil
Venezuela
2008
Colombia
Chile
2009
Argentina
Peru
Ecuador
Source: Foreign Trade Division, U.S. Census Bureau
Best Prospects for Sales to Brazil
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Agricultural Sector
Aerospace (Aircraft and Parts / Airports)
Electrical Power Systems
Environmental
Franchising
ICT - Information & Communication Technologies
Insurance
Medical Equipment
Mining
Oil and Gas
Pharmaceuticals
Safety & Security
Transportation (Ports / Railways)
Travel and Tourism
The Brazilian Oil and Gas Sector
(November 2010)
• Over 60 oil companies with oil exploration and appraisal areas in
Brazil.
• Petrobras 2009-2013 investment: US$174 B (US$ 92 in Brazil’s E&P).
Other oil co’s: Est. US$34.5 B.
• Opportunity: 819 oil blocks auctioned; Petrobras plans to contract
about 300 new vessels (e.g. oil drilling and production platforms,
ships, platform support boats, and very large crude oil carriers) .
• Pre-salt oil fields: Petrobras plans to invest USD$ 111.4 billion from
2009 to 2020 to produce 5.7 million bpd plus 1,815 million bpd from
pre-salt fields. This figure includes Petrobras and its partners’ pre-salt
production.
• Challenge: Heavy emphasis on local equipment content.
• Complex suppliers’ registration process with Petrobras.
Pre-Salt Reserves
The New Frontier: 100 Billion Barrels? (A 500-mile wide area in Brazil, located
under a thick layer of salt -- 350 miles off of Brazil’s southeastern coast,
stretching from Espírito Santo, Rio de Janeiro, São Paulo, Paraná, and Santa
Catarina States, at an
average water depth
of over 7000 feet.
About 25 percent of
the pre-salt area has
already been
contracted to private
companies through
Brazil’s competitive
bid round process. )
2010 Best Prospects
for E&P Equipment
• Production pipelines alloy
coatings
• Turbo compressors (6-10 Mw)
• Polyester mooring cables
• Mooring systems
• Drilling pipelines
• Electrical cables
• Control systems for well
control
•
•
•
•
•
Oil and gas metering systems
Offshore drilling rigs
Gravel packing
Drill bits
Steam generators (25-50 x 10
6 BTU/d);
• Special sphere subsea valves
• Subsea sensors for analysis of
oil and grease traces in water
Best Prospects for E&P Services
• Drilling
• Workover services
• Flexible lines and umbilicals laying services
• Support to ROV vehicles
• Support to mooring activities
• Special vessels
• Monitoring and inspection techniques for structural
integrity of flexible risers
World Cup 2014 and Olympic Games 2016
Business Opportunities in Rio
• Rio de Janeiro will host the first-ever Olympic Games in
South America August- September 2016, as well as some
of the games for the 2014 World Cup. These two events
will generate numerous trade and investment
opportunities in several areas, for both games and the
city.
Estimated investments
• The state government of Rio de Janeiro estimates
that investments from 2010-2016 will reach US$50
billion in infrastructure, construction, transportation,
public security, education and training, among
others. Most of those investments will occur through
Public-Private Partnerships (PPPs) under Brazil’s
Growth Acceleration Program (PAC).
Investments in
Building and Construction
• There will be a huge demand for
Architecture/Construction/Engineering (ACE)
services to plan and build sport facilities
(arenas, stadiums, etc), hotels, infrastructure
and transportation projects, as well as port and
airport upgrades.
Investments in Sport Facilities
Although more than half of Rio 2016 venues are ready, since Rio hosted the
2007 Pan American Olympic Games, about 20 new facilities are to be built.
They include:
• An aquatic sports stadium with 18,000 seats with an estimated construction cost
of US$40 million.
• An Olympic Park to host gymnastics, cycling, handball, and other sports
competitions with an estimated building cost of US$200 million.
• An Olympic village of 32 buildings with 12 floors each and a capacity of over
17,000 beds estimated at US$450 million.
• An Olympic Tennis Center with 16 courts (US$45 million).
• A renovated rowing stadium at Rodrigo de Freitas Lagoon will cost
approximately S$2 million.
• An arena in Copacabana for beach volley (US$7 million).
• The renovation of Maracanã Stadium (where the opening and closing Olympic
ceremonies will be held as well as soccer games) will cost approximately US$400
million, and must be completed before 2014 to use in the 2014 Soccer World Cup.
Investments in
Hotel/Hospital Facilities
• In 2010, the number of visitors to the city is expected to grow in 10%
in comparison to 2008, when 1.68 million tourists came to Rio. By the
time of the 2014 Soccer World Cup and the 2016 Olympic Games this
number will increase even more.
• Several hotels are being refurbished.
•
The municipality of Rio may reduce taxes to attract new investment
in hotels; thereby creating opportunities for U.S. hotel chains in
refurbishment, architectural projects and building or acquiring
existing hotels.
• As for hospitals, a clinic will be built within the Olympic Village.
Investments in Infrastructure
The estimated investment in infrastructure is about US$15 billion,
including US$5 billion in logistics upgrades at seaports and airports. The
main projects include:
• The modernization and enlargement of the two International Airport
terminals (increasing the airport's capacity from 15 million passengers per
year to 25 million),
• Highway widening,
• Construction of “Olympic lanes”,
• The Port of Rio area revitalization to include a new 30,000 square meter
leisure area featuring bars, restaurants, an amphitheater, a multi-use
space and parking,
• Port dredging,
• Construction of two new subway lines,
• The creation of a Bus Rapid Transit (BRT) system,
• Housing projects (including low income housing) and
• Water sanitation.
Infra-structure Matters in Brazil
•
•
•
•
Soy production costs
Transportation costs
Port costs
Total
BR
US
Difference
187
97
7
291
238
26
3
267
51 dollars cheaper in Brazil
71 dollars cheaper in U.S.
4 dollars cheaper in U.S.
24 dollars in favor of USA
Conclusion:
To produce soy in Brazil is 51 dollars cheaper, but the logistic costs
eliminates this advantage. In the end, it is 24 dollars cheaper to
get the product to market in the US.
Source: Veja Magazine
Thank you !!