Transcript Presentation

Market Opportunity: Brazil
Renata Vasconcellos
[email protected]
May 2011
Brazil in Numbers
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Territory: 514,876.599 square kilometers (3,287,612 sq mi)
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Population: 193 million
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Ninth largest economy in the world, expected to be the fifth
economy in the next decade
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GDP: $1,594,489,675,024 (2009)
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GDP per capita: $8,070 (2009)
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Unemployment Rate: 8.3.% (2009), 6.5% (2011, IBGE)
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Per capita incomes forecasted to grow at an average rate of
6% over the next several years
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U.S. Exports to Brazil
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U.S. Exports to Brazil: $35.3 billion (2010) (Census) – up 35% from
2009.
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The U.S. is the largest market for Brazilian imports (15% of the
Brazilian import market).
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U.S. exports of goods to Brazil increased by 42.2% in Jan. 2011 to
$3.2 billion, compared to $2.3 billion in Jan. 2010.
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Services: From 2002 to 2009, U.S. service exports to Brazil
increased from $5.1 billion in 2002 to nearly $12.7 billion in 2009.
Service exports to Brazil in 2009 were up 6% from the nearly $12.0
billion exported in 2008.
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U.S. Exports to Brazil (2010)
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Largest categories of exports:
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Machinery ($7.2 billion),
Aircraft and parts ($4.4 billion),
Electric machinery ($4.3 billion),
Mineral fuel and oil ($4.2 billion),
Chemicals ($2.0 billion).
Largest U.S. state exporters of goods to Brazil in
2010:
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Texas ($7.2 billion),
Florida ($4.7 billion),
California ($2.8 billion),
Illinois ($2.1 billion),
Louisiana ($1.4 billion).
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Foreign Investment in Brazil
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Must be registered with the Central Bank of Brazil.
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Cash investments do not require prior official authorization.
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No restrictions on the distribution or remittance of profits abroad.
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Registered foreign capital may be repatriated without prior authorization.
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International remittances that exceed the foreign capital invested is capital
gain - subject to a 15% withholding income tax.
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Participation of foreign capital is prohibited only in the following activities:
nuclear energy, health services, post office and telegraph services, and
aerospace industry. Rural land acquisition by foreigners is restricted.
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Investment guaranty agreement between Brazil and the U.S.
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Brazil is very supportive of international arbitration — a neutral and
non-political forum for resolving commercial and investment disputes.
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Upcoming Events In Brazil
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2011 World Military Games
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2012 UN Rio +20 Climate Summit
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2013 Confederation Cup
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2014 World Cup
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2016 Olympic Games
(www.rio2016.com)
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Olympic Games - Who is doing What?
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Federal Government:
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State and Municipalities
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Ports
Airports
Stadiums
Urban mobility
Financed by Federal Government
Private Sector
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Hotels
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Cities Hosting World Cup Games
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Manaus (AM)
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Brasilia (DF)
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Natal (RN)
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Belo Horizonte (MG)
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Fortaleza (CE)
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Rio de Janeiro (RJ)
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Curitiba (MT)
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São Paulo (SP)
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Recife (PE)
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Curitiba (PR)
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Salvador (BA)
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Porto Alegre (RS)
Porter Wright Morris & Arthur LLP© 2010
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Foreign Investment in Rio
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Expected volume of investment 20112012: R$181.4 billion (approx. $113
billion).
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Infrastructure: $36 billion
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World Cup and Olympics: $11.5 billion
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Petrobras: $107.9 billion
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Major Projects in Rio
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Comperj Refinary
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Ternium Metallurgy (Iron and Steel)
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New Port of Açu
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Navy and OSX Shipyards
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Third Nuclear Energy Plant
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Bus Rapid Transit System
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Porto Maravilha Project to Remodel Rio’s Port
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Rio Investment: Oil and Gas
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Largest oil (81%) and gas (53%) producer in Brazil. Royalty
payments from oil and gas production have been increasing.
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Rio’s deep oil extraction is currently 1.7 million barrels a day - more
than OPEC members Nigeria and Algeria.
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Recent discovery of vast oil reserves under the salt layer at the Rio
coast will require construction of additional infrastructures for
exploration.
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Petrochemical – Duque de Caxias Refinery.
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Exploration and production in the Campos Bay.
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Green fuel projects.
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Rio Investment: Manufacturing Industries
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Petrochemical (74.9%)
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Shipbuilding (18%)
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RJ Petrochemical Complex construction.
Expansion and modernization of shipyards.
New shipyards.
Steel Mills (2.7%)
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Construction of new steel mills (Santa Cruz e
Resende).
Porter Wright Morris & Arthur LLP© 2010
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Rio Investments: Infrastructure
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Logistics for the World Cup and Olympics
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Construction and remodeling of hotels.
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Construction and remodeling of stadiums and other sport
venues.
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Modernization of Tom Jobim Int’l Airport.
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Bullet train construction connecting RJ to SP.
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Road works for the RJ Metropolitan Ring Road.
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Construction of two new subway lines.
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Duplication of BR101 North Highway.
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Costa do Sol project (Cabo Frio).
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Rio Investments: Infrastructure
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Logistics
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Dredging of Itaguai port.
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Itaguai port expansion of container and cargo terminals.
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Açu Port Complex (large vessel capability).
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Construction of Açu electric energy station.
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Revitalization of the Port of Rio.
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Construction of Nuclear Power Station Angra 3.
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Construction of Simplicio Hydroelectric Complex.
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Promising Areas for U.S. Investments in Rio
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Oil and Gas
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Petrobras Supplier Registration is
open to foreign companies
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Iron and Steel
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Infrastructure
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Safety & Equipment
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Tourism
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Creative Industries
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Where to Get Assistance in Rio
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Firjan (Industry Federation of RJ)
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http://www.firjan.org.br
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Invest Rio
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http://www.investrio.com.br
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CODIN (Industrial Development Agency of RJ)
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http://www.codin.rj.gov.br
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Rio Negocios (Investment Promotion Agency)
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http://rio-negocios.com/
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Brazil Trade Net
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http://www.braziltradenet.gov.br
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Apex Brasil (FederalTrade & Investment
Promotion Agency)
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http://www.apexbrasil.com.br
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U.S. Consulate in Rio
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http://www.embaixadaamericana.org.br
Porter Wright Morris & Arthur LLP© 2010
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Where to Get Assistance in the U.S.
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Brazilian Embassy in Washington D.C.
– www.brasilemb.org
U.S. Chamber of Commerce
– www.amcham.com.br
U.S. Department of Commerce
(Brazil desk)
– www.doc.gov
Brazil-American Chamber of Commerce
– http://www.brazilcham.com
Porter Wright Morris & Arthur LLP© 2010
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Tips on Brazilian Business Culture
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Things move slowly.
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Portuguese language is essential.
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First name basis is okay.
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Companies tend to be organized along strictly hierarchical lines.
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Better to deal with the real decision maker.
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Relationships come first, second and third in Brazil.
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Meetings are generally quite informal and relaxed.
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Punctuality is a variable commodity in Brazil.
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U.S. Companies in Brazil
Success Stories
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Citibank
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Federal Express
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McDonalds
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Coca-Cola
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Mary Kay
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If you do not take
into consideration
the Brazilian
culture, you will
not succeed in
Brazil.
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