são paulo, brazil conceito brazil. top exports from brazil orange soy corn sugar cane airplanes...
TRANSCRIPT
São Paulo, Brazil
CONCEITO BRAZIL
Top Exports from Brazil
Orange
Soy
Corn
Sugar cane
Airplanes
Coffee
Oil
Iron ore
Ethanol
Meat
1. Crisis and Recuperation
2. Economic Development
3. Trading Partners and Best Prospects
Doing Business in Brazil
Industrial Production During the Crisis
IBGE indicated growth of 0.7% in March
-14
-12
-10
-8
-6
-4
-2
0
2
4
Jan-08 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-09 Feb Mar
By category, in 1st trimester 2009 compared to same period of 2008, in % :
General industry: - 14.7 Consumer goods: -8.0Capital goods: - 20.8 Durables: - 22.5Intermediate goods: - 18.1 Semi and non-durable: -3.0
Retail GrowthDuring the Crisis
Car SalesDuring the Crisis
Car production increased 34.2% between February and March.
08 09
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 2010The world recovering
Source: Agencia Estado
Brazilian GDP
Source: IBGE
6.1% 6.2%6.8%
1.3%
-1.8% -1.6%
0.5%
5.0%
6.5%
1º Qtr 08 2º Qtr 08 3º Qtr 08 4º Qtr 08 3º Qtr 09 4º Qtr 09 1º Qtr 10
1º Qtr 09 2º Qtr 09
• 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
Economic Indicators2010 Estimates
Source: Central Bank Brazil
Brazil Compared - GDP(US$ Billion)
Source: International Monetary Fund
Brazil’s Rate of Growth
Source: IMF, Consensus Forecasts, IBGE
0.0%0.3%
4.3%
1.3%
2.7%
1.1%
5.7%
2.9%
3.7%
4.5% 5.1 %
0%
1%
2%
3%
4%
5%
6%
7%
8%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Annual Perc
ent
2.6% average
1 %
2009
Inflation Rate
Source: Agência Estado
4.50%
1.80%
8.50%
6.00%5.50%
3.50%
7.75%
4.82%4.35% 4.60%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 BCB est.
2,477%
1993
Source: Central Bank Brazil
32.8
22.5
16.6
10.1
18.115.1
18.8
34.6
41.7
25.0
35.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 est.
Foreign Direct Investment(US$ Billion)
Prime rate in Brazil has reached the lowest historic level (in %)
8.65%
8.8%
9.3%
10.3%
13.0%
11.8%
11.5%
14.8%
19.8%
25.5%
18.5%
19.0%
Nov-09
Jul-09
Jun-09
Apr-09
Jul-08
Abr-08
Jul-07
Jul-06
May-05
Jan-03
Jun-02
Jul-01
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
R$ 3.50
R$ 2.75 R$ 2.60
R$ 2.25 R$ 2.14 R$ 1.95
R$ 2.30
R$ 1.74 R$ 1.75
2002 2003 2004 2005 2006 2007 2008 2009 2010 est.
Foreign Exchange Rate
Source: BCB
Southeast – 55,09
South – 19,03
Northeast – 13,68
Center-West – 7,28
North – 4,92
Regional DisparitiesGDP share - % of total GDP - 2008
Source: International Monetary Fund
2004 2008 2009
3,710,477,153
20,041,091,354
15,911,145,829
11,530,564,312
25,625,203,865
20,182,730,487
15,990,157,812
36,187,476,416
29,216,602,946
China United States (including Puerto Rico) European Union
Brazilian Imports by Economic Blocks
2003 2004 2005 2006 2007 2008 2009
11.21
13.9015.37
19.23
24.63
32.91
21.0017.91
21.16
24.4426.37 25.64
30.46
16.00
USA Exports USA Imports
Bilateral Trade(US$ Thousands)
Office of Trade and Industry Information (OTTI), U.S. Department of Commerce
0
20
40
60
80
100
120
140
160
2007 2008 2009
U$ Th
ousa
nd
Mexico Brazil Venezuela Colombia Chile Argentina Peru Ecuador
Brazil Compared: U.S. Exports to Latin America
Source: Foreign Trade Division, U.S. Census Bureau
1. Agricultural Sector2. Aerospace (Aircraft and Parts / Airports)3. Electrical Power Systems 4. Environmental 5. Franchising6. ICT - Information & Communication
Technologies7. Insurance8. Medical Equipment9. Mining10. Oil and Gas 11. Pharmaceuticals12. Safety & Security13. Transportation (Ports / Railways) 14. Travel and Tourism
Best Prospects for Sales to Brazil
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.
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
Pre-Salt Reserves
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 2016Business 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
BR US Difference
• Soy production costs 187 238 51 dollars cheaper in Brazil• Transportation costs 97 26 71 dollars cheaper in U.S. • Port costs 7 3 4 dollars cheaper in U.S.• Total 291 267 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 !!