should i go to brazil?

Should I go to BrazilShould I go to Brazil??

David BaramManaging partnerBase Investments

© All rights reserved

MARKET? PRICING? BUDGET?

PATIENCE!!!!!!!PLAN?


Do I have a marketDo I have a market??

Consumers behavior

Competition – No competition? Why? / Crowded market? Time!! / Strong Brazilian? Price!

Talk to:

1. Distributers2. Consumers (Hospital, Doctor, Patient(


RegulationRegulation


PricingPricing

TAXATION!!!!!!!!!!!!!!!!Your ExWorks price – compromise?Suply Chain length?Exporting country (Israel? China?)Exceptions (Mercosul)

Price without taxes (1) 3.70 Price without taxes (1) 3.70

PIS (Social Contribution) 5.09 1.65% 0.08 PIS (Social Contribution) 5.09 1.65% 0.08COFINS (Social Contribution) 5.09 7.60% 0.39 COFINS (Social Contribution) 5.09 7.60% 0.39ICMS (Value Added Tax) 5.09 18.00% 0.92 ICMS (Value Added Tax) 5.09 18.00% 0.92

Price before IPI (2) 5.09 Price before IPI (2) 5.09IPI 5.09 6.00% 0.31 IPI 5.09 6.00% 0.31

Total Raw Material Price 5.39 Total Raw Material Price 5.39

Labor and other costs (3) 0.56 Labor and other costs (3) 0.56

Gross margin (4) 0.81 Gross margin (4) 0.15PIS 1.87 1.65% 0.03 PIS 0.97 1.65% 0.02COFINS 1.87 7.60% 0.14 COFINS 0.97 7.60% 0.07ICMS 1.87 18.00% 0.34 ICMS 0.97 18.00% 0.17

Price before IPI 1.87 Price before IPI 0.97IPI 1.87 0.00% 0.00 IPI 0.00

Final Price to *** 1.87 Final Price to *** 0.97

Raw material and services costs 5.06 Raw material and services costs (5) 4.96

Other costs (5) 5.06 15.00% 0.57 Other costs (6) 4.96 11.45% 0.57

Gross margin (5) 10.67 20.00% 2.13 Gross margin (6) 9.78 21.82% 2.13

PIS 10.67 1.65% 0.18 PIS (5) 9.78 0.65% 0.06

COFINS 10.67 7.60% 0.81 COFINS (5) 9.78 3.00% 0.29ICMS 10.67 18.00% 1.92 ICMS 9.78 18.00% 1.76

Price before IPI 10.67 Price before IPI 9.78

IPI (6) 10.67 0.00% 0.00 IPI (7) 9.78 0.00% 0.00Total before ICMSst 10.67 Total before ICMSst 9.78

IVAst (deemed margin of resellers) (7) 58.04% IVAst (deemed margin of resellers)(8) 58.04%Total ICMSst 16.87 18.00% 3.04 Total ICMSst 15.46 18.00% 2.78(-) ICMS (1.92) (-) ICMS (1.76)ICMSst due 1.11 ICMSst due 1.02

SALLING FROM *** TO THE *** SALLING FROM *** TO THE ***

DESCRIPTION TAX BASIS RATE VALUES DESCRIPTION TAX BASIS RATE VALUES

TAX BASIS

SCENÁRIO VI - INCOME TAX CALCULATED ON THE ACTUAL PROFIT SCENÁRIO VIA -INCOME TAX CALCULATED ON THE DEEMED PROFIT

ACQUISITION OF RAW MATERIAL BY ACQUISITION OF RAW MATERIAL BY

LOCAL MANUFACTURER - MANUFACTURE BY ORDER INTERSTATE OPERATIONS

RATE VALUESDESCRIPTION TAX BASIS RATE VALUES DESCRIPTION

INDUSTRIALIZATION SERVICES BY MANUFACTURER FOR *** INDUSTRIALIZATION SERVICES BY MANUFACTURER FOR ***

DESCRIPTION TAX BASIS RATE VALUES RATE VALUESDESCRIPTION TAX BASIS


Operation ModelsOperation Models

Lower cost

Lower cost

Control

Control

Price & Lead Time

Price & Lead Time

Control &

Suply chain

Control &

Suply chain


Choose Your ModelChoose Your Model11stst decision point decision point

Or

Can you finance it?


Choose Your ModelChoose Your Model22ndnd decision point decision point

• Market validation• Reduced price justifies increased cost?• Classification?• Lead time


DistributorsDistributors

NationalRegionalStateCityMaster DistributerImporter?Government / Private sector


The upside

Your competitors face the same challenges!

Israeli products are welcomed in Brazil!

Mercosul agreement gives an advantage over non Israeli competition!


How LongHow Long??

Longer than you thought.

http://www.anvisa.gov.br/listadepeticoes/index.asp

http://www.anvisa.gov.br/listadepeticoes/index.asp


How LongHow Long? ?

Market Research 3M

Hosting Owner 1-2M

Registration Class 1,2 12-18M

Distributer 6-18 M

HostingHosting

ANVISA

ANVISA

Distributer

Registration Class 3,4 18-36M ANVISA

INMETRO

INMETRO

ANVISA

GMP

GMP


How MuchHow Much? ?

Market Research 3M

Hosting Owner 1-2M


Distributer 6-18 M

HostingHosting

ANVISA

ANVISA

Distributer


INMETRO

INMETRO

ANVISA

GMP

GMP

Registration fees:- ANVISA fees 1000 us$

- Hosting Company fees 1500us$/product Monthly Hosting 650$ per product/family


How LongHow Long? ?

Market Research 3M


Distributer 6-18 M

DistributerDistributer

ANVISA

ANVISA


INMETRO

INMETRO

ANVISA

GMP

GMP


How MuchHow Much? ?

Market Research 3M


Distributer 6-18 M

DistributerDistributer

ANVISA

ANVISA


INMETRO

INMETRO

ANVISA

GMP

GMP


How LongHow Long??

Market Research 3M


Distributer 6-18 M


INMETRO

INMETRO

Local Manufacture

Local Manufacture

ANVISA

ANVISA

ANVISA

Manufacture Partner 3-9 M

ANVISA


How MuchHow Much? ?

Market Research 3M


Distributer 6-18 M


INMETRO

INMETRO

Local Manufacture

Local Manufacture

ANVISA

ANVISA

ANVISA

Manufacture Partner 3-9 M

ANVISA


How MuchHow Much

should i go to brazil?

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