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U.S Commercial Service São Paulo U.S Consulate General São Paulo, Brazil President Luis Inácio Lula da Silva Took leadership on 1 st of January, 2003 Political party: Labor Party- PT 2002 - Won by 61.27% at the first mandate 2006 - Won by 60,83% at the second mandate

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U.S Commercial Service São Paulo

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U.S Commercial Service São Paulo

U.S Consulate General

São Paulo, Brazil


President Luis Inácio Lula da Silva

  • Took leadership on 1st of January, 2003

  • Political party: Labor Party- PT

  • 2002 - Won by 61.27% at the first mandate

  • 2006 - Won by 60,83% at the second mandate


Doing Business in Brazil


Brazil Compared:(Size of the EconomyUS$ Billion)


Brazil Compared:

U.S. Exports to Latin America (US.$ Billion)

Source: U.S Census Bureau


Brazil’s GDP US$ Billions


Robust trade surpluses, with both exports and imports on the rise.

Trade Balance, Exports and Imports

(12 months rolling)

Current Account and FDI

(12 months rolling)

TB

X, M

Source: Ministry of Commerce

Source:BCB

Strong trade adjustment dampening external financing needs.


Composition of Brazil’s GDP2007


Inflation Rate (1993 – Dec/2007)

2,477%

8.5%

6%

5.5%

3.5%

3%

4.5%

1.8%

1.8%

1993

1998

2001

2002

2003

2004

2005

2006

2007

Source: Agência Estado


Interest Rates

  • The SELIC interest rate is currently 11.5% (per year)

  • Mortgage loans range from 2% to 4% per month

  • Businesses generally pay from 2% to 4.5% (per month), depending on their creditworthiness


São Paulo and Brazil

3% of area

Brazil

22% of inhabitants

34 % of GDP

41% of industrial GDP

32% of exports

São Paulo

43% of imports

68% of financial operations

Source: IBGE, Seade and Banco Central do Brasil, 2005


São Paulo

45% of world trade of medium aircraft

(30-60 passengers).

53% of Brazilian motor vehicle-production

70% of Brazilian sugar and alcohol production and exports. World’s biggest producer of orange juice.

60% of Brazilian capital goods production.

40% of Brazilian refining oil production.


47 NUSA SITES IN BRAZIL 02 NUSA SITES IN PARAGUAY

Anápolis – GOAracajú –SEBelém – PA

Belo Horizonte – MGBelo Horizonte – MGBetim – MG

Boa Vista – RRBrasília – DFBrasíia – DF

Campinas – SPCampo Grande – MSCampo Grande– MS

Contagem – MGContagem – MGCaxias do Sul – RS

Cuiabá – MTCuritiba – PRDivinópolis – MG

Florianópolis – SCFortaleza – CEGoiânia – GO

Goiânia – GOJoão Pessoa – PBJuiz de Fora – MG

Londrina – PRMacae – RJMacapá – AP

Maceio – ALManaus – AMNatal – RN

Novo Hamburgo – RSPalmas – TOPetrolina – PE

Porto Alegre – RSPouso Alegre-MGRecife – PE

Ribeirao Preto - SP Rio de Janeiro-RJSalvador – BA

São Luís – MASão Paulo – SPTeresina – PI

Uberaba – MGUberlândia – MGUberlândia – MG

Vitória – ESVitória – ES

AsunciónCiudad del Este


(U.S. $ Billion)

U.S. Census Bureau


Best Prospects for Sales to Brazil

  • Aircraft and Aircraft parts

  • Chemicals/Pharma

  • Electronics and Electric Power equipment

  • Medical Equipment

  • Oil and Gasfield Machinery & Services

  • Pollution Control Equipment

  • Printing/graphic equipment

  • Retail/consumer items

  • Safety and Security Equipment

  • Telcom/Computer Hardware/Software

  • Transportation Equipment

  • Travel and Tourism


U.S. – Brazil Trade Relations

  • Brazil Business Concerns with the U.S.

    • Agricultural Subsidies (cotton, ethanol, soybeans)

    • Restrictive Tariff Rate Quotas (sugar, OJ, ethanol)

    • U.S. Anti-dumping policies

  • U.S. Business Concerns with Brazil

    • High tariffs (20%) & complicated taxes (Up to 60% FOB)

    • Enforcement of Intellectual Property Rights

    • Onerous licensing & Regulatory Requirements

    • Transparency, bureaucracy, different judicial system, slow customs


Best Prospects:

Wireless equipment & Services for 3G

HDTV related software & equipment (Set-top decoder boxes; transmitters for digital radio and TV, encoders, multiplexes, automation systems, studio TV cameras, video servers, IPTV solutions, digital transmitters for High Definition Television (HDTV), microwave systems

Concerns:

Brazil high tariffs (0-20%) & complicated tax system (Up to 60% FOB)

Telecom Market US$ 46 billion

Source: Anuario Brasileiro deTelecomunicacoes


The telecom sector has almost 150 million fixed, mobile, Internet and pay TV clients

2006

Fixed phones

35,4 million

Mobile users

99,9 million

Pay TV households

4,5 million

Brazil

LA - Most important countries *

FIxed phones / household

Mobile phones / population

Pay TV / households

Broadband / households

* Argentina, Chile, Mexico and Venezuela


Internet OverviewThe Brazilian users spend more time than anyone in the world

  • Internet users

  • 32 million Brazilians had used the internet, monthly in 2006. The forecast for 2007 I to reach 37 million

  • In four years, the number of internet users increased 67%

Internet users

  • Broadband Access

  • 2006: the broadband active connections growth was 40,1%. In this same period, the service penetration jumped from 2,2% to 3%

  • 2010: it is expected 10 million connections

  • Time Spend monthly surfing on web

  • The Brazilian internet user is the one who spend more time online: 22h26 for each user in June 2007 (USA: 19h05)

Time spend in internet

Source: Ibope e-Ratingand IAB (Interactive Internet Bureau)


  • Total Market size: US$ 2.2 billion/year

    • Best Prospects:

      • Crawler lattice-boom cranes

      • Cranes above 60 tons

      • Tower cranes above 100 tons

      • Rough terrain hydraulic cranes

      • Heavy earthmoving equipment

      • Large concrete plants

      • Paving equipment

      • Topography equipment

      • Non-destructive drilling and tunneling equipment

CONSTRUCTION EQUIPMENT


Abundance of cost line – over 5,000 miles long;

Less price-sensitive market;

Heavy duties as it is considered a “non-essential” market;

The market is expected to expand, accompanying the increased number of beach resorts being constructed along the northeastern coast of Brazil.

Small local production X heavy presence of foreign companies;

Brazilian boat fleet : Sao Paulo 80%, Rio de Janeiro 9% Santa Catarina and Parana together with 4%.

Leisure Boats


Leisure Boats

  • Accessories for the boats such as motors, electronics, awnings, GPS, furnishings are mostly imported.

  • The majority of the boats are used in the ocean.

  • The market is expected to expand as the number of beach resorts being constructed along the north and northeastern coasts of the country increase.

  • Major shows in the segment are:

    • Sao Paulo Boat Show – October 4-9, 2007

    • Rio Boat Show – TBD, 2008


  • AGCO

  • Caterpillar

  • CNH (Case New Holland)

  • Komatsu

  • Randon

  • Volvo

  • Ingersol Rand

  • Dynapac

  • Ciber

  • BobCat

    Note: All above companies are manufacturing in Brazil.

MAJOR COMPETITORS


Points of Contact

  • São Paulo: Sean.Kelley@mail.doc.gov

  • Rio de Janeiro: Camille.Richardson@mail.doc.gov

  • Brasilia: Rebecca.Armand@mail.doc.gov

  • Belo Horizonte: John.Mueller@mail.doc.gov


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