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Brazil 2008 Presentation by: Mauricio Vasconcelos U.S. Commercial Service/USDOC U.S. Embassy – Brazil February 2008 Brazil: Population: 187 million (Sep.2006) Size: 8,547,404 Km2 26 States and 1 Federal District 5 Positive Points:
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U.S. Commercial Service/USDOC
U.S. Embassy – Brazil
Population: 187 million (Sep.2006)
Size: 8,547,404 Km2
26 States and 1 Federal District
* Inflation under control since 1994 (under 5%). Balanced budget.
* Foreign Debt: US$200 billion but smaller than current reserves. First time ever, in January 2008. ( Zero debt).
* Foreign Direct Investment at record level in January 2008. (US$35 billion in 2007)
* Stock Exchange: All time high in Nov.2007 and Feb. 2008.
* Import taxes are quite lower than used to be (but still high).
* Higher competition through imports and privatization since 1990.
* Several sectors privatized, or partially privatized, since 1990: Steel making, energy, mining, telecommunications. Starting PPPs
* Exchange Rate: US$ 1 = R$3.75 in 2002
R$1.68 in Feb.26, 2008, same value as in May 1999.
* Investment Grade from international credit rating agencies, expected in 2008. More favorable terms in international trade and loans, access to credit.
* Infra-Structure: energy, ports, roads, airports.
* Privatization and concessions program: very slow.
* Need for huge investments in infra-structure, but no state funds for investments.
* Legislation: Labour, Fiscal,
* Interest Rate: still very high at 11.25% basic rate, although in all-time low.
* Import taxes still high (although they have been significantly reduced.)
* Financing: Very high interest rates (although the Central Bank basic rate of 11.25% in February 2008 is a historic low). Possibility of the U.S. Eximbank.
* Stocking pre-paid products: extremely expensive and risky
* The cost of selling: visits, travel, tests, labor, expertise, after-sales, advertising.
* Tests & warranty. Local maintenance.
* Price: Import Tax calculated on price CIF. Plus two local taxes that are calculated on the price “CIF plus Import Tax.”
* Competition: very developed local industry.
* The Brazilian rep / distributor will need: Technical assistance, financing, sharing expenses, marketing support,
* Try to buy and assemble peripherals (frames, accessories) in Brazil (if possible); to avoid import taxes.
* Bonded warehouse. Just-In-Time delivery very important.
* A new exporter must spend money, before he can earn money.
Large and diversified Brazilian industry. Many subsidiaries of leading international manufacturers have factories in Brazil.
Total Sales – US$ million
Exports from Brazil
* Total sales in Brazil in 2003: US$ 138 mn. Total sales in 2004: US$247 mn
* Exports from Brazil in 2003: US$ 95 million. Exports from Brazil in 2004: 179 mn (being US$56 mn to the U.S.)
* Factory in Pederneiras / SP.
Randon: Off-road trucks, components, truck beds, breaks
* Total sales in 2004:US$800 mn, Exports from Brazil:US$118 mn
* Market leader in Brazil for trucks, segment under 35 tons
* Joint-ventures with U.S. Arvin-Meritor and German Jost.
* Factory in Caxias do Sul / RS.
* Mining, construction and agriculture machinery
* More than 16,000 machines/year in Brazil.
* 40% share of Brazilian market for agriculture and construction machinery
* Total sales in Brazil: + US$1 bn; Exports + 25% (including to US)
* Bank CNC Capital, has financed 30,000 clients.
* Factories in Curitiba, Piracicaba and Contagem.
* Also of the same FIAT Group: IVECO trucks, factory in MG.
* Manufactured 42,000 engines in 2003. Exported 6,500.
* In 2004: 49,000 engines.
* Factory in Guarulhos / SP.
* Compressors, temperature control division Thermo King, refrigeration equipment Hussmann.
* Factory in Londrina / PR: average of 60% Brazilian components. Exports equipment to Latin American countries and components Ingersoll Rand / USA.
* Took over Svedala, Dynapac, Nordberg, Trellex and Faço. www.metsominerals.com.br / Factory in Sorocaba / SP.
* Total sales in Brazil: approximately US$ 100 million in 2003, exports from Brazil = 35%, especially Latin America, USA and Canada. World total sales: Euro 5.2 billion/y.
* Sold Euro 50 million to Sossego CVRD Project, being approximately 50% made in Brazil and 50% imported.
* Supplier of crushers, screens, transportation systems and engineering projects. Has a foundry for 1,900 tons/year.
P & H MinePro Services
* Supplier of shovel loaders, draglines, excavators. Assembly line in Belo Horizonte. Total sales in Brazil in 2006 were US$60 million, being 12% of that amount exports from Brazil.
* Total sales 2003: US$ 190 million
* 32% of total sales was mining and construction equipment (drilling tools and cruching equipment), 40% tools and 28% specialty steel.
* Cranes for mining, oil and construction. Reach stackers.
* US$ 19 million in 2003. Factory in Caxias do Sul / RS.
Haver & Boecker (Germany)
* Factory in Monte Mor / SP, since 1975. Exported two giant screens to Syncrude Sweet Blend / Canada for betuminous oil sands, 2003 / 2004.
* Started manufacturing locomotives in Brazil in 2005.
* Has manufactured 50 locomotives till Feb. 2008, only smaller locomotives, up to 3000 HP.
* Plan to manufacture 30 locomotives in 2008, including big ones, up to 6000 HP.
Atlas Copco Asea Brown Boveri Alstom
Boart Longyear Dorr-Oliver Flygt
NSK, FAG, Timken and SKF bearings
Orica (blasting systems) Schenk Process
Saint-Gobain ceramics Siemens
Voith Wehr Schenk
Trucks: Mercedes Benz, Ford, Scania, Volvo, Iveco, Caterpillar
SKF: manufactures automotive components, in Cajamar / SP. Imports and distributes bearings.
Exposibram: Sep., 2009 (Held every two years, in Belo Horizonte). Sponsor and organizer: IBRAM / The Brazilian Mining Institute: www.ibram.org.br
http://brasil.infomine.com/news/partners/brasilmineral/welcome.asp www.signuseditora.com.br ( Magazine “Brazil Mineral”) www.minerios.com.br/minerios (Magazine “Minerios”) www.inthemine.com.br (New magazine, started in 2006)
www.geologo.com.br (professional geologists association) www.abimaq.org.br (ABIMAQ - Brazilian Association of Machinery Manufacturers, with online database of manufacturers) www.abmbrasil.com.br (ABM - Brazilian Metallurgy Association)
Thank you !!
Mauricio Vasconcelos U.S. Commercial Service Belo Horizonte - Brazil email@example.com Tel.: (55 – 31) 3213.1573
U.S. Export Assistance Centers of the USDOC. In Charleston - WV: Leslie.Drake@mail.doc.gov 1116 Smith Street - Tel. 304 – 347.5123