The document provides an overview of Brazil as an emerging market. It discusses Brazil's inclusion in the BRIC and BRICS groups of emerging economies and provides statistics on Brazil's GDP and economic growth. Key industries in Brazil like agriculture, mining, manufacturing and services are outlined. The document also summarizes Brazil's economic history and reforms. Major Brazilian companies active in sectors like aviation, oil/gas, pulp/paper, mining and telecom are profiled. Brazil's competitive advantages in areas like natural resources, tourism, and sporting events are highlighted. Future challenges for Brazil's economy are also noted.
3. EMERGING MARKETS
"Emerging Markets are countries that are restructuring their
economies along market-oriented lines and offer a wealth of
opportunities in trade, technology transfers, and foreign direct
investment.”
(Chuan Li of University of Iowa's Center for International Finance and Development)
•The term "emerging markets" was coined by Antoine van Agtmael and dates back to 1981.
4. BRIC
• BRIC is a grouping acronym was coined in 2001 by
Jim O'Neill from investment bank Goldman Sachs in a paper
entitled "Building Better Global Economic BRICs”
• They might overtake the G7 economies by 2027 (SOME
SOURCES)
Goldman Sachs has argued IN 2050 could eclipse TO G7
5. BRIC
• B – Brazil
• R – Russia
• I – India
• C - China
6. BRIC
These countries encompass over 25% of the world's land
coverage, 40% of the world's population and hold a combined
GDP (PPP) of 33,690 billion dollars.
GDP (PPP)
• Total : $33,690 billion (2015)
• China $18,976 billion
• India $7,997 billion
• Russia $3,458 billion
• Brazil $3,259 billion
7. BRIC to BRICS
• August 2010 Jim O'Neill of Goldman Sachs argued that Africa
could be considered the next BRIC
•South Africa was officially admitted as a BRIC nation on
December 24, 2010,
•President Jacob Zuma attend the BRICS summit in Sanya in
April 2011 as a full member
8. BRAZIL
•Largest and most populous country in South America.
•5th largest country by geographical area.
•5th most populous country in the world.
•4th most populous democracy in the world.
9. BRAZIL-FDI
•FDI 5455 USD Million in January of 2016
•FDI averaged 3375.62 USD Million from 1995 until 2016
•All time high of 20427 USD Million in December of 2010
•2007 List by the UNCTAD 11TH
, 2013 List by the CIA World Factbook 13TH
11. The Opening Phase (1964 - 1974)
Brazilian military coup occurred in 1964
Priority was to reverse the high inflation rate to reduce the public deficit
Imports allowed, because not yet developed
"Economic Miracle”. 1969 and 1973, the National Development Program
12. The Closure Phase (1974 -1979)
Duetothefirstoilcrisisin1973, Brazil’sgovernmentlaunchedthesecondPNDin1974
Newforeignloans,searchfornewexportmarketsandtheattempttosubstituteimports
Thenationalalcoholprogramalsoknownas“PróAlcool” waslaunched in 1975
ThePetrobrásdiscoveryofnewoilfieldsinRiodeJaneiro
In1976theimportofautomobilestoBrazilwasprohibitedbythegovernment
14. The End of Dictatorship
In1985, Figueiredo'sgovernmentwasdeposed
1988,importtaxrateof85%wasunfavorableforcheapermodels
Accumulatedinflationremainedin1782.90%in 1989
in 1990thatcarimportswerefinallyallowed, openingmarket
15. The End of Dictatorship
Planlaunchedin1994in ordertostabilizethenationalcurrency,From1995to2000,theimportsresultedon adeficitofUSD24.1 billion
Against asurplusofUSD60.4billion, from1990 to1994.In2000,accordingtotheWorld TradeOrganization, Brazilparticipatedinworldtrade,with0.9%ofimports
16. Government of Brazil
•Federal Government of Brazil
– Democratic Republic
• Executive – Legislative –and Judicial
•Executives:
Dilma Rousseff
Head of State and Head of
Government of Brazil
(Since 1 January 2011)
Michel Temer
Vice President of Brazil
17. Global Market Share
• Rank in the world trade 2014:
Merchandise 25
Commercial services 32
18. Merchandise Trade
• Its share in the world total export is 1.8
• Breakdown in economy's total export:
Agricultural product 39.0
Fuels And Mining 24.4
Manufacturers 33.3
• By main destination:
European Union 18.7
China 18.1
United States 12.1
Argentina 6.3
Japan 3.0
19. Commercial Services Trade
• Its share in world total exports 0.79
• Breakdown in economy's total export:
Goods related services 1.0
Transportation 14.9
Travel 17.5
Other commercial services 66.7
21. Top Ten Exports
1. Oil seed: US$21.2 billion (11.1% of total exports)
2. Ores, slag, ash: $16.7 billion (8.7%)
3. Oil: $13.7 billion (7.2%)
4. Meat: $13.1 billion (6.8%)
5. Machines, engines, pumps: $11.4 billion (5.9%)
6. Vehicles: $9.6 billion (5%)
7. Iron and steel: $8.9 billion (4.7%)
8. Sugar: $7.8 billion (4.1%)
9. Food waste, animal fodder: $6.2 billion (3.2%)
10. Coffee, tea and spices: $6 billion (3.2%)
22. Industry: Agriculture & Commodities
Agriculture & Commodities
• In the foreign markets, it answers for 25% of global exports of raw cane and
50% of refined sugar;
• Reasons:
Rapid expansion of sugar cane production at globally competitive prices.
Decline in exports by previously large suppliers, particularly the EU and
Cuba.
Highly competitive costs of production .
Brazil, especially in the Center/South region, retains cost advantages from
large average mill size and long crushing season.
24. Industry: Agriculture & Commodities
It is the world leader in soybean exports and is responsible for
80% of the planet’s orange juice.
• A pioneer and leader in the manufacture of short- fibre timber cellulose,
Brazil has also achieved positive results within the packaging sector, in which
it is the fifth largest world producer.
25. Diversified Industry
•Brazil accounts for three fifths of the South American economy’s industrial
production.
•Accounting for one-third of GDP, Brazil's diverse industries range from
•Automobiles, Steel
• Petrochemicals, Computers
• Aircraft, Consumer durables.
Top companies among these diversified industries are:
•Embraer
•Aracruz Celulose
27. Industry: Service Sector
• Brazil has a diverse and sophisticated services industry as well.
• During the early 1990s, the banking sector accounted for as much as 16% of
the GDP.
Top performers in this sectors are:
• Banco Bradesco
• Banco do Brasil
28. Brazil, One of the Biggest E-Sales
Opportunity in the World
• Brazil is the 4th largest Internet market globally with 120 million Internet
users out of a total population of more than 200 million.
• According to AméricaEconomía Intelligence, Brazil represents about 60% of
all B2C e-commerce in Latin America.
30. Larger International Trade Players
from Brazil
• Petrobras (oil, petrochemicals)
• Vale S.A. (diversified metals, mining)
• JBS S.A. (food, beverages)
• Grupo Pão de Açúcar (retail including online)
• BRF S.A. (food)
• Oi (telecommunications)
31. International Trade Players from
Brazil
• According to global trade intelligence firm Zepol, the following smaller
companies are also examples of Brazilian exporters:
• American Safety Razor Brazil (razor blades, adipic acid)
• Hapag Lloyd Brazil (containers, siliceous earths, white cement)
• Vanguard Logistics Services Do Brazil (transmission belts, rubber/plastic
molds, malt beer)
• Inergy Automotive Systems Do Brazil (combustion engine internal pumps,
gas station external pumps)
• Afil Import Export E Comercio (garlic, flaxseed, corn)
32. Leading Brazilian Firms
Embraer ( NYSE: ERJ)
• Headquartered in São Paulo, Brazil.
• Embraer is a Brazilian aerospace conglomerate. The company produces
commercial, military, and corporate aircraft, as well as providing related
aerospace services. It also has maintenance and commercial sites in the USA
and commercial offices in France, Singapore and China.
• It recently replaced Canada based Bombardier Inc. to become the 3rd
largest
producer of aircrafts.
• Brazil only comprises about one-fifth of Embraer's revenue.
• At the end of 2014, Embraer had a order backlog totalling US$20.9 billion.
33. Manufacturer: Embraer
• It has delivered more than 1000 of these aircrafts.
• In 2003, Embraer entered a partnership with the Harbin Aircraft
Manufacturing Corporation of Harbin, Chinato produce ERJ 145 for the
Chinese market.
35. Commodities: Petro Bras
Petrobras (NYSE: PBR)
• Is a semi-public Brazilian energy company headquartered in Rio de Janeiro
founded in 1953.
• in 2008, Petrobras was the world’s fifth-largest company worth $310 billion.
Since then it has lost more than 90 percent of its value.
• The market cap of Brazil’s oil giant stands at just $19 billion with its shares
trading near $1--and some analysts say the actual equity value is zero.
• It’s shares trade at just 0.21 times the company’s book value, the least among
its oil industry peers, according to Bloomberg data.
• It operated the world's largest oil platform - the Petrobras 36 Oil Platform -
until an explosion on 15 March 2001 led to its sinking on 20 March 2001.
• Petrobras is a world leader in development of advanced technology from
deep-water and ultra-deep water oil production.
37. Core Competencies
• Petrobras works extensively with foreign acquisitions too, buying and
controlling the most important energy companies in South America and
exploring huge deep-water fields of West Africa and the Gulf of Mexico.
38. Materials: Aracruz Celulose
• Founded in 1972.
• In 2009 the company merged with VCP and renamed Fibria.
• Is a major Brazilian manufacturer of pulp. It is headquartered in Sao Paulo.
• The company is the world's leading supplier of bleached eucalyptus pulp.
• The company has an annual production capacity of 2.4 million tons, through
two mill sites.
• Aracruz Celulose (Fibria) posted net income of R$ 614 million in the second
quarter of the year.
• Principal Competitors:Companhia Suzano de Papel e Celulose; Industrias
Klabin de Papel e Celulose S.A.; Votorantim Celulose e Papel S.A.; Bahia
Sul Celulose S.A.
39. Mining: Vale
• It is one of the largest logistics operators in Brazil.
• In addition to being the second-largest mining company in the world, it is also the
largest producer of iron ore, pellets, and second largest of nickel.
• Total iron ore reserves of about 14 billion metric tons.
• A $150 billion diversified mining company, it has the capacity to produce about 400
million tons of iron ore a year and accounts for more than 80% of Brazil’s total iron
ore exports
• In the electric energy sector, the company participates in consortia and currently
operates nine hydroelectric plants.
• Vale has managed to establish itself as a global mining company through joint
ventures and acquisitions abroad.
• Vale has participation on mining operations in Finland, Canada, Australia, Mongolia,
China, India, Angola, South Africa, Chile, Peru and other countries.
• .Vale’s chief rivals are the Australian diversified mining groups BHP Billiton and Rio
Tinto
41. Oi (Telecmunication)
• Oi formerly known as Telemar, is the largest telecommunications company
in Brazil and South America, both in terms of subscribers and revenues.
• It is headquartered in Rio de Janeiro.
• OOi'smajor subsidiaries include Telemar and Brasil Telecom.
• Brazil’s telecom revenues reach R$234 billion
• At the end of 2013 Oi had 74.5 million subscribers, including 16.9 million for
landline, 50.3 million for wireless , 5.3 million for ADSL, and 1 million for
other services.
42. CORE COMPETENCIES
• A Changing Business Climate
• World-class Sporting Events
• Diversified Economy
• Natural Resources
• Tourism
43. A CHANGING BUSINESS CLIMATE
The Brazilian government is trying to simplify its business licensing processes to
make it easier for companies to become legitimate. If it succeeds, strong small
companies will grow, which will help the Brazilian economy overall.
The World Bank ranks Brazil 124 out of 183 economies for ease of doing
business in 2014
44. World-class Sporting Events
Hosting mega events have traditionally been a privilege of developed nations.
2007: Brazil was the sole bidder and won the right to host
• 2014: 2nd
time brazil hosted FIFA event
• October 2, 2009: International Olympics Committee (IOC) announced Brazil
as the host country of the 2016 Summer Olympics
• This marks the first time that South America has ever hosted the Olympics.
45. World-class Sporting Events Contd.
Hosting the games will “inject $51.1 billion into Latin America’s largest
economy through 2027.”
Additionally, the Olympics and Paralympics will create nearly 121,000 jobs a
year in the seven-year period.
With just two deals, the organizers have already secured an estimated $700
million in local sponsorships, which was a new record for the Olympics.
46. DIVERSIFIED ECONOMY
• Brazil’s diverse economy is characterized by well developed agricultural,
mining, manufacturing and service sectors.
• There is increased globalization where the Brazilian government policies
favor exports.
• A diverse economy offers many investment opportunities in several segments
in manufacturing and services industries
• More business friendly environment than other emerging countries.
• Established transportation networks and distribution channels in most
industrialized areas.
47. NATURAL RESOURCES
• Vast amount of natural resources Bauxite, gold, iron ore, manganese, nickel,
phosphates, platinum, tin, rare earth elements, uranium, petroleum,
hydropower and timber.
• No need to import large quantities , good local availability of key resources.
• With its ideal agricultural climate, Brazil boasts a healthy export trade in
coffee, sugar, soya beans, textiles and electrical equipment.
48. TOURISM
• Brazil is a land filled with joyous people, beautiful landscapes, the Amazon
Rain forest, untouched tropical beaches – some of the most beautiful in the
world – historical cities with incredible night life and some of the world’s
most breathtaking waterfalls.
• The growing tourist and eco-tourism industries cater to all tastes.
• In more recent years it has begun to attract foreigners from around the world.
In 2012, 5.7 million international tourists visited Brazil.
• Tourism is expected to soar further as the country will host the 2016
Olympics.
