Presentation delivered to SMEs in West Midlands (UK). Event hosted by Birmingham Chamber of Commerce, West Midlands Economic Forum, and UK Trade and Investment on 16/10/2014

1. Dr Breno Nunes
b.nunes@aston.ac.uk
Aston Business School, Aston University Birmingham, UK
Birmingham, West Midlands, UK
16 OCT 2014
Brazilian Business Climate

2. PRESENTATION OUTLINE
•Introduction to Brazil
•A brief view of the country macro-economics
•Opportunities for investors & exporters
•Final Considerations
Dr Breno Nunes / October 2014 Copyright © 2014 - All rights Reserved

3. BRAZIL: Country Profile
CAPITAL: BRASÍLIA CURRENCY: Brazilian Real (R$) Population: 200.4 million (2013) Official language: Portuguese GDP: 2.24 Trillion (2014) Size: 8,515,767 km² Or Approx. 65 Uks or 1.5 Europes
Dr Breno Nunes / October 2014 Copyright © 2014 - All rights Reserved

4. Country Profile - Comparing Brazilian states with countries
http://www.economist.com/blogs/graphicdetail/2014/06/comparing- brazilian-states-countries
Dr Breno Nunes / October 2014 Copyright © 2014 - All rights Reserved

5. MACRO-ECONOMICS
•Political stability
•Economic prospects
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6. POLITICAL STABILITY
Despite the protests in 2013, Brazil remains as a country with little room for political instability or threats to democracy.
Dr Breno Nunes / October 2014 Copyright © 2014 - All rights Reserved

7. MACRO-ECONOMICS
•Political stability
Dilma Rousseff
Workers’ Party
Centre-left
Photos: R7 and UOL.
Aécio Neves Social Democracy Party Centre-right
Dr Breno Nunes / October 2014 Copyright © 2014 - All rights Reserved

8. ECONOMIC SNAPSHOT
–Very low unemployment rate (4.9%)
–Quick reduction of poverty
–Fast-growing middle class
–Income gap still large but being reduced
–Inflationary pressures (6.75%)
–Increasing income per capita
Dr Breno Nunes / October 2014 Copyright © 2014 - All rights Reserved

9. A POLITE GUESS ON THE COMING YEARS?
2014
Slow, cloudy and uncertain
(World Cup, Elections, slow-down at global economy)
2015 Adaptation and Planing, Come back of investment Average or slightly higher growth
2016
Golden Year for Brazilian Economy?
A deja-vu of 2010?
2017
Clear path ahead with sustained high growth above global average?
Dr Breno Nunes / October 2014 Copyright © 2014 - All rights Reserved

10. KEY BUSINESS SECTORS
•Agricultural products (e.g. From beef to biofuels)
•Mining
•Aerospace
•Automotive
•Software and other creative industries
•Education
•Energy: Hydro, Wind, and Solar
•Healthcare & cosmetics
•Sports – Olympics 2016 in Rio!
•Oil industry (deep-water drilling)
•Rail, ports, and roads
Dr Breno Nunes / October 2014 Copyright © 2014 - All rights Reserved

11. BRAZIL’S BUSINESS ENVIRONMENT
•STRENGTHS
–Cheap skilled labour > Human capital -> young population
–Good overall respect to IPR
–Increasing number of innovation grants and funds
–Leading technological development in key areas: Energy, Agriculture & livestock (food security), aerospace (market niche), automotive, Finance, etc
–Good penetration of ICT infrastructure
•WEAKNESSES
–Very high import duty
–Bureaucracy of funding bodies
–Weak institutional environment (infrastructure, legal systems, etc)
–Deficient infrastructure & cost of doing business in Brazil
–Some urban areas in many large cities are still vulnerable to violent crime
–Shortage of skills in some areas
–Low productivity across key sectors
–Low “sense of urgency” promotes a number of missing opportunities
Dr Breno Nunes / October 2014 Copyright © 2014 - All rights Reserved

12. •OPPORTUNITIES FOR INVESTMENT AND EXPORTING
–Demand higher than supply; customers usually pay higher prices than in Europe and USA.
–Business maturity for greenfields investment, joint ventures, licensing, and franchising – low risk for expropriation!
–All market segments (Luxury, affordable luxury, and low-cost products) are likely to experience high growth in the coming years
–Integrate your business to global challenges for food security and energy – Brazilian commodities can help to solve them – be part of their supply chain!
–Brazil may experience exponential gains by doing the basics as it is in its early stages of being a global player
–Explore your network of expats and British presence (British Council, Embassy)
–Western Latin culture & Portugal: front door to Western & European Market? Or a Threat?
–Brazil as a bridge for new markets in the Mercosur – and also to the Portuguese colonies: are they the new “blue ocean” ? (e.g Angola, Mozambique, Cape Verde)
BRAZIL’S BUSINESS ENVIRONMENT
Dr Breno Nunes / October 2014 Copyright © 2014 - All rights Reserved

13. Final Considerations
•National content policies have been put in place which may reduce the chances of exporting
•Exporting needs to be carefully analysed because the import duty too – businesses will need to find a clear market niche
•Government keen to attract FDI in future years
•Many Brazilian companies are now seeking partners overseas to have a greater global presence
•Large infrastructure projects
•400 of the 500 Fortune MNC are in Brazil
Dr Breno Nunes / October 2014 Copyright © 2014 - All rights Reserved

14. Thanks!
Dr Breno Nunes
b.nunes@aston.ac.uk
Aston Business School, Aston University Birmingham, UK
Dr Breno Nunes / October 2014 Copyright © 2014 - All rights Reserved