NewBase 19 April 2024 Energy News issue - 1717 by Khaled Al Awadi.pdf
Setting Up Business in Brazil & Mexico: RISI Guide
1. RISI Latin America
Miami, Nov. 20, 2013
Setting Up a Business Operation in Latin America: Brazil
& Mexico
Scheibe, RISI, Miami Nov. 20, 2013
2. RISI Latin America
All Abroad
Stephen Scheibe – Managing Director
30 plus years of hands on experience in Brazil
15 years in Mexico in packaging business mainly with
Landsberg/AMCOR
An Insider/Outsider (Latin America/Industry)
Scheibe, RISI, Miami Nov. 20, 2013
3. RISI Latin America
THE PROGRAM PROMISE
An insight into the practicalities of establishing your
presence in the market, including identifying your
manufacturing site, local demand, pitfalls and
opportunities.
Scheibe, RISI, Miami Nov. 20, 2013
4. RISI Latin America
Peril
Uncertainty
A PUDDLE or
Doubt
Danger
Lacking information
Exposed
An unknown and unforgiving world?
Scheibe, RISI, Miami Nov. 20, 2013
5. RISI Latin America
Profits
Opportunity
A POODLE?
Open for business
Demand
Large
Enchanting
Hey, Let’s go!!!
Scheibe, RISI, Miami Nov. 20, 2013
7. S
a
m
b
a
RISI Latin America
GDP-Brazil No. 6
• Over 2 Trillion
GDP – Mexico No. 12
• About 2 Trillion
• Together- 70% of LATAM
Scheibe, RISI, Miami Nov. 20, 2013
8. RISI Latin America
Growth
, yet
erratic
Big Market,
Big Events
Scheibe, RISI, Miami Nov. 20, 2013
Growth
Tied to
NAFTA –
US
Economic
Integration
10. RISI Latin America
Mexico-A PULL
Clients under NAFTA have moved production to
Mexico
Corrugators and Box Plants have followed; they are
pulled in
Geography – Along the border, “twin plants”, in central
Mexico, in Guadalajara and Monterey following
industries: food, auto, electronics
Scheibe, RISI, Miami Nov. 20, 2013
11. RISI Latin America
Mexico Market Growth: Steady but not spectacular
But near shoring and middle class consumption add
promise
Is the Mexican market saturated?
Scheibe, RISI, Miami Nov. 20, 2013
12. RISI Latin America
Brazil: A PUSH
Wants investments & too big to neglect
Scheibe, RISI, Miami Nov. 20, 2013
13. RISI Latin America
New Brazilian middle class and better income
distribution (around 50 million new
consumersintegrated into the market)
Desire to affirm new status through consumption
Major online shopping driving brown box packaging
New demand in Northeast of Brazil and midsize
cities, both are underserved
Scheibe, RISI, Miami Nov. 20, 2013
14. RISI Latin America
Business Opportunities
Concentrated (especially for kraftliner) and yet spread out
(for medium, test liner and boxes).
In Brazil top 10 producers have almost 50% market share
in paper and top 3 have 33% in boxes
Bottom of the market held by many small “factories” with old
and inefficient machinery
Growth of corrugated higher in Mexico and Brazil than in
USA
Mexico tied to US performance (improving)
Scheibe, RISI, Miami Nov. 20, 2013
15. RISI Latin America
Business opportunities
NAFTA drew US producers to Mexico in the 90’s and
first decade of 21st century
What’s next? Growth in both Brazil and Mexico at 2 to
4% per year with further consolidation
Brazil will add almost 1 Billion and Mexico 600 million
cubic meters paper between 2010 and 2015
Scheibe, RISI, Miami Nov. 20, 2013
16. RISI Latin America
A Tale of Two Cities: Belo Horizonte and Tijuana
Tijuana: Kappa Smurfit, CECSO, Harbor, Reliable, plus
distributors like AMCOR/Landsberg, XPEDEX (IP),
ULINE, very competitive market.
Belo Horizonte: Approximately 2 x’s larger with less
corrugated capacity and limited distribution: thus less
competition and more opportunity.
Scheibe, RISI, Miami Nov. 20, 2013
17. RISI Latin America
MARKET ENTRY
Mergers and Acquisitions – An Industry Tradition
Brazil, i.e. IP-ORSA, Klabin-Igaras, MWV-Rigesa,
Irani-Sao Roberto; Mexico: Kappa-Smurfit-OCC, Rock
Tenn-Smurfit Stone, etc.
Greenfield international investment (more common in
Mexican case for corrugators & boxes)
Scheibe, RISI, Miami Nov. 20, 2013
18. RISI Latin America
The Pitfalls and Problems
The Cartels and the Cartels
Bureaucracy/Legal/Taxes/High Cost (custoBrasil)
Corruption
Learning Curve
Finding the right place/right people
Details, details!!! Taking care of the little stuff
Scheibe, RISI, Miami Nov. 20, 2013
19. RISI Latin America
Is the hour glass running out?
Is our cup half empty, half full or full?
Tequila or Cachaca or both?
Scheibe, RISI, Miami Nov. 20, 2013
20. RISI Latin America
References
ABPO, Relatorio Annual, 2012
AMEE, AnuarioEstadistico, 2013
Bohm, Carl, Reunion de AICC, Mexico, May 17, 2012,
http://www.aiccbox.org/region/meeting_data/Mexico/2012/Carl_Bohm_ICCA.pdf
Foster Vidal, Andre Carvalho, “O mercado de papelaoonduladoeosdesafiosdacompetividadedaindustriabrasileira”,
BNDES Setorial 35
http://www.bndes.gov.br/SiteBNDES/export/sites/default/bndes_pt/Galerias/Arquivos/conhecimento/bnset/set35
01.pdf
KPMG:http://www.kpmg.com/BR/PT/Estudos_Analises/artigosepublicacoes/Documents/Fusoes%20e%20Aquisicoes
/2013/Pesquisa-FA1-trimestre-2013.pdf
Scheibe, RISI, Miami Nov. 20, 2013