Country Analysis Report On Brazil

EDIM ASSIGNMENT

February 5

2014
Entrepreneurship Opportunities
Submitted By: ARVIND KUMAR TRIPATHI PRN: 12063 PGDM: MARKETING (2012-2014)

PROF. JENNY SABU PULIKEN

INTRODUCTION: - BRAZIL
Following more than three centuries under Portuguese rule, Brazil gained its independence in 1822, maintaining a monarchical system of government until the abolition of slavery in 1888 and the subsequent proclamation of a republic by the military in 1889. Brazilian coffee exporters politically dominated the country until populist leader Getulio VARGAS rose to power in 1930. By far the largest and most populous country in South America, Brazil underwent more than a half century of populist and military government until 1985, when the military regime peacefully ceded power to civilian rulers. Brazil continues to pursue industrial and agricultural growth and development of its interior. Exploiting vast natural resources and a large labor pool, it is today South America's leading economic power and a regional leader, one of the first in the area to begin an economic recovery. Highly unequal income distribution and crime remain pressing problems.

GEOGRAPHY : - BRAZIL
LOCATION: Eastern South America, bordering the Atlantic Ocean

GEOGRAPHIC COORDINATES: 10 00 S, 55 00 W MAP REFERENCES: South America AREA: Total: 8,514,877 sq km LAND BOUNDARIES: Total: 16,885 km BORDER COUNTRIES: Argentina 1,261 km, Bolivia 3,423 km, Colombia 1,644 km, French Guiana 730 km, Guyana 1,606 km, Paraguay 1,365 km, Peru 2,995 km, Suriname 593 km, Uruguay 1,068 km, Venezuela 2,200 km COASTLINE: 7,491 km MARITIME CLAIMS: Territorial sea: 12 nm, contiguous zone: 24 nm, exclusive economic zone: 200 nm, continental shelf: 200 nm or to edge of the continental margin CLIMATE: Mostly tropical, but temperate in south TERRAIN: Mostly flat to rolling lowlands in north; some plains, hills, mountains, and narrow coastal belt NATURAL RESOURCES: Bauxite, gold, iron ore, manganese, nickel, phosphates, platinum, tin, rare earth elements, uranium, petroleum, hydropower, timber LAND USE: Arable land: 8.45%

Permanent crops: 0.83% Other: 90.72% (2011) Irrigated land: 54,000 sq km (2011) TOTAL RENEWABLE WATER RESOURCES: 8,233 cu km (2011) FRESHWATER WITHDRAWAL (domestic/industrial/agricultural): Total: 58.07 cu km/yr (28%/17%/55%) Per capita: 306 cu m/yr (2006) NATURAL HAZARDS: Recurring droughts in northeast; floods and occasional frost in south ENVIRONMENT - CURRENT ISSUES: Deforestation in Amazon Basin destroys the habitat and endangers a multitude of plant and animal species indigenous to the area; there is a lucrative illegal wildlife trade; air and water pollution in Rio de Janeiro, Sao Paulo, and several other large cities; land degradation and water pollution caused by improper mining activities; wetland degradation; severe oil spills

GOVERNMENT: - BRAZIL
Conventional long form: Federative Republic of Brazil GOVERNMENT TYPE: Federal republic CAPITAL: Name: Brasilia GEOGRAPHIC COORDINATES: 15 47 S, 47 55 W

ECONOMY: - BRAZIL
ECONOMY - OVERVIEW: Characterized by large and well-developed agricultural, mining, manufacturing, and service sectors, Brazil's economy outweighs that of all other South American countries, and Brazil is expanding its presence in world markets. Since 2003, Brazil has steadily improved its macroeconomic stability, building up foreign reserves, and reducing its debt profile by shifting its debt burden toward real denominated and domestically held instruments. In 2008, Brazil became a net external creditor and two ratings agencies awarded investment grade status to its debt. After strong growth in 2007 and 2008, the onset of the global financial crisis hit Brazil in 2008. Brazil experienced two quarters of recession, as global demand for Brazil's commoditybased exports dwindled and external credit dried up. However, Brazil was one of the first emerging markets to begin a recovery. In 2010, consumer and investor confidence revived and GDP growth reached 7.5%, the highest growth rate in the past 25 years. Rising inflation led the authorities to take measures to cool the economy; these actions and the deteriorating international economic situation slowed growth to 2.7% in 2011, and 1.3% in 2012. Unemployment is at historic lows and Brazil's traditionally high level of income inequality has declined for each of the last 14 years. Brazil's historically high interest rates have made it an attractive destination for foreign investors. Large capital inflows over the past several years have contributed to the appreciation of the currency, hurting the competitiveness of Brazilian manufacturing and leading the government to intervene in foreign exchange markets and raise taxes on some foreign capital inflows. President Dilma ROUSSEFF has retained the previous administration's commitment to inflation targeting by the central bank, a floating exchange rate, and fiscal restraint. In an effort to boost growth, in 2012 the administration implemented a somewhat more expansionary monetary policy that has failed to stimulate much growth. GDP (purchasing power parity): $2.33 trillion (2012 est.) GROSS NATIONAL SAVING: 15.2% of GDP (2012 est.) GDP - COMPOSITION, BY END USE: Household consumption: 62.3% Government consumption: 21.5% Investment in fixed capital: 18.1% Investment in inventories: -0.5% Exports of goods and services: 12.6%

Imports of goods and services: -14% (2012 est.) GDP - COMPOSITION, BY SECTOR OF ORIGIN: Agriculture: 5.2% Industry: 26.3% Services: 68.5% (2012 est.) AGRICULTURE - PRODUCTS: Coffee, soybeans, wheat, rice, corn, sugarcane, cocoa, citrus; beef INDUSTRIES: Textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft, motor vehicles and parts, other machinery and equipment LABOR FORCE: 105.7 million (2012 est.) UNEMPLOYMENT RATE: 5.5% (2012 est.) POPULATION BELOW POVERTY LINE: 21.4% HOUSEHOLD INCOME OR CONSUMPTION BY PERCENTAGE SHARE: Lowest 10%: 0.8% Highest 10%: 42.9% (2009 est.) DISTRIBUTION OF FAMILY INCOME - GINI INDEX: 51.9 (2012) EXPORTS - COMMODITIES: Transport equipment, iron ore, soybeans, footwear, coffee, autos EXPORTS - PARTNERS: China 17%, US 11.1%, Argentina 7.4%, Netherlands 6.2% (2012) IMPORTS: $223.2 billion (2012 est.)

IMPORTS - COMMODITIES: Machinery, electrical and transport equipment, chemical products, oil, automotive parts, electronics IMPORTS - PARTNERS: China 15.3%, US 14.6%, Argentina 7.4%, Germany 6.4%, South Korea 4.1% (2012) EXCHANGE RATES: reals (BRL) per US dollar 1.9546 (2012 est.) 1.675 (2011 est.) 1.7592 (2010 est.) 2 (2009) 1.8644 (2008)

ECONOMY OVERVIEW

EXCEL PRINT

REGION INCOME CATEGORY POPULATION GNI PER CAPITA (US$)

Latin America & Caribbean Upper middle income 198,656,019 11,630

So Paulo CITY COVERED DOING BUSINESS 2014 DOING BUSINESS RANK 2013 RANK***

CHANGE IN RANK

116

118

DOING BUSINESS 2014 DTF** (% POINTS)

DOING BUSINESS 2013 DTF** (% POINTS)

IMPROVEMENT IN DTF** (% POINTS)

53.35

Rankings Distance to Frontier

52.49

0.86

TOPICS

DB 2014 Rank

DB 2013 Rank

Change in Rank

Starting a Business

123

121

-2

Dealing with Construction Permits Getting Electricity

130 14

126 14 No change

-4

Registering Property

107

103

-4

Getting Credit Protecting Investors

109 80

105 80 No change

-4

Paying Taxes Trading Across Borders Enforcing Contracts Resolving Insolvency

159 124 121 135

160 124 121 146 No change No change

FISH PROCESSING BUSINESS. Fisheries Industry

Prepared: May 2013

In Brazil, fishing is undertaken along 8 400 km of the marine coastline, in extensive river basins and in a large number of reservoirs, and provides a livelihood for millions of households. It is estimated that about 3.5 million people are directly or indirectly involved in fisheries and aquaculture in Brazil. Given the relatively low productivity of the marine waters of Brazil and the abundance of rich freshwater bodies, more than 30 percent of fish landings come from inland fisheries. The majority (more than 60 percent) of the total fish landings originate from artisanal fisheries, which represent more than 90 percent of the employment in the capture sector. These proportions are higher if only the inland fisheries are considered. Most of the industrial fishing activity is concentrated on the coastal states of southern Brazil, while the majority of artisanal fishers is concentrated in the north and northeast. Total catch in Brazil has been quite stable at around 800 000 tonnes in the last years, with marine capture production reaching a peak at 586 000 tonnes in 2009 and inland waters capture production a maximum of 261 000 tonnes in 2008. In terms of capture production, Brazil became the fourth largest producer in the Latin American and Caribbean region in 2011. Small-scale fisheries contribute 50-60 percent of the total production from capture fisheries. In 2011 a total of 875 700 fishers, 64 percent for marine and 36 percent for inland fisheries, were engaged directly in full time fishing activities with a fishing fleet of over 60 000 vessels, mostly less than 12 meters in length and with about one third being motorized.

Brazil is the largest importer of fish in the Latin American region. Imports of fish and fishery products have shown a series of ups and downs during the last decade due to the economic crisis at the start of the decade . Since 2003, imports have increased regularly, reaching nearly USD 1.3 billion in 2011, but slightly declining by 1 percent in 2012 at USD 1.2 billion Export have increased from USD 123 million in 1998 to USD 427 million in 2004, but declined to USD 212 million in 2012, due to the increase in demand from its domestic market and the strengthening of the national currency against the US dollar.

INVESTMENT REQUIRED
The government, with financial support from the Inter-American Development Bank (IDB), set up a program for the fishing sector of US$ 130.2 million, to financing renewal of the fishing fleet, support artisanal fisheries, industrial modernization, aquaculture development, production support, aquaculture stations and research vessels.
Currently, for the first time in decades, the National Developing Bank (BNDES), under the new government policy, is financing a line of credit to aquaculture equivalent to US$ 132 million over the next five years. The projections for the sector are that in the next three years around US$ 350 million in lines of credit will be needed to satisfy the needs of the fishing and aquaculture sector.

REASON I CHOOSE THIS OPPORTUNITY:

Brazil has a population of around 170,000,000 people who consume around 6.4 kg/person/year; lower than the international average, which in 1990 was around 13.5 kg/person/year. A large part of the catches (70%) is for consumption and 30% for the production of fish oils and fishmeal. Till 1998 the country used to export more fish than it imported, but this trend was reversed and today imports are rising considerably. The main products exported are shrimp, lobster, lane snapper and catfish (piramutaba) to USA, the European Union and the countries in Mercosul. Paraba State is becoming an important harbour for tuna export, having exported 10.000 tons to US and Europe in 2.000. The imports come mainly from Argentina (hake) and Chile (salmon) and Norway, Portugal and Canada (cod). In 1995 Brazil imported 206,362 tonnes of fish and in 1997, 190,105 tonnes, the equivalent of 1/3 of the total national capture.(BNDES,1996) Most of the fish export is done by fishing industries located in the Santa Catarina, Rio de Janeiro, So Paulo, Cear and Par states. However, part of the lobster and shrimp exported is catched by artisanal fishermen and sold to local industries for export.

The network of fish trade in artisanal fishing villages is complex, involving often middlemen in several levels, from the beach to the neighbour cities and central markets in State capitals. In the Amazonian region, for instance artisanal fishworkers, especially those who live far from the cities are totally dependent on the middlemen or monopolizers. In Par the fish bought by the geleiro is resold to the weigher who in turn sells it to the retailer and from there it is sold in the retail market. In the 70s, due to the widening of the roadways network, the traders in the cities as well as the fishing companies used to send their trucks to the beaches to purchase fish from artisanal fishermen. The fishing companies pay for the fuel of the motorised artisanal boats in exchange for monopoly given to them in the purchase of the catch.

DEMAND
A simple analysis of the potential of fishing products consumption in Brazil, clearly shows that the demand in practically all the main commodities is greatly unsatisfied, including the lack of options in the offer of its products was responsible for the low consumption of fish per capita, in Brazil. Obviously, any increase in the consumption of products derivated from the fisheries sector will be related with the market programs and specially with the quality and the final presentation of such products which will result in an incentive to the increase of consumption or to have new consumers. Undoubtly, it is interesting to stress out that Brazil, having such a natural potential for the fisheries production, has a double responsibility towards the international community to satisfy its own needs and to be able to answer to the world increasing demand of fisheries products. So, Brazil searches, urgently, for a national way out through the expansion of aquaculture and long distance fisheries, in order to get rid of the unpleasant situation of being the greatest fish importer in Latin America, with an amount, in 2000, equal to 194 thousand tons, corresponding to 297 million dollars. The phenomenum of globalization has forced the factories to make adjustments in their lines, in order to give priority to the quality of the products. The adoption of the HACCP concept in all the steps of the productive process is a way of conquering new markets and of protecting the Brazilian factories from the international competitivity.

FISHERIES DATA Commodity balance (2000):

Production Imports Exports 000 t live weight Fish for direct human consumption Fish for animal feed and other purposes
802 500 194 475 57 006 939 969

Total supply

Per caputsupply kg/year

5.56

Estimated employment (2000): Primary sector: Secondary sector: 790 000 250 000

Gross value of fisheries output (estimated 2000) US$1 500 000 000 at ex-vessel prices (2000): Trade (2000): Value of imports: Value of exports: US$297 221 000 US$238 602 000

COMPETITION:
Atum Do Brasil BRAZIL - Importers, Processors, Exporters and wholesalers of yellow tail snapper, lane snapper, b. liner snapper, swordfish, monk fish, mahi mahi, sea bream, wahoo and small tunas. Ayamo Foods BRAZIL - Buying & selling frozen fish products in the international market. Blue shark, Patagonian grenadier, hoki, white & yellow croaker, hake, Alaskan pollack, Pangasius, squid, Sea Trout, Flounder, Grouper, Skate, sea salmon, Argentina croaker, red porgy, snapper, Atlantic salmon, Bacalao cod, king clip, ling, black tilapia, reef cod, garoupa, horse mackerel, mackerel, moonfish. Bomar Seafood BRAZIL - The Bomar brand is a superior brand of seafood exporters in Brazil including High quality Brazilian Lobster tails (Panulirus Argus, Panulirus Laevicauda), Vannamai farm raised shrimp, Lane Snapper, Red Snapper, Yellow Snapper Expotuna Importacao & Exportacao BRAZIL - Importers, processors, wholesalers and agents of blue sharks, billfish, pangasius, salmon, pollock, sea trout, corvina, snook, oil fish, cod, snappers, groupers, porgies, bluefish, yellow fin tuna, big eye tuna, mahi mahi, surimi, pasteurized blue crab meat, breaded crab claws... Josaulo Food Products BRAZIL - International trader of pacific pollock, squid, merlucious hubsis, saithe, atlantic cod,

pacific cod, salmon, mackarel, blue shark, dried and salted codfish, cod, ling, zarbo, saithe, migas Maricultura Freixeiras Ind. e Com. Ltda. BRAZIL - We have been producing shrimp (Penaeus vannamei) since 1998. We produce about 100t a year. Pescados Me BRAZIL - Importers of seafood in Brazil. Porto Br Com Import Export Ltda BRAZIL - Lane snapper, Bigeye tuna, Yellowfin tuna, Black grouper, Parrotfish, White shrimp, Pink shrimp, Horse mackerel, Red snapper, White croaker, Mutton snapper, Mahi-mahi, Swordfish, Red grouper, Yellowtail snapper, Jack mackerel, Spiny lobster, Brazilian flounder, Thick lucine, Hake, Silk snapper, Oyster, Red porgy, Yellow croaker, Common Snook, Salmon, Red mullet, Atlantic Sardine, Dana swimming crab, Mussel, Black pac, Monkfish, Tilapia, Shark, Peacock Bass, Crevalle Jack, etc. South American & Overseas Fish Products BRAZIL - Sales and suppliers of different fish products from all over the world. International traders 80 years old. Dried and salted codfish from Norway, Iceland and Faroe Islands, frozen fish fillets, dried pollock and migas. frozen squid tubes, squid rings. South Atlantic Fisheries Ltd BRAZIL - We are seafood processors and packers in Brasil since the year of 1971 offering mullet roe, octopus, monkfish tails, wild pink shrimp. Ultrafoods BRAZIL - Importer, exporter and representative of international seafood companies in Brazil. Blue shark, Patagonian Grenadier, Hoki, White Croaker, Yellow Croaker, Hake, Alaskan Pollock, Pangasius, Squid, Shrimp, Sea Trout, Flounder, Grouper, Skate, Sea Salmon, Argentina Croaker, Red Snapper, Atlantic Salmon, Cod, Bacalao, Kingclip. Yaha Importer Company BRAZIL - We're a Brazilian importer company that is looking for good suppliers for sea foods to Brasil. Products we would like to import are Grouper fillet/whole/steak, Octopus whole, Cod fish fillet, Sea bass (Dicentrarchus labrax) Fillet

References: https://www.cia.gov/library/publications/the-world-factbook/geos/br.html http://investinbrazil.biz/industry/fisheries-industry http://www.trade-seafood.com/directory/seafood/country/brazil.htm http://www.fao.org/fi/oldsite/FCP/en/bra/body.htm http://www.thefishsite.com/articles/391/brazil-fishery-products-annual-report-2008 http://www.trade-seafood.com/directory/seafood/country/brazil.htm http://www.fao.org/docrep/006/y4931b/y4931b09.htm http://businessdayonline.com/2013/08/exploring-business-opportunities-in-brazil/ http://en.mercopress.com/2012/10/23/brazil-will-invest-2bn-dollars-in-promotingfishing-industry-and-doubling-catches http://www.conservation.org/how/ci_in_action/sustainable_fisheries_in_brazil/Pag es/sustainable-fisheries-abrolhos-brazil.aspx http://saopaulo.angloinfo.com/information/lifestyle/sports-and-leisure/fishing/ http://www.sea-ex.com/countryinfo/brasil.htm