Brazil 2020: What Brazil will Look Like in the Future

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Brazil 2020: What Brazil will Look Like in the Future?

Global Corporate Platforms: Competitive or Obsolete for Tomorrow’s World?

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  • Source: Brazilian Aerospace Cluster, ‘Believing in Great ideas’
  • Brazil 2020: What Brazil will Look Like in the Future

    1. Preface: What Does the World’s 5th Largest Country look Like from Space? <br />Why?<br />Source: NASA (United States – National Aeronautics and Space Administration)<br />
    2. INTRODUCTION: Brazil Structural Framework and Forward Trends . . .<br />
    3. Framework: Structural Determinants of Brazil’s Economic Geography … <br />West Largely Uninhabitable … 80% Population in East<br />A-Cities – Highest Population and FDI<br />Amazon Forest<br />S-Cities – Mid-High Population and FDI<br />Manaus<br />Fortaleza<br />Recife<br /> People<br />Salvador<br />Belo Horizonte<br />Rio De Janeiro<br />Sao Paulo<br />Curitiba<br />World’s 5th Largest Country<br />Highly Advanced Economy<br />Porto Alegre<br />Energy Independent, 45% Green<br />Aircraft, Automobiles, Petrochem<br />World’s 3rd Largest Food Exporter<br />Agribusiness & Natural Resources<br />
    4. Economy: Growth in Brazil’s Economy<br />IMF Projected Growth Rate at 6% for Next 5<br />Brazil GDP (PPP Adjusted) (USD, trillion)<br />Host Olympics (2016)<br />Host the World Cup (2014)<br />Global Financial Crisis<br />IMF Forecast<br />USD trillion<br />2x<br />Actual<br />Source: World Bank, IMF<br />
    5. Wealth: Brazil to have 2nd Highest GDP per Capita among BRIC Countries<br />Brazil GDP per Capita: USD 5,700 (2009) … USD8,800 (2020)<br />2020<br />Brazil GDP per Capita <br />2009<br />Source: ERSUSDA <br />
    6. Income: Brazil Per Capita Disposable Income in Tandem with China<br />Per Capita Disposable Income Growing at Average 6% Per Annum<br />Brazil<br />Disposable Income Per Capita (USD per annum)<br />Russia<br />China<br />India<br />Source: GS Global ECS Research <br />
    7. Resources: Rich in Mineral Resources – Iron Ore, Manganese, Gold<br />World’s 3rd Largest Iron Producer … 3rd Largest Manganese Reserves<br />World Iron Production (13% share, 2009)<br />IRON<br />World’s …<br /><ul><li>3rd largest iron producer
    8. 4th largest iron reserves</li></ul>World Manganese Production (17 % share, 2009)<br />MANGANESE<br />World’s …<br /><ul><li>6th largest manganese producer
    9. 3rd largest manganese reserves</li></ul>Source: US Geological Survey<br />
    10. Resources: Global Power in Natural Resources, Energy Production <br />World’s Second Fuel Ethanol Producer … 4th Largest Timber Producer<br />World Ethanol Production (33% share, 2009)<br /> ETHANOL<br />World’s …<br /><ul><li>2nd fuel ethanol producer
    11. First (#1) fuel ethanol exporter</li></ul>Top 10 Timber Producers (7.1% share, 2003)<br />TIMBER<br />World’s …<br /><ul><li>4th timber producer</li></ul>Source: Renewable Fuels Association<br />
    12. Resources: A Global Power in Agriculture – Soybeans, Coffee, Beef <br />World’s Largest (#1) Green Coffee Producer … 2nd Soybeans Producer<br />World Soybeans Production (26% share, 2008)<br />SOYBEANS<br />World’s …<br /><ul><li>2nd soybeans producer
    13. Largest (#1) soybeans exporter</li></ul>World Green Coffee Production (36% share, 2008)<br />COFFEE<br />World’s …<br /><ul><li>Leading (#1) coffee producer
    14. Leading (#1) coffee exporter</li></ul>Source: Food and Agriculture Organization, International Coffee Organization<br />
    15. The Future 2020: 1 of 5 Countries Highest Combined - GDP, Population, Resources<br />> USD3 trillion GDP … 100+ million people … > 3 million sq km<br />Over 100 million People<br />Over 3 million sq km<br />Indonesia<br />Philippines<br />Canada<br />Bangladesh<br />Pakistan<br />Brazil<br />US<br />India<br />China<br />Russia<br />Australia<br />Nigeria<br />Ethiopia<br />Mexico<br />Japan<br />Germany<br />France<br />Italy<br />Over<br />US$3 trillion GDP (PPP)<br />United Kingdom<br />
    16. Corporate Trends: Structural Optimization – Markets, Resources, Innovation<br />
    17. Corporate Burning Platforms: Markets, Resources, Innovation<br />Market Access/Revenue Growth … Global Structural’ Cost Reduction<br />Markets<br />Knowledge<br />REVENUE<br />R&D<br />INNOVATION<br />Sales<br />Engineering<br />IT HR<br />Service<br />Efficiency<br />Efficiency/ Shared Services<br />F&A Procure<br />Distribution<br />Sourcing<br />Innovation/ Knowledge<br />Production /Assembly<br />Resources/ Cost Reduction<br />COST<br />Markets / Revenues<br />Resources<br />DRIVING Shareholder Value<br />
    18. 1. Market: Car Sales/Production Proxy for Directional Market Sizing?<br />Leading Position for Car Penetration among BRIC<br />Brazil<br />Car Penetration in BRIC (units per 1,000 people)<br />Russia<br />Car Penetration in Brazil (units per 1,000 people)<br />China<br />India<br />Sources: GS Global ECS Research, Other<br />
    19. USD30 billion Market by 2015 … 5th in World<br />1. Market: Projected to be World’s 5th Largest Pharma Market by 2015<br />Pharmaceutical Market Size Country Ranking (2000 – 2015f - USD billion)<br />Sources: IMS; GSK, “Assessment of Opportunity for Pharmaceutical Manufacturers in Emerging Markets” JMCP; Monitor Analysis; Exolus<br />
    20. 1. Market: High Spending Growth Resumes after Global Crisis<br />Sales Growing at 28% CAGR<br />Retail Sales Growth<br />USD Million<br />Source: EIU, Planet Retail <br />
    21. 2. Revenue/Costs: Where are Pareto-Optimal Market/Resource Envelopes?<br />Intersection of Natural Resources (West) … A/S Cities … People (East)<br />Per Capita Annual Income <br />(USD, PPP-Adjusted)<br />Per Capita GDP / A/S-City Overlay<br />Roraima<br />Amapa<br />Para<br />A-Cities<br />Amazonas<br />Maranhao<br />Rio Grande do Norte<br />Ceara<br />S-Cities<br />Paraiba<br />Pernambuco<br />Piaui<br />Alagoas<br />Tocantins<br />Acre<br />Rondonia<br />Sergipe<br />Bahia<br />Mato Grosso<br />Goias<br />Minas Gerais<br />Mato Grosso<br /> do Sul<br />Espirito Santo<br />Sao Paulo<br />Rio De Janeiro<br />Parana<br />Santa Catarina<br />Rio Grande <br />do Sul<br />Source: Brazilian Institute of Geography and Statistics<br />
    22. 2. Production/Resources: Where are other Key Investment Nodes?<br />Car Investment Proxy for Investment Destinations?<br />Brazil Automotive Production<br />OEMs<br />Suppliers<br />Manaus<br />Fortaleza<br />Recife<br />Salvador<br />Goianis<br />Belo Horizonte<br />OEMs<br />Rio De Janeiro<br />Sao Paulo<br />OEMs<br />Suppliers<br />Curitiba<br />Suppliers<br />OEMs<br />Porto Alegre<br />Suppliers<br />
    23. 2. Production/Resources: Sao Paulo Region Immense, Larger than the UK<br />Sao Paulo State (248,209 km sq) larger than United Kingdom (243,610 km sq)<br />Sao Paulo Region<br />(248,209 km sq)<br />United Kingdom (Country)<br />(243,610 km sq)<br />Sao Paulo City<br />Sao Paulo State<br />Sources: Publically Available Information<br />
    24. 2. Production/Resources: Management Sourced in Sao Paulo, Labor Local<br />Sao Paulo Brazil’s Leading Foreign Investment Destination<br />Sao Paulo Region<br />(248,209 km sq)<br />Campinas<br />San Jose dos Campos<br />Osasco<br />São Paulo<br />Mauá<br />Sao Bernardo do Campo<br />Sources: Publically Available Information<br />
    25. 2. Production/Resources: Rio State Immense, as Large as Countries<br />Rio de Janeiro State (43,696 km sq) roughly same size Switzerland<br />Rio de Janeiro (State)<br />(43,696 km sq)<br />Switzerland (Country)<br />(41,285 km sq)<br />Rio de Janeiro City<br />Rio de Janeiro State<br />Sources: Publically Available Information<br />
    26. 2. Production/Resources: Management Sourced in Rio, Labor Local<br />Rio de Janeiro Region a Leading Investment Destination for Oil and Gas Sector<br />Rio de Janeiro State<br />(43,696 km sq)<br />Sources: Publically Available Information<br />
    27. 3. Innovation: Where are Leading Direct Investment Nodes?<br />Innovation clusters<br />Focus Areas<br />Electronics<br />Life sciences<br />Information technology<br />Sao Luis<br />Fortaleza<br />Telecommunication<br />Manaus<br />Health<br />Microelectronics<br />Recife<br />Nuclear energy<br />Aeronautics<br />Oil technology<br />Agriculture<br />Salvador<br />Bioenergy<br />Belo Horizonte<br />Vitoria<br />Santa Rita de Sapucai <br />SanPaulo<br />Rio De Janeiro<br />Sao Jose de Campos<br />Campinas<br />Londrina<br />Curitiba<br />Florianopolis<br />Sao Leopoldo<br />Porto Alegre<br />Sources: Kirsten Bound, “Brazil the Natural Knowledge Economy”; Isabel Bortagaray, “Innovation Clusters in Latin America”<br />
    28. 3. Innovation: The Largest Aerospace Cluster in Southern Hemisphere<br />Anchor: Embraer – World’s 3rd Largest Aircraft Manufacturer<br />Solutions & Design Engineering <br />Tecplas<br />VBJ Engenharia<br />Vectra Technology<br />Rastreal <br />TKA<br />Mikro-Stamp<br />Phoenix Serviços Aeronáuticos <br />Winnproject<br />Fibraforte Engenharia<br />Lima & Bonfá<br />Avionics <br />Lane Design<br />Flight Solutions<br />Flight Technologies<br />GMP Marcatto <br />Gyrofly<br />Lanmar<br />Marcatto <br />Massucato<br />Lacit<br />Winnstal<br />UTEC<br />Pan-Metal<br />Friuli<br />Globo Usinagem<br />Ambra Solutions <br />Geometra BTE <br />Mectron<br />Inbra-Aerospace<br />Aerolane <br />Aeroarte<br />Akaer<br />Brascopter<br />Embrasim <br />EQE<br />ESRA<br />Finetornos<br />Giovanni Passarella <br />Grauna Aerospace<br />Sources: DECOMI, “Brazilian Aerospace Cluster, Believing in Great Ideas”<br />
    29. 3. Innovation: A Global Leader in Green Energy - Biomass, Hydro<br />Installed Green Energy: Brazil 45% … OECD Average 7% … World 12%<br />Primary Energy Supply*<br />Green 45%<br />Green 12%<br />Green 8%<br />*For Year 2008<br />Source: International Energy Agency, Brazil Ministry of Mines and Energy <br />
    30. Brazil’s Economic Health<br />
    31. Senior Executives Select Brazil as a Top Global Investment Destination<br />Brazil Top 5 Investment Destination in World<br />Top 14 Most Attractive Destinations for Future Investment (2009 – 2011)<br />% <br />Percent of Responses<br />Source: World Investment Prospects 2009 - 2011<br />
    32. Brazil Economic Outlook: Large Forex Reserves, Positive Fundamentals<br />World’s 7th Largest Forex Reserves … Low External Debt … Growing Banking System<br /><ul><li>Brazil Holds The World’s 7th Largest Foreign Exchange Reserves: USD 316 billion
    33. In 2011 the Central Bank has accumulated over USD 316 billion in foreign reserves, up from USD 50 billion in 2004.
    34. The accumulation of large external surpluses means financial system enjoys abundant liquidity.
    35. Low External Debt/GDP Ratio and Positive Current Account Balance
    36. Healthy external debt to GDP ratio at 14% of GDP in 2010.
    37. Federal budget deficit at 2.3 % GDP in 2010; projected to decrease to 1.7% of GDP in 2011.
    38. Brazil’s Banking System under Stable and Rapid Expansion
    39. Banking deposits grew at CAGR or over 29% during 2002 – 2008 which indicate strong confidence of people to bank system. Moreover, the deposit system remained mostly unaffected through the global credit crunch .
    40. Banking sector assets are projected to grow at a CAGR of 10% from 2010 to 2013.</li></ul>Source: Central Bank of Brazil, OECD<br />
    41. Global Expansion Strategy & Cross-Border Investment Execution (Greenfield, M&A, Joint Ventures, Outsourcing)<br />About Exolus: Exolus is a hybrid management consulting and transaction advisory firm. We work with management teams in the development of their global expansion strategies, across the range of investment formats: Greenfield, M&A, Joint Ventures and Outsourcing. As well, we deploy against global strategies by providing program management across all phases of cross-border investment projects, from candidate searches and evaluation, through investment structuring and negotiations. <br />The founders of Exolushave spent the past two decades in the global service space and have direct experience operating in nearly all of the major investment destinations in the world (40+ countries). The team has served clients of all sizes, both public and private, on projects that ranged in investment size from USD10 million to greater than USD1 billion. We have served clients across all of the following industry segments: Life Sciences, Manufacturing, Automotive, Technology, Retail, Consumer Business, Real Estate, Public Sector.<br />Follow Exolus at: www.exolus.com<br />Need Further Information: info@exolus.com<br />Want Copies of our Reports: www.exolus.com/en/knowledge/research.html<br />
    42. Disclaimer<br />In writing we benefit from standing on the shoulders of others and, in the process, we strive to make our own contributions to the market of ideas. As well, we are always tremendously grateful for the many, often selfless, contributions that are availed in the process.<br />The opinions represented herein were prepared for information purposes only, at the time of publication.The information represented herein is believed to be reliable, at the time of publication, and was obtained by various public sources also believed to be reliable. The opinions were considered to be accurate at the point of creation, and further, any views, forecasts, or estimates contained herein may be subject to change at anytime without notice. The opinions expressed or implied herein may not be the opinions of the author, also Exolus, or any associated affiliates.<br />This report and the information contained herein collectively, is not offered as, and should not be regarded as, used or relied upon as advice on any matter. It shall not constitute or be construed as a recommendation or solicitation on behalf of the author, and no legal commitment or obligation shall arise by reason of this document. Thus, the reader shall make an independent assessment of opinion’s stated herein that shall not be considered a substitute for obtaining advise from the readers’ advisors. <br />The author shall not accept responsibility, express or implied, with regards to the accuracy and completeness of the information herein, and the author shall not be liable whatsoever and howsoever arising in connection to this publication. The author shall not accept, and hereby disclaim, all responsibility and liability to all persons, entities, or organizations for all consequences arising out of any use or reliance on the whole or any part of this publication.<br />This publication should not be reproduced or distributed without the author’s consent and is not intended for distribution in any jurisdiction in which this would be prohibited.<br />
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