RISI Latin American Conference, Eden Roc Hotel, Miami, Nov. 20, 2013

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RISI Latin American Conference, Eden Roc Hotel, Miami, Nov. 20, 2013

  1. 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. 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. 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. 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. 5. RISI Latin America  Profits  Opportunity A POODLE?  Open for business  Demand  Large  Enchanting Hey, Let’s go!!! Scheibe, RISI, Miami Nov. 20, 2013
  6. 6. RISI Latin America Where? Location, Location, Location ??? Scheibe, RISI, Miami Nov. 20, 2013
  7. 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. 8. RISI Latin America Growth , yet erratic Big Market, Big Events Scheibe, RISI, Miami Nov. 20, 2013 Growth Tied to NAFTA – US Economic Integration
  9. 9. RISI Latin America PUSH ME – PULL YOU Scheibe, RISI, Miami Nov. 20, 2013
  10. 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. 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. 12. RISI Latin America  Brazil: A PUSH  Wants investments & too big to neglect Scheibe, RISI, Miami Nov. 20, 2013
  13. 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. 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. 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. 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. 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. 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. 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. 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

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