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Presentació Brazil 2012 attractiveness survey


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Presentació Brazil 2012 attractiveness survey

  1. 1. Capturing the momentumErnst & Youngs 2012 attractiveness surveyBrazil
  2. 2. FDI in Brazil reached record levels in 2011 Number of FDI projects Jobs created FDI by value (US$ billion) 161,166 62,9 507 124.125 127.406 47,0 366 44,5 44,0 289 88.430 268 165 48.901 19,0 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011Source: fDI intelligence Source: fDI intelligence Source: fDI intelligence ► 27% increase in jobs ► 43% increase in FDI value.► Continuous rise in FDI generated through FDI Average value of a project projects since 2007. ► projects. in Brazil is US$124m –► 39% increase in the number ► Around 75% of the FDI higher than in China of FDI projects since 2010. jobs were directed toward (US$71m) and India industrial activity. (US$63m).Page 2 Brazil attractiveness survey 2012
  3. 3. US, UK and Japan are leading investors - Chinaemerging ► The US and Japan are the leading investors in Brazil, with the US Developed taking the lead in terms of projects. world investors ► The US had a share of 29.4% in FDI projects during 2011, Japan had 7.1%. ► The UK is the largest European investor in Brazil with projects European doubling from 20 in 2010 to 45 in 2011. investors ► The UK originated the highest number of jobs from Europe and second largest globally in 2011. ► China is emerging as a strong investor in Brazil. Emerging world ► Fifth-largest in terms of FDI value (a six fold increase since 2010); investors ► Fifth in terms of number of jobs created. .Page 3 Brazil attractiveness survey 2012
  4. 4. Where is Spain ?Page 4 Brazil attractiveness survey 2012
  5. 5. Investors come to Brazil for services andmanufacturingSource: fDI intelligencePage 5 Brazil attractiveness survey 2012
  6. 6. Positionning Brazil in FDI competition ?Page 6 Brazil attractiveness survey 2012
  7. 7. Southeast is the primary geographic focusFDI projects by destination city (2011) Barcarena 1 ► The Southeast region attracted 901 Belem1 North projects between 2007 and 2011. 11 12 Northeast ► Creating more than 250,000 jobs. 21 23 ► Accounting for more than 55% of FDI Macae 2 projects. Midwest ► The projects were mainly directed 9 11 toward ICT, manufacturing, business Southeast + 201 278 services and retail sectors. Rio de Janeiro 7 ► The South region has attracted 115 2010 2011 South + Sao Paulo 16 projects between 2007 and 2011 30 39 Number of UK FDI projects Curitiba 2 ► Creating more than 48,000 jobs.+ Well-developed infrastructure Santa Cruz 1 ► Northeast shows promise for the future- Infrastructure bottlenecksSource: fDI intelligencePage 7 Brazil attractiveness survey 2012
  8. 8. Emerging tier-two citiesNext coming ? Florianopolis South / Suape Northeast / Brasilia Midwest ?Page 8 Brazil attractiveness survey 2012
  9. 9. Brazil – inside the mind of investors
  10. 10. MethodologyPage 10 Brazil attractiveness survey 2012
  11. 11. Brazil: Latin America’s leader ?Page 11 Brazil attractiveness survey 2012
  12. 12. Brazil is the Latin American leader ► 78.4% of investors see Brazil as the most attractive country for investment in Latin America. Why? ► Robust economic foundations ► Burgeoning middle class ► Rising domestic consumption for goods and services ► Wide base of industrial and natural resources ► Higher awareness among investors with relation to other Latin American countries ► More mentions than any other country ► Competition from the emerging and developed countries ► Respondents (49%) believe that China is Brazil’s largest competitor, followed by India (14%) and the US (10%)Page 12 Brazil attractiveness survey 2012
  13. 13. Brazil’s domestic market is the primary attractionWhat factors make Brazil an attractive investment destination? Strengths ► 86.5% cited Brazil’s domestic market. ► 76% cited quality of life, culture, social environment and language. ► 72.8% cited telecommunications infrastructure. ► 71.9% cited entrepreneurial culture. ► Brazil has recently been ranked as the third-best country among the G20 at providing young entrepreneurs with a favorable environment for business. Opportunities ► Labor skills: The country still lags behind the G20 average in terms of university education and R&D. ► Environment and operational costs: A low-quality and high-cost transportation system still remains a weak factor for investors (only 43.4% mentioned it as an attraction) because it leads to operational inefficiencies. ► High labor costs compared with other RGMs such as Russia, China and Mexico, along with rigid and inflexible labor regulations, continue to raise concerns for foreign companies.Page 13 Brazil attractiveness survey 2012
  14. 14. Brazilian cities: the undisputed leadership of …Page 14 Brazil attractiveness survey 2012
  15. 15. Next coming ?Page 15 Brazil attractiveness survey 2012
  16. 16. Routes for the futurePage 16 Brazil attractiveness survey 2012
  17. 17. Boosting growth, especially with 2014 World Cupand 2016 OlympicsOver the next three years, do you think the Which three of the following businessattractiveness of Brazil as a place for your company to sectors do you perceive as driving Brazil’sestablish or develop activities will …? growth in the next 2 years? Oil & gas Real estate and construction Tourism Agriculture and food industry Transports industry and automotive Consumer goods Mining Information and communication technologies, IT Logistics and distribution channels B to B services excluding finance (IT service, consulting, audit, communication, etc.)► Pre-salt discoveries are expected to drive growth in Bank/Finance/Insurance the oil and gas sector, BUT the 2014 FIFA World Clean techs Cup and the 2016 Olympic Games will boost the The pharmaceutical industry and biotechnologies real estate and construction, and tourism sectors. UtilitiesSource: Ernst & Young 2012 Brazil attractiveness survey. Heavy industryTotal respondents: 250 NonePage 17 Brazil attractiveness survey 2012 Cant say
  18. 18. Brazil is strongly positioned but investment isneededHow do you see Brazil in 2020? Strong positioning ► Respondents believe that Brazil will take leading positions in: ► Energy – on account of pre-salt discoveries. ► Infrastructure and tourism – as sporting events spur growth. ► Manufacturing – as Government initiatives to boost competiveness take effect. Diversification required ► Investors are concerned about Brazil’s: ► Value added services – only 5.2% ► Shared service centers – only 5.1% ► Education and higher learning – only 3.3%Source: Ernst & Young 2012 Brazil attractiveness survey.Total respondents: 250Page 18 Brazil attractiveness survey 2012
  19. 19. Doing Business in Rio Rio de Janeiro – Gateway to BrazilPage 19 Brazil attractiveness survey 2012
  20. 20. Brazil has made steady and consistent progress in the last 50 years to become a country that no major company can afford not to be in ►Solid democracy ►Diversified capital-intensive industry ►Open economy status ► Solid macroeconomics (low inflation, low debt, high reserves, moderate GDP growth, floating exchange rate, fiscal responsibility) ►Robust banking system ►Open to private investment ►More inclusive society ►Significant infrastructure investment program in placePage 20 Brazil attractiveness survey 2012
  21. 21. …still, investing in Brazil requires investors to be familiar with the economic, legal and tax environments in order to succeed ►Complex tax system ►Transport and logistic infrastructure still requires major improvement ►Shortage of labor force required for complex and high end industries ►Red tape often creates delays for expansion / new investments ►Public services under perform if compared to levels at OCDE countriesPage 21 Brazil attractiveness survey 2012
  22. 22. Rio de Janeiro presents an opportunity for investors to enter / expand in Brazilian market avoiding many of the nation’s lingering pitfalls ►Tax breaks for major investments ►Top transport and logistics hub ►Leading education and R&D ►Agencies (such as Rio Negócios) supporting businesses to succeed ►Best-in-class, professional mind-set public servicesPage 22 Brazil attractiveness survey 2012
  23. 23. Rio de Janeiro has a strategic plan, to be a leading city in selected sectors ►Global oil & gas hub, leveraging proximity with pre-salt basins and being the HQ of Brazil NOC (Petrobras), major IOC, OFS and Brazil’s O&G sector regulators) ► Latin America centre of the creative industry ►Mega-events hub (Olympics, World Cup) for the decade ►Brazil’s telecom centre ►Major Brazil centre in pharmaceutical, health care and technology & innovationPage 23 Brazil attractiveness survey 2012
  24. 24. Nevertheless, going to Brazil and Rio, companies should know that “Brazil is not for Amateurs” ► Integrated logistics and tax planning can make a huge difference on business cases Return On investment figures ► Consider higher costs and bureaucracy to have expatriates legally working ► Consider existence of some exchange controls ► Be aware of what countries have tax treaties with Brazil and those that do not ►Some industries have specific tax regulations that , if used well, could create tax relief – good tax planning advice is criticalPage 24 Brazil attractiveness survey 2012
  25. 25. What next ?Ernst & Young Terco► Alexandre Rangel - Exec Director► Olympic Games Quality Review & Management Leader+55 21 9575 9896