Sourcing Opportunities in Brazil - Market Survey

Dragon Sourcing
Your Tailored Approach to Emerging Markets
www.dragonsourcing.com
Study on Sourcing Opportunities in
Brazil
Feb, 2015

Table of Contents
2© 2015 Dragon Sourcing. All rights reserved.
 Executive Summary
 Brazil – Macro Economics
 Ores, Slag and Ash
 Oil seed, Oleagic fruits, grain, seed, fruit, etc.
 Mineral fuels, Oils, distillation products, etc.
 Meat
 Vehicles other than railway, tramway
 Machinery, nuclear reactors, boilers, etc.
 Sugars and sugar confectionery
 Iron and Steel
 Ships, boats and other floating structures
 Residues, wastes of food industry, animal fodder
 Cereals
 Pulp of wood, fibrous cellulosic material, waste etc.
 Coffee, tea, mate and spices
 Electrical, electronic equipment
 Aircraft, spacecraft, and parts thereof

Executive Summary – Top Export Categories (1/2)
Category HS Code Top Products
Productions
(2013)
Export
Value
(2013) in
USD
Billion
CAGR of
Exports
Value (5
years)
Brazil’s
Share of
Total
Global
Export
(2013)
Top Export Destinations
Import
Duty into
US
Import
Duty into
EU
Export
Duty
Mining
HS 26
series
Iron Ore
398 million
metric tons
35.1 25% 14%
China, Japan,
Netherlands, Germany,
Korea
Nil Nil Nil
Oil seeds
HS 12
series
Soybean Oilseed 86.7 million
metric tons
(soybean
oilseed)
23 19% 23%
China, Spain,
Netherlands, Thailand,
Taipei
Nil Nil Nil
Cotton Oilseed
Mineral
fuels
HS 27
series
Crude Oil 2.023 million
barrels/day
(crude oil)
22.4 8% 1%
China, USA, Netherlands,
India, Chile
Nil Nil Nil
Natural Gas
Meat
HS 02
series
Pork 11.532 million
tons (Chicken)
2012 data
14.8 11% 12%
China, Russia, Saudi
Arabia, Venezuela, Japan
0 to 4.4
cents/kg
0% to
12.8%
Nil
Chicken
Automotive
HS 87
series
Cars 2.72 million
units (Cars)
14.1 14% 1%
Argentina, Mexico, Chile,
Peru, USA
Nil 16% Nil
Commercial Vehicles
Industrial
Machinery
HS 84
series
Tractors
73,061 units
(Agricultural
machinery)
12.8 12% 1%
USA, Argentina, Mexico,
Netherlands, Germany
0%-6.7% 0%-5.7% Nil
Sugar
HS 17
series
Raw Sugar
37.709 million
metric tons
12 9% 23%
China, UAE, Algeria,
Bangladesh, Russia
0 to 35.74
cents/kg
98.00 EUR
/ 1000 kg +
1.372 EUR
/ 10 000
kg/polar
Nil
Iron and
Steel
products
HS 72
series
Crude Steel
34.2 million
metric tons
8.3 6% 2%
USA, Netherlands,
Argentina, China, Japan
Nil 1.70% Nil
Note:
• Production value is provided for the top product in each category whereas Export value, CAGR of Export values and Percentage of Global exports are provided for
the entire category.

Executive Summary – Top Export Categories (1/2)
4
Category HS Code Top Products
Productions
(2013)
Export
Value
(2013) in
USD
Billion
CAGR of
Exports
Value (5
years)
Brazil’s
Share of
Total
Global
Export
(2013)
Import
Duty into
US
Import
Duty into
EU
Export
Duty
Ships &
Boats
HS 89
series
Tanker
1,417,797
gross tonnage
(Tanker)
7.93 186% 5%
Panama, Netherlands,
Switzerland, Mexico, USA
Nil Nil Nil
Floating production
storage and offloading
Drilling Ship
Animal
fodder
HS 23
series
Poultry feed 22.1 million
tons (Chicken
feed)
7.14 10% 9%
Netherlands, France,
Germany, Korea,
Thailand
Nil
0 to 44
EUR/1000
kg
Nil
Swine feed
Cereals
HS 10
series
Corn
80.53 million
tons (Corn)
7.07 44% 9%
Korea, Japan, Taipei,
Iran, Egypt
0 to 0.65
cents/kg
Nil Nil
Rice
Wheat
Oats
Wood pulp
HS 47
series
Pulp
14.995 million
tons
5.19 12% 11%
China, Netherlands, USA,
Italy, Belgium
Nil Nil Nil
Paper
Coffee, tea
and spices
HS 09
series
Tea 3.45 billion kgs
(Green Coffee)
4.95 6% 11%
USA, Germany, Japan,
Italy, Belgium
Nil 0%-8.30% Nil
Coffee
Electrical,
electronic
equipment
HS 85
series
Electric motors and
generators (excluding
generating sets)
72.6 USD
billion (Gross
Sales)
4.75 -3% 0%
Argentina, USA,
Colombia, Germany,
Chile
0%-6.7% 0%-4.7% Nil
Aeronautical
HS 88
series
Helicopters Not Available 4.37 1% 1%
USA, Ireland, Venezuela,
China, Kenya
Nil Nil Nil
© 2015 Dragon Sourcing. All rights reserved.
Note:
• Production value is provided for the top product in each category whereas Export value, CAGR of Export values and Percentage of Global exports are provided for
the entire category.

Executive Summary – Emerging Export Products
5
Emerging Products
Export Value
(2013) in USD
Billion
% of Total
Export (2013)
Growth rate in
Value (% per
annum)
Import Duty
into US
Import Duty
into EU
Export Duty
Turbo-engines 1.22 0.50% 44%
USA, Argentina, Mexico, Netherlands,
Germany
2.5%-6.7% 2.7%-5.7% Nil
Rice 0.40 0.17% 11% Korea, Japan, Taipei, Iran, Egypt
0.1cents/kg-
0.65 cents/kg
Nil Nil
Saffron 0.012 0.0% 29% USA, Germany, Japan, Italy, Belgium Nil 0%-8.30% Nil
Electric generating sets 0.16 0.07% 23%
Argentina, USA, Colombia, Germany,
Chile
2%-6.7% 0%-4.7% Nil
Electrical capacitors 0.12 0.05% 18%
Argentina, USA, Colombia, Germany,
Chile
2%-6.7% 0%-4.7% Nil
Aircraft Parts 0.52 0.21% 13%
USA, Ireland, Venezuela, China,
Kenya
Nil Nil Nil
Note:
• The above products are considered to be emerging products based on the performance and export growth of the products. It is expected that any potential client
could benefit by putting across the sourcing strategy right now and reap the benefits in the forthcoming years.

BRAZIL - MACRO ECONOMICS
Sourcing Opportunities in Brazil

– Brazil is the is the largest country in both South America and the Latin American region.
 Population of: 202.65 million (2014 estimate)
 Surface area ~8,515,767 km2
 Coastline about ~7,491 km
 World's 7th largest by nominal GDP and the 7th largest by purchasing power parity (2012)
Population (2010) Area (km2)
São Paulo 11.25 million 1,523
Rio de Janeiro 6.32 million 1,182.3
Salvador 2.67 million 706
Brasília 2.57 million 5,802
Fortaleza 2.45 million 313.8
Growth Growth (2013) Value (2013)
Gross Domestic Product
2014: 1.5%
2015 (E): 2.7%
2016 (E): 3.1%
2.5% USD 2,245 billion
Exports 2011-2012: -5.3% -0.2% USD 0.242 billion
Foreign Direct Investments 2010-2013: 14.86% 6.22% USD 80.842 billion
7
Brazil Overview
Source: worldbank.org, tradingeconomics.org, stat.wto.org

Brazil – GDP
8
The Brazilian economy slowed significantly during 2011 and 2012. The GDP growth of 7.5%, decelerated to 2.7% in 2011 and down to to 1% in 2012 due to the euro
zone debt crisis which increasingly indebted consumers retreated after nearly few years of buoyant spending in Brazil. The country is showing a slow recovery
-0.5
0
0.5
1
1.5
2
2.5
3
0
500
1000
1500
2000
2500
3000
2009 2010 2011 2012 2013
PercentageChangeinGDP
GDPinUSDbillions
Brazil - GDP in USD billions
66%
28%
6%
GDP Breakdown by Sector (2012)
Services Industry Agriculturre
5.20%
-0.33%
7.53%
2.73%
1.03%
2.49%
1.80%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
2008 2009 2010 2011 2012 2013 2014
Real GDP Growth in Brazil
Principle Industries
 Automotive
 Iron & Steel
 Aircraft
 Petroleum & Petrochemicals
 Cement & Construction
Other Industries
 Machinery
 Electronics
 Textiles
 Food and beverages
 Mining
Source: tradingeconomics.com,
data.worldbank.org, quandl.com, mecometer.com,
statista.com, zanran.com
Services include services in retail trade (including hotels and restaurants),
transport, and government, financial, professional, and personal services such
as education, health care, and real estate services.

Brazil – Labor Wage Rates & Labor Participation
9
Minimum wage rate in Brazil in 2014 was USD 318 (BRL 724) per month. It has been revised in 2015 and the current minimum
wage is USD 297 (i.e. BRL 788) per month in 2015 mainly catering to the increasing cost of living in the country.
 Highlights:
 Minimum wage rates in Brazil is calculated based on the GDP performance and inflation
 Standard working hours: 8 hours per day
 Unemployment rate in Brazil have been decreasing in 2013 to 5.1% from 5.6% in 2012
 GDP (PPP) in Brazil is USD 11,769 per capita
 GNI (PPP) in Brazil is USD 2,955 billion in 2013
 GNI per capita, PPP is USD 14,750 in 2013
267
307
293
304
287
318
12%
0.10
0.07
14%
9%
6.78%
0%
4%
8%
12%
16%
240
270
300
330
2009 2010 2011 2012 2013 2014
PercentageChangeinMinimum
Wage
MinimumWageRates/monthin
USD
Minimum Wage Rates in Brazil in USD per Month
15.70%
13.30%
71%
Labor Participation by Occupation (2011)
Agriculture Industry Services
Source: forbes.com, heritage.org, riotimesonline.com, reuter.com, tradingeconomics.com, ipeadata.gov.br, knoema.com, theodora.com
Although the minimum wage rate was increased in 2015, BRL has also weakened significantly against USD during the period

Brazil – Trading Partners
10
About 51% of the global exports from Brazil in 2013 are with its major trading partners including China, USA, Argentina,
Netherlands, Japan and Germany.
 Top countries importing from Brail include: China, USA, Argentina, Netherlands, Japan and Germany
 China holds about 19% of total exports from Brazil in 2013, followed by USA at 10.3%, Argentina at 8.1%
 Exports to China: Oil seeds and oleaginous fruits (worth USD 17.148 billion) is the major export product category from Brazil to
China. The next major export product category is Ores, slag and ash (worth USD 16.4 billion). Other product categories include
mineral fuels, pulp of wood or of other fibrous cellulosic materials, sugars and sugar confectionery, raw hides and skins, animal or
vegetable fats and oils.
 Exports to USA include mineral fuels, oils and distillation products, iron and steel, machinery, nuclear reactors, boilers, aircraft,
spacecraft, beverages, spirits and vinegar etc.
1.20%
1.27%
1.39%
1.32% 1.33%
0.00%
0.40%
0.80%
1.20%
1.60%
2009 2010 2011 2012 2013
Brazil's Share of World Exports
-
10.00
20.00
30.00
40.00
50.00
Major Export Market from Brazil in USD Billions
(2009-2013)
2009
2010
2011
2012
2013
Source: data.worldbank.org, trademap.org

Brazil – Foreign Investment
11
 Brazil is one of the top three major destinations of capital investment in Latin America. Foreign Direct Investment in Brazil increased
to USD 4.979 billion in October 2014 from USD 4.214 billion in September 2014. FDI is expected to increase to USD 5.27 billion in
2015.
 According to the United Nations Conference on Trade and Development (UNCTAD), Brazil was the sixth largest destination for global
FDI flows in 2013.
 There are several tax incentives in Brazil, depending on the industry and location of the investment, such as Manaus Free Trade
Zone, Infrastructure projects, Oil and Gas industry, and the automotive industry.
 Factors influencing Investment: Rising middle class, strong demographic growth, stable financial environment, public and private
commitment to infrastructure and financial investment.
31,481
53,345
71,539
76,111
80,893
0
20,000
40,000
60,000
80,000
100,000
2009 2010 2011 2012 2013
FDI inflow to Brazil in USD Millions
Investor
Approximate Investment
in 2012
Sector
Portugal
USD 39,893,139.1
(i.e. BRL 77,791,621.33)
Manufacturing of non-metallic materials,
Telecommunications
Italy
USD 32,979,855.7
(i.e. BRL 64,310,718.55)
Construction, Sustainable Energy, Naval
Industry, Luxury market
Spain
USD 13,348,630.9
(i.e. BRL 26,029,830.25)
Construction
China
USD 11,117,661
(i.e. BRL 21,679,439.02)
Oil and Gas, Agriculture, Mining, Steel,
Electricity, Manufacturing
France
USD 10,006,546.7
(i.e. BRL 19,512,766.16 )
Manufacturing, Retailing, Electricity, water
and gas, Transportation, storage and
communication, Housing and food
USA
USD 8,125,179.4
(i.e. BRL 15,844,099.83)
Education, Infrastructure
World Cup in 2014 and 2016 Summer Olympics were the major drivers of FDI in Brazil. Principle sources of FDI in Brazil are
USA, UK, Spain, China, Germany, Japan and France.
Source: data.worldbank.org, tradingeconomics.com, iflr.com, state.gov, thebrazilbusiness.com, blogs.ft.com

Brazil – Exchange Rate
12
In 2016, the Brazilian Real is expected to decrease to 2.62 against USD
 Recent collapse in crude oil prices have sent disruptive shocks to currencies and substantial policy adjustments is expected on the
BRL in the near term.
 In an effort to address the macroeconomic imbalances and to recover investor confidence; major adjustments are expected and
Brazilian real (BRL) is likely to maintain a weakening bias over the next 6 months.
 USDBRL is estimated to reach 2.60-2.70 range in 2015.
 In order to handle the impact over inflation, a higher interest rate environment is expected in Brazil.
 The year 2015 will be marked by a period of necessary adjustments, which in combination with a broad-based trend in favor of the
US dollar (USD), will likely exert depreciating pressures into the BRL.
2.76
2.35 2.33
2.51
2.87
3.11
0
0.5
1
1.5
2
2.5
3
3.5
2009 2010 2011 2012 2013 2014
EUR vs. BRL
Source: Federalreserve.gov, tradingeconomics.com, gbm.scotiabank.com
1.99
1.76 1.67
1.95
2.15
2.32
2.65
0
0.5
1
1.5
2
2.5
3
2009 2010 2011 2012 2013 2014 2015
USD vs. BRL

Brazil – Trade Agreements
13
 In 2011, Agreement on Trade and Economic Cooperation has been signed between USA and Brazil to enhance trade and
investment.
 India - MERCOSUR Preferential Trade Agreement: Aims to expand and strengthen the bilateral trade relations between
MERCOSUR (Argentina, Brazil, Paraguay and Uruguay) and India and promote the growth of International trade by granting
reciprocal fixed tariff preferences with the final objective of creating a free trade area between the MERCOSUR and India. Major
sectors covered under the India - MERCOSUR Preferential Trade Agreement are: meat, chemicals, leather products, iron and steel
products, machinery items and electrical machinery.
 Free Trade Agreement MERCOSUR – Egypt: In 2010, MERCOSUR (Southern Common Market) signs a Free Trade Agreement
with the Arab Republic of Egypt. Top trade partners of Egypt within Latin America are Brazil and Argentina. Main objectives include:
increase and improve their economic cooperation to raise the living standards of their populations; eliminate difficulties and
restrictions on International trade in products, including agricultural products; promote, through the growth of reciprocal trade, the
development of their economic relations; provide fair conditions of International trade competition; create conditions for further
encouragement of Foreign direct investment particularly for the development of joint investments; and, promote international trade
and cooperation between them in other country markets. The agreement will allow preferential treatment for Egyptian products
entering the markets of Latin America and will reduce the cost of Egyptian imports for key items including sugar, meat and soy oil.
 Free Trade Agreement MERCOSUR – Israel: The objectives of the Trade Agreement include: eliminate barriers to International
trade, and facilitate the movement of export products between Southern Common Market and Israel; promote conditions of fair
competition in the free trade area; increase substantially Foreign direct investment opportunities; create efficient procedures for the
implementation, application and accordance with this Free Trade Agreement MERCOSUR - Israel, and its joint administration; and
set up a framework for further bilateral and multilateral cooperation to expand and improve the benefits of the Free Trade Agreement
MERCOSUR - Israel.
 European Union - MERCOSUR Agreement: The European Union was the 1st biggest trade partner of MERCOSUR (21% of total
trade of MERCOSUR (Argentina, Brazil, Paraguay and Uruguay)). The agreement will cover not just goods, but issues such as
services, investment government procurement or trade and sustainable development. It also aims at ensuring adequate protection of
intellectual property rights and geographical indications, effective competition policies.
Source: en.reingex.com, dw.de
The agreements benefit the client in terms of reduced tariff on the export/import of products, reduced export/import duty,
eliminating the trade barriers, protection of intellectual property rights etc.

MINING ORES (HS 26 SERIES)

Mining Ores – Market Trends
15
Brazil is rich in minerals and one of largest producers of iron ore in world. In 2012, about 77% of total industry output was
exported to China.
33%
14%8%
6%
5%
34%
Top Exporters of HS 26 series Mining Ores in
2013
Australia
Brazil
Chile
South Africa
Peru
Others
14.45
30.84
44.22
33.24 35.08
0.00
10.00
20.00
30.00
40.00
50.00
60.00
2009 2010 2011 2012 2013
Export of HS 26 series Mining Ores from Brazil
(in USD Billions)
370 373
398 398
0
100
200
300
400
500
2010 2011 2012 2013
Production of Iron Ore in Brazil (in million Metric
Tons)
 Brazil is the major player in the export of Niobium, Iron Ore,
Manganese, Tantalite, Graphite, Bauxite and Ornamental
Rocks. It imports Copper, Diatomite, Phosphate and Zinc.
 Production of iron ore is expected to increase by 451 million
tons by 2016.
 Increase in Supply: Brazil along with Australia, two leading
iron ore producing countries are expected to increase their
supply to 90% by 2020.
 Mining giants VALE and Rio Tinto continue to increase
output.
 Fall in prices have been witnessed due to oversupply and
decrease in demand from the major consumer (China).
Source: International Trade Centre, statista.com, mining.com, ibram.org.br

Mining Ores – Suppliers in Brazil
16
0
5
10
15
20
25
China Japan Netherlands Germany Korea
Top Importers of HS 26 series Mining Ores from
Brazil (in USD Billions)
2009 2010 2011 2012 2013
 Brazil has the world's top four biggest iron ore mines including the world biggest Carajas iron ore mine, which is wholly owned and
operated by VALE (world's biggest iron ore producing company).
 The world's second biggest iron ore mining operation Samarco Alegria is owned and operated by a 50-50 joint venture between
Samarco and BHP Billiton.
 Brazil also hosts Anglo American's wholly-owned Minas-Rio iron ore mine which is the world's ninth biggest by reserves.
Source: International Trade Centre, mining-technology.com, platts.com
Supplier Locations

OIL SEEDS (HS 12 SERIES)

Oil seeds – Market Trends
18
11.57 11.18
16.53 17.68
23.03
0.00
10.00
20.00
30.00
2009 2010 2011 2012 2013
Export of HS 12 series Oil seeds from Brazil (in
USD Billions)
75,300
66,500
82,000 86,700
94,000
3,351 3,239 2,230 2,900 2,580
0
20,000
40,000
60,000
80,000
100,000
2010 2011 2012 2013 2014
Production of Soybean and Cottonseed Oil seed
in Brazil (in 1000 Metric Tons)
Soybean Oilseed Cottonseed Oilseed
227
295
326
364
290
83
116 110
195 200
83 88 95 95 95
0
100
200
300
400
2010 2011 2012 2013 2014
Production of Peanut, Sunflower and Peanut Oil
seed in Brazil (in 1000 Metric Tons)
Peanut Oilseed Sunflowerseed Oilseed
Palm Kernel Oilseed
27%
23%
7%
5%
4%
34%
Top Exporters of HS 12 series Oil seeds in 2013
USA
Brazil
Canada
Agentina
Netherlands
Others
Soybean is the primary oilseed produced in Brazil followed by Cottonseed.
Source: International Trade Centre, gain.fas.usda.gov

Oil seeds – Suppliers in Brazil
19
0
5
10
15
20
China Spain Netherlands Thailand Taipei
Top Importers of HS 12 series Oil seeds from
2009 2010 2011 2012 2013
 Though some states and regions of Brazil are likely to witness dryness; with the introduction of new soybean seed genetics and
improved farm management practices, yields are expected to increase marginally at a national level.
 Brazil’s Agriculture Research Corporation (Embrapa), Brazilian Association for Non-GE Producers (ABRANGE), and Mato Grosso
Soybean Producer’s Association (Aprosoja) launched “Free Soy” (“Soja Livre”) to pursue development of commercially competitive
non-GE varieties to aid Brazil’s continuing role as the main supplier of European and Asian markets of these products.
Source: International Trade Centre, gain.fas.usda.gov
Supplier Locations

MINERAL FUELS (HS 27 SERIES)

16.27
19.84
31.62 31.42
22.40
0.00
10.00
20.00
30.00
40.00
50.00
2009 2010 2011 2012 2013
Export of HS 27 series Mineral fuels from Brazil
(in USD Billions)
Mineral fuels – Market Trends
21
11%
10%
5%
5%
1%68%
Top Exporters of HS 27 series Mineral fuels in
2013
Russia
Saudi Arabia
UAE
USA
Brazil
Others
Recent discoveries of large offshore, pre-salt oil deposits could Increase domestic oil production
 More than 90% of Brazil's oil production is offshore in very
deep water and consists of mostly heavy grades.
 The world's largest oil discoveries in recent years have come
from Brazil's offshore, pre-salt basins.
 Along with the potential to significantly increase oil production
in the country, the pre-salt areas are estimated to contain
sizable natural gas reserves as well.
 In March 2013, Brazil launched a 10-year energy plan that
aims to expand oil production to over 5 million barrels/day by
2021, a decrease from its previous plan of over 6 million
barrels/day by 2020. The plan sets targets for oil exports of
over 2.25 million barrels/day by 2021.
1,812.23
1,950.36 2,054.67 2,105.41 2,061.23 2,023.87
445.67
363.03
444.61
514.89
598.23
752.20
0.00
200.00
400.00
600.00
800.00
1,000.00
1,200.00
0.00
500.00
1,000.00
1,500.00
2,000.00
2,500.00
3,000.00
2008 2009 2010 2011 2012 2013
Inbillioncubicfeet
In1,000barrels/day
Production of Crude Oil and Natural Gas in Brazil
Crude Oil Natural Gas
Source: International Trade Centre, eia.govNote: Crude oil production in 1,000 barrels/day and natural gas production in billion cubic feet

Mineral fuels – Suppliers in Brazil
22
0
1
2
3
4
5
6
7
China USA Netherlands india Chile
Top Importers of HS 27 series Mineral fuels from
2009 2010 2011 2012 2013
 About 18% of the total exports of mineral fuels is sent to ship stores and bunkers across different regions.
 State-controlled Petrobras is the dominant participant in Brazil's oil sector, holding important positions in upstream, midstream, and
downstream activities.
 Royal Dutch Shell was the first foreign crude oil producer in the country, and it has now been joined by Chevron, Repsol, BP,
Anadarko, El Paso, Galp Energia, Statoil, BG Group, Sinopec, ONGC, and TNK-BP.
Source: International Trade Centre, eia.gov
Supplier Locations

MEAT (HS 02 SERIES)

Meat – Market Trends
24
9.89
11.88
13.72 13.70
14.79
0.00
10.00
20.00
2009 2010 2011 2012 2013
Export of HS 02 series Meat from Brazil (in USD
Billions)
3015 3130 3195 3369.616 3464.52
10215.5 9940.35
10692.556
11421.73 11532.84
9024 9395 9115 9030 9307
0
2000
4000
6000
8000
10000
12000
14000
2008 2009 2010 2011 2012
Production of Meat (Pig, Chicken, Cattle) from
Brazil (in 1,000 tons)
Meat, Pig Meat, Chicken Meat, Cattle
13%
12%
9%
8%
7%
51%
Top Exporters of HS 02 series Meat in 2013
USA
Brazil
Germany
Netherlands
Australia
Others
29050 28450 28900 29150 29500
21500 21600 22000 21800 23000
0
5000
10000
15000
20000
25000
30000
35000
2008 2009 2010 2011 2012
Production of Meat (Goat, Horse) from Brazil (in
tons)
Meat, Goat Meat, Horse
The industry in Brazil has achieved strong growth over the decade particularly due to investments in herd rebuilding through
genetics, changing of production systems to feedlot systems, as well as other infrastructural developments.
Source: International Trade Centre, mordorintelligence.com

Meat – Suppliers in Brazil
25
0
0.5
1
1.5
2
2.5
China Russia Saudi Arabia Venezuela Japan
Top Importers of HS 02 series Meat from Brazil
(in USD Billions)
2009 2010 2011 2012 2013
 Brazil is the world's largest beef exporter with the world's largest commercial cattle herd; however, the production cycle needs to be
more efficient to supply internal and external demands in the future.
 Large farm land availability, ample feedstuffs supplies, a large domestic consumer market, and liberalization of trade barriers have
allowed large firms to achieve economies of size that have made the country a major, growing source of meat production.
 Brazil dominated the South American market until it shifted from Venezuela towards the Middle East. Argentina filled the void and
surpassed Brazil in 2013 and have a market share of suppliers with about 41% followed by Brazil at 40%.
Source: International Trade Centre, animalfrontiers.org, brazilianbeef.org.br, apps.fas.usda.gov, thebrazilbusiness.com
Supplier Locations

AUTOMOTIVE (HS 87 SERIES)

Automotive – Market Trends
27
Industry aims at fostering innovation and intensifying the local productive chain in the automotive industry as well as
delineating the requirements for automakers and suppliers.
18%
11%
10%
6%
1%
54%
Top Exporters of HS 87 series Automotive in
2013
Germany
Japan
USA
Mexico
Brazil
Others
120.994
189.941
223.388
132.953
187.089
30.021 40.53 49.373
36.63 40.111
0
50
100
150
200
250
2009 2010 2011 2012 2013
Production of Trucks and Bus in Brazil (in 1,000
Units)
Trucks Bus
8.46
12.09
13.76
12.60
14.10
0.00
10.00
20.00
2009 2010 2011 2012 2013
Export of HS 87 series Automotive from Brazil (in
USD Billions)
Source: International Trade Centre, wsj.com, bloomberg.com, rolandberger.us, anfavea.com.br
2,546 2,575 2,585 2,519 2,589 2,723
670 608
797 888 813
989
0
500
1,000
1,500
2,000
2,500
3,000
2008 2009 2010 2011 2012 2013
Production of Cars and Goods Carriers in Brazil
(in 1,000 Units)
Cars Goods Carriers

Automotive – Suppliers in Brazil
28
0
2
4
6
8
10
Argentina Mexico Chile Peru USA
Top Importers of HS 87 series Automotive from
2009 2010 2011 2012 2013
 Brazil sells about 85% of production to the domestic market, and the rest goes to neighboring Argentina, a regional trade partner.
 On the other hand, import duties paid by other foreign clients, Brazil's expensive labor, electricity and other costs have made the
country's vehicle sector uncompetitive.
 Despite Brazil’s current severe economic slowdown, Brazilian car makers will have the capacity to manufacture six million vehicles
annually by 2017
 Brazil has logged some new plants of its own. In 2014, Nissan opened a USD1.5 billion complex in Resende, and Chery Automobile
has a USD530 million factory in São Paulo state that will start production this year, marking the Chinese automaker’s first major
investment outside its home country. Source: International Trade Centre, thebrazilbusiness.com, businessweek.com, rolandberger.us
Supplier Locations

INDUSTRIAL MACHINERY (HS 84
SERIES)

Industrial Machinery – Market Trends
30
Brazil's capital goods sector is in the process of ongoing modernization of production supported predominantly by domestic
manufacturers rather than imports.
19%
12%
11%
7%
1%
50%
Top Exporters of HS 84 series Industrial
Machinery in 2013
China
Germany
USA
Japan
Brazil
Others
8.06
10.89
14.08 13.88
12.89
0.00
10.00
20.00
2009 2010 2011 2012 2013
Export of HS 84 series Industrial Machinery from
55,024
71,763
63,427 64,456
73,061
986 2,234 2,929 2,939 2,1394,503
7,007 7,630 7,485 8,778
3,865 5,948 6,177 7,420 8,549
0
20,000
40,000
60,000
80,000
2009 2010 2011 2012 2013
Production of Agricultural Machinery in Brazil
Wheel Tractors Crawler Tractors Tillers Combines Loaders & Backhoes
 In 2013, the performance of Brazilian machine and equipment
sector was weaker than in 2012, with net revenues falling by
approximately 5%.
 Exports decreased by 11%, while imports registered a 7%
increase.
 Although some subsectors of the industry related to
agriculture and transport performed well, others linked to
infrastructure were hit by weak demand largely due to low
rate of investments.
 However, government spending on infrastructure will continue
in the coming year of elections, a fact that will ensure a
steady demand for machinery and equipment.
Source: International Trade Centre, cdn-www.securities.com

Industrial Machinery – Suppliers in Brazil
31
0
0.5
1
1.5
2
2.5
3
3.5
USA Argentina Mexico Netherlands Germany
Top Importers of HS 84 series Industrial
Machinery from Brazil (in USD Billions)
2009 2010 2011 2012 2013
 The prospects for the sector are favorable due to expectations for continued domestic demand and recovery of the global markets.
Although imports will continue to affect the locally manufactured capital goods, analysts estimate that the volume of imports will
gradually fall in the coming years. Another boon for the sector is the forecast for about BRL 1.19 trillion worth of investments in
transport, logistic, sanitation, energy and real estate by 2018.
Source: International Trade Centre, cdn-www.securities.com
Supplier Locations

SUGAR (HS 17 SERIES)

Sugar – Market Trends
33
Sugar confectionery is expected to register a steady volume and a constant CAGR of 2% between 2013 and 2018. With
increasing purchasing power among low-income consumers, it is expected for the trend to continue.
23%
6%
6%
5%
5%
55%
Top Exporters of HS 17 series Sugar in 2013
Brazil
Thailand
France
Germany
USA
Others
8.57
12.95
15.15
13.03
12.01
0.00
10.00
20.00
2009 2010 2011 2012 2013
Export of HS 17 series Sugar from Brazil (in USD
Billions)
31,048 32,957
38,006 35,924 38,244 37,709
0
10,000
20,000
30,000
40,000
50,000
2008 2009 2010 2011 2012 2013
Production of Sugar in Brazil (in 1,000 metric
tons)
Centrifugal Sugar
 Due to weather related problems in the center-southern
producing region, a decline in the production of sugarcane is
expected.
 Sugar Confectionery consists of Boiled Sweets, Liquorice,
Lollipops, Medicated Confectionery, Mints (Power Mints,
Standard Mints), Pastilles, Gums, Jellies and Chews, Toffees,
Caramels and Nougat
 Rising raw material costs continue to influence the prices of
sugar confectionery, driven mainly by the volatility of the price
of sugar.
Source: International Trade Centre, thecropsite.com, euromonitor.com, reuters.com

Sugar – Suppliers in Brazil
34
0
0.5
1
1.5
2
China UAE Algeria Bangladesh Russia
Top Importers of HS 17 series Sugar from Brazil
(in USD Billions)
2009 2010 2011 2012 2013
 Brazil’s center south region is the main sugar crop growing region.
 Approximate Sugar and Gum Confectionery Market Share in Brazil: Mondelez (56%), Arcor (10%), Riclan (9%), Perfetti Van Melle
(8%), IindtFerrero (7%)
Source: International Trade Centre, confectionerynews.com
Supplier Locations

IRON AND STEEL PRODUCTS (HS
72 SERIES)

Iron and steel products – Market Trends
36
Industry will witness an increased competition in nearly all the products especially as there is a focus shift to high-value,
higher margin steel products.
33.7
26.5
32.8 35.2 34.7 34.2
0
10
20
30
40
50
2008 2009 2010 2011 2012 2013
Production of Crude Steel in Brazil (in million
metric tons)
Crude Steel
10%
9%
7%
6%
2%
66%
Top Exporters of HS 72 series Iron and steel
products in 2013
China
Japan
Germany
Korea
Brazil
Others
6.72
8.39
12.01
10.71
8.37
0.00
10.00
20.00
2009 2010 2011 2012 2013
Export of HS 72 series Iron and steel products
from Brazil (in USD Billions)
 World's largest iron ore mine, Carajas Mine is located in the
Northern Brazil.
 Steel demand is forecasted to grow at a 3.6% per annum
buoyed by the world cup infrastructure demand
 Steel end-user markets in 2016 is forecast at 8.4%
(Infrastructure), 7.56% (Construction), 6.34% (Automotive),
5.7% (Oil & Gas).
 However, prevailing overcapacity and low utilizations are
projected to maintain the prices under pressure.
Source: International Trade Centre, ey.com

Iron and steel products – Suppliers in Brazil
37
0
1
2
3
4
USA Netherlands Argentina China Japan
Top Importers of HS 72 series Iron and steel
products from Brazil (in USD Billions)
2009 2010 2011 2012 2013
 Brazil comprise 14 private companies, controlled by eleven business groups and operating 29 mills in 10 states.
 More and more steel manufacturers have integrated mining into the value chain to protect their margins.
Source: International Trade Centre, ey.com, acobrasil.org.br
Supplier Locations

SHIPS & BOATS (HS 89 SERIES)

Ships & boats – Market Trends
39
24%
19%
11%5%
4%
37%
Top Exporters of HS 89 series Ships & boats in
2013
Korea
China
Japan
Brazil
Poland
Others0.12 0.18
1.15 1.55
7.93
0.00
2.00
4.00
6.00
8.00
10.00
2009 2010 2011 2012 2013
Export of HS 89 series Ships & boats from Brazil
(in USD Billions)
1,417,797
1,230,856
919,103
464,342
85,200 81,000 68,240 22,310
-
500,000
1,000,000
1,500,000
Orders by Ship Type in Brazil (in Gross Tonnage)
in 2013
Tanker FPSO Drilling Ship Offshore
Containership Bulk Carrier Gas Tanker Others
 Brazilian shipbuilders completed 29 merchant ship new
buildings in 2012 representing 275,072 of gross tonnage.
 The recovery of the Brazilian shipbuilding industry was seen
as a prestige project of national importance, and a vote-
winning policy, creating much-needed employment
opportunities.
 However, the picture for the Brazilian shipbuilding industry is
far from rosy as the global shipbuilding industry suffers from
major overcapacity.
 In 2013, Petrobas' P55 Floating Production Unit was installed
in a water depth of 1790m in the Campos basin.
Source: International Trade Centre, ihsmaritime.wordpress.com, fpso.com, bureauveritas.com

Ships & boats – Suppliers in Brazil
40
 Brazil’s state-owned Petrobras and its transportation subsidiary, Transpetro, are driving the majority of vessel constructions.
 The largest ships for delivery are wholly owned by Transpetro while many of the other new buildings will ultimately end up operating
for the same company under long-term charters.
 Ship completions during 2012 were dominated by the offshore support vessel sector, which accounted for 22 of the 29 vessels built.
Source: International Trade Centre, ihsmaritime.wordpress.com
Supplier Locations
0
1
2
3
4
Panama Netherlands Switzerland Mexico
Top Importers of HS 89 series Ships & boats
2009 2010 2011 2012 2013

ANIMAL FODDER (HS 23 SERIES)

Animal fodder – Market Trends
42
Brazil’s animal feed production in 2013 was estimated to be about 64.6 million tons, which was about 2.6% up from 2012.
15%
15%
9%
8%
6%
47%
Top Exporters of HS 23 series Animal Fodder in
2013
Argentina
USA
Brazil
Netherlands
Germany
Others
4.88 5.04
5.99
6.90 7.14
0.00
2.00
4.00
6.00
8.00
10.00
2009 2010 2011 2012 2013
Export of HS 23 series Animal Fodder from Brazil
(in USD Billions)
 Brazil is the major producer of feed in South America and
ranks third in the global feed production.
 Demand for meat products promotes the market needs of
animal feed and feed additives stimulate the rapid
development of feed industry.
 Poultry feed and swine feed contributes to about 80% of the
total feed production. Corn and soybean are the main
ingredients for animal feed in Brazil.
 Poultry feed production has seen a growth of 3.6% in 2014
compared to 2013.
Poultry, 58%
Swine, 24%
Dairy, 8%
Beef, 4%
Dog & Cat,
3%
Horse, 1% Aqua, 0.80%
Others, 1.20%
Brazilian feed consumption by species
Source: International Trade Centre, feed-pellet-mill.com, sindiracoes.org.br, wattagnet.com

Animal fodder – Suppliers in Brazil
43
0
0.5
1
1.5
2
2.5
3
Netherlands France Germany Korea Thailand
Top Importers of HS 23 series Animal Fodder
2009 2010 2011 2012 2013
 Brazilian feed industry was challenged with legal uncertainties, rights and duties issues, successive changes in legislation and
regulatory frameworks, excessive bureaucracy and complex procedures, as well as the heavy charge on costs and prices due a
cumulative system of taxes (the Brazilian feed industry was affected by a particular set of taxes, mainly the combination of the
PIS/COFINS on livestock production chains, and on most of the feedstuffs used for poultry and swine).
Source: International Trade Centre, feed-pellet-mill.com, sindiracoes.org.br, wattagnet.com
Supplier Locations

CEREALS (HS 10 SERIES)

Cereals – Market Trends
45
Quality is also expected to increase with better seed varieties and improved farm management practices.
15%
15%
9%
8%
6%
47%
Top Exporters of HS 10 series Cereals in 2013
Argentina
USA
Brazil
Netherlands
Germany
Others
1.64
2.60
4.03
6.55
7.07
0.00
2.00
4.00
6.00
8.00
10.00
2009 2010 2011 2012 2013
Export of HS 10 series Cereals from Brazil (in
USD Billions)
58,933
50,720 55,364 55,660
71,073
80,538
12,061 12,651 11,236 13,477 11,550 11,759
0
20,000
40,000
60,000
80,000
100,000
2008 2009 2010 2011 2012 2013
Production of Cereals (Corn, Rice) in Brazil (in
1,000 tons)
Maize Rice
6,027
5,056
6,171
5,690
4,418
5,718
239 253 395 373 431 479
0
2,000
4,000
6,000
8,000
2008 2009 2010 2011 2012 2013
Production of Cereals (Wheat, Oats) in Brazil (in
1,000 tons)
Wheat Oats
Source: International Trade Centre, gain.fas.usda.gov, agrocharts.com

Cereals – Suppliers in Brazil
46
0
0.2
0.4
0.6
0.8
1
Korea Japan Taipei Iran Egypt
Top Importers of HS 10 series Cereals from Brazil
(in USD Billions)
2009 2010 2011 2012 2013
 Corn and Rice are the major cereals produced in Brazil and the cereal crops industry is broken down into three segments: wheat,
coarse grains (barley, oats, sorghum and other coarse grains), and rice.
 In 2013, Kellogg remains by far the leader in breakfast cereals with a 39% value share mainly due to its long presence in the
category and investments in new packaging, promotion and advertising campaigns.
Source: International Trade Centre, gain.fas.usda.gov, agrocharts.com
Supplier Locations

WOOD PULP (HS 47 SERIES)

Wood Pulp – Market Trends
48
Despite currency volatility and slowing demand from China and Europe, Brazil, Chile and other key Latin American markets
continue to churn out wood pulp for export, and the sector is seeing increased interest from international players.
20%
15%
11%6%6%
42%
Top Exporters of HS 47 series Wood Pulp in 2013
USA
Canada
Brazil
Chile
Sweden
Others
3.32
4.76 5.00 4.71
5.19
0.00
2.00
4.00
6.00
8.00
10.00
2009 2010 2011 2012 2013
Export of HS 47 series Wood Pulp from Brazil (in
USD Billions)
12.697 13.315 14.164 13.922 13.977
14.995
9.409 9.428 9.978 10.159 10.26 10.428
0
5
10
15
20
2008 2009 2010 2011 2012 2013
Production of Pulp and Paper in Brazil (1,000
Tons)
Pulp Paper
 Owing to many years of genetic improvement work, Brazil’s
eucalyptus plantations have the world’s best growth rates,
averaging about 40 m3 per hectare per year.
 Brazilian industry is the world’s lowest cost producer of
bleached eucalyptus pulp. Brazil currently produces 12.8
million tons of market chemical pulp per year.
 The social and economic development and the increase in
the population’s income have resulted in a greater demand
for books, notebooks, newspapers and magazines, packaging
for food, medicines and personal hygiene items.
Source: International Trade Centre, paperonweb.com, cfs.nrcan.gc.ca, gfmag.com, bracelpa.org.br

Wood Pulp – Suppliers in Brazil
49
0
0.5
1
1.5
2
China Netherlands USA Italy Belgium
Top Importers of HS 47 series Wood Pulp from
2009 2010 2011 2012 2013
 Optimistic perspectives in the economy and the demand from emerging markets maintain investment programs in the sector
 By the end of 2017, when forests planted in 2010 will have completed a new growth cycle, pulp production is expected to go from
13.4 million to 20 million tons. During the same period, paper production will also increase from 9.3 million to 12.5 million tons, and
planted forest areas will be 25% larger.
 In addition to high quality, Brazilian pulp is known for its environmental attributes, i.e., originates from 100% highly productive planted
forests, a renewable natural resource that absorbs and stores large CO2 volumes from the atmosphere.
Source: International Trade Centre, bracelpa.org.br
Supplier Locations

COFFEE, TEA AND SPICES (HS 09
SERIES)

Coffee, tea and spices – Market Trends
51
39,100
53,300
44,800
54,500
49,200
57,600
0
20,000
40,000
60,000
80,000
2008 2009 2010 2011 2012 2013
Production of Green Coffee in Brazil (in 1,000
60kg Bags)
Green Coffee
4,752 4,686
4,278
3,520
1,496
0
2,000
4,000
6,000
2008 2009 2010 2011 2012
Production of Tea in Brazil (in tons)
Tea
3.98
5.40
8.32
6.02
4.95
0.00
10.00
2009 2010 2011 2012 2013
Export of HS 09 series Coffee, tea and spices
11%
9%
7%
7%
5%
61%
Top Exporters of HS 09 series Coffee, tea and
spices in 2013
Brazil
Vietnam
Germany
India
China
Others
Source: International Trade Centre, knoema.com, faostat.fao.org

Coffee, tea and spices – Suppliers in Brazil
52
 Brazil is the largest producer of coffee followed by Vietnam, Colombia and Indonesia. Brazil contributes to about 30% of the global
coffee output.
 Weather in Brazil's arabica-growing regions has been less than favorable and hence the industry has witnessed a surge in price for
Arabica coffee.
 There has also been an expansion to the production of specialty teas such as herbal tea and fruit tea. Brazilian green tea is also
enjoying success. New plantations in the southern state of Paraná are steadily increasing their production of green tea.
0
0.5
1
1.5
2
USA Germany Japan Italy Belgium
Top Importers of HS 09 series Coffee, tea and
spices from Brazil (in USD Billions)
2009 2010 2011 2012 2013
Source: International Trade Centre, brecoder.com, iandmsmith.com, cnbc.com, wsj.com, teagenius.com, dailycofeenews.com
Supplier Locations

ELECTRICAL, ELECTRONIC
EQUIPMENT (HS 85 SERIES)

Electrical, electronic equipment – Market Trends
54
Machinery and equipment production accounts for approximately 7% of the overall Industrial Production Index
27%
8%
7%
7%USD 4.747
billion, 0%
51%
Top Exporters of HS 85 series Electrical,
electronic equipment in 2013
China
USA
Germany
Korea
Brazil
Others
5.26 5.00 5.14 4.92 4.75
0.00
2.00
4.00
6.00
8.00
10.00
2009 2010 2011 2012 2013
Export of HS 85 series Electrical, electronic
equipment from Brazil (in USD Billions)
 Industry consists of about 4,000 companies of which around
80% of them are small sized companies.
 Between 2003 and 2011, the industry registered a growth of
about 110% in Sales due to continuous increase in domestic
demand.
 Major Export Segments: Electrical and electronic
components, industrial equipment, power generation and
transmission & distribution are the major export segments
from Brazil.
56.1
70.7
82.5
73.9 72.6
0
20
40
60
80
100
2009 2010 2011 2012 2013
Sales of Electrical, electronic equipment in Brazil
(in USD Billions)
Source: International Trade Centre, wesgro.co.za

Electrical, electronic equipment – Suppliers in Brazil
55
0
0.5
1
1.5
2
Argentina USA Colombia Germany Chile
Top Importers of HS 85 series Electrical,
electronic equipment from Brazil (in USD
Billions)
2009 2010 2011 2012 2013
 Top destination markets for exports of machinery and equipment from Brazil are United States with 21%, followed by Argentina
(15.4%), Mexico (6.6%), Germany (5.4%), Netherlands (4.7%), Colombia (3.7%), Chile (3.6%), Paraguay (3.4%), Peru (2.9%) and
Venezuela (2.7%)
Source: International Trade Centre, wesgro.co.za
Supplier Locations

AERONAUTICAL (HS 88 SERIES)

Aeronautical – Market Trends
57
37%
18%
14%
6%
1%
24%
Top Exporters of HS 88 series Aeronautical in
2013
USA
France
Germany
UK
Brazil
Others
4.19 4.36 4.34
5.22
4.37
0.00
2.00
4.00
6.00
8.00
10.00
2009 2010 2011 2012 2013
Export of HS 88 series Aeronautical from Brazil
(in USD Billions)
 Industry Overview: According to the Brazilian General Aviation Association, Brazil has the third largest helicopter fleet in the world.
In 2012, there were 1,893 registered helicopters, mostly concentrated in the State of Sao Paulo (690), Minas Gerais (219), and Rio
de Janeiro (422). More than one third of the fleet is less than 5 years old.
 Boeing and Airbus are contributing to the development of aircraft industry in Brazil by choosing the São José dos Campos
Technology Park as the site for their research and technology centers.
 It is expected that Boeing’s research center will focus its work on sustainable biofuels for aviation, advanced traffic management,
advanced metals and biomaterials, and technology for support and services.
 Aeronautical products must meet the Brazilian aeronautical requirements and obtain the certification issued by ANAC (Agencia
Nacional de Aviação Civil), the Brazilian agency responsible for the regulation and the safety of civil aviation. The certification is the
recognition that the design of a product is in accordance with the airworthiness requirements adopted by the country
Source: International Trade Centre, Aerospace Resource Guide

Aeronautical – Suppliers in Brazil
58
0
0.5
1
1.5
2
USA Ireland Venezuela China Kenya
Top Importers of HS 88 series Aeronautical from
2009 2010 2011 2012 2013
 The industry is led by Embraer, the world’s third largest aircraft manufacturer. In 2013, Embraer delivered 215 aircraft, which
consisted of 90 commercial jets, 119 business jets, and 6 military aircraft. The other key player is Helibras, the Brazilian subsidiary of
Airbus Helicopters. Every year the company delivers around 36 helicopters produced in Itajuba, State of Minas Gerais.
 Helibras, the Brazilian subsidiary of Airbus Helicopters has been producing helicopters in Brazil since 1978 and is taking a position as
a world class helicopter manufacturer. Helibras has delivered more than 500 helicopters to the Brazilian civilian, military, and law
enforcement markets.
Source: International Trade Centre, Aerospace Resource Guide
Supplier Locations

Disclaimer
The Analysis and Statements in this Report represent the considered views of Dragon Sourcing Ltd (DSL). The
Report includes ‘forward looking statements’ and opinions based on the analyst’s current analysis and judgment
of the Industry. Although DSL believes the outcomes expressed in such ‘forward looking’ statements are based
on reasonable assumptions, such statements are not a guarantee of future performance and actual results or
developments may differ materially from those in forward- looking statements. Factors that could cause actual
results to differ materially from those in forward- looking statements include the general economic,
environmental, market, business or government conditions. While DSL has made every reasonable effort to
ensure the veracity of the information presented, it cannot expressly guarantee the accuracy and reliability of the
estimates, forecasts and conclusions.
No part of this report may be distributed, copied or reused without prior written permission from Dragon
Sourcing Ltd

Sourcing Opportunities in Brazil - Market Survey

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Sourcing Opportunities in Brazil - Market Survey