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Nuts About Brazil
Friday, 25 August 2006
It may be more famous for Samba, soccer and its carnival, but Brazil is also an important trading partner to the North.

The mere mention of Brazil brings to mind famous footballers Pele and Ronaldo, beautiful beaches and colourful carnivals - but for business travellers there is far more to this vast country than coffee and the Copacabana.
Brazil is the UK's biggest trading partner in Latin America, with UK exports valued at £840 million in 2005, making it an increasingly important destination for those seeking to develop their export business.
With a territory of 3.3 million square miles, Brazil is larger than Europe and has a population of 180 million. The country has a broad and sophisticated industrial base, and the government is overseeing a programme of privatisation and deregulation, providing new markets for both goods and services.
Many large UK operations have well-established operations in the country, and top exports include organic chemicals, pharmaceuticals, road vehicles, professional scientific instruments and electrical goods. There are also opportunities for UK companies to help develop the infrastructure needed for the Pan-American Games, which will be hosted by Rio de Janeiro in 2007.
Brazil has a thriving aerospace industry, supplying both British Airways and British Midland with Brazilian-made jets, and the country is also the fourth-largest manufacturer of space satellites, the second-largest producer of mobile phones and the fifth-largest maker of cars in the world. Brazilians are also pioneers in the up-and-coming biofuel industry, being the first to convert sugar from crops into alcohol for use in cars.
The North West already has healthy trade links with Brazil, and is especially strong in aerospace with several companies already exporting components to Embraer, one of Brazil's largest aircraft manufacturers.
In June this year, the International Trade Centre, UKTI's Regional Director Clive Drinkwater and several local businesses welcomed a visit from the Brazilian Deputy Ambassador Mitzi de Costa and commercial counsellor Alberto Fonseca. Both visitors, as well as Brazilian Ambassador Jose Mauricio Bustani, have been involved in a number of joint ventures to develop business opportunities for North West companies with the help of dedicated Market Advisor Paul Eadie. The visitors attended presentations on what Liverpool has to offer as an international partner and over lunch they met several local companies hoping to develop their export trade with Brazil before being taken on a tour of local landmarks and meeting Lord Mayor Councillor Joan Lang.
The International Trade Team in Greater Merseyside has run four trade missions to Brazil in the past four years, with another being planned in September to Rio and Sao Paulo. For further information please contact Paul Eadie, UKTI’s Brazil Market Adviser on 07850 610 954


CASE STUDY - TEN TO THE DOZEN
A Liverpool-based software development company specialising in export and commodity management systems has grown its customer base rapidly through exporting in recent years, with Brazil quickly becoming a key market.
In fact, Generation 10 has blossomed from being a single client contractor into a business with clients in more than 60 countries in just six years. The company, which also has an office in Dallas, Texas, first started exporting to Brazil in 2002, setting up a system that streamlined processes and integrated laboratories for an international commodity controlling company, Wakefield Inspection Services. Since then, it has also been able to attract business from commodity and chemical companies such as Bayer Crop Science, Cargill and Louis Dreyfus.
However, managing director Richard Williamson says that cracking the Brazil nut takes time. "Business could not have developed in Brazil without many visits to the country, but fortunately it is not such a bad place to go!
"Attending the various annual conferences and charity events within the industry sectors was the most beneficial marketing tool," he says. "Visibility in the marketplace, target advertising to specialist press and networking are key. However, word of mouth and reputation are paramount in concluding business. The only thing that travels faster than
good news is bad news in the Brazilian market.
"Generation 10 makes three or four market trips to Brazil each year," he adds. "The Passport to Export programme that UKTI have formulated is perfect for this market. You have to be there to build the relationships. Being able to speak Portugese (the main business language in Brazil) certainly helps, but many people speak English. In just four years, the number of English-speaking Brazilians has grown noticeably, but most people appreciate you making the effort to speak their language even if you only know a few phrases."
Generation 10 currently owes approximately per cent of its revenue to the Brazilian market and it is continuing to seek expansion in the commodities sector, as well as exploring other opportunities in areas such as logistics and insurance. Further information can be found on its website, www.generation10.net

CASE STUDY - HANDLING GROWTH
Another Liverpool-based company which has found success in South America's biggest market is Joloda International, which is one of the world's leading designers, manufacturers and installers of truck and container loading systems for the transport industry.
The majority of Joloda's sales are through export via a network of agents and it has been trading with Brazil for the past four years, after its website - www.joloda.com - attracted potential customers from the country.
Wojtek Kordell, Joloda's managing director, went on a UKTI-sponsored trade mission to Brazil and then appointed Astro Technologica as its Brazilian distributor. After a number of meetings, Joloda secured a contract in Rio Grande exporting automated loading docks to deliver car seats, tyres and wheels to a subsidiary of General Motors, the Brazilian manufacturer of Vauxhall Corsas.
The loading systems were designed in Liverpool, with the first part of the order being built in the UK and shipped to Brazil. However, the second half of the order was completed under license in the country, which worked out to be cheaper and better for the client.
Joloda has now completed a contract for Dow Chemicals in Buenos Aires, taking advantage of the fact that goods that have been imported into countries in the Mercosur bloc - which includes Brazil, Argentina, Paraguay and Uruguay - can be exported to any of the other countries without further duties being levied.
It has provided Dow with a system to unload polyethalene granules in bags on pallets from containers onto fork-lift trucks. Like the previous contract, half of the order was manufactured in England, and the other half will be made in Brazil under license and then imported to Argentina from there, allowing it to take advantage of the tariff agreements and dramatically reducing delivery times.

SIX OF THE BEST
Paul Eadie, Market Advisor to Brazil, shares his top tips for new exporters.
1. It is essential to find a local agent in Brazil, otherwise importing becomes extremely difficult. Niche products may have few potential buyers, and a single agent may be all that is required, but products with a wider appeal may require a number of agents in strategic regions due to the sheer size of the country.
2. When appointing an agent define the terms of engagement as soon as possible, as Brazilian law is biased in favour of agents. Potential exporters should use a good Brazilian lawyer to advise on the principle points to cover in any agreement - including agreed sales volumes, time frames and regions of the country in which sales are to be made.
3. The most usual form of payment on the first order is cash in advance. After a business relationship is established, usually after a few shipments, the payment condition is changed to open account. Companies in Brazil consider letters of credit too expensive.
4. Pilfering is common in Brazilian ports and airports, so to minimise this danger, complete documents should be sent to the importer without delay, allowing him to start customs clearance immediately after the shipment's arrival.
5. Rules on importing products into Brazil change frequently and unexpectedly. Exporters should maintain regular contact with their agents or a reliable local customs broker to ensure that they are aware of any changes in the system.
6. Like many countries, Brazil uses import tariffs as a means to control the supply of imports - although since 1990 a policy of opening up the economy to outside competition has existed, and the Brazilian government has reduced tariffs from an average of more than 40 per cent to typically less than 12 per cent.

 





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