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US/MULTINATIONAL BUSINESSES IN BRAZIL
Ryan Devine ▪ Michael Higgins ▪ Paras Kamdar ▪ Patrick Kaminski ▪ Michael Orton ▪ Ryan Waldron
Attracting Global Business
• 8th Largest Economy in the World (GDP)
• Employment Structure
– Agriculture 19%
– Industry 21%
– Services 60%
• GDP Structure
– Agriculture 6%
– Industry 25% (Incl. 16% Manufacturing)
– Services 69%
US/Multinational Businesses in Brazil
Oil & Gas Industry
International Oil Majors
• BP (UK)
– O&G, Ethanol JV, Aviation Fuel, Lubricants, etc…
– 4,200 Employees
• Chevron (US)
– Growing Offshore Operations; Deep-water Heavy Oil
– Lubricants Manufacturing Plants in Sao Paulo & Rio
– 700 Employees
• Statoil (Norway)
– Operator of Several Deep-Water Gas Wells
– JV with Petrobas for Commercial & Technological Development
Oil Services
• Many Rigs Transferred Post-Macando
US/Multinational Businesses in Brazil
Exxon Mobil
Senior Financial Corporate Controller
• Business Support Center in Curitiba
– Global Financial Consolidation, Computer Services, Call Center
– XOM US Subsidiaries Report Financial Data to Curitiba
• Young, Educated, English Speaking Workforce (Less $$$)
– Lower Experience Level
• High Turnover & Currency Appreciation Eroding Benefit
– Intense Competition for Services from International Firms
– Offer More Training & Promotion Opportunities
• Minor Culture Adaptations
– Longer Work Hours, Later Start
– Lunch Subsidy, etc… is Government Mandate
– Fewer Managers & Supervisors
US/Multinational Businesses in Brazil
Consumer Goods
Brazil Growing Market
• Growth Through Acquisitions of Local Companies
• Expansion of Local Brands
Pepsi vs. Coke
• PepsiCo
– Partnership with AmBev (Largest Brewer in Latin America)
– 9,000 Employees Across 19 Plants & Food/Beverage Facilities
– November 2011 Acquisition of Mabel – Cookies, Crackers, Snacks
• Coca-Cola Brazil
– 16 Independent Authorized Manufacturers
– 53,000 Direct Employees Across 46 Plants
– Over 150 Brands and Product Line Extensions
US/Multinational Businesses in Brazil
Consumer Goods
• Unilever
– Food: Lipton, Bertolli, Slim-Fast, Ben & Jerry’s
– Personal: Dove, Axe, TRESemmé, St. Ives
• Kraft Foods
– Gums & Candies: Trident, Halls, Chiclets, Certs
– Biscuits/Cookies: Nabisco, Club Social, Bon Gouter
• Kimberly-Clark
– 3,000 Employees Across 4 Factories
– Personal Care: Scott Paper Towels, Kleenex
– Baby Products: Huggies Diapers/Wet Wipes
US/Multinational Businesses in Brazil
Auto Manufacturing
• Brazil’s Fast Growing Car Market
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5th Largest Automobile Market
7th Largest Producer
Annual Production of Nearly 2,000,000 Vehicles
1st Capitalist Company to Bring Together the 10 Major Car
Assemblers Inside its National Territory
• Market Players
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Volkswagen
General Motors
FIAT
Ford
• Increased Import Tax on Foreign-Built Cars
– Raise in 2011 to 35%
– Mexico Free-Trade Agreement in the News
US/Multinational Businesses in Brazil
Brazil & China
International Trade
• Biggest Trading Partner – China
• Trade surplus exporting raw materials – iron ore, soy beans and crude oil
• Trade deficit in manufactured goods due to:
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Inflation
High Interest Rates
High Taxes
Poor Infrastructure
Lack of Proper Education/Training
• Intense competition in the
manufacturing sector
• Protectionist measures to stifle
imports and boost domestic
output (i.e. 35% import duty)
• China is single largest investor
in Brazil
US/Multinational Businesses in Brazil
Recent Developments
Brazilian Ethanol from Sugarcane
 U.S. government import tariffs and tax credits
(protecting ethanol distilled from corn) ended
on Dec 31, 2011.
 Opened the American market to sugarcane
ethanol from Brazil
 Brazil makes as much ethanol from sugarcane
as U.S. does from corn
Joint Ventures – Ethanol Production
 Dow & Mitsui
 Royal Dutch Shell & Cosan SA
 Cargill & Grupo USJ – SJC Bioenergia
US/Multinational Businesses in Brazil
Multinational Presence in Brazil
US/Multinational Businesses in Brazil
Perguntas?
US/Multinational Businesses in Brazil