Is Brazil the next frontier? How interesting could this country be for you and your company?
Over the last few years Brazil has attracted billions of dollars in investments for a range of sectors and cemented its status as one of the major economic forces in the world. Once known as an hostile and risky place to do business, history has turned upside-down nowadays.
In the last years solid economy policies, political stability, valuation of the local stock market, investments in infrastructure development and a strong local currency have created a positive scenario for foreign companies to establish businesses here.
In order to finance the government policies, Brazil has one of the highest and most complex tax schemes in world. This is where local industry loses performance and competitivity. This is where imported goods come to play a significant role in Brazil.
Even though imported goods are heavily taxed (average 45% over face price) plus logistics costs which may account for another 5% on final product price, imports may give two-three-, four-fold productivity/price advantage over competitors due to the hefty taxes and low productivity.
It’s no wonder why Brazil imports have been increasing steadily and enormously over the last years: in 2011 imports totalled the record mark of USD 226.2 billions, 24,5% increase over 2010’s USD 181.6 billions. Raw materials, industrial supplies and capital goods account for 66.3% of the total imports, followed by consumer goods at 17.7%. It shows that productive investments is the main reason why Brazil resort to foreign goods, an attempt to increase productivity.
Brazilians are particularly known for their resilience, creativity and problem-solving skills due to their long history of economic instability. They are hungry for solutions to minimize their productivity and inefficiency issues.
In order to be part of this history, assure that your products are properly certified and find a partner to assess you to explore the possibilities and opportunities of this giant market.