Brazil Brazil Transition, a New Era for a New President

Brazil Brazil transition, a new era for a new president

February 2003

World Investment News’ Investor Guides and Reports

World Investment News Ltd. Top Report on Brazil

Production

Top Report, February, 2003 Special Report published in Technology Review. Produced by World INvestment NEws Ltd. Producer: Pascal Belda. Production Supervisor: Corinne Semaille. Associate Director: Fabienne Muzy. Associate Producer: Eduardo Gil, Cecilia Ines . Written by World Investment News, Carlos Dominguez With the participation of camara-e.net and some Brazilians specialists. Web and PDF Edition: Gustavo Dominguez B.

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World Investment News Ltd. Top Report on Brazil

Index PRODUCTION ...... 2 INDEX ...... 3 COUNTRY REPORT ...... 4 CARDOSO`S NATURAL HEIR...... 4 BRAZIL’S IT SECTOR...... 8 SCIENCE IN BRAZIL ...... 12 TELECOMMUNICATIONS ...... 13 COMPANY PROFILES...... 20 AMERICA ONLINE BRAZIL ...... 20 BRISA ...... 22 CAESAR PARK ...... 25 CAMARA-E.NET...... 28 INTERVIEW WITH MR. CID TORQUATO, EXECUTIVE DIRECTOR OF THE CAMARA-E.NET (BRAZILIAN CHAMBER OF E-COMMERCE) ...... 33 CITRIX SISTEMAS DO BRASIL LTDA ...... 37 CPQD ...... 41 INTERVIEW WITH MR. HELIO GRACIOSA, PRESIDENT OF CPQD...... 42 CPM ...... 45 CTIS ...... 48 ENDEAVOR...... 52 MANDIC...... 57 NETWORK ASSOCIATES...... 59 PROMON...... 62 SOFITEL...... 66 VESPER...... 71 VOTORANTIM ...... 75 INTERVIEW WITH MR. PAULO HENRIQUE DE OLIVEIRA SANTOS, CEO OF VOTORANTIM VENTURES CAPITAL...... 76 V.I.P. INTERVIEWS ...... 80

INTERVIEW WITH H.E. FERNANDO HENRIQUE CARDOSO, PRESIDENT OF THE REPUBLIC OF BRAZIL...... 80 INTERVIEW WITH CAIO LUIZ DE CARVALHO, MINISTER OF SPORTS AND TOURISM...... 82 INTERVIEW WITH DR. SOLON LEMOS PINTO, SECRETARY OF LOGISTICS AND INFORMATION TECHNOLOGY...... 85 INTERVIEW WITH MR. JOAO ROBERTO VIEIRA DA COSTA, NATIONAL SECRETARY OF COMMUNICATION...... 89 INTERVIEW WITH MR. MARIO GARNERO PRESIDENT OF BRASILINVEST ...... 92 INTERVIEW WITH MR. RUDOLF HOHN PRESIDENT OF INVESTE BRAZIL...... 95 LINKS ...... 100

World Investment News Ltd. Top Report on Brazil

Country Report

Cardoso`s Natural Heir

Brazilians have presented themselves with a different future by voting the Worker's Party (PT) candidate, Luiz Ignacio "Lula" Da Silva, into the presidency against the odds of international analysts, whose gloomy forecasts of a Brazil under Lula may add reason to their classification as an endangered species.

It is known that money watchers fear change, but in a country like Brazil, risk often grows bigger by lack of action rather than by change. Brazilians have just probed theirs' is a mature democracy by breaking the elite's secular grip on power, choosing instead a man of humble origin, a self-educated, former Union leader as their president.

Brazil's Lula has been around for the last 30 years of Brazil's political history. His Union activism contributed to end the military dictatorship during the 80s, he has been a forerunner in three previous presidential elections, and his party already holds local and regional governments credited with good management skills and corruption free manners.

To gain the presidency, Lula has changed his party's ideology from the far left to a more moderate stance, making the middle classes and especially the university and public service worlds his primary backers. In his way to the political center, Lula resembles Felipe Gonzalez, the Spanish prime minister who first brought socialism to power in Spain in 1982, only seven years after Franco's 40 years long, far right dictatorship ended.

World Investment News Ltd. Top Report on Brazil

As Lula is doing now, Gonzalez lured banks and unions alike, and steered the Socialist Party out of Marxism and Spain into NATO and the European Union, while embracing liberalization and privatization, all capped with a touch for social policies. Brazil has already changed during Fernando Henrique Cardoso's eight years in office. The United Nations Children's Fund reported on December 2002 that Latin American countries, especially Mexico and Brazil, "had made some of the most significant advances in the developing world toward improving children's health and education levels."

"There are 387 investment projects, worth US $228 bn coming on line in the next eight years" Rudolf Hohn, President of Investe Brasil

"We do not intend to have anymore inflation, we intend to be an open country in terms of our trade and we would like to be integrated into the world community" Mario Garnero, President of Brasilinvest

In Cardoso's Brazil, infant mortality fell sharply, the economy stabilized and more than 90% of children attend to school, but nonetheless Lula inherits a troubled country as Brazil -that ranks among the ten biggest economies in the world- encounters problems to grow at a pace that generates employment and a betterment of living conditions. In fact, Lula may be better understood as the natural heir to Cardoso (himself a social democrat), despite Cardoso's party candidate was Serra. Voters could not vote for retiring Cardoso again, so instead chose who they think has the strength to continue in the same path. To support this view, Lula sounds and acts much like Cardoso. Reasonable and conscious not only about Brazil's many internal problems, but also of his country's role in the international arena, where he also has backers like Mark Weistrot, of the Centre for Economic & Policy Research, in Washington, who thinks the PT presents "a whole set of very reasonable policies that could move the country towards sustainable growth and also do something for the poor." There are also signs for confidence in Lula's recent record. He backed president Cardoso's US $30bn deal with the IMF in the middle of the presidential campaign, restraining himself from trashing his opponent's policy to gain yet more popularity.

World Investment News Ltd. Top Report on Brazil

"Any investor should carefully analyze the regions to maximize their investment in each different regional culture. This offers greater success than simply looking at Brazil as one huge market." Carlos Trostli, President of AOL Brazil.

He intends not to default on Brazil's huge debt (58% of GDP), if only because this time around most of it is of domestic origin, as Cardoso's government converted foreign held debt into domestic debt. Lula also believes in reinforcing the ailing Mercosur free trade area (made up of Uruguay, Paraguay, Argentina and Brazil) as a receipt to avoid further financial crisis in the region and also as a way to strengthen South America's negotiation position with the US to join The Free Trade Area of the Americas (FTAA), and has already visited Buenos Aires, Santiago and Washington to coordinate future steps. He is also committed to respect Brazil's primary budget surplus objective (which the country already reached in October for this year) and of course has promised Brazil's some 54 million poor to better their living conditions.

"The FTAA is a good opportunity for Brazil as it was for Mexico. It will create an economy of US $17 trillion for a market of 800 million people." Mario Garnero, President of Brasilinvest.

Too many a task for a country with growth rates below two percent, 30 percent interest rates and a currency which has lost twice its value this year against the dollar?

One may think so, and yet most of those taunting problems have a double side. One is coincidental, caused by analysts panicking to the news of Lula's serious chance to grab the presidency. That should ease now that he is being elected and analysts learn to live with him from January 2003, when he will take office. The second side is structural, and it is here where Lula may come in handy. Lula should be able to find a much-needed middle ground between poverty alleviation and fiscal discipline.

Lula's magic touch

Of course there should be a magic touch to any election in the wonderland that is Brazil. Both first and second election rounds were held on Mr. Da Silva's two birthdays. He was registered by his father as born in October 6th, while his mother always sustained he was actually born on October 27th, 57 years ago. A sign? Many Brazilians believed so.

World Investment News Ltd. Top Report on Brazil

His economic team has also raised confidence, as Antonio Palocci is being nominated to be the next Minister of Finance. Palocci has a good governance record as former Mayor of Ribeirao Preto city, and has been credited with reassuring the markets during the electoral campaign, when he advised Lula on economy matters. "I think it's good and positive," Carlos Kawall, chief economist at Citibank in Sao Paulo told the BBC. "We have seen his position is associated with cautious commentary about fiscal austerity and commitment to low inflation." "He's a good man and has earned for himself a very good reputation, so this will not be negative," said Suhas Ketkar, senior economist at Royal Bank of Scotland in New York, also to the BBC. Lula has promised a bigger involvement of the State in social affairs. Many fear this will put the economy under further stress, but bridging the divide between rich and poor is just as right in Brazil as it is in any country. Done in a non traumatic way, it will bring down the crime rate, expand the market as the purchasing power also expands and provide more social stability. This is probably the most urgent reform Brazil needs and Lula's huge popular backing -he grabbed the presidency with a 61% majority of votes- will lend credit to the necessary reforms.

World Investment News Ltd. Top Report on Brazil

Brazil’s IT Sector

Brazil's IT sector is the world's reference and best hope in the use of technology to boost social development. Cardoso's government made IT investment and development a priority, and the country has laid down the foundations for a leap forward in the coming years. The IT market in Brazil is estimated to have reached a US $13bn size in 2002.The Government is acting decisively in this field and is expected to invest some US $100bn in the next decade, both in its e-government initiatives and in infrastructure.

The government has "since 1995 changed its focus and restructured itself to become more citizen oriented, cutting red tape, simplifying and eliminating procedures" says Dr. Solon Lemos Pinto, former Secretary of State of Logistics and Information Technology, "The government is turning itself from a bureaucratic to a managerial administration".

In the last decades, the evolution of Information technologies and data transmissions set a new phase in the process of economical globalization. In this new scenery, electronic commerce shows up as a great innovation in the economic world, making it possible to carry out trade operations without having a precise definition of the places of origin and destiny. It is well known that trade by Internet is a fast-developing activity.

The e-commerce is constituted by business-to-consumer (B2C) and business-to business (B2C) operations B2C: In relation to B2C, Boston Consulting Group estimates in US$ 215 million the business in Latin America. In 2000, Brazil has taken part in over 80% of continental trade, and must have generated US$ 170 million in on-line systems to the consumers in 2000 and foresees an amount of US$ 2,64 billion for 2003. Among the Latin-American countries, Brazil dominates in such areas as online advertising, user numbers and E-commerce is no exception. Brazil seems to be far ahead of the rest of Lain America in E-commerce, while still lagging far behind the U.S. Books, magazines, and CD's are the most purchased products on the Web in Brazil. In Latin America, especially in Brazil, purchasing patterns are in keeping with those of

World Investment News Ltd. Top Report on Brazil the United States, with the notable exception of online grocery shopping, which is much more popular with Latin American consumers. An example is the "Pao de Acucar " supermarket chain, one of Brazil's largest supermarkets.

Launched in 1995, Pao de Acucar Delivery was the first virtual Brazilian supermarket with investments of US$ 2 million for its implementation. Nearly 40% of its sales originate from purchases on their Website. Moreover, most of the Brazilian companies working with e- commerce now face logistics problems concerning distribution. The biggest challenge of the Internet in the will be migrating the means of distribution, regarding both products and information, to a more WWW-compatible format. B2B: The greatest potential of e-commerce growth is not B2C, but B2B.

The coordinator of MBA in e-commerce of FGV, André Valle, states that B2C will hardly surpass 10% of the total number of sales to consumers in retail. According to specialized consulting firms conducting studies in Brazil, the Brazilian B2B markets will grow in two years what took four years for the U.S. market to grow. Sixty eight per cent of the Brazilian B2B sites deal with replacement parts, office supplies and computer equipment. Another developing market is the international commerce sector- Portals dedicated exclusively to facilitating import and export. The services include identification of logistics operators, financing partners, and information on the sale of commercial paper on the secondary market.

A major factor behind Brazil's rapid Internet diffusion is the technological capabilities accumulated during the market reserve policy when ten of thousands of engineers were involved in R&D activities. Many of them now run Internet providers, design applications and give support to the diffusion of on-line information systems. Internet use in Brazil: Brazil is the tenth country in the world with the highest number of people connected to the Internet and the first country among the Latin American countries. Currently, Brazil has 14.4 million Internet users but this number is projected to increase to 34.5 million users by 2004.

For Aleksander Mandic, President of Mandic.com and one of Brazil's Internet pundits, "Brazil has a very advanced Internet system, but there is a limited user base, a lot of the population still has no access to the Internet".

Carlos Trostli , President of AOL Brazil, shares the same concern "penetration currently stands at around 13% of homes, which means that 5.9 million households in Brazil have an Internet connection. But it is also growing fast, up 31% from the previous year".

Reacting to the situation, there are several government initiatives to bring the Internet to all citizens. PCs are to be available at Metro stations, commuting areas, postal offices, government offices and popular neighborhoods. So far, some 7,000 Internet access points are being tested and a massive deployment should follow in 2003 and 2004.

World Investment News Ltd. Top Report on Brazil

Flat Internet connection rates will be introduced in 2003, pushing Internet use forward to the next level. "Countries that have migrated from charging per minute of use -as is the case of Brazil- to flat rates have seen average growth in the number of Internet users rise 35%, with connections times going up by around 50%" says Carlos Trostli.

Taking into account these measures, Rudolf Hohn, President of Investe Brasil, speaks out the future ahead "It is estimated that by the year 2006, Brazil will have over 42 million Internet users. This represents enormous potential in terms of e-commerce. Estimates say that by the year 2004, US $39 billion will be traded through B2B and B2C." The Government sees information technology as its main tool to relate with the citizenry in the future, the only way for a developing country to provide services to the citizens in a cost effective manner.

World Investment News Ltd. Top Report on Brazil

"On-line is the only way governments can cut infrastructural costs, improve management, foster democracy and participation, offer transparency and control, promote citizenship and social justice" says Cid Torquato, Executive Director of The Camara-e.net (Brazilian Chamber of e- commerce).

The Brazilian e-government initiative has been praised all over the world, not only because its noble aims, but because it actually works. As an example, more than 90% of Brazilians fill in their income tax via the Internet, while the Income Department site is receiving some 400,000 visitors everyday. Other test passed with honors by the IT sector left international observers grasping at last October's presidential election, when voters throughout the country punched their votes into 406,000 ATM resembling voting machines, allowing the authorities to announce official results in a few hours.

The Government has also developed a portal name Compras.net in which any company or citizen can access all government tender processes. The aim is to optimize the use of public money, make the State a better consumer and contractor. The State is already saving 30% on its expenditure with this program. "Although IT development require big initial investments, they can provide for tremendous economies and also better the decision and speed of both citizens and government's transactions", says Dr. Solon Lemos Pinto.

"e-government is a huge step toward greater transparency and accountability" Outgone President Fernando Henrique Cardoso

World Investment News Ltd. Top Report on Brazil

Another example of this happened when Judge Marco Pinto Basilio inaugurated in December 12th, 2002, a videoconference system to take testimony to four high-risk prisoners from their cells, avoiding escaping risk and saving the government the complicated logistics of transporting them to court.

The private sector, especially banking, is also leading the way ahead. Two Brazilian banks (Bradesco and Banco do Brasil) rank second and third in Internet use worldwide. "The banks are the leaders in investments and in fostering the use of IT in Brazil. And they do it for obvious reasons: productivity, competitiveness and profitability" says Cid Torquato.

The IT sector is in crisis all over the rich world, but not in Brazil, where more than a sleek gadget it is a must to reach out to the 160 million Brazilians spread over more than eight million square kilometers. While in Europe or the US internet based solutions are substituting paperwork and trimming normal administration, there is much more virgin space in developing countries, with territories (physical and social) where e-administration will be the first administration at all, making Brazil possibly the best IT investment destination as it is a gigantic lab where to explore IT new applications.

Science in Brazil

By Jose Galizia Tundisi

The formal development of Brazilian science has its roots in the Oswaldo Cruz Institute in Rio de Janeiro. Oswaldo Cruz worked in many areas of science related with health and gathered together a group of scientists who were devoted to combating yellow fever which was rampant in Rio de Janeiro and in many regions of Brazil. So Brazilian science has strong roots in the area of applied medicine. In the twenties and thirties, the main universities in Brazil were organized from a set of existing medical, engineering and law schools. The University of Brazil dates from 1927, the University of São Paulo - today the largest in the Country - dates from 1934. At these universities and at others scientific research was defined, commenced and organized on a more formal basis. Also in the forties and fifties, research institutes were set up to solve practical problems mainly in agriculture. The National Research Council was set up in 1951 for the purpose of supporting scientific development and training of human resources. This institution, transformed into the National Council for Scientific and Technological Development (CNPq) in 1975, is in charge of the task of

World Investment News Ltd. Top Report on Brazil supporting research at national level and also has a wide ranging program for human resources training, in Brazil and abroad. The Committee for Postgraduate Courses in Higher Education (Capes), linked to the Ministry of Education, was also set up in 1951 and its objective is to support the training of university lecturers. In 1973, the Studies and Projects Funding Body (Finep) was set up, which developed support programs for technological and applied development, and also broadly supported programs of infrastructure at universities and research institutes. An important framework in the scientific development of Brazil was the Foundation for the Support of Research in the State of São Paulo (Fapesp), set up in 1958, which had remarkable repercussions in the State of São Paulo and in Brazil, owing to its continued support for science and the rigor with which it examines projects. All this institutional organization resulted in an increase in scientific productivity and in a continuity of training of human resources. Today Brazil trains 2,500 doctoral students each year in all areas of science. There is extensive support from the Federal Government for training programs for masters and doctoral students in Brazil and abroad (50,000 scholarships for postgraduates, of which 5,000 receive their doctorates abroad). This effort has resulted in the diversification of the basic science areas, an increase in postgraduate programs and a significant increase in scientific production published in the Country and abroad in indexed journals. Today Brazil has centres of excellence in specific areas, such as physics, biochemistry and engineering, which have international production of great relevance to the Country. The postgraduate system has 1,700 programs, of which 500 are considered to be at a high level, compatible with universities abroad in advanced Countries. Brazilian science has several challenges at present: to expand the system with quality, supporting the installed competence; transfer knowledge from the research sector to industry; embark on government action in strategic areas; enhance the assessment of existing programs and commence innovative projects in areas of relevance for the Country. Furthermore, scientific dissemination plays a fundamental role in transforming the perception of the public at large of the importance of science in modern life. All these new activities and new challenges are being actively undertaken in the Country from the institutional base and the operation of existing qualified scientists. One of the major objectives is to base the development of Brazil decisively on science and technology and extend the participation of private enterprise in this process.

Telecommunications

By Jose Eduardo Pessini

The field of telecommunications has seen profound changes since the mid 1970s when advances in microelectronics signaled a convergence between information technology and telecommunications. In the 1980s it became clear that it was not only a convergence of technologies but also one of markets. In other words, the information and telecommunications industries not only increasingly used microelectronics components, but also developed services and applications together, which meant the rise of new markets of enormous potential. This second aspect of the convergence between the two areas is much more far reaching and, although the technological development of equipment and systems goes on, it is the rise of new markets and new applications which has really revolutionized telecommunications in the 1990s.In turn, it is evident that characteristic features which used to distinguish telecommunications systems all over the world, such as natural monopolies and the universal provision of services, are being reviewed or completely re-thought in many cases. This means that the revolution is not exclusively a question of technology, but also a matter of the structure and organization of the industry and its markets.

World Investment News Ltd. Top Report on Brazil

Technologically, development can be summarized as the use of new means of transmission and conversion - digital centres, satellites, optic fibers, development of the radio frequency spectrum, among other innovations - and the introduction of new services and applications for the user - fax, mobile phone, personal communications services, video conferencing and a whole range of on-line services, culminating in the recent explosion of new applications made possible by Internet. Another aspect of recent development has been the growth in networks of various kinds - LAN (Local Area Networks), MAN (Metropolitan Area Networks) and WAN (Wide Area Networks). These networks are generally privately owned and are custom-made to meet the specific needs of their users, although in most cases they depend heavily on the infrastructure and special services provided by the public telecommunications system. From a commercial point of view, the changes have come about because by making new means available for the "production" of services at an ever decreasing cost, technological development has sharply reduced the barriers to the entry of new carriers onto the market. Finally, from a structural point of view, the changes in the field of telecommunications have demanded heavy investment not only to set up a vast and modern infrastructure, but mainly to market the services available for users. In order to place Brazil within this context, it may be helpful to summarize the most important recent developments either completed or under way: - installation of fiber optic cables between the main state capitals and other important cities is under way; recently optic cabling is also being implemented in urban areas of São Paulo (Paulista avenue, Eng. Luiz Carlos Berrini avenue and Iguatemi street) and of Rio de Janeiro (downtown), where financial enterprises and intensive users of telecommunications are concentrated; - besides the recent launching of the second generation satellites - Brasilsat B1 and B2, the country is an active partner in various international groups both for the operation of satellites and for the laying of oceanic optic cables to the United States (Americas 1), to Europe and Asia (Columbus), and to the Mercosur countries (Unisur); - The digitalization of telephone networks is also going ahead at several stages - central, local and primary access exchanges - although this program still leaves something to be desired, especially at the primary access stage; - recent years have also seen notable investment in new services, particularly data communication, basic telephone subscriber services and mobile telephones; - Privatization of Telebrás, ANATEL's firm operations and competition in mobile and fixed telephony introduced a dynamic growth without precedents in the country's telecommunications. In the New Private Telecommunications System (NSPT), one of the largest challenges is precisely the need for a significant expansion at the investment level, in order to provide a faster response to a rapidly growing market. This can often involve scrapping of equipment which has not yet reached the end of its useful life. By adequately establishing an institutional scenario to attract private capital, modification of the State's regulatory role greatly contributed to make this investment expansion possible. The main point is that, notwithstanding that there are still technical and economic obstacles to competition, the market for telecommunications services is already more competitive than it has

World Investment News Ltd. Top Report on Brazil been in the past and will become still more so. This is because the growth of new services which are not only complementary but competitive with each other has a tendency to split up the market, encourage the entry of new processes and make it more difficult to sustain monopolies. It should also be added that national frontiers are no longer a guarantee of closed national markets. The outcome of these trends is likely to be the formation of a market dominated by an oligopoly (two to begin with), in which the imbalances and tensions between them will have to be permanently mediated by a regulatory authority. A parallel trend is that the market segmentation will produce a few strong players in each major segment. Countries like Brazil, with a large unmet demand for telecommunications services and a shortage of resources to meet all the public's needs, must seek a balance between public and private investment and provide opportunities for services to be provided by private enterprise.

Did you known that?

AERONAUTICS INDUSTRY· Santos Dumont, a Brazilian, invented the airplane.

· EMBRAER, the Brazilian Aeronautics company, sold 4.959 airplanes in 27 years.

· EMBRAER sells jets and turbo propellers to developed countries like USA, (Continental Express, American Eagle, etc.), France, Italy, Switzerland, Portugal, Spain, Luxembourg, Holland, Poland, China, and Sweden.

AGRICULTURE AND CATTLE RAISING· Brazil has the largest cultivable area in the world (22%). · Brazil is first in the world in the production of coffee, oranges, and sugar cane; the second in the production of manioc, beef, and poultry, beans, and soy; the third in the production of refined sugar and corn; the fourth in grains and cocoa; the seventh in eggs and pork; the eighth, in cotton and rice. Also, Brazil is ranked the second exporter of poultry and fourth of pork.

AREA· Brazil is the fifth largest country in the world with an area of 8,547,403 square km and in Brazil's territory can fit all the countries in Europe and Brazil's territory is equal to 28 times the territory of Italy.

CLIMATE· Although Brazil is essentially a tropical country, from São Paulo towards the South, the annual average temperature is 66 F. In some southern states, it can snow.

COMPUTER TECHNOLOGY· The number of computers in Brazil increased from 5.1 million in 1997 to 9.2 million in 2000. · Brazil is ranked seventh in the world in the number of computers and Brazil is the largest world market of computer technology. · Brazil is first ranked in occasional and regular usage of Internet banking, surpassing Canada, USA and Japan. · In 1998, more than 2,500,000 Brazilians have sent their income taxes via Internet. · During the last elections held in October 3, 2000, 144,969 electronic ballot boxes were used, 65% of voters used this system and 67,000 new ballot boxes showed the candidates' photos.

ECONOMY· Brazil is the eighth largest economy in the world with a Gross National Product (GNP) of US$ 840 billion. In 20 years we will be the fourth largest economy, at least as large, or larger than, France, Italy and England. · Brazilian GNP grew an average of 4% every year from 1994 through 1997. In comparison with an annual increase of 0,22% from 1990 through 1993. In 2000 Brazilian GNP grew 4%. · Brazilian GNP per capita, which decreased 1,25% per year from 1990 to 1993, increased 2,51% per year during the period from 1994 to 1997. · According to the World Bank, Brazil, China, India, Indonesia and Russia will have the highest rate of development in the next 25 years. · During the period from 1947 through 1988, Brazilian GNP increased 12.5 times, second only to Japan's increase in GNP of 19 times. · Brazilian GNP constitutes 38% of South American GNP. · Among the 500 largest South American companies, 300 are Brazilian, 80 Mexican, 60 Argentinean and 30 Chilean.

· MERCOSUR composed of Brazil, Argentina, Paraguay and Uruguay, has a GNP of 1,141 billion of dollars, occupies 10% of the area of the Americas and it has a population of 212 million of inhabitants (26% of the continent's total). · Brazil is responsible for 30% of the coffee

World Investment News Ltd. Top Report on Brazil production in the world, 20% of the soy, 8.5% of chicken meat, 4.5% of manufactured shoes, 3.2% of steel and 2.9% of automobiles. · Brazilian supermarkets in 1999 had gross receipts of US$ 35 billion with their 55.300 stores, hiring 670 thousand employees directly and 2 million indirectly and being responsible for the 85% of the country's food supply. · Between 1990 and 1999, 4.9 million companies were created, of which 2.7 million (55.1%) are micro or small enterprises, representing a production of about 20% of the GNP, 60% of jobs and it is responsible for 30% of the gross amount of the industrial production of the country.

EDUCATION· The illiteracy index has been decreasing rapidly, from 17.0% in 1990 to 13.0% in 1998. Also in 2000, 91% of the children between the ages of 10 and 14 years old were attending school. · Illiteracy among youngsters in the ages between 10 and 14 in urban regions is less than 5%. · In 1992, 18.2 % of children between the ages of 7 to 14 years old were not in school and in 1999, only 4% were not in school. · The percentage of the population over 10 years of age, who had completed high school, increased from 25.4% in 1992 to 29.8% in 1996. · The enrolment in high school increased 57% between 1994 and 1999 and the number of students attending university courses increased 28% between 1994 and 1998. · In 1998, there were more than 2,1 million students attending university, an increase of 28% from 1994. · The number of students in university graduate courses increased from 43 thousand in 1994 to 53.9 thousand in 1999. · During the period from 1994 to 1999, the number of professors who graduated every year increased from 2.7 thousand to 4.7 thousand and the number of scholarships granted increased from 5.867 to 8.009. · The average period of time dedicated to study increased from 5.7 years in 1992 to 6.6 years in 1999. · In the year 2000, the Government distributed 110 million school books helping 32.5 million students of elementary schools, continuing the "National Program of School Books". · The "TV School Program" was created with the objective to help and enable teachers in underdeveloped rural areas. It was responsible for the distribution of kits (with TV set, VCRs, tapes and satellite antennas) for all the elementary schools with over 100 students, targeting 1 million teachers and 28 million students. · The Informatic Education Program (PROINFO) has been responsible for the installation of 30 thousand computers and accessories in more than 2. 2276 elementary schools, benefiting about 200,000 students.

ENERGY· Itaipu is the largest hydroelectric plant in the world. · Brazil is the tenth producer of electric energy in the world.

ENVIRONMENT· The Northern countries cannot teach the Southern countries how to take care of their forests. In Europe, for instance, only 2% of native forests are left. In Latin America 59% of native forest remain. · The countries that are mainly responsible for global warming are USA, members of the European Union, and Russia which since 1950, totaled respectively, 186.1 billion tons, 127.8 billion tons and 68.4 billion tons of carbonic gas emitted. Brazil only had 6.6 billion tons of gas emissions in the same period, representing less than 4% of the North- American total. And these countries are always talking bad regarding Brazil… · More than 1500 different species of fish live in the waters of the Amazon River. · Thirty three percent of the world large-leafed tree forests are in the Amazon, with 3,500,000 hectares of virgin forests and 750 different varieties of trees. · The Amazon retains about 30% of the genetic store of the planet and represents the most diversified and complex ecosystem known to mankind.

HEALTH· Brazil has 143 thousand community health representatives, who visit 82 million Brazilians every month, as part of the Family Health Program. · The Brazilian program for AIDS with free distribution of the "drugs cocktail", is considered by the World Health Organization, as one the best in the world. · The Brazilian drug market generates sales equal to US$ 8 billion dollars annually. · Annually, 20 million children are vaccinated free of charge against many diseases, among them poliomyelitis. · Between 1989 and 1998, the death index among children declined from 50.9 to 36.1 per thousand of born-alive infants, which corresponds to a decrease of 29.1% in nine years. · The average life span of Brazilians increased from 66 years in 1992 to 68 in 1999. HISTORY· During World War II, Brazil had sent 25,000 soldiers to Italy to fight nazi- fascism and of those 500 of them died on Italian soil defending democracy. In Pistóia, Italy there is a cemetery in the memory of these Brazilians.

HOMELESS CHILDREN· Despite what has been published by the international press, Brazil does not have 2, 5, 7 or 11 million of homeless children. · According to a research made by IBASE, a non-governmental organization, in 1994 (last year of the research), there were less

World Investment News Ltd. Top Report on Brazil than one thousand homeless boys in Rio de Janeiro. · About 2.7 million children in Brazil, between the ages of 7 and 14, are still out of school and the Government created an special program called "All Children in School", which intends to take them to school until the end of this year. INDIANS· In Brazil, there are 554 Indian territories with a total of 946.452 km2 (11.12% of the country's area), corresponding to three times the size of Italy. From this total, 220 areas (436.400 km2) were already delimited, corresponding to 47.24%. · In these areas 325.652 Indians of 227 different ethnic groups live, and they speak 170 different dialects. They live mainly in the Amazon, but are spread all over the country. · In Roraima State in the extreme north of Brazil with an area of 224,000 square km (Italy has 301,308 square km), there are Indian reservations covering an area of 94.190 square km. Also in these territories live 9,910 Ianomanis Indians, corresponding to one Indian for each 10 square km. · The number of indigenous natives increases twice as fast as the regular population (3.2% compared to 1.4%).

INDUSTRIAL PRODUCTION· Brazil has the tenth largest industrial complex in the world. · Brazil is the world's twelfth automaker and among others, Audi, Chrysler, Fiat, Ford, General Motors, Honda, Mercedes, Peugeot-Citroen, Renault, Scania, Toyota, Volkswagen and Volvo manufacture there. · As far as manufactured products are concerned, Brazil is the second largest producer of ceramic tiles and refrigeration compressors; the fourth of beer; the fifth of gasoline and radios; the sixth of cigarettes and CDs; the seventh of refrigerators, textiles and clothing and the eighth in corrugated paper, chemicals and prepared foods. · Seventy percent of Brazil's exports are manufactured products.

· PETROBRAS, a national corporation, with all Brazilian technology, has the world record in oil extraction in deep water, at 1.700 meters .

INVESTMENTS· According to business specialists, there are series of factors, which explain why Brazil became one of the stars in the developing world in the recent years. The factors are economic stability, the size of the consumer market, the existence of a solid financial system, democracy, the fact that Brazil is one of the countries which is better positioned as far as the New Economy and it has the most competitive agriculture in the world. · More Japanese capital has been invested in Brazil than in any other South American country. · The Brazilian Program of Privatization is the largest in the world and its total is US$ 130 billion in telecommunications, energy, sanitation, banking, gas distribution, and also that the steel, petrochemicals and fertilizers industry have already been privatized. · The last decade, the total volume of foreign direct investment in Brazil increased 3,000%. · In the year 2000, the total volume of foreign direct investment reached US$ 27 billion dollars. · According to research carried out in February 2001 by A.T. Kearney, the North American consulting firm, which interviewed a thousand business people responsible for 90% of the world's direct investments, Brazil is in the third place with regard to the preference for mega investors, after the United States of America and China.

LAND REFORM· In six years, 400 thousand families were given pieces of land, with a total area equivalent to twice the size of Belgium. · To implement land reform 13.2 million hectares were purchased of expropriated. That area is equal to three and a half times the territory of Switzerland or half Italy's territory.

LIFESTYLE AFTER THE REAL PLAN· After the problem of hyper inflation was solved and the consequent recovery of purchase power, coupled with a major emphasis of Fernando Henrique Cardoso's government with social issues, the average income of employed people increased 27% in the urban areas. · During the period from 1998 to 2000, 13 million people went above the poverty line, reducing the percentage from 43.8% to 32.7%. · The average poverty percentage decreased from 42% in July 1994 to 28% in the month of January 1996, in the six major cities in Brazil. · The average monthly income of the population also changed from 364 Reais in 1992 to 472 Reais in 1999. · Between 1992 to 1997, the number of families receiving tap water increased from 69.5% to 81% of the population. · Between 1992 through 1997, the number of residences provided with garbage removal services increased from 64% to 74% of the population. · From 1992 through 1999, the number of homes served with the sewage system increased from 50.3% to 59.4%. · From 1994 through 1998, the consumption of construction materials in general grew 24%. On June 1994, a minimum wage would buy 12.4 sacks of cement and in May 1998, 20 sacks. · The use of processed foods has also increased in the period of 1994 through 1997. For chicken, beef and pork meat, the growth was about 39.9%, 27.1% and 26.1%, respectively. Also the yogurt consumption increased 85.9%; cheeses

World Investment News Ltd. Top Report on Brazil

51.8%; beer 56.8%; sodas 71.5%; and cookies 42.6%. · The cost of the monthly basic food supply per family increased 25%, compared to an increase of 70% of the index which regulates the increase of prices from the time the Real was established until now. · The unemployment rates in Brazil were lower than ones in Europe (Italy: 12%) and were around 4,8% in December 2000.

MARKET· The present number of consumers in Brazil estimated at 43 million, will increase to 65 million in the year 2005, which then will make Brazil the fifth largest consumer market in the world. · Brazil is third worldwide in the franchising market, only surpassed by USA and Canada. Also, the total numbers of units grew 96% between 1995 and 1999, reaching 46,534 units, with a total of 226.334 direct jobs. · The Brazilian middle class is composed of 35 million families, according to IBGE: a) 8% larger than the population of Germany and greater than the sum of the population of Austria, Belgium, Denmark, Finland, Hungary, Ireland. Iceland, Luxembourg, Norway, Portugal, Sweden, Switzerland and the Czech Republic; b) greater than the sum of the population of France and Canada; c) equivalent to 1/3 of the population of the United States of America and 72% of the population of Japan. · Brazil is the fifth country in the world in purchasing power with more that US$ 1 trillion in Purchasing Power Parity, after the united States of American, China, Japan and Germany.

MINING· Brazil is the second largest producer in the world of iron minerals; the fifth of manganese; the sixth of aluminum; the seventh of gold, and the eighth of pewter. · Brazil has the sixth largest supply of iron in the world.

POPULATION· Brazil is fifth in the world in population, with 165 million inhabitants. · Brazil has 40% of the population of Latin America. · The Brazilian population is young, as 63% is younger than 29 years of age. · Ethnically, the Brazilian population is 55% white, 40% mulatto, 5% black, 0.5% Asian and 0.1% native and that our tendency is to become a mulatto country. · Twelve Brazilian cities have more than 1,000,000 inhabitants. They are: São Paulo, Rio de Janeiro, Salvador, Belo Horizonte, Fortaleza, Brasília, Curitiba, Recife, Belém, Nova Iguaçu, Porto Alegre and Manaus. · There are 23 million Italians and Italian descendants in Brazil and São Paulo has 5 million of them. Therefore, Sao Paulo has more Italians than Rome. · 16% of Brazilians live in poverty and it is estimated that by 2005, it will decrease by 10%.

PUBLIC OPINION· According to a research done at the end of last year, 58% of Brazilians are confident about their country's future, 22% are undecided and only 20% are pessimistic. SLUMS· The Mayor of Rio de Janeiro is developing a project called "Project Slum-Borough", which intends to urbanize all the slums in the city.

TELECOMMUNICATIONS· In 1994, Brazil had less than one million cellular phones. In 1998, cellular phones in Brazil totalled 5.6 million, and today Brazil has 23.2 million. This means an increase of 310% since 1998. By 2005, Brazil will have 60 million cellular phones. · In 1994, Brazil had 13 million regular telephones and, at the end of 2000, this number has risen to 38,3 million. · Brazil is ranked ninth among the countries which utilize the Internet the most, with 10,9 million users, after USA, Japan, Germany, United Kingdom, China, Canada, South Korea, and Italy. · Sixty percent of Latin American Internet sites are Brazilian. · TV Globo is ranked the fourth TV station in the world.

TRANSPORTATION· Brazil has the eighth largest fleet of vehicles in the world, behind only USA, Japan, Germany, Italy, France and Great Britain. · Brazil has the seventh largest fleet of helicopters in the world, with 900 helicopters.

WORLD RANK·

First worldwide: Cattle; coffee, sugar cane, fruits and oranges; iron reserves; in Latin America, Internet user.

· Second worldwide: Producer of iron minerals, beans, manioc, soy and beef; ceramic tiles, refrigeration compressors and jeans; chicken producer and exporter of chicken; largest market for executive jets, helicopters, fax machines and painkillers;

World Investment News Ltd. Top Report on Brazil

· Third worldwide: Producer of refined sugar and corn; maker of regional flight aircraft; largest market for franchising, sodas and motorcycles;

· Fourth worldwide: Producer of grains, cocoa and beer; producer and exporter of pork meat; largest market of computer technology, of shopping centers, refrigerators and freezers and clothes washing machines; television network;

· Fifth worldwide: Country in size and population; producer of gasoline, radios and manganese; major consumer market;

· Sixth worldwide: Producer of milk, iron, pig iron, primary aluminium, cement and music records; largest market of musical CDs; iron mineral reserve.

· Seventh worldwide: Producer of gold, cellulose and eggs; of refrigerators, textiles and clothing; in number of computers and TV sets: largest fleet of helicopters and vehicles;

· Eight worldwide: Producer of cotton, rice, steel and tin: of corrugated paper, chemicals and prepared foods; in number of credit cards; vehicle fleets;

· Ninth worldwide: Internet users;

· Tenth worldwide: Industry in general; energy producer;

· Twelfth worldwide: Automaker; lubricant producer;

· Fourteenth worldwide: Nickel producer;

· Seventeenth worldwide: Zinc producer;

· Eighteenth worldwide: Crude oil and copper producer.

Sources: The major data above was taken out of "Perfil da Economia Brasileira - 2000", edited by CBMM - Companhia Brasileira de Metalurgia e Mineração, "Brasil - Conjuntura Econômica", from the Brazilian Ministry of External Affairs, e "Sete Anos de Real", from the Office of the President of Brazil. Another resources: Anthropos Consulting (Dr. Luis Marins); the Brazilian magazines VEJA and EXAME, Brazilian newspapers (Jornal do Brasil e O Globo), Secretaria de Estado de Assistência Social do Ministério da Previdência Social (Brazilian Social Security Agency); Annual Statistics Report from the IBGE.

World Investment News Ltd. Top Report on Brazil

Company Profiles

AMERICA ONLINE BRAZIL

Contact Information:

Contacts: Av. Marginal do Rio Pinheiros, 5200 Sao Paulo - SP- 05693-000 BrazilTel: (55-11) 3759 7410 Fax: (55-11) 3759 7404 Email: [email protected] Website: www.aol.com.b

Interview with Mr. Carlos D. Trostli, President.

AOL Brazil was the first localized AOL service launched in Latin America. It has been only two years since 1999 so what have been the key steps taken in this short time by AOL Brazil?

When AOL arrived in Brazil the key step was to identify the country's Internet needs and areas of potential Internet business growth, and we decided to focus on the newcomers to the Internet. The Internet in Brazil does not have a high level of penetration compared to other developing countries. Penetration currently stands at around 13% of homes, which means that 5.9 million households in Brazil have an Internet connection. Although the penetration is on a small scale, it is also growing fast, up 31% from the previous year. Our positioning and products are ready to maximize that fast growth rate by offering the newcomers what they require. We have a proprietary browser and an integrated console with all the functions and tools that a newcomer needs to take full advantage of the relevance of the Internet within their own lives. More specifically, we have a browser, instant messenger, emails, multimedia player, etc. We have all the necessary tools to provide the new user with a satisfying Internet experience, and this is a competitive advantage compared with AOL's competitors. Although we came to the Brazilian Internet market at a late date, we have been growing very fast and today we are able to capture a great many of those new to the Internet. We launched in Brazil using version 4.0 and we have already evolved to AOL version 7.0, which offers the latest technology available in the US. An important consideration is that our new technologies are adapted to best meet the needs of local consumers based on continuous consumer research.

This first operation of AOL Latin America began as a joint venture of AOL Time Warner Inc., Cisneros group and Banco Itau. What is the current structure regarding shareholders and is the company open to new depositors?

It is open to new shareholders, in other words, 8% of the company stock is currently traded on the NASDAQ, so it is open for any potential shareholders.

What is the purpose of the investment of US $160 million announced recently by AOL Time Warner Inc. to finance the Latin American Operations?

Before we talk about the purpose of the funding it is important for us to talk about the reason for it. Through 2001, AOL Latin America had built probably the most exciting and fastest growing Internet service in Latin America, demonstrating our relevance on the continent. We have been able to show that we can improve earnings per share quarter after quarter, so this is clearly the right place for an investment. Brazil and the rest of Latin America are absolutely strategic locations for our stockholders. This US $160 million investment, which we expect to be sufficient to fund operations through at least the end of 2002, is the right approach to take advantage of this strategic opportunity for our stockholders.

World Investment News Ltd. Top Report on Brazil

The revenue is growing quarter after quarter. Last year AOL Latin America made US $66.4 million, what percentage was made in Brazil?

We do not disclose these figures by market; we only have numbers for the whole of Latin America. I can tell you that Brazil has contributed considerably to AOL Latin America.

What are your expectations for the growth of AOL this year, 2002?

We hope to continue our drive to increase our paying member base and maximize user satisfaction, so that we can really boost the revenue from subscriptions as we go forward. We have been installing new technologies in the billing and collection areas, which we hope will provide us with incremental revenues in Brazil and Latin America and an increasingly large and well-qualified base of members

Out of the 1.3 million subscribers of AOL in Latin America, how many come from Brazil? How many cites in Brazil do you offer services to and what is your workforce in Brazil?

We do not disclose numbers by country, not even the subscriber levels. In Brazil, users can access our service through a local phone call in 235 cities. We have almost 1,000 employees including our member service staff and our operational staff, the vast majority of them Brazilian. Although from time to time we get a few people in from elsewhere to do a specific job, we are basically a totally Brazilian company. This is important for us because we can really blend in to the society and understand its needs and desires instead of imitating other countries where we followed a different path to success. This allows us to be very flexible within the Brazilian market and that's part of our success..

What do you expect from AOL 7.0 and other new projects in Brazil?

We will continue to drive new technologies that will simplify and be relevant to our users' lives. AOL has conducted a CyberStudy in several different countries and some insightful facts demonstrate the importance and show the growth potential of the Internet in Brazil. Some specific results are: · 71% of Brazilian Internet users said that on-line activities were almost a necessity for them, compared to 40% in the USA and 62% in Germany. In Brazil, 49 % of home Internet users regularly use online banking services, compared to 29% of the users in the USA and 33% in France. · 86% of Brazilian users said that the Internet has improved their lives, compared to 75% in the USA. · 86% of Brazilian Internet users consider their online experiences as an enrichment of their daily lives. With all this in mind, the new technology embedded in the latest version of our software is helping AOL to grow, implementing noticeable changes that help users carry out important tasks. For example, in version 7.0 when you open an email you will see that the users who received the email are highlighted if they are on-line. This means that you can answer them using the instant messenger instead of writing an email. This is an example of how the new technology will make life easier and the Internet more relevant to AOL users.

From your point of view, besides telecommunication companies and contact providers, what other kind of partnerships do you consider significant to an ISP like AOL?

First of all I will give you a brief overall insight into how we see our business strategies and phases of the businesses. We had our initial phase in Brazil, which I would say was through last year. We had the strategic objective of establishing AOL in Brazil and operational objective establishing trials and awareness for our business. The next stage is to build relevance for our users in their everyday lives and our operational objective is to reach our cash break even point. With this strategy in mind, we have considered various different industries but our main need is to bring not only new technologies but also new content. We have just announced a major deal with the SBT television network, where we will carry all of their reality programs as exclusive content on our site for the rest of the year. That means we will be broadcasting "Casa dos Artistas", "Temptation Island" and "Pop-stars", bringing a new level of interactivity for SBT. This will really offer something exciting to our users. We are looking for specific content based on research into consumer needs and desires. We have also recently announced our sponsorship of Gilberto Gil's world tour "Kaya N'Gan Daya" which is basically a tribute to Bob Marley. This is important because Gilberto Gil is probably one of the leading world class artists signed to Time

World Investment News Ltd. Top Report on Brazil

Warner Music, so we hope the synergies between Time Warner Inc. and AOL will produce massive opportunities. We typically import opportunities like Lord of the Rings, Harry Potter or Britney Spears and now we are exporting world class artists like Gilberto Gil. We just brought AOL users the first of many live chats with Gilberto Gil which are broadcast simultaneously in English and Portuguese. This is just one example of many things to come in the future in that direction.

Time Warner, a giant in the media sector, and Cisneros group the biggest media corporation in Latin America. Now the Government is passing a law that will allow the media sector in Brazil to receive investments from foreign corporations (up to 30% of their shares), what is the strategy of AOL Brazil in the Brazilian media market?

I would say that Brazil is such a strategic market for both companies that they will always be interested in this issue. I think it is too early to tell how this will develop, although you will have to ask them for their position because I cannot answer on their behalf..

What are the positive points of the legal and commercial frameworks in Brazil for AOL and the aspects that you would like to change or remodel? How would you describe the compromise of AOL with Brazil and how would you describe the contribution of AOL to the Brazilian Internet?

First, an objective that we have and the Brazilian population in general has, is a flat rate for Internet access via telecommunications companies. Flat rate will push Internet use forward to the next level. Users will be able to research and let their children use the Internet without having to worry about per minute charges, etc. The current system in Brazil is unusual, with single pulse charges after midnight and on weekends regardless of the time spent online. This means that everyone ends up going online at more or less at the same time. This is not fair to society as a whole and does nothing to improve Internet access. Countries that have migrated from charging per minute of use to flat rates have seen average growth in the number of Internet users rise 35%, with connections times going up by around 50%. We are bringing the easiest and most exciting internet to Brazil. We are opening doors for people who really like to embrace technology and the internet. This is the best short-term solution for the Brazilian Internet. It is also something with a great deal of relevance to their daily lives. We see this in the average time people spend online in our service compared with competing services. Our mission is to improve people's quality of life using a medium that we believe will become more important than TV, the Radio or the Telephone.

Mr. Trostli, having what we could call a multi-national career after working for several multinational companies and taking into consideration that this report may attract more foreign investors, What would be your best advice to those international investors that may become part of the present Brazilian business community?

First of all, anyone who wants to invest in Brazil should examine the opportunities offered by the sheer scale of the country, but secondly, and more importantly, they should analyse the different regions of the country. They represent a multitude of different cultures, and careful analysis can help to maximize their investments in each different culture, and this will offer greater success than simply looking at Brazil as one huge market.

Winne cannot be held responsible for unedited transcription.

BRISA

World Investment News Ltd. Top Report on Brazil

Mr. Paulo Francisco de Vilhena Toledo, President and C.E.O. Rua Francisco Tramontano 100 , 11th floor Sao Paulo Brazil Tel: (55) 11 3755 8113 Fax: (55) 11 3755 8111 Email: [email protected] Website: www.brisa.org.br

Project and consulting

Communications Networks

- LAN, MAN e WAN Information Systems.

- Corporate Systems, WEB, Datawarehouse, WAP, Internet, etc.o Software fabric. - Systems and prototypes technical auditing Security.

- Planning, design and implementation. - Contingency and Business Recovery Plans. - Digital Certification (PKI) Planning.

- Strategic, Tactical and Operational RFPs elaboration.

IT Management Methodologies Transference

- IT Management. - SW Fabric and Systems Development. - Network Design, Auditing and Technical Opinions.

Outsourcing

- IT Management, IT Operation, Systems Development, Network Operation.

- E-learning.

- ERP Analysis and Management.

Telecommunications strategic consulting

Market Analysis

- Market Analysis Monthly Report, covering trends, news, wireline and wireless telephony, satellites, data communications, etc. - Direct Calls and Private Meetings

- Direct telephone access to the Chief Telecom Consultant.

World Investment News Ltd. Top Report on Brazil

- Monthly meetings with the Chief Telecom Consultant Business Planning.

Mergers and Acquisitions Support, Market Studies, R&D Programs Management

- Law 10.196/01 (and associated regulations) application management. - R&D projects qualification analysis. - Government Reports preparation. - R&D projects execution management. - R&D investment opportunities investigation and analysis.

Systems Development

- Software Development. - Product development. - Methodologies transference.

Laboratories

Product Certification

- Telecommunications products certification, as required by ANATEL Technical Training - Development and application of technical training programs R&D Partners - 30+ universities and research centers

Support to Government Regulations

- IT - Telecommunications - Network and Systems Security Publishing, Information, Guidance

- Guideline BRISA - Weekly update - BRISA News Member Committees

- Government - Telecommunications - IT Users Seminars

Government Forums Participation

- Board Member of PKI - Brazil (representing the private sector); - Member at COTEC (Technical Commission of PKI - Brazil) - Board Member of the Electronic Commerce Executive Committee (Ministry of Development, Industry and Foreign Trade)

National and International Standardization Support

- Only sponsor of the IT and Data Communications Committee of the Brazilian Standards Institute 3rd. Sector Organizations Support - Hosting of CAAETÉ website (www.caaete.org.br) - NGO dedicated to the protection of the Atlantic Forest in South-East Brazil

World Investment News Ltd. Top Report on Brazil

Eradication of the "Digital Divide"

- Sponsoring of 2 (out of 10) SAMPA.ORG (www.sampa.org) Telecenters - (digital inclusion project in the area of Capão Redondo, southern São Paulo)

Private non-governmental organization Headquarter: Brasília Largest Office: São Paulo Accredited by the Ministry of Science and Technology to Develop R&D projects under the Brazilian IT Law Solid organization, established in 1988 Recognized by the Brazilian Government as a "Public Interest" Organization Vendor independent

Winne cannot be held responsible for unedited transcription.

Caesar Park

Caesar Park Av Vieira Souto 460 - Ipanema 22420-000 Rio de Janeiro BrazilTel: (55) 21. 2525 2525 Fax: (55) 21. 2521 6000 Email: [email protected] Website: www.caesar-park.com

CAESAR PARK IPANEMA: REFINEMENT IN RIO DE JANEIRO

Located in the most elegant neighborhood of Rio de Janeiro, between the sea and mountains, Caesar Park Ipanema is a reference point in the city, known for the quality of its services. Attention is given to the minute details, through a personalized service attending to the needs of each and every customer. This makes the hotel the ideal location for tourists on vacation, unworried but demanding, as well as high-ranking executives who are decision makers for large corporations.

World Investment News Ltd. Top Report on Brazil

Member of The Leading Hotels of the World, Caesar Park Ipanema boasts 222 apartments and suites with frontal or lateral sea views, decorated in a style, which is both classic and cozy, providing the utmost in comfort. In its constant quest for modernization, the hotel offers, among other facilities, apartments equipped with cable television, individual safe box, three telephone lines, answering machine, connection for fax and computer, and access to the Internet.

For executives, the Caesar Park offers a Business Centre, with the latest generation of equipment and infrastructure for support. Besides this, there are five function rooms, where anything from small meetings to conventions for 200 people can be accommodated. The meeting rooms are equipped according to the specific requirements of each customer, and the efficient and courteous service provided by the hotel staff guarantees the success of any type of event.

During leisure time, the guests can count on beach service with lifeguards, sun lounges, and sunshades. Refreshment can be provided as respite from the heat of the "Carioca" sun, with delicious fresh fruits served on the beach. The Fitness Centre is also an ideal place to relax, either with a session in the sauna or a massage. Those wishing to keep fit will have at their disposal the most up-to-date gymnastic equipment. Aficionados of good cuisine have an excellent option in the Galani Ristorante, specialized in Italian Cuisine. Located at the top floor,

World Investment News Ltd. Top Report on Brazil the dazzling view over Ipanema and Leblon complement the restaurant's atmosphere of charm and splendor.

From breakfast to dinner, the menu, carefully prepared by the Executive Chef, satisfies even the most demanding of palates.

On Saturdays the Petronius restaurant boasts the most famous feijoada of Rio de Janeiro, accompanied by the live sound of the equally famous Bossa Nova and Samba trio.

In addition to offering all the services of a 5-star hotel, Caesar Park Ipanema epitomizes the art of receiving guests in all languages, standing out in every detail: highly personalized service, technological update and staff always prepared to receive every guest with a smile.

FACT SHEET

Address: Av. Vieira Souto, 460 - Rio de Janeiro, RJ Brazil

World Investment News Ltd. Top Report on Brazil

ZIP CODE: 22420-000

Telephone: (5521) 2525 2525

Fax reservations/Sales: (5521) 2521 6000

E-mail: hotel_rj caesarpark.com.br

Homepage: www.caesar-park.com

Category: Luxury

Represented by: The Leading Hotels of the World

Opening: November 1978

Airports: Rio de Janeiro International: approximately 35 minutes Santos Dumont (domestic flights): approximately 20 Minutes

Bar: Dionysus

Banquets: Five function rooms; three of them with sea view

Credit Cards: All are accepted

Restaurant: Galani: open daily for breakfast, lunch and dinner

Business Centre: Latest generation equipment and secretarial service

Accommodation: 222 apartments, including 28 suites

Parking: Courtesy for guests

Room Service: 24 hours

Pool: From 6h00 to 22h00, for the exclusive use of guests

Sauna and Massage: From 7h00 to 22h00 (mixed sauna)

Lifeguard: Service extending to the beach

Check In: 2:00 PM

Check Out: 12:00 PM Winne cannot be held responsible for unedited transcription.

Camara-e.net

World Investment News Ltd. Top Report on Brazil

BRAZILIAN CHAMBER OF E-COMMERCE

R. Ferreira de Araujo 221-cj.42 Alto de Pinheiros Sao Paulo - SP- 05428-000 Brazil

Tel / Fax: (55-11) 3026 9112 Email: [email protected] Website: http://www.camara-e.net

CONCEPTION

· "There will be no life outside the Internet" (Bill Gates);

· The internet, as the tool for the globalization and the productivity, controls all the economical activities by breaking historical paradigms from the industrial society;

· E-commerce means the revolution of manners and business/ commercial practices in the information society and knowledge;

· It is vital for the practical transformation of the business world to be followed by organized society institutions, which will be able to interact positively with modernity in nations' development.

INTRODUCTION

The Brazilian Chamber of e-Commerce was founded on May 7, 2001. It is the main multi-sector entity of the Brazilian and Latin American Digital Economy, which is directed to the electronic business as a strategic factor for the economic development in the information and knowledge era.

In this regard, Camara-e.net is being an active participant in the most important forums of discussion on public policies, both domestic and foreign; in order to be able to assure a healthy business environment in regulatory, tax and political terms.

MISSION

The Brazilian Chamber of e-Commerce ´s mission is to discuss, position, promote, represent and defend the collective interests of companies, entities and associate users involved in the electronic commerce, activities, relations and business.

Its main flag is to translate electronic business into Information Technology that is applied to the modernization of economic relations and to increase productivity and competitiveness in all business levels.

OBJECTIVES OF THE ASSOCIATION

· Consolidate and grow its´ membership · Foster business and enterprises´ digital inclusion · Increase the interaction with the public sector

World Investment News Ltd. Top Report on Brazil

· Generate state of the art knowledge · Self regulation · Partnership with domestic and international institutions · Forefront association

KNOWLEDGE AND ACTIONS

The Brazilian Chamber of Electronic Commerce is the main benchmark for spreading the state of the art knowledge through all its communication tools, site, monthly bulletin, directory and partnerships with the most significant media players such as, B2B Magazine, e-Commerce, IDG, Digital Society magazine, Radio Eldorado and Rede Globo (the largest media group in Brazil

In the academic arena, The Brazilian Chamber of e-Commerce has agreements with FGV and USP. In the institutional scenario there are cooperation partnerships with Fiesp (State of São Paulo's Industry Federation), Fecomércio (State of Sao Paulo Commerce Federation), Abranet, Anapp, Brisa, Sucesu and with international bodies such as BSA, TechNet and the Latin American chamber of electronic business.

The Brazilian Chamber of e-Commerce has also a varied program of institutional campaigns, events and seminars, such as the Parliamentary Cafés (Cafés Parlamentares), weekly meetings amongst members and congressmen from all parties ETC…

Main actions

AGENDA 2002

· Initiatives of corporate digital inclusion · Formulation of a National policy of IT and electronic business · Special Studies in key vertical areas, such as broadband and wireless · Consolidation of the legislation on government procurement · Electronic document standards · Dissemination of the bar code readers utilization · Consolidation of the metric criteria of the market · Creation of Arbitration Council on electronic business

Actions of Self-Regulation

· Upbringing high Studies in technology of information and e-commerce Institute; · Studies for an upbringing of an Arbitrary Board to Controversial solutions and a Board to multi- sectors of e-commerce self-regulation; · Institutional, educational and promotional campaigns; · Coalition for free software choice; · Cyber cafés self-regulation; · Market criterion consolidation; · Information of Technology and e-commerce national Board

Actions of Entrepreneurial Inclusion

· Monitoring governmental purchase in IT; · Monitoring public incentives and funds (FUST, Fundo Verde Amarelo, FNDCT, Telecentros, CEF, BB, Sebrae, Comites, Brasil Empreendedor); · International activities encouragement: GBD, CSPP and USA Mission (september/2002);

World Investment News Ltd. Top Report on Brazil

· Pattern projects with the e-Commerce Executive Board; · Consolidation of the legislation towards the public purchase; · Origins and labels: Better practices, security, privacy, quality and compatibility.

MEMBERS

The Brazilian Chamber of e-Commerce has more than 150 members among the main corporations involved with Information Technology, Communications and Electronic Business in Brazil.

GOVERNMENT RELATIONS

The Brazilian Chamber of e-Commerce keeps a proactive interaction with all branches of Federal Government, Executive, Legislative and Judiciary, the state of Sao Paulo's government, Electronic Government and business initiatives, Executive committees, Post Office, Anatel (equivalent to the US FCC), Other State Governments and Municipalities.

At the request of the foreign ministry, The Brazilian Chamber of e-Commerce participates in the ALCA, Mercosul, UN and European Union negotiations on electronic Business.

In regulatory terms, The Brazilian Chamber of e-Commerce defends the creation of a Special Commission in the House of Parliament to analyze and organize, jointly, the proceeding of more than 100 bills, which will create guidelines for the sector.

RESULTS

World Investment News Ltd. Top Report on Brazil

The Brazilian Chamber of e-Commerce has already reached significant political and institutional results for its members and for the market.

· It has contributed for the improvement of MP-2200 (provisional law issued by the Executive Branch), which has established the Brazilian Public Keys Infrastructure

· It has contributed for the Electronic Business Bill (4.906/01)

· It has maintained a strong position opposing the present format of the Postal Law's Bill (1.491/99) which represents a real step backwards for the country

· It has stimulated initiatives for electronic governments

· It has fostered market business development activities among member companies and others

CHALLENGES

More than 100 projects are being discussed in the House of Parliament, which affects the electronic business in Brazil.

The Brazilian Chamber of e-Commerce main challenge is to work on building an Information Technology and e-Commerce National Policy that will stimulate self-regulation and avoid the approval of negative regulatory initiatives that prevent full market development.

INTERNATIONAL PERSPECTIVES

The main issue in the international arena is that the regulatory initiatives in electronic business should be harmonized with international legal principles and with the main international conventions and treaties.

Therefore, The Brazilian Chamber of e-Commerce is participating in important international forums on electronic business, which highlight the negotiations in area of the Mercosul, WTO (World Trade Organization), FTAA (Free Trade Association of the Americas) and ALADI (Latin American Integration Association).

MEMBERSHIPS

The Brazilian Chamber of e-Commerce's role grows as the government modernizes and rationalizes its activities, which brings as a consequence, in general, the cut back in the government's structure and a significant transfer of technical and economical duties from the public to the private sector.

According to this point, The Brazilian Chamber of e-Commerce has a catalyst role, joining members and other entities, searching for consensus regarding the most important regulatory and political issues worldwide.

To consolidate its influence in Brazil, The Brazilian Chamber of e-Commerce has increased the number of memberships with the involvement and participation of major corporations and the development of Regional Centers in some of the most important Brazilian cities, such as Florianópolis, Belo Horizonte, Rio de Janeiro, Brasília, Recife, Porto Alegre and Curitiba.

Winne cannot be held responsible for unedited transcription.

World Investment News Ltd. Top Report on Brazil

Interview with Mr. CID TORQUATO, Executive Director of the Camara-E.Net (Brazilian Chamber of E-Commerce)

13 of June 2002

Camara-e.net was created on May 7th, 2001. What were the reasons behind the creation of this institution?

The main reason for Camara-e.net's foundation was the institutional vacuum in the private sector concerning IT, e-Business and e-Government related issues. There are over 120 bills of law in our Congress dealing directly or indirectly with such matters. Our aim is to help avoid the approval of negative regulation.

Another reason that lead to the foundation of the Camara-e.net was that IT and e-Business are fantastic tools of economic development but in a country like Brazil these tools can also further broaden our social-economic divides. Our chamber was founded to deal with public and regulatory policies, and to foster IT/e- Business development at all levels.

What would you highlight as being the most important contribution of Camara-e.net to the Brazilian digital economy in this first year of its activities?

In terms of public policies, our major contribution has been the proposal of a National Policy on Information Technology and e-Business, elaborated in partnership with the Executive Office of the President and other public and private organizations.

Our Policy encompasses all IT related matters, setting principles and organizing the major issues in calls to action by our governments and governmental agencies at all levels, as well as by private and third sectors.

Through our work proposition, we have established that what matters in the IT sector is the private sector, its associations and its pressure groups. We have to overcome historical paradigms of public/private exchange, setting the agenda, leading the formulation of public policies and monitoring and interacting with our governments to make sure our limited resources are thoroughly invested.

World Investment News Ltd. Top Report on Brazil

Although our study deals with all IT related issues, there is no doubt that the key points are e- Gov, telecommunications infrastructure, regulation and auto-regulation, international negotiations and harmonization of national legislations, imports and exports, international investments and our enormous digital divide.

Regarding Camara-e.net's work to foster business and market growth, our main banner is what we call Business Inclusion, which is our contribution to the broader digital exclusion issue.

Our efforts in this field are focused on bridging the digital divide for small/medium-sized companies, through business education and consultancy, creating awareness and providing information to enable company leaders to decide and act. We say to businessmen: (i) "Do not let inertia set the future of your organization"; (ii) learn and decide; (iii) get connected to the digital economy; (iv) upgrade your human resources to this mindset; (v) and they will spread this new culture to their families and communities, closing up the cycle of digital inclusion.

What kind of companies / organizations are members of the Camara-e.net and what benefits do they get from this institution?

As e-Business cuts the market horizontally, our founding members are the leading companies from the main sectors of the economy, as well as the major portals and main players of the Internet.

Amongst our 130 members, we can count on worldwide known brands such as Accord Group, Amex, Aol, C&A, HP, Ericsson, Fedex, GE, IBM, Microsoft, Nokia, Palm, Reuters, Siemens, Telefónica, 3M, Unilever, Verisign, Visa and Xerox, as well as leading Brazilian companies, like Americanas, Grupo Estado, CPM, Datasul, Correios, Fiesp, Rede Globo, Petrobrás, Serasa, UOL, Varig and Votorantim.

With the support of such giants, Camara-e.net has become the intelligence on IT and e- Business in Brazil.

Theses and other companies have joined the Brazilian Chamber of e-Commerce to build the intelligence of the market and to become the leaders of the net economy in Brazil. We are effectively influencing the present and the future of e-Business in our country and Latin America.

Besides leading public and regulatory matters on IT, our members have access to exclusive information on legislative work, governmental investments and purchases, business opportunities and international trade.

Federal projects in Brazil like e-Governo, the Digital Inclusion Program or ComprasNet, are contributing towards the growth of e-commerce and the use of Internet. How are these governmental efforts contributing towards the transformation of the Brazilian economy?

These efforts are fundamental for the development and the modernization of economic relations in Brazil, promoting gains in productivity and competitiveness at all levels. E-Government is essential to the development of e-Business and the Cardoso administration has made a point of it.

Led by his most acclaimed minister, Pedro Parente, this administration in power since 1994 has made clear that there is no future to government outside the Internet. On-line is the only way governments can cut infrastructural costs, improve management, foster democracy and participationism, offer transparency and control, and promote citizenship and social justice.

Our e-Gov Program, for instance, even though uneven and still limited, is a worldwide reference both in terms of governing tools and public services, of which the highlights are the Federal Government Intranet and information networks; our digital voting system for major elections, reaching 100% of voters; the tax system; the procurement system ComprasNet, responsible for

World Investment News Ltd. Top Report on Brazil up to 30% savings in government purchases; and a great number of other on-line services that improve dramatically the over-burocratic over-the-counter services.

Of course the challenges are still immense, since Brazil is a developing country with limited capital resources, uncountable problems and a huge population of not-haves. That is exactly why we have proposed our National Policy on IT and e-Business, in order to have a plan that deals with such infrastructure matters in a strategic and pragmatic way.

The Brazilian state-of-the-art e-banking system is recognized worldwide as a model. How is this highly developed financial structure affecting the evolution of the Brazilian digital economy? What is your strategy to involve this sector in the activities of the Camara-e.net?

Our banking system as a whole is considered to be very advanced, a worldwide benchmark in many aspects. The banks are the leaders in investments and in fostering the use of IT in Brazil. And they do it for obvious reasons: productivity, competitiveness and profitability.

Correios, our postal services, is also launching its Postal Bank in a partnership venture with Bradesco that will reach all of Brazil's over 4,500 cities, making financial services and the Internet available to millions of Brazilians.

We interact with those kinds of initiatives and support them. We also work together with our members on regulatory issues concerning means of payment, privacy and security.

In addition to this, we collaborate in campaigns to create awareness about important questions, such as digital crimes, best practices in on-line retail, the use of credit cards and Business Inclusion.

The privatization process in the Telecommunications sector in Brazil has allowed for a spectacular growth in the country's connectivity. What has this process done to influence B2B, B2C and B2G? What are your expectations for the future business volume negotiated through the digital economy?

Privatizing our telecommunications infrastructure has been a key aspect to the increase of the use of information technology in Brazil. There is no doubt about it. The number of fixed lines has increased to over 40 million, there are 25 million Internet users and close to 30 million cell phones subscribers. This amounts to around 100 million Brazilians users. However, the sector is now suffering from over-optimism, after having made investments that will never give the expected returns. Nevertheless a consolidation process is on its way, coming to a head in 2003, when privatization restrictions will expire, thus allowing companies mergers and acquisitions to take place.

Both e-retail and e-business will keep on growing fast for the next decade, not only here but also worldwide. We could call it the Digital Decade and the potential is inexorable.

The studies made by Camara-e.net indicate that the Digital Economy will make a turnover of US$ 13 billion in Brazil this year, taking into account B2B, B2C, B2G, on-line media, ISPs and Asps. Retail might has broken the US$ 1 billion mark, with sales growing in cars, electronics and home equipments. On-line commerce is the future.

Since 1997 BNDES (National Bank for Development) has been providing incentives for Software companies to export through its business unit "Prosoft". What does Brazil has to offer in the international markets? How can the Camara e-net be involved in helping this process?

Brazil has a fantastic potential to become an important exporter in many different areas. Software is one of them and, indeed, a crucial one.

Our commercial deficit in technology is over US$ 8 billion a year and is expected to reach US$ 40 billion before the end of this decade.

World Investment News Ltd. Top Report on Brazil

One of our missions is to act internationally, to help harmonize legislations and to break unnecessary commercial barriers between countries. That is why we are setting the basis together with the main IT associations in the US and Latin America. It is what will be called the IT and e-Business Chamber of the Americas. This is why the Brazilian Chamber of e- Commerce, in partnership with the Softex Program and the Brazilian Embassy in Washington, is organizing for late September 2002. It will be a commercial mission of e-banking/e-business software and platform developers. Our goal is to double Brazilian software exports until the end of 2003, adding up to around US$ 200 million.

Public and private have joined forces towards the evolution of the new economy. The government is setting up the basis and the private sector needs to invest constantly in IT. Where do you see this investment taking place?

We believe that investments in e-government will be the main business force in the IT market in the next couple of years. Governments have no choice but to invest heavily on IT, to modernize their structures and cope with the demands of growing e-democracies.

We estimate that e-Gov programs at all levels will consume up US$ 100 billion in investments during this decade. A considerable amount of such investments will come from the private sector in partnerships and concessions with our governments.

This is an important reason why the private sector, especially in a huge country like Brazil, has to get organized and act institutionally to lead the formulation of public policies, as well as monitor and interact with governmental investment processes.

Referring to the FTAA and MERCOSUR. What role is Camara-e net playing in negotiations and what do you think Brazil can add to the digital economy of Latin America? In what aspects can the Brazilian digital economy benefit from these agreements and what are the issues that Brazil still needs to discuss?

Again, the private sector has to play an active role in international negotiations because of the impact these legislations will have on the country's affairs. More and more national legislation has to emanate from international treaties and conventions, especially in terms of e-business.

Camara-e.net's contribution in this process has been to set a pragmatic agenda, identifying what is controversial and what can be easily negotiated. In such negotiable cases, which represent the majority of matters, we have been presenting propositions and papers, setting the basis of the negotiations in important fields, such as best practices in the on-line retail and consumer protection.

In the case of Brazil, we still have to do some homework and approve our National Policy on IT and e-Commerce, create a set of principles and interests, to be able to draw our international negotiation strategies. Camara-e.net is presently working on both.

Brazil has a key role in such international negotiations, particularly in the Americas. Within Mercosul, there is no doubt we have the most advanced legislations in the majority of cases. In terms of FTAA, Brazil has the opportunity to set the pace, since our legislations apply to the whole country, differently from the US where every state has its own laws.

Mr. Torquato, in the book "Desvirtualizando a nova economia" (Devirtualizing the new economy) that you have recently published, you talk about the advantages and inconveniences of the new economy and the challenges to be faced in this new universal network. What would be your message to the international business community concerning these aspects?

Being on-line has brought people and countries closer together. Everybody, everywhere, is sharing the same problems. Humanity has to learn how to distribute wealth more equally. The rich have to take care of the poor, even if only for security reasons. The criminal wars fought in the streets of developing countries, like Brazil, and the lesson drawn from September 11th are proof of this. Good investment must generate wealth all round, not just profitability for a select few. I am sure the frontierless digital world will help human kind be more just.

World Investment News Ltd. Top Report on Brazil

Note: WINNE cannot be held responsible for the content of unedited transcriptions.

Citrix Sistemas do Brasil Ltda

Citrix Av Brigadeiro Faria Lima, 2055 Sao Paulo, SP- 01452-001 Brazil Tel: (55-11) 3816 5730 Fax: (55-11) 3816 5363 Email: [email protected] Website: http://www.citrix.com

Interview with Mr. Roberto Regente Junior Country Manager.

When did Citrix started operating in Brazil?

Citrix is in Brazil since 1997 doing direct sales. The whole way the company tackles the market is two channels. So we are 100% channel-oriented company up until now. With that in mind, by 1999, the company started to look more seriously to international markets. One of the key markets at that time was Latin America and specifically Brazil. Then they decided to open up operations here in Sao Paulo that would be taking care of the commercial issues at that time. That is why I came on board, to establish this operation.

I was in charge of Brazil and later on, due to the size of the market, I moved here. You can fit the entire Europe inside Brazil. There is too much ground to cover and a lot of different aspects from the economic and logistic point of view so they decided to split. I just take care of Brazil now, and you have other people taking care of Argentina, Chile and the other countries. Citrix takes care of Latin America in the next way: the Latin American group is based in Miami and we do have physical Citrix operations in Mexico, Brazil and Argentina. All the rest is being taken care of from Miami.

World Investment News Ltd. Top Report on Brazil

And how did you see the relations improve between the distributors CNT and TD after you establishing operations in Sao Paulo?

When I started, the worldwide channel PROGRAM was not in place in Brazil and all Citrix business was conducted by local companies. We did not work with TD at that time, it was just CNT and a company that does not exist any more, which was: PERROTTI. When you start changing things with the procedures, creating programs and bringing another distributor into place, those changes create a flood on the market. Because you used to hold a niche and all of a sudden you get a competitor. Then you have a channel problem and you get to have companies certified. So in the beginning it was a difficult time, a rough time to get things adjusted and to get the programs adjusted to Brazilian reality. But as soon as we got that in place, all the right procedures and the mechanisms done, the business started to grow and it has been like that since.

Today we have two distributors that are CNT and TechData and we are very satisfied. They bring the products from the US and sell them to our certified channel called CSN, which is Citrix Solutions Network, made of companies that we manage the relationship with them and they do have a comfort signing with us. We have a lot of alleviations from both sides, the way we want them to take care of the marketing and what they expect from us to help them do this type of business. Today we have 64 companies representing us all over the country and Citrix in Brazil has a very unique position about channel, because we do not run for capillarity, for me the sense of having more and more re-sellers is a bad business. I would rather stick with a very manageable number of companies to do business with and that I can offer a very high level of interaction and relationship and have them very focused on my product line in order to succeed for both of us. Let me know the market, the space, who are the top guys on the business space and let us try to get these guys to work with us.

But the products, the software, it is produced in the US?

It is produced in the US, it is imported by two distributors, and it is resold by these companies that are called CSN.

There is a huge potential in Brazil to produce software and develop capacity with low cost and highly qualified workers. Do you agree with this statement?

Yes, but I do not think about Citrix bringing on that space because we actually work with infrastructure products. We are not a development company. We provide infrastructure to companies to create a concept that is called a digital workplace. What is a digital workplace? Information is a very key, sensitive data and it has its value when you need it. If you do not have the right information at your hands now it does not work at anything in a couple minutes from now. So our idea is that if information access has to be as simple as a telephone call it has to be independent from the device you have in your hands, from the type of connections that you are supposed to have, and from the place where you actually are. This creates a concept that is not tight on devices, on network, on anything. We create this type of concept: Being able to get the data, the information that you need to perform your work or take your decision without being tied to a notebook or to a cable modem or to a DSL line or whatever. With that in mind we are working to provide this type of infrastructure to portals and stuff like that. This concept is not really where I think you benefit to have a local company or an investment in, like in India in software development.

I think that the areas in which Brazil can help a lot are solutions areas. The finance industry here, the things that people developed, and the concepts and the procedures are very advanced, but how did they do that? with American products most of them. It is different, it is not to create software but to create solutions from the software which is a quite different concept. You use experience and flexibility. For many years it has been a tight and closed market and all of a sudden it is open. The globalization, new realities and an open economy, no more inflation and the elections. Brazilian people are very flexible on these things because it has been a rough journey, a couple of years from now, you learn how to adjust quickly and be very creative. I think this is one of the key things that we can offer on this type.

World Investment News Ltd. Top Report on Brazil

You mentioned before the virtual access to the office, the ability to connect to a network anytime, from any location. Do you think this is an increasing need in the Brazilian corporate market?

Absolutely. Not just Brazil but I think worldwide. Researches from Gartner state that in the next 3 or 4 years half of the workforce will be mobile. Mobility itself is a very crazy concept. People usually think about mobility as being able to carry one of those things around with you. But really, mobility is more than that, it is not tied to one point, it is not tied to being able to connect to a phone line, mobility is all about speed and independence. This is not just for Brazilian corporations but for all over the world today. The world is global, there are no frontiers. A decade from now you used to know your competitors, today you do not know them anymore. Five years ago you want to buy a stove or a fridge and you used to go to a store that is very specialized on this. Today, if you just take a walk in a supermarket you are going to realize that on the inside you find building materials, computers, telephones, car supplies, everything. This is a kind of crazy thing from an executive sense. I do not know with whom I compete anymore. I do not know where those guys are, if they belong to the same industry. This is a tough concept, because it requires you to be flexible enough and have enough speed to respond to all these changes on the environment. Technology is a key component of this. Technology is the engine behind this thing. The company that does not foresee technology as a key asset will probably not be in the market in a couple of years from now or will be bought or will merge with somebody. Now all the CIO's are responding not to the Financial Director anymore but to the president himself because it is a key asset and because most of the people in the companies, it does not matter the size of the market, are aware of this. It is a frenetic change.

Last March Citrix announced that the Independent Computing Architecture was available for Nokia 9210 Communicator. Is this is the first agreement with Nokia?

No and actually Nokia is one of the device providers. We play with infrastructure that can be available to different sort of devices. You can use it for a PDA, you can use for a communication cell phone, for an e-tablet, for a DOS machine, an ECHO machine, etc. The difference is that I can get the same application that is in your PC and have it running in all those different machines without changing a single line of code. That is the good thing because today if I have a Visual Basic, for instance, that runs in C on a notebook with this size of a screen and I have to make it available on a cell phone then I have to create a WAP version or an SMS version. If I have to put it on an Apple machine you have to have an Apple version. We get that exact application and make it work in an Apple, a cell phone, a PDA, a UNIX box or a LINUX box. That is the true mobility.

That is a cost and time saving aspect for your clients?

Yes because you do not need to be worried about what type of devices your user has on their hands. You do not need to touch the edge of the network. You do not need to touch every PC. You do not need to install software on them to make it work. If a worker wants to have this type of application I get on the console, click the icon on the application and by the time that person is connected you will realize what type of device is he using, you adjust the screen if it is necessary and he will have it but nobody went to visit him on his location, asked him to do some crazy setup, adjusting things and all the DLL conflicts. That thing has to have an end and this is our entire philosophy.

Do you think this is one of the advantages of Citrix when you are creating a partnership, they want to have the same software that you are probably going to have with another partner?

Exactly. We deal with most of the ISPs, we got 130 ISPs. We also get very good partnerships with people like JD Edwards, SAP, Oracle, Microsoft, etc. We got over 350 contracts signed with all those industry leaders, actually I think it is more than that, close to 400. You have to find all the big players in the industry that we can keep relations with.

Now Citrix is an International Company with 1500 employees. How many employees are in Brazil?

World Investment News Ltd. Top Report on Brazil

We are over 1500 employees. We have offices in 30 different countries and our headquarters are based in Ft. Lauderdale, Florida. The company was founded in 1989 so we are close to 13 years old now. Today in Brazil we have 8 employees. It is much better, by 1999 it was just me so we grew 800% in three years (Laughter).

Citrix worldwide accomplished a total turnover of USD592 million. What quantity of those 592 million was accomplished in Brazil?

This is what it was worth last year. But this kind of technology that Citrix put into the market created a concept which is virtual user interface. The market woke up to this technology by 1995. At that time the company worldwide made USD14 million dollars so in six years we got our revenue close to USD600 million. With this type of growth you can measure how things are doing and how the technology is being perceived in the market. We do not disclose figures by country .

And what do you think is the most important reason for such a growth?

Because we do not create a dream. We believe in a real solution. This is what I think is happening in 2002. Companies are tired to spend lots of money and realize that by three or four years after the thing is not well done, that they have over capacity. Citrix ties together the same architecture of the two dominant technologies in the world: The mainframe UNIX technology offers security, scalability, and manageability. These are the key factors for our success; On the other side, the client server is the Windows world, that offers interactivity, the user experience and the ability to do the work by himself, not asking somebody from MIT to get this thing done. What Citrix did was to add these things under one architecture and make it available. With Citrix your IT staff has the management, the control, the security, the backup and everything else again on their hands without changing the users experience in any aspect. So we live in a world where who buys technology are the users not the IT staff anymore. It is imperative that you keep the right to decide, the freedom on their hands, not on the IT staff anymore. That is what we have done on these 13 years and I think this is the key thing that made us successful on the market, being capable to deliver a very solid, business-oriented proposition, not just a technology product. Our technology is being bought mouth-to-mouth, because we do not do a very effective job of marketing it and it works very well. We got this type of revenue growth, the way the company is doing in the market, it came from this.

One of the studies of the Gartner group said that by the end of 2004 50% of the companies in the software industry will have merged or will be acquired by others. What do you think will be the near future of Citrix?

I think Citrix is going to be around for more and more than that. The technology is very solid now and I think today with this new line of products that we are announcing by the end of this semester we are going to be the unique company on the market that can provide the union of two different worlds under the same umbrella. We are going to be able to type under a corporate world all your years of experience and old applications with the latest applications plus all the new Internet content and applications under the same environment. Citrix will be able to provide this consolidation for a corporate world. We are going to have technology in place, products in place that can put these two worlds together, in a way that it can offer security, scalability and manageability without requiring huge investments. We are going to be around for more than that. I do not see Citrix merging or being bought by anybody. It is a very solid company from every aspect: the financial aspects, technology aspects, etc. We are market believers on this arena.

Another study of the Gartner group said that there was going to be a 7% growth in the IT sector this year showing the recovery of the sector. Do you agree with this?

Internationally, worldwide? yes. I think it is fair. If you take a look at last year the US had a negative number, minus some two or four. Brazil reached 12%. From a worldwide perspective I am fine with that. But you have to respect regional. Latin America has been growing much faster due to the fact that the region lacks investments on these areas for decades. All the developed countries are in a stable situation . We are starting to run off, that is why everyone is

World Investment News Ltd. Top Report on Brazil looking at Latin America. The US market has been fulfilled for years now and the average growth expectations are very low because it is a very consolidated market. You have to move your operations to international areas in order to keep your revenues up, one of the key areas is the far eastern, China, India and Japan. Then you have the federal government sectors, which is key for every software industry and then you have different pulses in emerging countries in Latin America like Brazil, Mexico and others. It is just a matter of time.

Compared to a country like China, what could be the advantages of Investing in the Brazilian IT sector?

From a revenue perspective China is a much better offer because it has more population, it has been a museum for years, but from a feasibility point of view Brazil, Latin America as a whole, is much faster. You do not have language barriers. When you do business in China everything has to be in Canton, to support an application to work in China it is a very tough job. You have to find the right partners, you have to learn how they do business, it is not the same way. Latin guys are more flexible, they can adjust easily. Now they are open to the world. There are a lot of barriers to overcome but the potential is huge. The problems and the key thing is the way you tackle feasibility, the amount of money that requires you to invest in order to be successful and there is a learning and practicing curve that has to be in place. When you want to open up a branch in China it is going to take a while before I learn the practice, the culture, to adjust the products, etc. in order to start in the business. It is easier to do it through Latin America, is more like a short, medium-term revenue and China is more a long-term revenue. If you get this, the way the stock market is in place today, you have to balance both worlds. Because you ca not look at the US anymore to perform your numbers. You have to have this mix in place in order to be successful. That is how I perceive China. I think it is a great marketplace but it is going to take a while before it heats up.

Mr. Regente, You worked five years for Microsoft. What took you out of there to come to Citrix?

Basically a challenge. I found a chance to open up a new company from a zero stage to something like this. Have people in place, create a market, create awareness, do programs, adjust things, this is a very challenging thing. It is like conceiving a child.

Winne cannot be held responsible for unedited transcription.

CPQD

Rod. Campinas- Mogi Mirim (SP- 340) Km 118,5 Sao Paulo - SP- 13088-902 Brazil

Tel: (55-19) 3705 7201 Fax: (55-19) 3705 7271 Email: [email protected] Website: http://www.cpqd.com.br

World Investment News Ltd. Top Report on Brazil

Mission

Cpqd delivers innovative solutions to the telecommunications industry that increase productivity, efficiency and quality of customer service. CPqD is a major provider of Operations and Business Support systems, including targeted training and consulting services. Offering hundreds of software applications targeting Customer Care, Billing, Order Management, Inventory, Design, Workforce Management and more, CPqD's solutions benefit companies with subscribers totaling more than 40-million wired and wireless accesses.

CPqD recognizes and values the importance of working closely with other leading technology providers to deliver outstanding end-to-end BSS and OSS solutions. Strong Partnership relations built with premier hardware, software, telecommunications equipment vendors and systems integrators attest to CPqD's capabilities and expertise. If you want to know more about CPqD partnerships please contact at [email protected]. Some of CPqD's partners:

INTERVIEW WITH MR. HELIO GRACIOSA, PRESIDENT OF CPQD.

Você poderia nos dar algumas informações sobre o CPqD em relaçao a privatização da Telebras?

O CPqD foi criado em 1976 como centro de investigações e apoio da Telebras. Até 1998 ficou como parte da Telebras. Com a privatização da Telebras, CPqD foi destacado da Telebras e transformado numa entidade privada sobre a forma de fundação.

Essa fundação pertence a quem?

Pôr definição fundação não pertence a ninguém. Pôr exemplo, se o CPqD como fundação terminar há um juiz quem tenha que dizer para aonde que vão os inmoveis do CPqD. Há fundações de direito publico que tenham que seguir a legislação de orgao publico. Fundação de direito privado segue a legislação da empresa privada. Na maneira de comprar ou contratar pessoas são iguais a um empresa privada no nosso caso. Nos não temos dinheiro do tesouro, do orçamento do Brasil. Resumindo é como se a CPqD tem a forma de empresa privada sem os acionistas.

World Investment News Ltd. Top Report on Brazil

Uma empresa privada tem conselho de administrações e assembléia de acionistas. Uma fundação tem conselho de curadores. Temos um conselho de curadores formado de doze membros. Um membro é indicado pelo ministério de comunicação. Um é indicado pelo ministério de ciência e tecnologia. Um é indicado pelo BNEDS e outro indicado pela FINEP que é órgão do ministério de ciência e tecnologia. Os outro oito são eleitos. São dois representantes de empresas operadoras, dois representante de clientes do CPqD, dois representes de sociedades civis e dois representantes da comunidade científica. Quem era o representante do ministério de comunicação é o senhor Quadros, que não era ministro a duas semanas atrás. Ele era o presidente do conselho então virou ministro, a segunda posição mais importante da sua carreira profissional porque a mais importante é de presidente do conselho de CPqD (risada).

Gostaria de saber porque o CPqD trabalha no setor de telecomunicação e que produtos e serviços oferece?

Éramos o centro de investigações da Telebras que era o único centro da Telebras. Todos nos no CPqD, ao longo da nossa história estudamos todos os aspectos da telecomunicação. Desde apoio de equipes, consultoria tecnológica para as empresas de telecomunicações e também software, sistemas de suporte a operações de negocio para telecomunicações. Privatizamos, continuamos na mesma linha com uma pequena diferencia. Desde 1998 podemos oferecer estes produtos a todas as empresas de telecomunicações, no Brasil e no exterior e também podemos oferecer esses produtos a outros segmentos de mercado no Brasil. Pôr exemplo, o setor elétrico, bancário. Nossa origem é telecomunicações tanto com o desenvolvimento de equipamentos tanto com o software. Três anos após a privatização estamos atuando em outros mercados no Brasil e no exterior. Aumentamos a nossa atuação.

Que tipos de empresas podem se beneficiar de os produtos de CPqD?

Nossos principais clientes hoje são empresas operadoras de telecom. Quase todas as empresas do Brasil. As quatro grandes: Telemar, Telefônica, Embratel e Brasil telecom são clientes. GVT é cliente, a Vésper é cliente. Depois as celulares também, quase todas são nosso clientes. Esse conjunto cria a maior parte do nosso faturamento. Depois temos uma categoria de industrias de telecom, apoio, ensaios, consultoria e testes para Arcatel, Nortel, Motorola, etc. Esse é o segundo maior grupo de clientes nosso. Temos também uma outra categoria que também são industrias mas elas tem a tecnologia de CPqD. Nos vendemos a tecnologia para que alguma indústria produza em serie aquele produto. É um grupo que tem contatos com o fornecimento de tecnologia e nos pagam royalties. Tem um conjunto de outros clientes que estamos priorizando este ano que são os governos. Estamos adaptando nossos sistemas de software para a área de governo. Tanto federal quanto municipal. Estão sendo adaptadas para a administração pública. O outro conjunto é o setor bancário e elétrico. Nos atuamos nas oportunidades de mercado que geramos internamente através de nossos trabalhos de investigações mais aplicadas a tecnologia. Também temos acordos com institutos de pesquisa. A partir dessas duas "inputs" nos olhamos soluções em muitos casos com parceiros empresariais. As quatro áreas, redes de telecomunicação, comunicação ótica e redes de comunicação sem fio são áreas muito específicas de telecomunicação. Temos sistemas que estão operando em quase todas as operadoras. Nosso sistema de rede externa está em Embratel, Telefônica, Telemar, Brasil telecom, Vésper, GVT. Essa é a posição estratégica de CPQD, um provedor de soluções tecnológicas no cenário Brasileiro. Manter a inteligência nacional de telecomunicação, realizando trabalhos de vanguarda. Na Segunda posição, provedor de tecnologia de sistemas. Transferência de tecnologia para empresas nacionais. O terceiro é o provedor de sistemas software de grande porte. Fomos contratados pelo ministério de comunicação para lançar alguns terminais do governo eletrônico.

Quais são os seus projetos de Pesquisa y Desarrolho mais importantes no momento?

Temos três grandes linhas de atuação. Uma é voltada para novos serviços de aplicação. Outra é voltada para tecnologia de transporte. Nosso grande ênfase é em "optical communications, optical network". Também temos uma linha voltada a novos sistemas de suporte de operações de negócios. Antes da invenção da Internet o mundo de telecomunicação era as empresas que vendiam equipamentos para as operadoras de rede. Depois que inventaram a IP o mundo de

World Investment News Ltd. Top Report on Brazil telecomunicações ficou muito mais rico e complexo. Empresas que oferecem acesso, empresas de navegações e empresas de conteúdo.

Quando o CPQD representa o Brasil internacionalmente como é percebido o setor de IT do Brasil?

Creio que o nosso setor de IT com tecnologia própria ainda não tenha muita presença, nao e muito percebedo. A tecnologia do Brasil não está presente no exterior nessa área. Em CPqD temos uma diretoria internacional, com planos para aumentar as nossas rendas no exterior. Temos clientes internacioanis, instalamos sistemas nos EEUU, sistemas Globaltron e temos sistemas na Bolívia. São sistemas de software. Temos um sistema na Alemanha e em cable na Espanha. Ainda e pequenha la participaçao internacional.

Tem firmado un contrato de 60 milhoes de Reais com a Telemar, uma boa maneira de començar o ano. Quais são as suas expectativas esse ano em termos de "revenue"?

A situação está muito ruim para telecomunicações. No nosso plano deste ano diversificamos os clientes. Esperamos que as nossas vendas para o setor de telecomunicação vão parar. Mas os outros setores, como o governo e novos clientes, tipo Petrobras vão aumentar. Nosso plano é que as receitas desse ano vão estar no mesmo valor do ano passado. 215 milhões de reais.

CPqD vai ser o centro de negocios de Campinas para desenvolver o e-commerce. Qual e a sua opiniao de o B2B em Brasil?

Creio que vai crescer muito. O Brasil tem uma distribuição de renda muito desigual. Tem as pessoas mais pobres e mais ricas. Nas cidades mais ricas como São Paulo e Campinas a dinâmica é muito veloz em termos de inovações. Nessas regiões o e-commerce vai crescer muito. O que o Brasil precisa é uma maior dinâmica das pequenas e medias empresas. Estamos desenvolvendo um projeto com o dinheiro do governo para criar Centrais De Negócios Eletrônicos, este ano em onze regiões do Brasil, com portais dedicadas a economia de cada região. Estamos começando na região chamada de Triângulo Mineiro, uma região de atividade agropecuária com 5 mil produtores pequenos e médios. Queremos criar um centro aonde eles podem entrar nos sites que mais interessam a eles. Também eles podem fazer negócios diretamente através das cooperativas usando o comercio eletrônico. Em Campinas tamos estudando outros, uma ligada a serviços de transporte. Em Pernambuco um outro ligado as novas tecnologias. Um trabalho en el que tamos contratados por o Ministerio de Ciencia e Tecnologia. Há uma expectativa de que aumentando a dinâmica das pequenas empresas isto pode ter um efeito muito positivo na economia das regiões e futuramente nas exportações.

Quando vim voçe a CPqD?

Vim para o CPQD antes dela existir. A Telebras foi criada em 1972. Fui trabalhar na Telebras em Brasília em 1973. Lá foi projetado a criação de um centro de desenvolvimento fora da capital em uma região que tivesse belas universidades então fue escolhido Campinas. A Telebras crio a CPQD em Campinas em 1976, eo Foi uma dessas pessoas que vieram para cá no começo. Antes da Telebras fiz faculdade e mestrado de engenharia. Foi engenheiro depois diretor de projeto, gerente de departamento, de programas, etc. Até que me convidaram para ser o diretor da Telebras e depois presidente da fundação CPQD. Alem disso, eo tambem tenho um curso de journalista e logo de mecanico de aviao.

Winne cannot be held responsible for unedited transcription.

World Investment News Ltd. Top Report on Brazil

CPM

CPM SA Rua Jeronimo Teles Junior, 35 Sao Paulo, SP- 05154-010 BrazilTel: (55-11) 3908 8054 Fax: (55-11) 3908 8485 Email: [email protected] Website: http://www.cpm.com.br

Interview with CARLOS REGO GIL, President of CPM

In the recent history of CPM, in the year 2000, 51% of the shares were bought by an international group of investors. Why did CPM call the attention of the Deutsche Bank and, from your point of view, how has this affected the development of CPM?

We started to look into CPM in mid 1999 because of a few reasons. First, it is the business that CPM is in, the business of integration, of information technology, of telecommunications and computers. This is a very important business that is going to grow. Because we have the conversions of the technologies and the pace of technological advances, you have new medias, the Internet, you have wireless, you have privatization, and you have deregulation. It becomes very complex for the companies to make a decision on where to go. They will receive Microsoft in the morning, IBM at lunchtime and so on. Everybody is telling the executive of this company what the solution is. Despite the conversions there are two very different worlds in computers

World Investment News Ltd. Top Report on Brazil and the way you approach the problem is very complex. What happened is that the decision has moved from the CIO to the CEO and the CEO is not necessarily a technical minded guy, he needs someone to guide him through this situation. This business has been growing at a rate of 10% to 15% per year. The second point is that we hired an outside consulting company, one of the big 5, and they did a survey on the customers of CPM. CPM has around 200 customers among the fortune 500. We asked the customers what was their reaction about CPM and we received a very positive response almost from 100% of them. CPM delivers on time, we have good quality and our relation with the customer goes beyond the contract. In this era of virtual relationships we feel it is important to have a name that people can know and trust that they will be there. The other reason that made us look at CPM is its list of customers. If you take the 200 largest companies in Brazil they are CPM customers. CPM has a very big network of partnerships. And last but not least, the people of CPM, the 2,500 good quality people that work in this company.

In this sector partnerships are a must and companies are coming up with new innovations and products all the time. In this active environment, what is your policy to always build new and better partnerships?

This is the hundred-dollar question. You have to keep on top of things. We are constantly reading, researching and working. Last year in May we hired the Lloyds consultant from the US to help us with our product line, to design the CPM product line for the next few years.

We are very lucky with our shareholders, Deutsche Bank, the capital partner. They lead a group of international investors and these investors have investments in about 250 technology companies all over the world. This gives us a very good network. Here in Brazil we had the opportunity to do the postal bank and Deutsche Bank controlled a company in Spain that did the postal bank over there. They immediately put us in contact with this company and we are working together on this project. Deutsche Bank no longer controls them. The same thing happens with the other shareholders, we are constantly exchanging things. This is the name of the game; CPM is the largest Cisco dealer in Latin America. You have to be constantly monitoring and following the trends.

You offer a complete portfolio of IT solutions, in fact you like CPM to be linked to the idea of Independent Integrators. Could you give us a brief out line of what is exactly that you offer to your clients?

The independence is just to make a point that we are not tied to any of the companies that I mentioned earlier. We have a very good relationship with Cisco but we are not Cisco bound. Each customer's needs vary and we will go with whatever company is going to be best for him or her. Either that or we will develop our own solution. CPM is the largest independent customer software developer in the country. We are probably the only independent one-stop-shop in Brazil. If you are a company you can count on CPM for all your IT telecommunications needs, we have just signed a contract here in Brazil with one of the three telecommunications operators for a CRM application. We supplied the hardware for them as well in this case, we designed the network, we installed the equipment and we will manage the operation for them, meaning that we will keep the network up and running from a technical point of view. This is one of the largest call centers in Brazil. Projects vary, sometimes it is just a small thing, and other times it is an integrated solution. We always continue giving our services to the customers to maintain the products they purchase. Other companies will offer a complete solution for a CRM situation but they do not offer hardware, they do not offer services, etc. They will just offer the package and then they will implement it.

Are not there other companies that could be called one stop shop for IT solutions?

They could but except IBM we are the only ones that will offer to install PCs. CPM is working with Telefonica to install all of the terminals that we developed to supply free Internet for the people. If our product is being used in other situations like Banks we will go from A to Z in that situation.

World Investment News Ltd. Top Report on Brazil

The central issue concerning IT and banks now is the SPB (Brazilian Payment System). Are you involved in the new payment system, the SPB?

We are not as involved as we would like to be. Together with the consulting company we have developed the solution and we have sold this to a number of Banks. We installed it and we are maintaining it. The same way as what we did with the millennium bug, we produced some software to help them in the Y2K situation.

How would you have liked to be more involved?

We would have liked the whole system to be ours and to sell it to more customers. We did not have the market share we would have liked.

What about the Public Sector. The Brazilian government is doing major investments in IT, are they among your clients?

We have just recently started to pay more attention to the public sector. Originally CPM was a company that was working with the finance sector and this is still our main target, but since we changed one of our shareholders back in 2000 we moved very strongly into telecommunications, manufacturing, retail and more recently into the government. I think that there is a huge opportunity. People do not realize that in the Brazilian Government, mostly the federal Government, there has been a very silent revolution going on since 5 or 6 years. Preparing this sector for a massive use of digital technology, they are changing the way the Government does business. This is especially true for the areas of education and health. There is a program that the state government of Sao Paulo has started. It is basically a government shopping center. It is a huge installation, like a shopping center and very well done. If you need to do business with the government you can go there and do what ever you need. For instance you can have your passport done or discuss your social security, everything is there in one single location and it is all IT based. Currently we have 20 terminals there where people can go there to be linked to the Internet. You can surf the net, send e-mails, chat and you can also do business, and this can be a banking terminal. This infrastructure that the Government has put in place is very slowly coming to the light. There have been a lot of discussions about how to handle this but the money has not come out yet. When the money is out this will give you a formidable opportunity for schools and hospitals for care centers. I do not know of many other examples of that magnitude in the world. I just recently participated in a Lloyds Bank conference in the US, we were talking about the new areas were technology will continue to grow. One of these areas was Governments and public services. In Brazil we have the vote counting system, I do not know many countries in the world with 100 million people were when there is a vote we know the result 30 minutes later. There is a joke about this, maybe we will export this technology to countries that ca not handle very well the online voting system.

Does this have to do with a geographical expansion process in CPM?

We had an office in Chile but we changed our strategy a bit focusing on the US market. Argentina, South America, was a natural step but it is in a holding pattern now because of the situation there. We will still do business there because most of our customers have interests in South America. I think that Brazil has an extraordinary opportunity to enter the US market in this area because there is technical expertise in the country, we are cost competitive as compared with countries like India. And we are in the same time zone. If you want something solved immediately you ca not talk to someone who is sleeping. Finally Brazil is one of the most advanced countries in terms of financial institutions. Even when you compare it to the US or Europe because the hyperinflation made us do that. In the US inflation does not make a lot of difference but here it does. If we enter the US market we can take advantage of this.

World Investment News Ltd. Top Report on Brazil

CPM has had an average growth of 29% in the last 6 years, last year you had a turnover of $473 million Reais. What reasons contributed most to your growth in revenue and what are your expectations for 2002?

We have 4 business areas and 7 areas of expertise that contribute to 26 different products. In the 4 business areas, infrastructure is the biggest one; it was responsible for almost 30% of our turnover. There is the systems business that would be another 30% and the rest is spread evenly between services and business information. The financial industry, banking, insurance etc. is responsible for approximately 60% of our turnover. Telecom is responsible for 20% and the rest are distributed evenly across the other industries and the Government is starting to become important. Before privatization the Government was the largest user. The approach is new but you do not necessarily have to deal directly with the Government, you have to be around the government. The postal Bank is an example. We are looking very strongly at the level of the City Government. Today the management of a city is becoming very complex. There is a Law that you cannot spend more than you earn and the Majors of the cities are getting in trouble trying to uphold this Law. This is very integrated with the health and education because of the budget that comes to them. So we are looking into a package that we can sell to different cities.

Where are you focusing your investments at the moment?

We are basically moving towards wireless and Internet, solutions to manage businesses. Being able to work from home instead of coming to the office is the future. Sophisticated software for handling objects or images, a package, an application... It is a very complex thing, pooling a lot of small pieces that are developed all over the place having the problem of how do we use what has already been developed. Today in the development of software you have to be qualified to enter the European and US markets, we are investing a lot in this area now.

From your point of view, what are the main priorities that the next government will have to face after the elections?

They will have to continue investing heavily in education, even though Brazil has already a great number of high-qualified workers in this industry but we have to keep investing in the postgraduate education. We need also to make a concentrated effort in promoting the Brazilian software industry abroad. For all of the reasons I mentioned before: Quality of the workforce, low costs and the knowledge base that exists in Brazil. Brazil could easily be a major exporter of software but there is a lack of a concentrated effort. We need a Marketing effort, we need to sell ourselves better but the most important thing is that we need to put business profile behind us.

Winne cannot be held responsible for unedited transcription.

CTIS

SCN Qd 04 Bl B Nr 100 Sl.401 Brasilia, DF- 70.714-900 BrazilTel: (55-61) 426 9202

World Investment News Ltd. Top Report on Brazil

Fax: (55-61) 327 2229 Email: [email protected] Website: http://www.ctis.com.br

INTERVIEW WITH Mr. ALVADIR DA SILVA OLIVEIRA, PRESIDENT OF CTIS.

O Sr. Oliveira contou que a CTIS começou em 1983 mas até esse ano as companhias de software não eram tão freqüentes no Brasil. Então, de certa forma, você foi um pioneiro na indústria de Informática no Brasil. Qual a razão por trás do início da CTIS, como tudo começou?

Realmente nós trabalhávamos em uma Empresa pública e já trabalhávamos com IT na área de informática e tivemos numa época a visão de que o Brasil deveria realmente demandar, ou seja, demandar os serviços na área de informática de IT. Então foi essa a visão inicial, transformar a experiência técnica em uma experiência de negócios, que era o nosso objetivo, ser empreendedores. Essa foi realmente a visão inicial.

A CTIS teve um crescimento muito importante. Por exemplo, a "Valor Econômico" publicou uma pesquisa colocando CTIS entre as seis maiores companhias no setor de IT. O que explica esse crescimento incrível?

Nós tivemos um crescimento, nós fomos não a sexta, mas se você ver, nós fomos a quarta Empresa. Porque foi publicado... quando você coloca o quadro, nós fomos a quarta. Mas na reportagem saiu a sexta. Mas nós fomos a quarta. Então fomos a quarta no ranking nacional considerando as Empresas de tecnologia e as Empresas da economia em geral, mas na área de tecnologia nós fomos a primeira. Então o nosso crescimento, esse crescimento, ele realmente aconteceu de 1997 até o ano atual. Então nós tivemos, a CTIS é uma Empresa de 18 anos e ela cresceu até 1994-95 e depois fizemos um "spin off", ou seja, uma venda de parte da Empresa para um grande grupo de São Paulo. Então ela tem duas histórias: uma até 1995 e outra depois de 1995... de 1997, na verdade. Então de 1997 para cá nós fizemos uma retomada da Empresa e tivemos um crescimento realmente grande, grande crescimento e rápido, espetacular. Passando de um faturamento de 14 milhões de Reais para um crescimento de 96 milhões no ano de 2000 e vamos crescer mais ainda, mas esse crescimento foi realmente espetacular. Como aconteceu isso? Foi uma retomada com o esforço de uma equipe que objetivava fazer um retorno rápido. Enfim, fomos para o mercado e concentramos nossos esforços aqui, no Distrito Federal e hoje o Governo Federal está necessitando de uma grande, em função do governo eletrônico, uma grande transformação, ou seja, realmente está tendo de se aparelhar, ou se adequar em termos de tecnologia. Então o Governo Federal, o Estado daqui é um grande comprador de serviços, que é o nosso foco de serviços na área de tecnologia. Então nós temos o Governo, o grande demandador, e estávamos exatamente aqui em Brasília nesta oportunidade. A retomada, o cliente, o Governo como grande demandador, a própria privatização das telecomunicações no Brasil foi espetacular e as Empresas de Telecomunicação no Brasil em grande parte se concentram aqui no Distrito Federal, Embratel, Brasil Telecom, TCO (Tele Centro-Oeste)... Então dois focos, o Governo e as Telecomunicações, proporcionou o crescimento, a demanda de informatização pelo setor público e a privatização da área de telecomunicações no Brasil. Proporcionou o crescimento uma série de Empresas dentre as quais citei essas.

Muito interessante que você menciona a parte de Telecomunicações, porque a indústria aponta para o futuro, um dos setores do futuro com muita expectativa de crescimento será o setor de telecomunicações como um todo, principalmente de soluções WAP e nesse sentido, o que está fazendo a CTIS para desenvolver esta área de negócios que tem muitas promessas para o futuro?

Nós temos duas linhas de negócios, dois departamentos. Nós temos um de serviços, de desenvolvimento de software, principalmente para o Governo, esse é um segmento realmente bastante expressivo porque o Governo precisa desenvolver software para acompanhar essa tecnologia. Então nós temos o que chamamos de fábrica de software. Temos o outro

World Investment News Ltd. Top Report on Brazil segmento, depois eu vou chegar na área de Internet com interface com WAP. Temos também a área de out-sourcing ou body-shop que nós colocamos profissionais técnicos treinados no órgão de Governo. E agora, respondendo a sua pergunta, essas duas áreas são muito importantes para nós. A outra área onde a CTIS está desenvolvendo o maior investimento com capital próprio dando segmento de Internet. Internet aonde? Nós criamos o portal Mix, que deu a nós a perspectiva, é um portal vertical, onde estamos formando banco de dados para a venda de informações. Essas vendas de informações, Business to Business, Business to Consumer ou, nós chamamos e-Information, venda de informações pela Internet, por exemplo, um banco de dados sobre pessoas ou autoridades que ocupam cargos no Governo Federal. Nós temos um banco de dados de mais de 100.000 autoridades que ocupam posições dentro do Governo, que podem ser acessados pela Internet, utilizando inclusive a tecnologia WAP e também por telefone, usando um sistema 0300 e você vai poder acessar e ver quem é quem nesse banco de dados. A expectativa é chegarmos também, mediante um convênio com a Infraero, que é a companhia que controla os aeroportos no Brasil, estar disponibilizando, colocando essas informações sobre vôos na Internet, utilizando a tecnologia WAP também e pelo telefone. Se você quiser saber se o vôo está atrasado ou está dentro do schedule, você liga e obtém essa informação. Essas informações serão remuneradas através de patrocínios, na Internet através de banners, e assim vamos estar fazendo outras informações relativas a cotação, ou seja, de veículos que pode ser feita pela Internet ou pode ser feito novamente utilizando tecnologia WAP ou pelo telefone também. Então esse é o projeto que nós temos, que é onde a CTIS concentra o investimento próprio. Temos interesse, é possível ter parceria com investidores nacionais ou internacionais. Mas nós queremos transformar o status deste portal em investimento para na hora em que ele estiver na situação de um break even, de receita-despesa, assim aí é o momento oportuno para nós irmos buscar os investidores.

Nesse momento o capital de risco está voltando outra vez a níveis mais aceitáveis do que desses últimos dois anos. Nesse sentido você estaria interessado em formar uma parceria, uma associação com algum investidor estrangeiro?

Sim, veja bem, o que acontece é que no Brasil, como no mundo todo, o investimento Internet teve uma fase interessante, mas os empreendimentos não deram resultado em termos de retorno de capital, então exatamente nesse momento é que nós estamos entrando, ou seja, estamos lançando esse investimento. Todo o nosso objetivo hoje, o investidor que fosse se interessar por esse projeto, ele hoje não avaliaria o investimento como nós consideramos que ele vai ter um retorno. Então nosso objetivo é com investimento próprio, crescer o investimento, viabilizar o investimento. A hora que ele estiver viável nós passarmos à fase de start-up e aí vamos ter o investidor para alavancar ele desse projeto, aí em nível de âmbito nacional, ou seja, em todo Brasil e também no exterior. Hoje a nossa concentração, o foco é o Distrito Federal, ou seja, Brasília, e São Paulo. São Paulo é um Estado muito representativo no Brasil e talvez represente 50% da economia nacional. Mas o mercado aqui no Distrito Federal é muito importante.

Então não descarta no futuro uma possível expansão para o exterior, uma expansão internacional?

Não só não descartamos, mas também o objetivo nosso e sabemos que estaríamos abertos a um possível "joint-venture", "joint-e-business" sobre o portal.

Como você mencionou, tudo isso requer muito investimento, mais também requer muito capital humano. Possivelmente um dos segredos de uma Empresa que funciona bem é o capital humano. Nesse sentido que cito a CTIS com respeito à competência, sentido de qualidade, sentido de bom serviço ao cliente.

Sim, veja bem. Inclusive quando falamos de Internet, de Portal, inicialmente, principalmente no Brasil, as Empresas que lançaram portais focaram na tecnologia, talvez seja aí o motivo dos não-sucessos, dos insucessos dos portais. A CTIS, ela refletiu, ou seja, reavaliou todas essas possibilidades, esses casos de insucessos e ela focou, apesar de ser uma Empresa de tecnologia, ela focou, ou seja, o foco do nosso portal, ele tem foco e prioridade no modelo de negócio. Nós usamos a tecnologia como suporte mas a prioridade é o modelo de negócio, aonde nós buscamos para o nosso portal parcerias, quem tinha banco de dados interessantes, quando falamos dentro do compra-direta e compra corporativa, o compra-direta é um site onde

World Investment News Ltd. Top Report on Brazil nós buscamos para parceiros os maiores atacadistas, fornecedores e hoje estão com a CTIS nesse empreendimento. Acreditamos que o nosso portal venha a ser viável, ou seja, nós vamos atingir o ponto de equilíbrio, atingir o break even dentro dos próximos... dentro de uns 18 meses, estaremos atingindo o ponto de equilíbrio do nosso portal.

O Sr. Oliveira nos que é uma pessoa tradicional no planalto, que ele pessoalmente estaria ali para assegurar que tudo funciona bem e nesse sentido é um serviço de qualidade para oferecer ao cliente, é uma presença, enquanto a outra parte é a de solução de software. O que os diferencia das outras companhias?

Nós temos o nosso lema: Inovação e Qualidade. Inovação é busca de novas tecnologias, tecnologias aplicáveis à realidade de nosso país e também do processo de evolução, e qualidade é realmente a qualidade da informação, a qualidade de atendimento e a qualidade da prestação de serviços. Isso talvez tenha sido, a razão não só do crescimento da nossa Empresa, como também da fidelidade dos nossos clientes. A CTIS hoje tem clientes que nós prestamos serviços a esses clientes como a ECT (Empresa de Correios e Telégrafos), o órgão que controla as eleições no Brasil, chamado TSE, que a CTIS presta serviços a mais de 13 anos. E isso nós consideramos que têm sido possível em função das nossas premissas que são inovação e qualidade na prestação de serviços e qualidade no relacionamento com o cliente.

Boas premissas. Se os dados não são incorretos, para o ano de 2001 tem uma previsão de faturamento de 140 milhões, estão essas previsões corretas?

O ano de 2000 nós fechamos com 133 milhões. Realmente prevíamos 142 e fechamos em 133 milhões, que foi um dos melhores resultados no Brasil, em termos... você tinha uma expectativa, uma meta, mas no Brasil nós tivemos uma série de problemas no ano de 2000. Relacionamento, problemas da Argentina, problemas também de ter influência o evento do dia 11 de Setembro, ter influenciado na economia do Brasil de alguma forma. O Governo que é o nosso foco reduziu o orçamento, então nós atingimos 133 milhões e já temos dentro do nosso planejamento para 2002 uma expectativa, uma meta de 202 milhões. Um crescimento de mais de 50% no ano de 2002. Essa vai ser a nossa meta publicada para 2002.

É uma meta, um desafio muito importante...

... É muito importante mas é uma meta extremamente factível de ser alcançada Étore em função já de contratos firmados, contratos assinados pela Empresa já no final de 2001 dos quais Santos é responsável por parte, ou seja, perto de 30 milhões que é o recorde de fechamento de Étore Santos. Então nós temos uma meta muito consciente, ou seja consciente de ser atingida.

Há muitas companhias norte-americanas que estão investindo no Brasil, principalmente em Campinas. Nesse sentido, há interesse de oferecer seus serviços a essas companhias americanas?

Sim temos. A CTIS hoje tem interesse por dois mercados, o Distrito Federal, São Paulo- Estado de São Paulo e dentro do Estado de São Paulo, Campinas é muito próximo, Campinas fica a 100 quilômetros de São Paulo. Então o nosso foco é São Paulo e o Distrito Federal, grande cidades de São Paulo, inclusive Campinas, nós temos acordos inclusive com Empresas de Campinas como Lucent, CPQD que é um centro de pesquisa tecnológica voltada para telecomunicações, enfim, que ficam... a IBM, que é muito forte em Campinas, nossos parceiros, ficam em Campinas. Temos um relacionamento de parceria e de prestação de serviços já com essas Empresas e temos interesse em prestar serviços para outras Empresas que venham a se instalar não só em São Paulo, Campinas, Santo André e enfim, nas cidades que ficam próximas à Campinas.

Qual a sua visão para a CTIS nos próximos anos? Onde quer chegar com a Companhia? Onde a quer posicionar?

Nosso objetivo é nos posicionarmos ou consolidarmos em dois mercados. Continuamos no Distrito Federal, em São Paulo e o terceiro mercado: Rio de Janeiro. Quando nós falamos

World Investment News Ltd. Top Report on Brazil nesses três mercados nós estamos falando de 60% da economia nacional e a CTIS quer crescer de forma bastante consistente e com qualidade. Mas nosso foco é prestação de serviço e, no meu pensamento, prestação de serviço você não pode crescer para o Brasil todo. O Brasil é um país muito grande. Então a partir da hora que você cresce, se não for de forma não ordenada você perde na qualidade do serviço. Diferente, lógico quando nós falamos Internet. Nós queremos por São Paulo, que vai ser nossa próxima etapa, transferir nosso portal que está aqui hoje, e por São Paulo queremos atingir o Brasil todo e no futuro. Hoje os nossos bancos de dados, nossas informações são voltadas para o Brasil. Mas pode ser que no futuro a gente venha a atingir, ou seja, realmente, outros países enfim, como Europa, Estados Unidos, Merco Sul. Mas hoje, nossa visão, continuamos firmes nas premissas de qualidade para isso a nossa visão de mercado é São Paulo e Distrito Federal.

É importante não perder a qualidade. Com a globalização de hoje é muito possível chegar a outros mercados e com o Portal Mix as possibilidades são infinitas. Países como a Índia por exemplo oferecem soluções de IT que são "out-sources" e vocês contemplam essa possibilidade também?

Em princípio o nosso foco é o Brasil, mas já pensamos na possibilidade com a nossa tecnologia, fazer um join-venture em outros países, onde o nosso capital é a nossa tecnologia agregando investimento financeiro de outros países e mercados de outros países é o nosso objetivo. Inclusive já estamos sendo convidados para análise dessas possibilidades.

Winne cannot be held responsible for unedited transcriptions.

ENDEAVOR

ENDEAVOR BRAZIL

Av. Brig Faria Lima, 3729 Sao Paulo Brazil Photo 1 Tel: (55) 11 3049 5503 Fax: (55) 11 3049 5577 Email: [email protected] Website: http://www.endeavor.org.br

World Investment News Ltd. Top Report on Brazil

Mrs Marilia Rocca, Managing Director.

ENDEAVOR GLOBAL

Endeavor Global, Inc. is a non-profit organization pioneering a new approach to international development.

Founded in 1997, Endeavor's mission is to be the leading non-profit supporter of entrepreneurship in emerging markets.

We believe that entrepreneurship and new venture creation are the key drivers behind economic growth and innovation. New ventures create jobs, spread wealth, expand opportunity and increase social mobility.

Entrepreneurs innovate and build, taking the risks that transform industries and societies, and inspiring others to follow their lead. Finally, entrepreneurs become the next generation of community leaders and philanthropists, continuing the cycle.

ENDEAVOR'S MODEL

A development model rooted in entrepreneurship is therefore the most highly leveraged way to achieve economic, social and cultural development in emerging-markets. With headquarters in New York City, Endeavor has established operations in Argentina, Brazil, Chile, and Uruguay and is initiating operations in Mexico.

Endeavor next seeks to expand its innovative model of development through entrepreneurship to additional emerging-market regions around the globe.

Taking into account all of the cultural and institutional impediments to new venture creation in emerging markets, the founders strategically designed Endeavor's model to provide a comprehensive, step-by-step solution.

Endeavor's model engages different actors and systematically removes barriers in each of its six stages Essential to Endeavor's model are the features of local ownership and accountability. These in fact serve as pre-conditions to new country entry (Stage 1). Prior to launching a new country office, Endeavor's CEO recruits prominent members of the local business community to form a board and Country Benefactor Syndicate. This local syndicate agrees to finance the initial years of Endeavor's programs and administrative costs in the home country. Four years of

World Investment News Ltd. Top Report on Brazil operating costs, approximately US$1.8- $2.4 million, depending on country size and currency exchange rate, must be secured up-front through written pledges from the local private sector in order for Endeavor to enter a country. (See "The Revenue Model" for details). The Country Board, in turn, selects a qualified Managing Director to lead the day-to-day operations under its supervision. Endeavor Global then trains the local management and licenses its proprietary methodology to the new Country Affiliate.

Through its rigorous, multi-step Search & Selection process (Stage 2), Endeavor's staff and professional support network annually review hundreds of business plans submitted by entrepreneurs and select the most promising candidates in terms of ability to take risks, create jobs, spread wealth and inspire others with their passion. (See "The Selection Process" for details).

Endeavor then deploys its professional network of seasoned business experts and top MBAs to deliver targeted, demand-driven services to the selected entrepreneurs (Stage 3).

Through its multi-pronged service offerings, Endeavor helps its entrepreneurs sharpen their professional skills, develop their business strategies, locate strategic partners and raise capital Endeavor next communicates its entrepreneur's success stories through media reports, university case studies and multimedia products to create a role model effect (Stages 3 to 5).

As the entrepreneurs and their businesses mature, Endeavor shifts its focus to their role as community leaders. The company leaders gain exposure to best practices in philanthropy, corporate citizenship and public-private partnerships (Stage 6)

Beyond helping a select group of entrepreneurs, Endeavor partners with local players to build a "venture-friendly" environment (Stage 4). Endeavor works closely with local individuals and groups interested in learning about best practices in angel investing, venture capital and entrepreneur support functions.

Endeavor also serves a public education role (Stage 5). The organization shares knowledge with thousands of local citizens through public conferences, Speaker Series, training workshops, published case studies, university partnership programs and the Endeavor country websites, e.g., www.endeavor.org.br.

Finally, Endeavor leverages its hands-on experience and wide-ranging network of contacts to make policy recommendations to national governments and multilateral development institutions. (Stages 4, 5 and 6)

World Investment News Ltd. Top Report on Brazil

Endeavor's six-stage model is completely aligned with Endeavor's mission, in that the stages of the Endeavor model provide a framework for working with the Endeavor Entrepreneurs and countries to create long-term economic growth and systemic change.

ENDEAVOR IN BRAZIL

Entrepreneurship in Brazil offers some highly singular challenges. In the last decade approximately 5 million small companies have been created in Brazil, but 47% of these failed before they were 3 years old. The main reasons for such a high mortality rate are lack of experience or ability on the part of the entrepreneurs, and the fact that most of them have taken the entrepreneur route from need and not from choice, since the entrepreneur is not well regarded by society.

In this scenario, the importance of promoting the Endeavor Entrepreneurs as role models who show the potential of innovative entrepreneurship is clear - so as to educate and inspire other talented Brazilians. However, we have to go a long way beyond this. For Endeavor to be able to have a significant impact in Brazil, we need to give scale to our educational programs, widening the range of knowledge that we generate, distributing it through the Internet, and other media. The holding of 30 weekly workshops and 2 conferences in 2001 enabled us to define the necessary content clearly, and to identify the target publics. We are ready for the next phase.

This year was also marked by a better development of relationships between Endeavor and other institutions involved in the promotion of entrepreneurship and technological innovation in Brazil, such as Anprotec, Sebrae and Finep. It is important to conjugate efforts with institutions which have synergy with our mission, to ensure the complimentarily of our programs and provide an adequate response to entrepreneurs with different challenges.

Fortunately, there is no lack of entrepreneurs in our country. Our challenge is in developing their ability and talents - since they employ 60% of Brazil's labor - giving them incentives to build innovative companies and widening their horizons. This is how we build a new Brazil, with a more strengthened economy and society, able to generate revenue and employees in a sustainable fashion.

ENDEAVOR ENTREPRENEURS IN BRAZIL

- Automatos/Solvo

Information technology and services provider (Agostinho Villela, Andre Fonseca, Marcelo Salim)

- Escol@24horas web-enabled education technologies (Severino Felix da Silva)

- Fazenda Santo Onofre organic agribusiness (Renato Hauptmann & Paula Hauptmann)

- Grudy

Fashionable summer and beach wear (Ana Luiza de Almeida)

- Infnet

Information technology education (Andre Antunes, Andre Kischinevsky, Eduardo Ramos)

- MultiDelivery

Multi-product food delivery. (Daniela Klabin)

World Investment News Ltd. Top Report on Brazil

- MV Sistemas

Healthcare technology solutions (Paulo Magnus & Luciano Magnus)

- Nano Endoluminal

Biotech research & development (Guido Dellagnelo, Pierre Galvagni Silveira, Ricardo Peres)

- Papel Virtual

Online book publishing (Tomaz Adour & Andre Figueiredo)

- Perfil Tecnologia

Perfil develops and implements Customer Relationship Management (CRM) solutions for small to medium sized companies. (Wanderley Schmidt Campos)

- Poit Energia

Power generator leasing (Wilson Martins Poit)

- Pollux

Integrating machine vision technology to improve the processes of assembly line based companies. (José Rizzo Hahn Filho)

- ProPay

Managing the outsourcing of human resources and other business processes. (Alexandre de Botton and Mark Barcinski)

- Rede Omega

Wireless technology providers (Jaime Aron Teig & Sergio Cabral)

- S&V Consultoria

Smart-card technology provider (Penido Stahlberg & Fredy Valente)

- Taho

Wireless broadband access (Sergio Cabral)

- Tecsis

Wind blade and industrial fan manufacturing (Bento Massahiko Koike)

- Vaidosa

Technology provider of on-line simulation tools for women (Daniel Li & Edgar Ortiz, Jr.)

Winne cannot be held responsible for unedited transcription.

World Investment News Ltd. Top Report on Brazil

MANDIC

Mandic Rua Pedroso de Morais, 433 Sao Paulo, SP- 05419-000 BrazilTel: (55-11) 3034 1000 Fax: (55-11) 3034 3939 Email: [email protected] Website: http://www.mandic.com

INTERVIEW WITH Mr. ALEKSANDER MANDIC, President of Mandic.Com

Sr. Mandic, usted es uno de los pioneros de la Internet Brasileña, pero primero nos gustaría saber que está haciendo ahora. ¿Mandic.com es su único negocio actualmente?

Sí, es el único negocio que tenemos ahora mismo. Nosotros entramos en el área de Internet ofreciendo acceso mediante la compañía Mandic Internet. Estaba metido en eso porque nadie mas estaba involucrado pero esa empresa acabé por venderla ya que hoy en día eso forma parte del negocio de una compañía telefónica. Ellos proveen acceso ya que son ellos los que tiene la línea y el backbone. El papel del proveedor de acceso a Internet hoy día gira en torno a una empresa telefónica, llegó un momento en el que ya no era muy interesante para nosotros. Por otra parte el servicio de contenido está bien establecido con proveedores como Terra, IG o globo, que gestionan la información. En cambio con el e-mail vimos la oportunidad de hacer algo distinto.

¿Nos puede decir cuando nació Mandic e-mail y en qué consiste más exactamente?

Fue inaugurado el 9 de Enero de 2002 pero la idea existía desde hace mas de un año. Cuando vendí Mandic Internet me dije que nunca mas trabajaría en Internet y fracasé en ese intento porque dos meses mas tarde, hablando con el presidente de una compañía telefónica, surgió la idea y aunque no seguimos adelante con este concepto fue a raíz de esto que surgió la idea. Diseñamos el nuevo e-mail de tal manera que no se pudiese copiar. Tome por ejemplo empresas como UOL o IG, con una situación financiera delicada, que no pueden dar un producto de lujo, como nosotros, que por ejemplo no tenemos límite de espacio en el mailbox. También dejamos un backup de todos los mensajes borrados durante un año en el servidor. Lo que diferencia nuestro producto es que hay una sincronización entre el web mail y Outlook para guardar información. Hay un compromiso con el usuario de no comercializar nuestra base de datos. A partir del día 1 de Mayo empezamos a trabajar con acceso en Roaming. Ahora mismo tengo acceso en Sao Paolo y Río de Janeiro y lo tendremos también en el resto del territorio nacional

World Investment News Ltd. Top Report on Brazil y en 150 países. Para nuestro usuario esto es un extra, tenemos un acuerdo con una empresa que tiene este servicio de Roaming y los clientes de este que vienen a Brasil, pueden utilizar mi infraestructura y viceversa.

¿Cuántos usuarios tiene actualmente?

Tenemos dos diferentes tipos de usuarios, empresas y personas físicas. Son más o menos 2,000 usuarios que hemos conseguido sin ningún tipo de Marketing. A partir de la mitad del año empezaremos a hacer campaña publicitaria, cuando hayamos terminado de implantar todo lo que queremos hacer.

Entendí que había más que e-mail, que Mandic era una puerta de acceso a otros servicios, no necesariamente vinculados al e-mail.

Los otros servicios que vamos a inaugurar son de comunidad. Chat, conferencia y este tipo de cosas.

¿Qué ha tenido que hacer para llevar este proyecto a la realidad?

Yo reservé 5 millones Reales para llevar este proyecto adelante. No hemos gastado todo esto pero con el tiempo, lo que queda se utilizará para desarrollar el sistema de e-mail y otros como anti-virus, chat, comunidad, etc. Esto es la totalidad de inversión que vamos a tener que meter en el próximo año.

¿Es usted el único inversor?

Por ahora sí, aunque el año que viene quiero vender una parte, para que la empresa tenga más caja para trabajar.

¿Tiene pensando meter a un inversor en la compañía o vender el servicio, el nombre Mandic como marca a otros?

No, quiero un inversor que entre en la empresa. No necesariamente un capitalista, puede ser por ejemplo, una empresa de tecnología, ya que tengo que gastar dinero en tecnología y a mí me vendría bien alguien que pueda proveer este producto.

¿Dedalux.com, es hoy por hoy su principal socio tecnológico?

Ellos son una empresa que nos provee. Yo soy un cliente de ellos porque nos ofrecieron la mejor oferta, hicimos un buen arreglo y nos va muy bien.

Los socios en Internet, en la nueva economía en general, son fundamentales para que una empresa tenga éxito. ¿Cuál es su política para crear socios?

La marca Mandic es una marca muy fuerte, con presencia dentro de la comunidad de negocios y es sinónimo de exigencia en calidad. Esto funciona de forma que nuestros socios quieren nuestros clientes y nosotros queremos un precio mas barato.

Un servicio como el suyo va a tener que luchar con la competencia duramente. ¿Cómo piensa afrontar la batalla?

UOL, IG y las compañías de este sector no son verdaderamente mi competencia porque no tienen mi producto. En Brasil somos los únicos que dan este tipo de servicio. Cuando aparezca el primer competidor esto será prueba de que el negocio está encaminado. Definitivamente tenemos un producto más práctico pero primero lo tenemos que demostrar.

World Investment News Ltd. Top Report on Brazil

Respecto a la campaña publicitaria que va a comenzar dentro de unos meses, ¿Cual va a ser su estrategia de comunicación?

No voy a hacer nada apresurado. No necesito crecer rápidamente con lo cual me voy a tomar las cosas con calma pero cuando llegue el momento utilizaré fundamentalmente la prensa escrita como medio de comunicación.

¿Cuál es su estrategia de crecimiento, y para cuando quiere llegar a tener esos 50.000 usuarios que se ha propuesto?

En un año más o menos. Hacia el 2003.

¿Van a ser las subscripciones su única forma de ingreso?

Hay una parte corporativa que estamos discutiendo.

Y entre su producto corporativo y el de las personas físicas, ¿cuál es su plan de inversión al año y cuál es la facturación que espera de su empresa?

Partiendo de la suposición de tener 50.000 usuarios, creemos que a final de año la empresa puede empezar a funcionar sola, se podrá sustentar por sí misma. En los últimos tres meses a crecido tres veces y esperamos hasta el fin de año para consolidar. Esto no quiere decir que no tenga que invertir mas dinero en nuevos productos, como discos virtuales para el viajero, sistemas de memoria para links, cosas pequeñas pero que hacen falta cuando uno viaja.

El gobierno federal es un importante inversor en IT, ahora está haciendo muchos proyectos, como la inclusión digital, el e-gobierno, etc. Como profesional y pionero en el sector de Internet, ¿Cree usted que se podría hacer más para desarrollar el sector de Internet?

Brasil tiene un sistema de Internet muy desarrollado y avanzado, mejor que muchos países de Europa. Por ejemplo el 99% de las personas hacen su declaración de la renta a través de Internet. También el sistema bancario es muy avanzado. La base de la tecnología y de procesamiento de datos existe aquí desde hace un buen tiempo. Sin embargo hay que agregar que la gente que tiene acceso a esta tecnología, a nivel de población, es limitado. Es la responsabilidad del gobierno de invertir en esta tecnología ahora para que la mayoría de gente tenga acceso a ello.

Mandic se encuentra en los anales de las historia de la red de Internet en Brasil. ¿Se siente involucrado con todo lo que está ocurriendo en el país actualmente?

En parte sí. Fuimos los primeros con ISP en este país, aunque poco después aparecieron un montón. Nosotros creamos muchas cosas aquí, fuimos un punto de referencia para muchos proveedores. Hasta el día de hoy existe un mito de que si estoy creando una cosa, tiene que ser algo interesante. Mi filosofía es de hacer las cosas tal y cual como me gustaría tenerlas. Como no existen, las creo yo mismo.

Winne cannot be held responsible for unedited transcription.

NETWORK ASSOCIATES

World Investment News Ltd. Top Report on Brazil

Network Associates Brazil R. Geraldo Flausino Gomes, 78 Sao Paulo - SP- 04575-060 BrazilTel: (55-11) 5503 0134 Fax: (55-11) 5503 0131 Email: [email protected] Website: http://www.nai.com.br

Interview with Mr. Wilson Grava, Vice President Latin America& Caribbean.

Could you please explain to us what is the present commercial structure of Network Associates, the product routes, and IT solutions?

In general terms, Network Associates is worth nearly USD1 billion company, worldwide. We are a company with operations in the US, Europe, Latin America, Asia-Pacific, and Africa. With respect to the Latin American operations, we have fully-grown subsidiaries both in Brazil and Mexico, which are the two most vibrant economies in the region. In the rest of the Latin American countries, we have indirect business through a network of distributors, suppliers, and resellers. We have around 50 people working In Brazil, close to 40 in Mexico, and in the CASA region, the third region, (Central and South America, with exception of Brazil and Mexico), we have around 10 people, based in Miami, including myself. It can be said that our Latin American business can be divided into 3 geographical institutions or operations. We work with three business units worldwide, McAfee, the most known brand name in anti-virus and security market worldwide. Sniffer is the second business unit for Network Associates, dedicated to the network environment, where we produce hardware and software to monitor and check the performance and availability of networks. The third area of our business unit is Magic, dedicated to help-desk solutions, totally web-based and a particularly good technology for small to medium companies. In each of the three regions mentioned, Brazil, Mexico and CASA, we work with the three BUZ, and use an indirect model of marketing. That is to say, we go through third parties to sell our products. I think this is a good summary of what we do.

As for Brazil, do you have a partner center in Brazil?

That is right. With the McAffee side of the business, we have a full-scale production center in Brazil. That means, we put together the software, produce the boxes, and deliver the product completely manufactured in Brazil. As the corporate software business is licensed, it is more of a production center, where we use third parties to do the work for us, and then ship from Brazil.

World Investment News Ltd. Top Report on Brazil

I should also add that our core business is corporate, though we do have a retail operation, which is very good and competitive. However our main focus is the company or the corporate market. The technology that we provide, is more suitable for this, we are very skilled at talking to other companies.

In Brazil, do you deal with the same line of products?

Absolutely. In Brazil, we reproduce the same model that we use in other parts of the world, particularly the US. What has changed is that the company has been totally restructured in terms of management in the last year. We have a new CEO, who started a year and 2 months ago, promoting an intense change of culture worldwide. This implies that if the business was primarily US, today the objective is to have 50% US participation in the market and 50% international. That has evolved to a ratio of 60%-40%; and we aim for 50-50 in no more than two years. To promote this international expansion, the geographies have been empowered, with me at the head of Latin America, and someone similar in Europe. Add to these Japan and Canada, our biggest international operations we have, and you can see that the company is effectively working its international potential. Brazil represents 50% of the Latin American market for us. A lot of investment has been going on and plenty of things have happened since last year.

It is a very competitive market. What are the advantages you provide above your competitors?

Basically, the market niche we are dedicated to. We have a very good relationship with the corporations and companies we work with, and consider we also have a better business model than the competition. We are talking here about relationships with big corporate customers, who have to trust in our technology and our support, because they have core parts of their IT business in our hands. This implies security, a very sensitive part of any company, especially banks or a telecommunications company. They cannot afford to have their networks down for five minutes, not even one minute, because they would be losing a lot of money. This is the Sniffer business line: security and network availability. We deliver relationship and trust, which makes us different from the competition.

With respect to the anti-virus market, competition is primarily the retail consumer. A different philosophy to the corporate customer. Nevertheless, the differentiator is the relationship with our customers. Particularly in Brazil. Research made by an institution called Fundaçao Getulio Vargas on the Brazilian software market says we have 52% of the anti-virus market in Brazil. If I am not wrong Symantec is 28%, the research is published on our site. This is definitely supporting what we were saying about our trends and operations.

We read in the paper today that Network Associates earned 15 million dollars in the first three months of the year. What percentage of this was due to Brazil?

Our turnover was USD201.9 million. I will have to check. Last year, we closed at USD834 million, close to USD1 billion. But that was a very good quarter considering the economic climate around the world. We consider that the market was phenomenal; we beat the street estimates we had. We are pleased to accomplish what we promised. Lots of companies released the results in those days and many of them made less than expected. We were able to beat all expectations due to the impact of Brazil and Latin America based on the trust that companies have in us. We think that we are in the right market today. Security is the No. 1 or No. 2 priority quoted by "The Economist". Take events like that of Sept. 11th, or the Ninja or Cold Rat, viruses attacking companies. Nobody can afford to have a major outbreak or invasion, because of the loses this might incur. In this respect we are very fortunate to be with these companies, helping them to avoid this kind of situation. We have definitely seen an increase in the number of deals, after Sept 11. A lot of interest in the security and network availability business. We are believers in our components and we are happy to be in this side of the business.

After Sept. 11th, did you also see an increase spending from the government in this market?

Definitely. Not only government but also private companies. The government is probably the biggest user we have. We are strong in the financial, governmental and telecommunications

World Investment News Ltd. Top Report on Brazil community. What we see is that the government is increasingly aware of the piracy problem, an aspect that impacts on revenue, for our company or any company competing in the software business. We are seeing a lot of initiatives by the government to deter piracy, particularly at the federal level. It is promoting this aspect of their agencies, bringing in policies to avoid and punish piracy. This benefits us, our partners and the competition in the market, making the industry get stronger.

The Internet relation to wireless devices is growing. Are you working with the telecom industry to develop software?

We are working with the telecommunications industry, not only from a vendor and customer relationship, but also in partnership to develop new technologies. Network Associates, through McAffee, was the first company in the market to develop anti-virus solutions for the wireless market. The Sniffer business unit is very powerful in managing and monitoring wireless networks. We are comfortable in the wireless market and believe there are major opportunities for the future. It is growing progressively bigger each day, we can not do this alone so we partner with major telephone providers to develop our technology, helping us and helping them, because that helps managing their increasingly large customer base.

What is your policy in terms of research and development here in Brazil?

We have a centralized development in Forteleza. We manage budgets through the US but have laboratories across the board. In Latin America we have part of the worldwide initiative, it is called AVERT, the anti-virus emergency response team, a 24/7 organization belonging to us that works in identifying and promoting the release of information on new viruses. When we detect an outbreak of virus infection in any part of the world, we have an immediate response. We work on fixing the problem and promoting information, which we share with all our users and the community. We send information to magazines, to major corporations and to associations. These sorts of initiatives are important for AVERT. This year, we are investing a lot of money in developing new products and integrating our three business unit solutions into integrated packages, to meet those needs. In respect to monitoring networks, as the network is the heart of any company, you cannot have separate approaches in their management. Security is part of the job, as well as availability and performance monitoring. We are trying to integrate technologies delivering to the customer a more integrated solution. Development plays a key role for foreign vendors together with a good understanding of the market. In the security arena we are the only company that has a research department in Brazil. All the other vendors, such as Symantec, Trend-Micro, or whoever, do not have this. This probably makes a difference, along with our corporate customers. Another important initiative that we are promoting is that we are not just selling anti-virus, a popular licensed-based or box-based technology, but we are also giving a service which makes us different. The market is definitely asking for companies to contribute more on the service side, helping not only to sell solutions but as for support in all situations and in particular on security. We are the first company to develop an integrated approach, delivering anti-virus and security protection through the Internet as a service. This is through a technology that you will be hearing of a lot of it in the future.

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PROMON

World Investment News Ltd. Top Report on Brazil

Promon Av. Pres. Juscelino Kubitschek, 1830 Sao Paulo - SP- 04543-900 BrazilTel: (55-11) 3847 4156 Fax: (55-11) 3849 0071 Email: [email protected] Website: http://www.promon.com.br

Briefing

Founded in 1960, Promon is a Brazilian company exclusively owned by its professionals. Its activities include mainly design, integration and implementation of projects and businesses for infrastructure sectors of the economy such as electricity, industries, telecommunications, information technology and knowledge management

Since its creation, the company has been acquiring a wide experience on the development and implementation of projects and business in Brazil and abroad. With highly skilled teams and state-of-the-art tools, Promon provides its customers with a wide range of integrated and innovative solutions, always in compliance with the strict international standards of quality, terms, costs and security.

The company is formed by the operating holding, Promon S.A., and by Promon Engenharia, Promon Tecnologia, Trópico - a joint venture with Fundação CPqD and Cisco Systems -, Neogera - a joint undertaking with Camargo Corrêa S.A. -, and UTE Bahia - a joint undertaking with Ecoluz.

The operating holding is controlled by Promon Ltda., which gathers all senior managers and professionals of the organization. The system has also the Promon Ventures unit, which is responsible for the execution of the strategy for new business investments, and Fundação Promon de Previdência Social, a closed entity that provides supplementary security.

MR. LUIZ ERNESTO GEMIGNANI, PRESIDENT OF PROMON.

What would you highlight as the most significant directions the Holding has taken in the last five years?

Promon established a presence in the Information Technology sector, starting, partly through acquisitions, a new company, Promon IP. Another sector in which the company positioned itself was Corporate Education and Knowledge Management, again by starting a new company, Promon Intelligens.

Promon also developed Netstream, a CLEC (Competitive Local Exchange Carrier) and subsequently sold it to AT&T.

A single holding for seven different companies, what is your philosophy regarding integrating the activities of all of them to benefit the whole Holding?

There are several integrating elements and mechanisms. First, we can define all the companies as systems integrators and project managers. Second, they share some core competencies. Third, there is a strongly institutionalized internal mobility program. And finally and perhaps most importantly, there is a strong culture, with shared values and policies. The most visible of those is the employee ownership model: the company has been 100% owned by its then active employees since 1970.

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Last year the Holding had a turnover of 626 Million Reais, getting a 24% growth from year before. What would you say are the main reasons for this financial wealth in Promon Holding and what are the financial expectations for the coming years?

The presence in different segments of the economy provides the Promon Holding with an interesting hedge against the fluctuations experienced by each individual segment. In 2001 most of the growth derived from a specific situation in the Brazilian environment that encouraged the Telecom operators to conduct aggressive investment programs despite the difficulties of the industry worldwide. This year the main driver of growth is the Energy segment.

In addition to that "hedge", a conservative financial strategy followed since the early days of the company has been beneficial to its financial health. One of the main elements of the strategy is high liquidity, with the maintenance of a solid cash position and modest investments in fixed assets. Liquidity is a key factor for the investment decisions of the Holding. Historically, Promon has produced a return on equity in the region of 30% per annum, which we expect to be able to maintain.

IT and Telecom contributed to more than half of your turnover. Since when is this happening and do you think the evolution of the Holding will keep this track? In what divisions of the holding do you expect increased growth?

The Telecommunications market, including data communications has been the most important source of revenue for Promon for the past ten years. Now investments in Telecom are down all over the world.

We expect significant growth for 2003 in Promon Engenharia, mainly due to its contracts for the implementation of power plants.

In which areas are you focusing your investments in order to upgrade our present infrastructure and diversify your activities?

Infrastructure: the most important investments are in a new IT architecture and in an upgrade of our Knowledge Management System.

In Promon Telecom: Consulting and Performance Assurance.

In Promon Engenharia: diversification of our activities in the Oil and Gas Market.

Promon IP and Promon Intelligens can still be considered startups and in this sense they can be classified as investments.

Promon Ventures prospects new areas of activity outside our current mission scope.

We are also, as developers, implementing a Thermal Power Plant in the State of Bahia, as part of the National Energy Emergency Program.

Promon Holding has established commercial links with important multinational companies like the recent joint venture of Cisco Systems with Tropico and CPqD. How did this collaboration started and what has been the impact of your cooperation with Cisco Systems? Do you think more alliances with other international players could bring positive consequences to the Holding ?

One of the basic concepts underlying Promon's activities, as previously mentioned, is that of being a Systems Integrator and a Project Manager. Being a Systems Integrator means, among other things, being able to assemble complex solutions based on many different technological components, usually trying to offer a best of breed solution in terms of technology and services. It was always natural, in this sense, for Promon to seek alliances with technology and market

World Investment News Ltd. Top Report on Brazil leaders in the different fields it operates, and so important partnerships with companies such as Westinghouse, ABB, Hughes Network Systems, Nortel, Oracle and Microsoft were developed.

In the case of Cisco Systems, the first interactions in 1998 started due to Promon's presence in Corporate Data Networks, and by 1999 both companies already had a partnership for the integration of IP networks inf Brasil. Still in 1999, a strategic partnership was sealed between Cisco and Tropico, so both could start working in the development and deployment of VoIP (Voice over IP) solutions. With this alliance, Promon/Cisco won several large bids for deploying Brazil's largest IP backbones, and by the end of 2000, Promon was Cisco's largest Systems Integrator in Latin America. In 2001, with the evolution of NGNs (Next Generation Networks, which bring together voice and data on the same IP platforms), the relationship between Cisco and Tropico was also deepened, resulting, in November 2001, in Cisco's minority investment in Tropico. With this investment, both companies are developing an integrated product line based on Tropico's Vectura softswitches and Cisco's voice gateways and IP gear.

In conclusion, alliances with international players have always been present in Promon's strategy, and will continue to be extremely important in the future.

In the IT sector: Gartner Group forecasts a 7% growth worldwide. In the Telecom sector: The liberalization process in Brazil and the expected increase in number of mobile users to 58 million by 2005. What is your vision of Promon Holding in the near future ?

Since early in its history, Promon developed an ability to explore different segments of the infrastructure sector in Brazil. Starting out as a design engineering company, Promon added several competencies to its portfolio throughout the way. In this sense, Telecom and IT are now two core areas of the company that are in different stages of maturity, but are both very important in shaping the company in the future.

In the Telecom sector, Promon has a long tradition of being an important player in the country, having participated in all major developments that shaped the scenario we currently see in Brazil in terms of its telecom infrastructure. Promon prepared itself extensively for Brazil's liberalization process that started out in 1998, and became well positioned to continue to serve the Telecom market based on assets such as technology expertise, project management capabilities, key strategic alliances, deep knowledge of the industry and a vast experience in telecom projects in Brazil and abroad. For the near future, we envision value added services and technological convergence (including multi-service networks, voice over IP and mobile technologies) to be two key areas in which Promon will be active, helping now to set the stage for the next wave of Telecom development in Brazil.

In the IT sector, Promon is coming to a successful start with Promon*IP, having consolidated a position in the Brazilian IT market after only two years of commercial presence. The belief is that we are witnessing a new age in IT, one in which a new model is created based on the connectivity and the open architecture of the Internet, making applications more available, distributed, flexible, robust and easy to use. We are calling this model "IT for the IP world", and we believe Promon is fully equipped to grow as successfully in IT as we did in engineering and telecom. The forecasted growth in the sector can only contribute to that.

To summarize, our vision of the Promon holding in the near future includes the basic "ingredients" that have been present since the start (technology, systems integration and project management), coming together in several basic areas, including engineering (energy, oil & gas, process industries), telecommunications, information technology and corporate education (e- learning, knowledge management), to continue to build a solid and entrepreneurial company, organized as a community of professionals, that can excel both at execution and at innovation.

Some name Brazil as the IT center of Latin America. Do you think this country is developing the necessary industry to become the technological heart of the continent?

On one hand, Brazil is well positioned to be IT center of Latin America for several reasons. The IT industry in Brazil is large (a $14 billion market projected for 2002), and is growing at a healthy

World Investment News Ltd. Top Report on Brazil pace that's above the world average. The country is well equipped in terms of human capital, with excellent universities and research centers in Engineering and Computer Sciences.

Many of Brazil's universities are recognized to be among the best in their fields, and this has led to the creation of several academic centers of excellence which have been nurturing both qualified IT professionals and companies that employ them. Good examples, spread all over Brazil, are USP (University of São Paulo), UNICAMP (University of Campinas), PUCC-RJ (Catholic University of Rio de Janeiro), UFRGS (Federal University of Rio Grande do Sul) and UFPE (Federal University of Pernambuco), all of which attracted Brazilian and multinational IT companies as frequent recruiters (Promon itself, Microsoft, IBM, HP, Dell Computer and Cisco are examples).

In addition to that, we have recently seen growth in the entrepreneurial activity in the country, with several programs aimed at providing support for small entrepreneurs in the area of software and IT. Finally, Brazil has a recognized role of leadership among Latin American countries and is in a good position to explore that in terms of attracting direct investment for the IT sector and further developing the industry and its local companies.

On the other hand though, Brazil has yet to better prepare for a more effective insertion in a global economy that transcends Latin America, where science, technology and highly skilled labor are also organized on a global scale. In this sense, a coherent strategy to participate in the global networks (such as Alca) needs to be developed; incentives need to be put in place and consciousness about the role the country can play needs to be acknowledged by government, companies and professionals alike.

Winne cannot be held responsible for unedited transcription.

SOFITEL

Hotel Sofitel Rio de Janeiro Av Atlantica 4240 Rio de Janeiro Brazil

Tel: (55) 21 2525 1232 Fax: (55) 21 2525 1200 Email: [email protected] Website: http://www.accorhotels.com

Sofitel Rio de Janeiro: The best view at the city's most famous Address

The Sofitel brand has been in Rio de Janeiro since 1997, when it took over the former Rio Palace, located in the city's most famous address: Avenida Atlantica, at a point that offers the best view of the Copacabana beach, in the southern part of Rio.

Recently remodeled, it is currently regarded as one of the most modern hotels in Rio. To improve even more the services offered, about US$ 25 million were spent in works that lasted

World Investment News Ltd. Top Report on Brazil for a year and half. With 400 employees, the hotel has 388 suites and rooms - all with a balcony, air conditioning, 80% with a sea view.

The Sofitel Rio de Janeiro offers non-smoking rooms and rooms for the handicapped, as well as convention areas, business centre and the Imperial Club, an area that offers exclusive services for the guests.

Under the prizewinner command of chef Roland Villard, the gastronomy deserves a chapter apart in terms of sophistication. The hotel offers two international restaurants - Le Pre Catelan and Atlantis - a tearoom - Cha & Simpatia (Tea and kindness) - and the Horse's Neck Bar.

The modern and sophisticated decoration combines perfectly with the various pieces of art that compound the environments of the lobby and some rooms. Among the relics, are paintings by famous artists, such as Burle Marx, as well as a collection of rare books from the XVIII and XIX centuries.

In addition to the beautiful view and the easy access to Copacabana and Ipanema beaches, the Sofitel Rio de Janeiro offers excellent leisure facilities. Two swimming pools dry and steam sauna, massage, gymnastics and fitness centre. Leaving the hotel lobby, the guest has direct access to the Casino Atlantico Mall, well known for its antique.

Sofitel Rio - Luxury and sophistication on Copacabana beach

With a sea view from 80% of the rooms, the Sofitel Rio de Janeiro has one of the best hotel locations in Rio de Janeiro, between Copacabana and Ipanema. All of the 388 rooms have a balcony, air conditioning, minibar, cable TV, and plug for Internet access, electronic safe box and services such as daily newspaper delivery. The hotel offers non-smoking rooms and rooms for the handicapped.

Rooms:

World Investment News Ltd. Top Report on Brazil

Presidential Suite: 220m2, sea and swimming pool view, Imperial Club service, Open Bar (02 units). It has one store with one ample living room, one dinning room, pantry, kitchen, three bedrooms (one double), three bathrooms and two washrooms.

Superior Imperial Club - 35m2, view to the square swimming pool or side view, Imperial Club service, double or single. (32 units)

Luxury Imperial Club - 35m2, view to the square swimming pool or side view, Imperial Club Service, double or single. (13 units)

Executive Suite: 70m2, sea view, Imperial Club service (VIP), living room and bedroom. (16 units)

Junior Suite: 55m2, sea and swimming pool view, Imperial Club service (VIP), possible King Size bed (16 units)

Luxury: 35m2, view to the round swimming pool and sea view, double or single. (92 units)

Superior: 35m2, view to the square swimming pool or side view, double or single. (178 units)

Exclusive Business Area - Convention Rooms and Imperial Club

With 10 meeting rooms, the Sofitel Rio de Janeiro offers a complete infrastructure for corporate events and conventions for 2.5 thousand people. The Business Centre has 13 different sized rooms, office facilities and a capacity for up to 40 people.

Alternatively, the Imperial Club is a space created for business people who require personalized attendance, occupying an area comprising 79 rooms and suites, with a view of Copacabana or an Ipanema beach view. It offers butler's service and 24 hour guest relation service, private restaurant and meeting rooms, bilingual secretarial staff and translation services.

Guests enjoy all comfort immediately from arrival, with a VIP area for the check-in and checkout. They are welcome with a drink and in the room, a refined decoration is found with comfort translated into details such as personalized visiting cards and stationery.

Breakfast is served in an exclusive restaurant, opened from 6 a.m. to 11 a.m. From a local lounge that has a panoramic view, the guests can enjoy tea and a happy hour.

All rooms have two telephone lines, plug for laptop, CD player, and video and radio clock. The hotel offers in total, a staff of 32 skillful professionals especially trained to attend to the guest's needs.

Library

Sofitel's trademark all over the world, the library is one of the distinguishing elements of Accord Hotels luxury establishments in Rio de Janeiro as well. Located on the ninth floor, where the Imperial club terrace is found, it owns a great collection, mostly of books on the city of Rio de Janeiro and its natural, cultural and historical riches. Works giving details about Copacabana and everything that Rio has to offer to local and foreign tourists. Many works show beautiful photographs and illustrations of the city in different historical periods.

A number of books by Brazilian - mainly from Rio de Janeiro - and French authors also from part of the library collection, with a specific area for books on decoration and gastronomy, two distinguishing aspects of the Sofitel in Rio de Janeiro.

World Investment News Ltd. Top Report on Brazil

The Prize Winning Gastronomy of Rolland Villard

The Chef

Born in Saint Etienne, central region of France, since early ages Roland Villard showed his cuisine talents: he already cooked crepes and cakes at 10. His career started when he was 18, having worked extensively in various restaurants stared in the Michelin Guide, including the Le Pre Catelan in the French capital.

In his resume, names such as Bocuse, Lenotre, Troignos and Verges can be seen, with whom he worked during the period he was in Europe. After 10 years of experience and a French Cuisine Academy award, Roland was invited to go to Africa, where he started work for the Sofitel chain, on the Ivory Coast.

Subsequently, he commanded the Sofitel Bordeaux restaurant, again in France, and then he came to Brazil, where he has been since 1997 as first chef of gastronomy in Sofitel Rio. Throughout his career, in the last two decades, Roland won a number of national and international awards and prizes, notably the following:

The only chef in Brazil who is a member of the French Cuisine Academy Outstanding Personality of the year 2001 - Danusia Barbara Guide Year 2000 Best Chef - Veja Rio Magazine 2000 "Premio Unanimidade" (Unanimous Prize) - Rio Show - O Globo Newspaper 1999 "Melhor Incursao Gastronomica" (Best Gastronomic Performance) - Rio Show - O Globo Newspaper French Cuisine Academy Grand Prix in 1993

The patissier chef

Born in the city of Macon, France, Beatrice Dupasquier is 27 - 11 dedicated to patisserie. She studied at the Thonon Les Bains and the Touquet Housekeeping Schools, also in France. Came to Brazil in November 2000, from Sofitel Melbourne, in Australia, where she worked as the hotel patissierie sub-chef during a year and half.

She has worked in hotel cuisines and independent restaurants in France, England and Australia, many of them well recommended in the Michelin Guide. Notably, a trainee period in the Georges Blanc restaurant, in the city of Vonnas, France, between 1993 and 1994, and two periods in the Le Bateaulvre France, in Courchevel, also in France, from 1995 to 1997.

The Restaurants:

Le Pre Catelan

The only affiliate of the famous Le Pre Catelan of Paris, located in the charming Bois de Boulogne wood. It is considered one of the best French restaurants in Rio's gastronomic guide.

Re-inaugurated in November 1998, it is commanded by the French chef Roland Villard, 39, 23 years of working experience, who brought all the French cuisine glamour to Brazil and to the Sofitel Rio de Janeiro's gastronomy.

World Investment News Ltd. Top Report on Brazil

With 70 seats and an art-nouveau decoration, the Le Pre Catelan is distinguished by its fortnight menu, an unusual habit in Brazil: Every two weeks there is a new menu with three suggestions of entry, main course and dessert.

With its own bar and exclusive cellar, the Le Pre Catelan and Roland Villard were considered gastronomy distinctions in 1999 and 2000. Meeting place of the fine cuisine enthusiasts, the restaurant frequently organizes international gastronomic festivals.

Atlantis

Having 80 seats, the Atlantis restaurant offers an assorted buffet with international cuisine, with a view to the sea and one of the hotel swimming pools. Famous for its variety and thematic programming, it offers the outstanding Feijoadissima Sofitel (black bean stew cooked with dried meat, pork and sausages), which is served every Saturday, from 12:30 pm. A delicious breakfast can be enjoyed there, from 6:00 a.m. to 10:30 a.m.

Cha & Simpatia ("Tea & Kindness")

One of the most well known tearooms of the city, it offers, from Monday to Friday, the delicacies of the French patisserie. All this with a beautiful Copacabana beach view. Tea is served upon prior reservation for minimum groups of 12 people.

Horse's Neck

English style jazz bar, it offers a great variety of Brazilian and imported beverages - including Rio's most complete list of Belgium beers, as well as exclusive appetizers. Offering 80 seats and live music, the bar has an in-door veranda with Copacabana beach view.

Technical Profile

Inauguration: 1997

Managing Director: Nagi Naoufal

Investment: US$ 25 million

Rooms 388

Meeting Rooms 10 lounges and 13 rooms (2,5000 people)

Restaurants First Chef: Roland Villard

Le Pre Catelan Gastronomic Restaurant, 70 seats From 7:30 pm - 00:30 am

Atlantis International Buffet and a la carte, 80 Seats - from: 6 am to 10:30 am/ 12:30 pm to 3:30 pm/ 7:00 pm to 11:30 pm

Cha & Simpatia Tea room, 30 seats - prior reservation for A group of 12 people

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Horse's Neck English style pub, 80 seats From: 5 pm to 2 am

Sofitel Rio de Janeiro Av. Atlantica, 4240 - Copacabana Tel.: (55) 21 525 1232 Fax: (55) 21 525 1200 e-mail: [email protected]

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VESPER

Av. Presidente Vargas, 3131- 18 floor Sao Paulo SP- 20210-030 BrazilTel: (55-11) 3085 5100 Fax: (55-11) 3085 4015 Email: [email protected] Website: http://www.vesper.com.br

Interview with Mr. Luiz Kaufmann, President

You've had a difficult beginning in Vesper. The company had 1.3 USD billion in debts; you negotiated and got a big discount and also extra funds of around 300 million USD. What did this operation mean for the future of Vesper?

Basically it has meant survival, to keep on existing, because we would not have been able to keep on going with the debt we had before. In addition, we also needed the extra cash to keep investing, so as to provide quality services to our customers.

There was always the possibility of selling the company.

Nobody would buy Vesper with a 1.3 billion dollar debt, right? So the strategy was to design a new business plan linked to a recapitalization plan. It was our job to show to the investors - and in particular to Qualcomm - that it was worth making this investment. The conditions attached

World Investment News Ltd. Top Report on Brazil were restructuring the debt. We bought back 1,2 billion dollars of debt, which a discount of approximately 90%.

Could you explain how did you do that?

Well, it was a negotiation that resulted in an agreement. The alternative was bankruptcy where nobody would have won.

You make it look easy, but I am sure it is not easy to get a 90% discount of debt.

It's easy to explain, but difficult to accomplish. It took us 6 months, - from May 15th to Nov 15th - to conclude the structure, 6 months from my joining the company. It was a very, difficult and complex operation mainly because of all of the people involved: shareholders, suppliers, banks and their investments bankers and lawyers, suppliers.. I would say it was a unique operation in terms of the Brazilian market, which worked out in the end.

What regions does Vesper cover with its technological infrastructure of WLL and CDMA?

Vesper is unique: the technology we use to provide fixed telephony services (WLL) is the same that we could use to provide cellular. We have a mobile infrastructure, but do not yet have a license to be a mobile company. We now cover 17 states, we are operational in 80 cities and will cover another 85 cities in the near future. In these additional cities we will operate by contract with the other telecommunication companies, through unbundling contracts. At least, initially.

With that territory in mind, what is the potential in terms of number of clients for Vesper, taking into account that Brazil will have 46 million mobile users in 3 years time?

We presently cover all regions except for region 2, in the south, which we might apply for later in the future. We cover an area with a population of 125 million people, in 17 states , this is most of Brazil. As you may well be aware, there is right now a sufficient offer of fixed telephone lines. But there is still a significant room in the cellular phone sector and we believe that, (though I do not know when in the future), we can look forward to convergence in technologies and services, as mentioned by the Chairman of Anatel, in an interview, announced recently. I can't see how in the future one will be able to separate fixed and mobile telephone services. It will have to become one single thing in the end.

The potential of Vesper is not only half a million users, but also its capacity and infrastructure, to host a lot more.

When we talk about infrastructure, there are several parts of the chain. We have switching capabilities for 6 million lines. The most expensive part of the investment has already been made, but we would have to make additional investments in Radio Base Stations, and some other specific parts of the system, to be able to supply all these people. The important thing is that the basic infrastructure is in place, giving us the possibility of moving forward with a small marginal investment per line..

The license with which Vesper was granted allowed the company to operate in the major population centers in Brazil: Sao Paulo, Rio, etc. Was this the reason why Vesper installed that infrastructure?

Vesper's plans aimed at reaching a target capacity in each city, that is to say, fulfill goals for each phase of the project. Those were the commitments to Anatel, and the expectations of the planners. When the company was started Vesper believed that it would be possible to penetrate the market and reach 6 million lines in two years.

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Let's move on to the new business plan. I would like to ask you about the deal with Eletronet concerning Internet access provided to your customers.

We have two business units, a residential business unit, using our own wireless infrastructure, which concentrates on selling the "Vesper Portátil", a portable handset. We also have a corporate business unit. The corporate business unit has a totally different structure and strategy. It supplies only corporations, mainly medium and large ones, and has a very different product portfolio. In this case, we do not have our own infrastructure, we use third party infrastructure: backhaul, longhaul and last mile access to customers. In this case we buy (or exchange) infrastructure from different partners, Telemar, Telefonica, Embratel, AES, Eletropaulo, Infovias, and Eletronet. We have made interesting deals with them, swapping capacity for fiber.

You mentioned large corporate clients. Are you going to target smaller companies?

Yes, we supply services to micro-businesses through our residential business unit. In the case of a large corporation, or a mid sized one, this is done through our corporate business unit, which started to operate in May last year. It's new, but it is growing fast. We are concentrating on attracting large customers because the impact on performance is better, however that doesn't mean that you can't target small and middle-sized clients too.

How is "Vesper Portátil" responding so far?

Very well, as you know we launched the product recently, it's two months old. We are still building our distribution chain for the "Portátil. In the past the client did not buy the telephone (the handset): he/she signed for a line and paid for an activation fee. This was accomplished through our call centers. With the "Portátil", we sell the handset: hence, we have to develop new distribution channels because nobody buys an expensive handset without being able to see the product. The distribution outlet options are retail chain and a door-to-door. The door-to-door chain is already well structured, and the retail channel is in its initial phase. The Portatil is doing quite well; it is an attractive product and people like it.

Can you give us a description of the conveniences on this product?

If we had a license it would be a mobile phone, but as this is not the case, we only guarantee the quality of the service at the home. If a client wants to acquire one of our phones, we check whether there is coverage at his/her address and then install the phone. It's physically impossible with this technology to restrict the use of the phone to the residence itself, people can use it around the home. The advantage is that you pay fixed telephone line rates. With the "Vesper Portátil" and the "Fale a Vontade" we have innovated in many ways.

Can you describe in which ways have you innovated?

We sell the phone with a flat fee, for a monthly subscription, that means that you pay 59 Reais (25 USD) a month with unlimited local usage. It doesn't matter how much you talk, so if you are a heavy user, talking for one hour a day, it is much more economic to use our phones compared to other fixed or mobile options.

… But it is a mobile phone, I mean the handset is wireless…

The handset is mobile and the technology is mobile too. The handset is a typical cellular phone, manufactured by LG, Nokia, Kyocera and others. If we had a license, with very small changes in our system it would become a mobile phone. We still do not have total coverage of the larger cities, like São Paulo for example, because we are not a cellular company, but that could happen in the near future.

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What will happen if Anatel finally grants Vesper with a license of third generation mobile?

That is going to happen. The question is when. Anatel is in the process of what they call "cleaning the spectrum". The "consulta pública" should be coming out in a day or two. It was announced last week by one of the counselors. They will define a new area in spectrum for WLL that is still at 1.9. We will adapt accordingly . The regulatory environment is changing and it will create new opportunities for Vesper.

One other thing to guarantee the future of Vesper was the establishment of the "meritocracy philosophy" in the sales programme?

Meritocracy all over Vesper, not just in the sales program. I think that every start-up in the Telecom or the Internet business during the years of irrational exuberance, nobody cared about results, cash flow, etc. People used to manage companies based on how much money was burnt that month, growing as fast as possible and taking maximum market share. Nobody cared about costs or financial performance. At Vesper we had to change the company culture to become totally results oriented. For this the meritocracy system is perfect. The idea is very simple, you pay for performance, whoever brings results gets the money.

Can you tell us about some specific cases where this philosophy worked, for instance that magic Friday when 4,000 lines were sold?

Those specific cases are anecdotic but also good examples. What we are doing this year in relation to the variable compensation system, is defining aggressive variables for people that have been performing very well. In the case of sales people, we have a performance-based system, subject to not only the amount of sales but also the client's performance. It is a complex system but straightforward at the same time, very attractive for people who work hard and are motivated by the possibility of making a lot of money. In fact, if you are an exceptional salesman you can make more money than me.

What are your expectations for the end of this year in terms of number of clients and turnover?

We would like to reach at least 1 million lines and probably the turnover will be around close to R$ 500.000.000 this year.. It is still a small company.

When Bell Canada announced its intentions of selling their stake in the company, there were a few companies interested, right?

BCI did not have that much to sell. As a result of the capital restructuring they were diluted to a very low participation.

The restructuring has been completed?

Yes, the financial restructuring was finished November 15th. We are still restructuring in other areas, redefining our strategy, the product line, the organizational structure, and compensation systems. These things are still on going.

On a more personal level Mr. Kaufmann, Tell us a little bit more about how was working for "GP Investimentos" and then for Arthur D. Little .

I spent two years as a partner in GP, before joining Vesper, and I was managing director of Arthur D. Little a long time ago, - from 77' to 84'. I used to say that it was my MBA because we used to do a lot strategy and turn around work. I also did that in several companies as CEO. I think that's why they invited me to come here, because of this experience.

As a last question. How would you like Vesper to be seen?

World Investment News Ltd. Top Report on Brazil

I think that I would like Vesper to be recognized as an innovative company that provides high- quality services to its customers and a good return to its shareholders.

Winne cannot be held responsible for unedited transcription.

VOTORANTIM

Votorantim Ventures

Contact Votorantim Ventures Rua Funchal 263 15th Sao Paulo - SP- 04551-060 Brazil

Tel: (55-11) 3089 6555 Fax: (55-11) 3045 8181 Email: [email protected] Website: http://www.vventures.com.br

Brief Background

Votorantim Ventures is a US$ 300 Million multi-sector venture capital fund, focusing primarily in Information Technology, Communications and Life Sciences.

The fund is affiliated to the Votorantim Group, a leading Brazilian industrial conglomerate and, at the present moment, its sole capital provider.

Established in 1918, Votorantim Group is Brazil's largest industrial conglomerate with approximately US$ 5 Billion in revenues.

With interests in cement, mining and metals, pulp and paper (NYSE: VCP), energy and agribusiness, the Group has a leading position in all markets it participates in Brazil. Recently, the Group has expanded its operations to the United States with the acquisition of selected assets from Blue Circle North America, a cement producer.

More than a simple provider of growth capital, Votorantim Ventures brings to its portfolio companies an unparallel business network and an association with a blue chip company and premier brand name in Brazil.

World Investment News Ltd. Top Report on Brazil

The fund also seeks an active participation in the Board of Directors of investor companies, and a strong influence over management and strategic decisions.

The fund typically invests between US$1 to US$15 Million in each transaction. This policy allows Votorantim Ventures to participate both in early stage ventures and in later stage opportunities. The fund is also prepared to invest larger amounts in the case of very attractive opportunities.

Votorantim Ventures applies 5 basic criteria to evaluate investment opportunities:

1/ Size and growth of the market that the firm operates 2/ Operational performance and quality of products and services; 3/ Quality of the management team; 4/ Existence of a viable exit strategy through strategic sale or IPO 5/ Attractive expected return on investment.

Investment Focus

Votorantim Ventures is a multi-sector venture capital fund. On a non-exclusive basis, the fund focus its investments in three sectors: Communications · Wireline Broadband Infrastructure · Wireless Broadband Infrastructure · Data services · Media Information Technology · Software · IT Services Life Sciences · Biotechnology · Healthcare Services · Healthcare Products · Devices

Winne cannot be held responsible for unedited transcription.

Interview with Mr. Paulo Henrique de Oliveira Santos, Ceo Of Votorantim Ventures Capital.

World Investment News Ltd. Top Report on Brazil

Before starting up Votorantim Ventures, you were CFO and Executive Director of Votorantim Mining and Metals. Why did you accept to join this new project in year 2000?

In June 2000, the shareholders of Votorantim Group decided to commit US$ 300 Million of the Group´s capital to create the venture capital fund. I was invited to put together this fund, which is clearly not an easy task in a country like Brazil. I found the opportunity challenging and motivating and decided to leave my CFO position and join Votorantim Ventures.

In what sectors is Votorantim Ventures focusing the investments and why?

VV is a multi-sector fund and we have a focus on Information Technology and Biotechnology. We believe that those are industries with tremendous growth opportunities in Brazil and globally. Given the size and depth of Brazilian and Latin American markets, however, we feel that we could not have a too narrow focus. Consequently, we also look at opportunities in other high growth industries, such as services.

Could you explain us why those sectors have more potential?

IT and biotech have a sizeable potential due to a combination of two factors. First, the market is already quite large and continues to grow at substantial rates. Second, we believe that there is an untapped and unexplored pool of good scientists producing good science in the Brazilian universities. We have the opportunity to transform this knowledge in good technology businesses and that is why we have established a closer link with the universities and research centers.

What is the selection criterion that VVC uses to invest in a company?

There are four criteria we follow in order to invest in a company: The size and growth of the market in which the firm operates; the operational performance and quality of products and services the company has; the quality of the management team; and the existence of a viable exit strategy through strategic sale or IPO which would provide an attractive return to our investment. The most important thing for us, however, is the management team. It is not easy at all to find the right kind of people to grow a business in Brazil, and most of them are already employed in good companies. So, before anything, we always try to find the right group of people to manage the business.

Are you focusing in Brazil or do you have operations in other countries?

We target companies that have Brazil as a key market in their strategies. This is where we could add more value due to our knowledge of the market and extensive business network. But we

World Investment News Ltd. Top Report on Brazil have companies that operate or have expanded into other countries as well. We have six investments up to now: .comDominio, Estrutura.net, Optiglobe, Quadrem, Telefutura and Alellyx Applied Genomics, which was announced yesterday. Alellyx is an interesting case. It is a biotech company that we and a team of five researchers founded. We and these scientists, who were the coordinators of the Brazilian Genome Project, worked side by side in developing the business concept and putting together a business plan before launching the company.

These Scientifics are responsible of the sequencing of the bacteria Xyllela Fastidiosa. What is the impact of this discovery for the Brazilian scientific context?

The impact has been significant, since it has created a cluster of highly skilled biotech researchers. These guys have sequenced not only the Xyllela, but other bacteria as well. The publication in top scientific journals such as Nature and Science has also attracted international attention to what the Brazilian universities are doing in this field. It indicates that there is a considerable potential for relevant scientific research in Brazil, if the project has a solid strategy and is adequately financed by institutions such as Fapesp, a research-financing agency of the State of São Paulo, and others.

Is this going to have an impact, for example, in the Brazilian agricultural industry?

We believe that it will have a significant impact, if Allelyx succeeds in transforming the genomic information into effective technologies to solve economically relevant problems of the industry. If that happens, the impact will not be restricted to Brazil but will affect the agricultural industry on global basis. This is what usually happens when there is a technology breakthrough, as the US companies have done over and over again in several industries. This is emblematic of what we are trying to do: put together Scientifics who are doing interesting science in the research centers across the country and build companies to supply products and services to the global market.

This company was announced yesterday, are we going to hear from you again in the pending time?

Probably yes. I cannot say precisely when, but you will certainly hear from us in the near future.

And in order to find that "right people", what kinds of structure do you have here in VVC?

We are building a team of people that has a blend of experiences and expertise to provide the most adequate support to the growth of the companies we invest in. So we have in our team people with industry and top management experience, people with science background, people with finance and negotiation skills, people with control and tax expertise, with sales and marketing experience and so on. To lead our biotech efforts, for instance, we hired in December last year a scientist that was one of the coordinators of the Genome Project in Brazil. He was the person who put together Alellyx, alongside with the founding scientists. Scientists in Brazil are not familiar with the venture capital business. So what we are trying to do is to build a bridge between two different and separated worlds of the business enterprise and scientific research. Having a scientist in our team is a key differential, since we have somebody who knows most of the people in the universities and what is really going on. It is not easy. Sometimes the researchers in Brazil do not understand what we are trying to do, they think that a VC firm is like a bank that is going to lend money to them and get his house as a collateral for the loan. We are trying to show them how venture capital works.

What are those explanations like? How do things really happen?

We are not just taking the scientists from the universities, putting them in a room, and given a nice lecture on how to build a business. What we do is to build the business from the ground up alongside with these researches. We typically mix them with experienced executives who are managers of companies that operate in the target industry. This combination is very good for sides, scientists and businessmen alike. By doing that, the scientists get a better understanding

World Investment News Ltd. Top Report on Brazil of how a business work and what are the needs and problems of real companies. At the same time, the business managers learn what are the likely benefits of having top class scientists working to solve problems of their businesses.

And these meetings must be difficult.

Yes and no. It is not the same thing as it is USA, where there is a well-established culture of exchange of information between the academia and the business community. At the same time, if the right atmosphere is created, it is surprising how fast people come to realize the potential we have in fields such as biotechnology. We know that it will take time to build our business and to show that our model works. But we are not in this business for the short term. We believe that our job is to build successful companies for the long run. This is the philosophy of Votorantim Group and ours as well. The Votorantim Group is the largest industrial group in Brazil and is here for the long term. So there is no hurry.

So you recommend to companies that want to come into Brazil to stay long?

If you take a look at the country now you will see that a great deal of the most important global companies is already here. Some of them have been here for a hundred years and most of them are doing quite well. Brazil is the largest country in Latin America. We live in a democracy and nobody is going to change that. We have an economy with solid fundamentals and with good growth prospects going forward. If Brazil is not the best country in the world to make an investment, I am sure that it is in the top five list for long-term investments.

Winne cannot be held responsible for unedited transcriptions.

World Investment News Ltd. Top Report on Brazil

V.I.P. INTERVIEWS

Interview with H.E. FERNANDO HENRIQUE CARDOSO, President of the Republic of Brazil.

July, 2002

The project of “e-government” is providing through the Internet open access to government activities, public information and services to the Brazilian society. How are you ensuring full access to the services provided by the “digital inclusion” projects? How would you say “e- government” adds transparency to the activities of a government?

There are many important initiatives aimed at providing electronic access to Government information and services. Our greatest success story is perhaps the filing of tax returns through the Internet. Nowadays, an overwhelming majority of Brazilian taxpayers present their tax returns to the Government by means of a computer program that anyone can download at home and that makes it very easy to organize the data and to send it directly to the Revenue Service – no need for long lines in front of a counter, no bureaucracy, no paperwork. The data show that every day around 400.000 people use the Revenue Service’s site on the Internet to ask questions, to solve problems and get guidance on administrative procedures. Also, the voting and the processing of the results of our national elections are almost completely done with electronic media, which has made it possible to have the results on the next day and to eliminate any uncertainty involved in the process.

There is a general Government site, called “Rede Governo” (Government-Net), through which Brazilians can get all kind of information on public services and on their rights as citizens. Moreover, most of the data related to the planning and implementation of all federal expenditures is available on line, which makes it easier for members of Congress and the press to monitor the use of public funds.

All in all, e-government is a huge step toward greater transparency and accountability by public authorities. If democracy is to work well, than it is essential that the citizens be fully informed of

World Investment News Ltd. Top Report on Brazil what the Government does, and why, and also of what the Government is planning. In Brazil, the use of electronic media is proving to be a major asset in this effort.

The Brazilian energy sector has been through rough time this past year. In a country with the largest Hydroelectric Plant in the world and large oil reserves, how do you explain what happened and what has been done to guarantee security in the electricity supply? Are foreigners investing in this sector?

Most of Brazil’s electric power is generated from hydraulic sources. This brings us huge advantages. Firstly, it is a renewable source. Secondly, it is environmentally cleaner that other alternatives, such as coal-generated electricity. The down side is that hydroelectric power makes us dependent on the weather. If precipitation falls under a certain level, there is the risk of a shortage. This is precisely what happened, as a result of a protracted drought in several regions in Brazil.

Faced with the electricity shortage, Brazilians responded decisively and effectively, by cutting energy consumption by some 20%. This made it possible for us to overcome the problem, and now, after a good rainy season, the situation is back to normal. The question now is: how can we prevent this kind of problem from happening again? The answer is quite clear: investment, and some diversification, in order to reduce contingency risks linked to weather fluctuations. In 2001, we have increased our electricity generation capacity by 3,000 MW. We are putting in operation 30 more thermoelectric energy plants, using as fuel mainly the natural gas imported from Bolivia. All in all, from 2002 to 2004 some 20,000 MW will be added to our electrical system. Apart from that, in order to guarantee security an early-warning system was introduced, so that the threat of any shortage will be detected at least two years in advance, giving us time to adopt the necessary measures.

Privatization has been central to your mandate. What has been your strategy to ensure that companies sold to foreign investors will contribute effectively to the improvement of the national economy in the long run?

The whole process of privatization must be envisaged within the context of a reconfiguration of the regulatory activities of the state in Brazil. Over the last several years, we have created new, semi-autonomous regulatory agencies, that are responsible, each in its own sector, for ensuring the quality of service provided to the population. Thus our concern has not been restricted to privatizing, but we have designed a regulatory structure aimed at overseeing market forces and with powers to enforce quality standards based on objective and transparent criteria. As a result, the public has a double benefit. First, because the private companies can mobilize the funds required to ensure investment at the appropriate levels, something the Government could hardly afford. Secondly, because the public interest is safeguarded by a new and modernized structure of regulation and oversight.

Increasing exports has been a priority since you took over as president. “Export or die” was your motto. How is the administration supporting the private sector in order to diversify exports? What has been your government’s recipe to improve commerce?

In the long run, the only recipe for increasing exports is to promote competitiveness of Brazilian products. This has been achieved in many significant ways. From 1993 to 1998, the growth of Brazil’s foreign trade has been driven mainly by the opening of the market to imports. The amount of trade (exports plus imports) increased from US$ 60 billion annually in the early 90’s to US$ 106 billion in 2001. Since the adoption of a floating exchange rate, in January 1999, Brazil has moved from deficit to surplus in foreign trade. Last year, we had a surplus of US$ 2.6 billion. And the studies show that the growth of exports has not been led by traditional labor- intensive products, but by technology-intensive industries. Brazil today is one of the world’s leading exporters of regional jets.

The fact is that Brazilian manufacturing industries and agriculture is today fully competitive in several key areas. The government has supported this effort by ensuring economic stability, by improving finance mechanisms and by working to develop Brazil’s infrastructure in crucial sectors such as ports, waterways, roads and telecommunications. As a result, Brazil’s firms are able to compete in the most demanding markets.

World Investment News Ltd. Top Report on Brazil

Exports still represent 10% of the Gross National Product. What do you expect from FTAA (Free Trade Area of the Americas) and other international agreements to improve exports? What is the role that Brazil must have in the FTAA?

As I just said, Brazil’s exports are increasingly competitive, both in price and in quality. This is why the effort to promote free trade is so important to us. Protectionist measures such as tariffs and subsidies in the US and Europe are among the greatest obstacles to the growth of our exports. Thus, our main expectation in the FTAA negotiations is that we obtain greater access to North American markets. To accomplish that, we need to make significant progress in reducing agricultural subsidies, limiting the use of anti-dumping measures and removing obstacles that prevent us from reaping the benefits of our comparative advantages. In the early 90’s, Brazil has significantly opened its markets to imports. Nonetheless, we still face huge protectionist barriers in other countries. The FTAA will make sense if it contributes to reducing such barriers and to promote a balance distribution of costs and benefits among all countries in the Americas, great or small, rich or poor.

Mr. Cardoso, you are a sociologist and have studied, analyzed and written about the Brazilian society. As President and sociologist what is your advice to foreign investors when they come to invest in Brazil?

My advice is probable superfluous, because the strength of the Brazilian economy speaks for itself. But I will say this: those who bet on Brazil’s future stand to gain a lot, because the country has all it takes to continue in the path of social and economic development. For too long has Brazil suffered in stagnation and backwardness. This chapter is now closed. With democracy, economic stability and greater social justice, there is nothing that can stop Brazil in its progress. Our economic environment is business-friendly. Our people is hard-working, creative and eager to learn more. The country is not affected by any sort of ethnic rivalries or civil strife. We have world-class universities and world-class scientists. Investors who come to Brazil will be partners in our development and they will get the very significant returns of operating in a market of over 160 million people, or even more if you consider the integration with our neighbors in Mercosul.

Note: WINNE cannot be held responsible for the content of unedited transcriptions.

Interview with Caio Luiz De Carvalho, Minister Of Sports And Tourism.

Esplanada dos Ministerios Bloco A Brasilia- DF 70054-900 Brazil Tel: (55-61) 217 1852 Fax: (55-61) 217 1834 Email: [email protected] Website: http://www.met.gov.br

Los Brasileños no sólo son buenos deportistas de elite en fútbol, tenis, Formula1 o volleyball, también es una sociedad por lo general muy deportista. ¿Existe una explicación a este hecho Sr. Ministro?

No futebol nos tivemos o Pele, que foi o maior de todos. Ayrton Senna, Emerson Fittipaldi, Nelson Piquet na Formula 1 o proprio Guga do tennis. O Esporte no Brasil comecou a ser organizado de 1984 para ca. Em 1994 o Brasil recebia apenas 50 medalhas internacionais em competicoes internacionais e no ano passado chegamos a conquistar 265. E logico que quando se fala em Brasil no exterior, se fala em pais do futebol. Mais e verdade, nos somos mesmo o pais do futebol porque a crianca ja nasce brincando de futebol. O futebol hoje, ate

World Investment News Ltd. Top Report on Brazil esta na legislacao brasileira, e patrimonio social e cultural do povo brasileiro. Entao, sendo patrimonio cultural e social e estando dentro da cultura do brasileiro, e obvio que num pais com de 170 milhoes de habitantes, a chance de nos termos idolos e bons jogadores e maior.

En una ocasión Vd. Dijo que, en Estados Unidos, por cada US$ invertido en deporte ahorraba al país US$ 15 do gasto en salud. ¿Qué tipo de inversión esta haciendo el gobierno Brasileño en relación a infraestructura deportiva?

E verdade, eu falei isso, cada US$ investido nos Estados Unidos acabam representando cerca de US$ 14 a US$ 15 em economia em gastos com saude. Hoje o governo brasileiro esta convencido de que nos temos que universalisar a questao da atividade fisica e do esporte. No esporte, e verdade que nos temos que trabalhar a crianca quanto potencial de ser uma futura atleta. Num pais com tantas carencias sociais como o nosso, e importante tambem a gente trabalhar aquela crianca que nao sera uma campea, mas que precisa praticar esporte, atividade fisica, para melhorar suas condicoes de saude e educacao. A Organizacao Mundial de Saude hoje ensina que aqueles que praticam 150 minutos de exercios fisicos por semana acabam reduzindo em 51% a sua chance de contrair infartes e 37% de contrair a doenca do cancer quando idosos. Entao, a questao do esporte e estrategica na formacao de uma sociedade e o Brasil precisa investir nisso. Comecamos o governo Fernando Henrique com um grande projeto chamado Esportes na Escola e Esporte Solidario junto a todas as escolas do pais, junto a comunidades carentes, comunidades pobres. Isso tem sido um programa bem sucedido. Hoje nos estamos trabalhando, tambem, na integracao dos 250.000 professores de educacao física no sentido que eles possam ajudar as nossas criancas a crescerem sadias, longe do trafico e da violencia.

Cuando 2 billones de personas vieron a un Brasil Penta campeón llegó una oportunidad única de atraer más turistas. ¿Cuáles son los planes para aprovechar este momento y los objetivos previstos?

Embora nos temos poucos recursos para promover o pais la fora, nos temos que aproveitar esse campeonato mundial que bilhoes de pessoas assistiram a conquista da Copa do Mundo pelo Brasil. Embora hoje o governo brasileiro queira vender a imagem do Brasil como um pais multi-racial, o pais do eco-turismo, o pais do turismo aventura, o pais do turismo cultural e o pais do turismo de congressos e eventos, sol e praia, nos nao podemos negar que o futebol e sem duvida um icone no nosso pais. Temos investido num filme que devera ser apresentado nas principais emissoras de televisao da Europa, a partir do Segundo semestre do ano de 2002. Temos a pretensao de conquistarmos 400.000 europeus nos proximos 2 anos para o Brasil a mais dos que ja vem. Nos recebemos em 2000, 5.380.000 turistas estrangeiros. Por conta da crise da Argentina perdemos turistas, quase 1.000.000 de argentinos, e se nos conseguirmos conquistar 400.000 europeus, compensa a perda de 1.000.000 de argentinos, porque o europeu quando vem ao Brasil gasta US$ 90/dia e fica aqui 14 a 15 dias, enquanto que o argentino que vem ao Brasil, ele gastava US$ 60 e ficava 8 dias. Entao vamos investir muito no Mercado europeu e norte-americano. Estamos mais preocupados com investir em segmentos especificos como o turismo etnico, aproveitar a comunidade negra norte-americana que tem interesse em conhecer a Bahia, a cultura afro, e tambem questoes como eco-turismo e fishing - pescas esportivas, que sao os 3 produtos que nos temos que podem melhorar a nossa performance de fluxos norte-americanos para o Brasil.

Hablando del mercado norte-americano, ¿como afectó al turismo en Brasil los acontecimientos del 11 de Septiembre?

Depois do dia 11/Setembro, nos achavamos que o Brasil teria grande oportunidade porque com tudo que estava acontecendo no hemisferio norte, a tendencia no hemisferio sul, era as coisas melhorarem porque os sul-americanos iam ficar no hemisferio sul e o Brasil e o grande destino da America do Sul e porque os europeus e norte-americanos tenderiam a viajar para um lugar que, por mais problemas que tenha, e um destino multi-racial, onde nao existe conflito e guerras entre classes. A retracao do turismo aconteceu no mundo inteiro, nos Estados Unidos e na Europa foi dramatica. Entao, de 3.500.000 do brasileiros que estavam previstos ir

World Investment News Ltd. Top Report on Brazil para os EUA ficaram aquí hum milhao. A tendencia no mundo todo foi que os turistas acabaram ficando.

La Organización Mundial de Turismo recomienda que Brasil invierta US$ 40.000 millones para atraer turistas. Gostaria de saber se o governo brasileiro conseguiu essa quantia de investimento?

A Organizacao Mundial do Turismo recomenda que um pais deve investir 2% do que arrecada em divisas na promocao da sua imagem no exterior. Como no ano de 2.000 nos recebemos US$ 4 bilhoes em entradas de divisas nos teriamos que investir US$ 80 bilhoes so que essa recomendacao da Organizacao Mundial de Turismo diz 2% sendo metade para o setor publico e metade para o setor privado. Isso significa que o governo brasileiro, dos US$ 80 milhoes, ele iria investir US$ 40 milhoes. Infelizmente, por a conjuntura mundial, a crise da Argentina, etc., isto nao foi possivel. Brasil cresce muito em potencial com uma infra-estrutura que melhorou, com a qualidade de servico, com a vinda de grandes cadeias internacionais, com 15 novos aeroportos que foram construidos pelo Presidente Fernando Henrique, com 700.000 metros quadrados de patrimonios historicos que foram restaurados. Tudo isso que aconteceu melhorou a qualidade do produto brasileiro mas o que nos temos para mostrar la fora nao da para fazer nem boato, como dizem os nossos publicitarios - e tao pouco que nao da para fazer. Hoje, o grande desafio nosso e que a nossa area economica comeca a entender que a importacao de turista e um grande produto de exportacao para o Brasil. O nosso Ministro de Desenvolvimento da Industria e Comercio e um grande intusiasta e ve no turismo um grande produto de exportacao, a mesma visao que a Franca, Espanha ou Italia de que o turismo e exportacao, e buscar divisas, e melhorar a balanca comercial. O governo brasileiro hoje comeca a ver desta mesma forma. O turismo, finalmente depois de decadas no Brasil, e considerado atividade economica e produto de exportacao. Acho que a partir dos proximos 4 anos vamos ter um salto muito grande nao so de qualidade, mas como de aumento de ingresso de divisas e em busca de turismo e de novos mercados.

Hablando de nuevos mercados. Se estan haciendo inversiones fuertes en el Nordeste Brasileño, un ejemplo es "Costa do Sauipe". En qué otras zonas y actividades se están realizando inversiones importantes?

80% das viagens no mundo sao de curta distancia e 20% de larga distancia. Hoje, o nordeste brasileiro, a 6 horas e meia de voo de Portugal, e um grande destino europeu pela proximidade. E um destino que tem uma diversidade extraordinaria, diversidade cultural, natural e de recursos humanos. Tem uma identidade dificil de se encontrar e voce tem um clima extremamente favorable, acho que o nordeste e um grande caminho de investimento. Um outro caminho que tem um enorme atrativo para investimentos privados e a regiao da Amazonia e do Pantanal para projetos voltados para eco-turismo, turismo aventura e pesca esportiva. Os ivestidores estrangeiros ao longo da historia tem sido alemaes, franceses e americanos mas hoje os grandes investidores, especialmente na area de turismo, sao os espanhois, portugueses e franceses. O maior grupo hoteleiro do Brasil em expansao e o Grupo Accor, que investe muito aquí.

Playas bonitas, sol y cultura hay en muchos destinos turísticos. ¿Cuáles son las principales características que diferencian a Brasil de otros destinos turísticos?

Sol e praia existe em qualquer lugar do mundo, o que nos temos que e unico e o nosso potencial de recursos naturais, nossos eco-sistemas e a nossa cultura diversificada que tambem e unica e ela seduz europeus e norte-americanos. O Presidente do Banco PanAmericano de Desenvolvimento, costuma dizer que o Brasil tem maturidade aulica. Se voce processar essa materia prima, riquezas naturais, diversividade cultural e qualidade do homem brasileiro, vai dar um grande produto diferenciado. Hoje para voce conquistar turista tem que agregar o sol e praia do Brasil (que nos temos de melhor) com o eco-turismo e o turismo cultural. O Brasil esta melhorando muito a qualidade da infra-estrutura. Foram US$10 bilhoes investidos pelo governo em infra-estrutura nos ultimos 6 anos. Trezentos novos hoteis foram construidos. Tivemos uma grande reforma no patrimonio historico. Acho que o Europeu

World Investment News Ltd. Top Report on Brazil que vem ao Brasil vai encontrar um pais mais moderno, inserido na globalizacao, um Brasil que nao esconde os seus problemas sociais mas que sabe que tem que resolve-los. A diferenca e que hoje nao joga mais embaixo do tapete, ele assume e tenta resolve-lo. Em questoes que sao polemicas, como as questoes ambientais, o Brasil hoje nao merece receber conselhos de ninguem mias sim dar conselhos para paises do primeiro mundo.

La cuestión de la seguridad es un tema que preocupa mucho al turista de hoy en día. ¿Qué ocurre en Brasil a este respecto?

A questao da seguranca existe em qualquer pais do mundo. Temos problemas de seguranca aqui mas sao problemas que atingem aos brasileiros e nao aos turistas. Ha 10 anos que nao tem um crime barbaro com o turista. Diversas pesquisas tem mostrado que o turista hoje ate se considera mais seguro no Brasil pelo tipo de residencia, que na Europa o EEUU. O turista sabe que tem que tomar cuidado mais esse problema de seguranca existe nos dois grandes centros que sao Rio e Sao Paulo. Se voce vai para o Nordeste, Pantanal o para a Amazonia isso nao acontece.

Brasil como país de samba, fútbol y carnaval. ¿Qué le parece esta asociación de ideas que se tiene hoy en día de Brasil en el exterior?

As pessoas que conhecem o Brasil so de orelha vao achar que o Brasil e o pais do Samba, do Carnaval e do Futebol. Mas o samba, carnaval e futebol fazem parte quase de um passado do pais. E muito bom ser o pais da alegria, do carnaval e do futebol mas o Brasil ja passou dessa fase. Tem outras coisas para mostrar. Para as pessoas conhecerem essas belezas que so aqui nos temos como o Pantanal, a Serra Romantica do Rio Grande do Sul, Lencois Maranhenses, Fernando de Noroña, que e o lugar mais lindo do planeta terra, Alter do Chao no Para, onde se nada com botos cor-de- rosa ao seu lado, os sucos tropicais... So no Brasil tem isso, um pais onde existem diversidades tao grandes que voce descobre a cada instante um negocio diferente.

Winne cannot be held responsible for unedited transcription.

Interview with Dr. Solon Lemos Pinto, Secretary of Logistics and Information Technology.

Esplanada dos Ministerios Bloco C Brasilia DF- 70046-900 Brazil

World Investment News Ltd. Top Report on Brazil

Tel: (55-61) 322 2056 Fax: (55-61) 322.1393 Email: [email protected] Website: http://www.planejamento.gov.br

Usted es el fundador del proyecto de "e-gov", o la persona que lo ha llevado a cabo, ¿Cómo empezó, qué filosofia hay detrás de este proyecto?

Os trabalhos desenvolvidos no Programa Governo Eletrônico têm partido do pressuposto do aumento da eficiência da Administração Pública na promoção da melhoria das condições de vida dos cidadãos. Nesta visão, a administração pública está voltada para o cidadão, desempenhando suas funções enquanto organização, integrada, eficiente e transparente, graças à utilização intensiva das novas formas eletrônicas de interação.O programa governo eletrônico consiste no desenvolvimento de ações para a melhoria da prestação de serviços pela Internet, com menores custos e mais qualidade, além de maior transparência e estímulo ao controle social. O programa também se propõe a utilizar a infra-estrutura e os recursos governamentais para apoiar a universalização do acesso à tecnologia da informação, por meio da disseminação de quiosques eletrônicos em localidades distantes. Desse modo, o governo eletrônico promove a universalização do acesso do cidadão aos serviços prestados pelo Governo, a integração entre os sistemas, redes e bancos de dados da administração pública e a abertura de informações à sociedade, por meio da Internet. Outro grande objetivo do Programa é o de ampliar e estimular o processo de inserção do Brasil no novo modelo de desenvolvimento baseado na sociedade da informação, sempre com foco no cidadão. É nesse ponto que o aprimoramento da relação governamental com os parceiros investidores e fornecedores é fundamental. É aqui também que a necessidade de aprimoramento dos processos de contratações de governo e de estímulo aos investimentos é decisiva. Essa integração entre parceiros e fornecedores está sendo desenvolvida na forma de uma extranet conectada aos sistemas de informação do Governo Federal que compreende, dentre outros, os sistemas de administração financeira, de administração de pessoal, de serviços gerais, de apoio à educação, à saúde e à previdência social. A estrutura relacional envolve governo, cidadãos e empresas, dentro das diversas possibilidades de transações eletrônicas.Toda essa estrutura vem sendo construída de forma acelerada, com base em marcos legais estabelecidos nos últimos dois anos. Uma parte dessa extranet, a que trata da relação governo/fornecedores, está construída. O Portal Comprasnet representa para o Governo Federal a principal ferramenta para melhorar as suas contratações, para comprar melhor, de forma mais transparente e aberta ao controle social. O que temos observado é que, em geral, os sistemas eletrônicos exigem expressivos investimentos iniciais, mas podem proporcionar economias gigantescas, além de acelerar os processos administrativos e agilizar a tomada de decisões. Por isso, é muito importante ressaltar que a utilização intensiva dos recursos de tecnologia da informação não pode prescindir do planejamento cuidadoso e criterioso. O Governo Eletrônico representa um impacto de aperfeiçoamento progressivo da máquina administrativa. De acordo com a política que vem sendo seguida, o governo funcionará com eficiência cada vez maior na prestação de melhores serviços, com menores custos.

O governo do Brasil tem desenvolvido um programa de reforma do Estado desde 1995. Esse projeto consiste numa estratégia de modernização do Estado brasileiro, com desburocratização, simplificação, desintermediação de ações com uma mudança de um Estado burocrático para um Estado gerencial. De acordo com essa visão, o Estado está voltado para o atendimento ao cidadão. O Estado existe para incentivar o desenvolvimento, o bem estar e prestar bons serviços ao cidadão, que paga os impostos. Esse programa de reforma reúne uma série de ações em desenvolvimento para atender a necessidade de modernização do Estado, com um capítulo que se chama "o uso da tecnologia de informação na administração pública". Nesse contexto, o Ministério do Planejamento é o responsável pela coordenação da utilização da tecnologia de informação e também pela direção desse projeto de transformação do Estado. O ministério também é o responsável pelo orçamento, pela organização do aparelho de Estado, pelo gerenciamento de funcionários e pelas compras governamentais. Por tudo isso, o Ministério do Planejamento foi o escolhido para coordenar as atividades de governo on-line. Por outro lado, o planejamento estratégico do governo brasileiro tem um programa composto por 300 módulos e um desses programas se chama Sociedade de informação. Este programa é uma estratégia básica para o país entrar no contexto das

World Investment News Ltd. Top Report on Brazil sociedades da informação e obter uma vantagem competitiva em um enfoque global. O Programa Sociedade da Informação possui capítulos específicos para a educação, tecnologia, geração de conteúdos e para o Governo On-Line, ou Governo eletrônico. Claramente, essa é uma estratégia de utilizar a revolução digital, do avanço das tecnologias, para criar vantagens competitivas para o país. Assim, o Programa Governo Eletrônico (e-gov) possui facetas bem delineadas dentro do projeto de reforma e de acordo com a programação estratégica do governo. Para isso, a presidência da república criou um comitê executivo que é presidido pelo ministo chefe da Casa Civil e é composto por cada um dos vice ministros. A execução desse plano tem a colaboração de todos os ministérios. A melhoria do trabalho interno do governo (back office), o aperfeiçoamento da relação com os fornecedores (com economia de gastos e menos burocracia) e melhor atendimento ao cidadão são os principais objetivos do e-gov. Isso também implica em colocar serviços na Internet, disponíveis 7 dias por semana, 24 horas por dia. Hoje temos 1.000(mil) serviços no portal www.redegoverno.com.br. Esta é a filosofia do projeto.

¿En este momento el texto del ministro está contemplando a la poblacion en general?

Ainda não, porque priorizamos a realização dos ajustes internos na máquina administrativa. Em paralelo a todos os projetos de uso intensivo de tecnologia da informação do e-gov, era necessário dar valor jurídico às transações eletrônicas, o que exigiu diversas alterações na legislação. O marco legal para o e-gov foi a instituição de uma infraestrutura de chaves públicas para certificação/autenticação digital dos documentos eletrônicos e das transações públicas e/ou privadas realizadas eletronicamente. Com essa regulamentação, o sistema financeiro do país aderiu imediatamente a essa ICP-Brasil. A interligação do Sistema de Pagamentos Brasileiro - SPB a essa estrutura é uma coisa muito importante. O novo SPB entrará em vigor no dia 22 de abril próximo, dará mais agilidade e segurança às transações bancárias, além de garantir ao Brasil um sistema de pagamentos similar aos melhores do mundo, ajudar a elevar a imagem do país internacionalmente e reduzir o risco Brasil. A implantação do SPB reduz a possibilidade de uma instituição financeira que enfrente dificuldade para liquidar seus compromissos diários afetar as demais instituições, seus clientes, investidores e o Banco Central. É que para realizar transferências financeiras pelo novo sistema de pagamentos, as instituições precisarão de recursos efetivamente disponíveis, depositados no Banco Central e garantias previamente constituídas, em valores diariamente atualizados na Câmara de Interbancária de Pagamentos. É importante para todo o sistema bancário. Esse é o primeiro grande projeto, que não é necessariamente do governo. O marco legal está assentado numa política de segurança das transações eletrônicas, que exigiu a criação de um grupo de trabalho específico e altamente qualificado. Foi preciso estabelecer punições para crimes eletrônicos. Se alguém faz alguma invasão, modificação em dados da administração pública, será punido com multa ou prisão. Isso é algo muito sério, esta lei já está pronta e em vigor. Criamos também uma legislação para leilões reversos, os pregões. Desde a criação da modalidade pregão, em agosto de 2000, já foram realizados 4.477 pregões, que resultaram em economias de 200 milhões de reais para a administração pública federal. O portal de comércio eletrônico para as compras governamentais divulga 100% das licitações do Governo Federal e realiza pregões com economia média de 20%. Essas compras são transparentes e podem ser acompanhadas on-line pela Internet. As novidades, que começam a ser replicadas pelas administrações estaduais, exigiram mudanças na legislação e, principalmente, o estabelecimento de um novo modelo de negócios, onde o governo é capaz de fazer valer o seu poder de compra.. Existe ainda uma construção do marco legal para o comércio eletrônico em geral, que não está ainda pronta. Uma outra coisa que está sendo construída em paralelo é a infraestrutura para o governo. Estamos fazendo neste momento, já recebemos as propostas de contratação em grupo de acesso ao "backbone" governamental. É a primeira vez que o governo brasileiro faz esse tipo de contratação coordenada. O resultado deverá ser divulgado nos próximos dias. Participam consórcios formados pela Embratel, Telefonica, Brasil Telecom e Telemar. Temos muitas coisas para fazer a médio e curto prazos.

Uno de los temas candentes es el de la exclusion digital. ¿Cómo ofrecer la internet a personas que no tienen acceso?

Temos a concepção de que este tema não é só do governo, mas sim de toda a sociedade. O governo tem que liderar e criar as condições para viabilizar, mas toda a sociedade precisa

World Investment News Ltd. Top Report on Brazil cooperar, as iniciativas não são só governamentais. Mesmo assim, o governo federal tem algumas iniciativas. Até o final do ano, o governo quer instalar 3.500 terminais de computadores em locais de grande concentração pública, como prefeituras, rodoviárias e estações de metrô. A iniciativa faz parte do Programa Governo Eletrônico - Serviço de Atendimento ao Cidadão - Gesac, que vai disponibilizar, gratuitamente, durante 24 horas, via Internet, as informações e os serviços públicos. Também estará garantido o acesso a serviços privados, mediante a compra de cartões, nos próprios locais onde estiverem instalados os terminais. A instalação dos primeiros terminais está prevista para agosto próximo e na primeira etapa serão atendidas as capitais e as cidades com mais de 200 mil habitantes, num total de 3.500 pontos de atendimento. Existe ainda uma iniciativa dos Correios, que montarão 4 mil quiosques em suas agências, nas cidades com mais de 10 mil habitantes. Uma outra experiência, menor, é a de colocação de quiosques de auto-atendimento em lugares públicos. É um projeto piloto, de 100 quiosques de acesso gratuito a serviços de governo via Internet. Estamos começando a fazer testes, experiências, pondo quiosques em diferentes lugares com perfis distintos para ver como o cidadão responde, reage a eles.

Correios also started with 100.

A iniciativa dos correios tinha uma visão mais comercial, sem cobrança de Internet para o usuário de serviço público na rede, para navegação na internet o serviço é cobrado, com um cartão indutivo, similar ao cartão telefônico. O Comitê Executivo trabalha com mais projetos piloto.Existem iniciativas estaduais muito importantes, como as do estado de São Paulo, Bahia, Rio Grande do Sul, Ceará, Minas Gerais, Rio de Janeiro. São Paulo tem a idéia interessante de criar um computador com uso de flashcards. Com ele, o computador se personaliza para o usuário. A idéia é criar one-stop shops onde esses computadores estariam disponíveis. O governo de São Paulo pensa em 5 mil computadores e 100 mil flashcards. Esta é a experiência maior e mais importante. O Rio Grande do Sul tem essa experiência também. Lá tem o CDI (Centro de Democratização da Informatica) uma ONG, com a direção do Rodrigo Baggio. Há em São Paulo também um projeto junto com a prefeitura, o Sampa.org, coordenado por Rodrigo Assumção, um trabalho com a parte mas carente da cidade. Cria-se um telecentro com uma estrutura auto-gerida em parceria com a Microsoft e IBM. O objetivo desses telecentros é a educação, alfabetização digital, construção de conteúdo local, com a construção de pequenos negócios. Existem também iniciativas, como as do Rio de Janeiro, em favelas, para estimular iniciativas comunitárias. Esses centros servem, por exemplo, para compras em atacado de material para construção. Eles formam consórcios para compras, agrupando as pequenas quantidades que cada um iria comprar numa grande aquisição e depois dividem, distribuem. Há ainda outra iniciativa similar, também no Rio, chamada Movimento Viva Rio. Quando se trata de inclusão/exclusão digital é possível detectar muitos projetos em andamento no país, mas com pouca verba federal envolvida. Mesmo assim, essas são experiências importantes, que estão sendo acompanhadas e devem ser levadas em consideração.

A ultima decada vimos como crecía Internet e as novas tecnologías, mas a inversao pode ter tido alguma flutuaçao desde a caida da Internet. ¿Como isto afetou ao sector aqui em Brasil e concretamente ao projeto?

A tecnología da informaçao afeta o governo de maneira diferente do setor privado. Vocês têm clientela em potencial e há muito que fazer no governo para modernizá-lo, torná-lo mais eficente, mais barato, etc. Não temos ainda nenhuma causa que nos afete negativamente no setor público após o desastre das ponto com. As iniciativas privadas mostram aspectos muito positivos, com a criação de portais de Internet e iniciativas no setor da construção civil, exportação, e outras indústrias tradicionais. O e-banking no Brasil está muito avançado. Bradesco e Banco do Brasil são o segundo e o terceiro bancos da internet do mundo. O Brasil, de acordo com o instituto Data Folha, possui pelo menos 20 milhões de internautas, o que representa 10% da população Latinoamericana.

Como ultima pergunta, pessoalmente ¿Voçe pensa en voltar ao setor privado ou continuara con seus trabalhos a serviço do governo?

Eu vou permanecer no governo, tenho que permanecer no governo mas há eleições em outubro e sobre o futuro nunca se sabe o que pode acontecer, como dizem na Espanha "Deus dirá".

World Investment News Ltd. Top Report on Brazil

Winne cannot be held responsible for unedited transcriptions.

Interview with Mr. Joao Roberto Vieira da Costa, National Secretary of Communication. Contact Secretary of Communication Esplanada dos Ministerios Bloco A Brasilia- DF 70054-900 Brazil

Tel: (55-61) 411 4805 Fax: (55-61) 226 1620 Email: [email protected] Website: http://www.planalto.gov.br

Sr. Da Costa, cada persona imprime su marca personal cuando llega a un nuevo puesto de trabajo. Cuando usted se encontró con los planes de comunicación existentes, ¿con cuáles decidió que había que continuar y cuáles eran las nuevas direcciones que decidió tomar?

Yo he llegado aquí en el último año de gobierno del Presidente Fernando Enrique Cardoso. Los principales objetivos en la Secretaría de Comunicación del gobierno, las estrategias de comunicación ya estaban establecidas por lo que yo estoy finalizando el trabajo de estos 8 años de gobierno. En este último año de gobierno fueron dos las preocupaciones principales de esta Secretaría: Primero, hacer una campaña de exposición de cuentas, una presentación del balance de estos 8 años en los que Brasil ha vivido con una nueva moneda, con el Real. Mostrar a la población brasileña los avances conseguidos en estos últimos 8 años, las metas que el gobierno ha ido consiguiendo. Por ejemplo en Telecomunicaciones, donde en 1994 teníamos 800,000 teléfonos móviles y hoy 14 millones, o en mortalidad infantil que cayó de 48 para 29 (por cada 1,000 habitantes). En resumen, mostrar con los principales indicadores sociales y económicos lo que ha pasado en estos 8 años en Brasil.

Segundo, cambiar la forma en la que el gobierno hace su gasto publicitario. Hasta ahora el Estado gasta en concepto de propaganda de comunicación del gobierno y eso es un concepto errado, había que cambiar estos conceptos. Hoy tenemos, por un lado, una publicidad llamada mercadológica, de productos que están en el mercado como por ejemplo la gasolina de PETROBRAS, que tiene competidores en el mercado. Por otro lado hay una publicidad más institucional como la de presentación de cuentas del gobierno. Estamos creando una nueva categoría llamada Publicidad de Utilidad Pública.

Acabamos de contratar una agencia de publicidad para trabajar la imagen de Brasil en el exterior dirigida hacia un público justamente como su lector, donde el Brasileño necesita vender sus productos en países como EEUU, España, China, etc. Esa agencia fue contratada por el Ministerio de Desenvolvimento Económico Industrial e Comercio Exterior para tener un trabajo más profesional. Esta publicidad es de utilidad pública porque va a generar empleos, si es hecha de cara al interior del país deberá orientar al empresario a mirar al exterior, a comunicar que tiene un mercado fuera de Brasil. Como nosotros en Brasil tenemos un gran gasto en comunicación, lo que pretendemos con estas medidas es que la oposición, algo que ocurre en todos los países, pueda hacer una crítica más cualificada de cómo se están gastando los recursos. Pongamos como ejemplo la

World Investment News Ltd. Top Report on Brazil campaña de lucha contra el SIDA. Hemos conseguido desarrollar un programa muy eficiente en Brasil reconocido por la ONU como el mejor programa de lucha contra el SIDA del mundo. Esto es muy importante porque nadie puede cambiar el comportamiento de las personas sin darles información y este gasto no puede ser tratado de la misma manera que el que se realiza para comunicar los buenos resultados del gobierno en una determinada área. Esta es la nueva clasificación de la publicidad institucional de Brasil.

En 1999 se aprobó la nueva marca del gobierno federal para comunicación con el exterior. En esta nueva imagen, ¿cuáles fueron los conceptos básicos que se querían transmitir?

En el presente, y desde 1999, estamos haciendo un cambio muy fuerte de la imagen que se tiene de Brasil en el exterior. Antes de 1994 la imagen de este país en los mercados internacionales no era de las mejores. No había ni estabilidad económica ni un equilibrio fiscal de las cuentas públicas adecuado, existían ciertas distorsiones económicas dentro del país. Obviamente todos estos problemas eran reflejados en el mercado internacional. Pero Brasil hoy es el segundo país del mundo que más recibe inversión extranjera después de China. Durante estos 8 años ha habido una variación importante de la forma en que Brasil es percibida en el mundo. Desde 1999, se comprobó que Brasil tenía el equilibrio y determinación necesarios para vencer las crisis económicas mundiales, inclusive devaluando su moneda se vio que Brasil pudo mantener el control de la situación económica. Vimos que era importante mostrar para el mundo esa nueva realidad de Brasil pero se comenzó de una forma algo tímida, una comunicación que todavía es insuficiente a la deseada, desde el punto de vista de la imagen Brasileña al exterior. Pero al menos ya existe un camino que ahora debe ser continuado.

Dentro del ALCA, un nuevo e importante mercado externo para el futuro cercano de Brasil, ¿cómo se pretende posicionar a Brasil dentro de este nuevo grupo de países?

El resultado de la imagen de Brasil en el mundo es la sumatoria de una serie de iniciativas dentro del gobierno. Por ejemplo, Brasil tuvo un papel destacado en la última reunión de la Organización Mundial del Comercio (WTO) en Qatar ya que presentó una posición firme y supo agregar fuerzas de muchos otros países en la cuestión de las patentes. Brasil consiguió, junto con otros países, definir una posición clara a este respecto. Otro ejemplo es la cuestión de EMBRAER, hoy día cuarto fabricante mundial de aviones del mundo, que tenía un litigio con la canadiense Bombardier. El problema se resolvió de una manera bastante favorable para EMBRAER. Por otro lado, Brasil es hoy uno de los países mayores productores de carne del mundo, un mercado muy difícil hoy día ya que hay muchos subsidios y mucha protección de los mercados internos en todos los países y Brasil ha conseguido destacar internacionalmente en este sector.

En estos últimos días el Índice Riesgo Brasil ha subido, esto es algo totalmente coyuntural. Incluso el presidente anunció ayer un ajuste en el presupuesto interno Brasileño por cuenta de un atraso, absolutamente circunstancial, de un impuesto que es el CPMF. De forma preventiva el gobierno adoptó un ajuste fiscal más fuerte de 5,3 billones para no tener problemas de desajuste en sus cuentas públicas. Esto es un ejemplo de la madurez que está mostrando el gobierno, un ejemplo de que lo que debe ser hecho se hace. Eventualmente estas cosas pueden ocurrir, hoy ya ha caído 20 puntos el Riesgo Brasil y el USD también reculó. Nuestro vecino, que siempre fue un gran socio de Brasil, no hizo los deberes internos como Brasil los ha hecho y por eso se encuentra en una situación muy difícil.

Sin embargo a la comunidad internacional sí que preocupa el ascenso del candidato Lula en las encuestas preelectorales. El presidente FHC pidió un mensaje que transmita confianza y tranquilidad a los inversores extranjeros, como experto en comunicación, ¿cuál seria su mensaje sobre el futuro político de Brasil?

En estos últimos años en Brasil ha habido una maduración de la democracia, de las instituciones y también de la oposición. Todo aquel habilitado para ser presidente de Brasil tienen conciencia de la importancia de mantener determinada estabilidad económica, todos parten de esta base y es una cuestión ya consensuada. La sociedad brasileña también ha

World Investment News Ltd. Top Report on Brazil madurado mucho en estos 8 años. No hay motivo para preocuparse por ninguno de los candidatos. Pero este índice de Riesgo es de carácter muy inmediato, muy del día, todavía no han sido suficientemente presentados los programas de gobierno de los candidatos y no hay razón para esa vulnerabilidad.

Resulta muy difícil cambiar una imagen preestablecida que se tiene hoy del Brasil de desigualdad social. ¿Cuál es esa estrategia para cambiar esta imagen de cara al exterior?

Hoy día somos percibidos de una manera totalmente diferente de Argentina en este contexto. Sólo el hecho de que hayamos vencido la reciente crisis sin que haya habido un empeoramiento de la cuestión social es una prueba de ello, hemos conseguido mantener al país dentro de la normalidad. Con la desvalorización de la moneda brasileña en 1999 fue posible mantener en las mejores condiciones posibles las cuentas públicas, la administración de toda la economía no provocó ninguna cuestión social grave como infelizmente ha ocurrido en Argentina. Esto es una muestra del proceso de madurez en el país, un proceso que con las próximas elecciones se va a consolidar. Es la última etapa que tenemos que pasar para mostrar ese claro rumbo de crecimiento. En los principios del gobierno de FHC hubo un momento de estabilidad de la moneda. Con esa estabilidad conseguimos varias cosas como por ejemplo presentar aumento muy significativo de bienes de consumo o tener una presencia importante, como moneda estable, en el proceso de globalización. Con la moneda estable fue posible hacer una reformulación del papel del Estado. Los ministerios entonces enormes disminuyeron, muchas empresas fueron privatizadas, fueron creadas agencias reguladoras y fue aprobado en el congreso nacional la ley de responsabilidad fiscal (sólo se puede gastar lo que se recauda), aumentando el compromiso con los presupuestos oficiales. La estabilidad de la moneda y un Estado más fuerte, más centrado permitió que Brasil tuviese más respeto en el escenario internacional. Y el Estado hizo todo eso sin olvidar que ha comenzado a pagar la enorme deuda social con la sociedad brasileña. Hoy, todo lo que se recauda del Impuesto de la Renta, unos 28,000 ó 29,000 millones de Reales, vuelve para la población más carente a través de programas como la Bolsa-Escuela, que mantiene al niño dentro de la escuela sin trabajar dando una ayuda a la madre de 15 Reales, o la Bolsa-Alimentación, que asegura una alimentación adecuada a la población más necesitada. Hay otros programas de transferencia de renta que lucha contra la enorme desigualdad social que todavía hoy existe en Brasil.

Si vemos a los países como marcas podríamos decir que "Made in Taiwán", por ejemplo, es unido a conceptos como "producción en serie de manufacturados a bajo costo". ¿A qué conceptos querría unir "Made in Brasil"?

Made in Brazil significa que, por ejemplo, cuando se tiene enfrente a un avión de Embraer significa que está siendo testigo de la investigación, la tecnología y la alta capacidad de sofisticación que hay detrás de cada aeronave que produce EMBRAER, la cuarta mayor empresa del mundo en aviación del mundo. Made in Brazil hoy tiene mucha mas pesquisa, mucha más tecnología y modernidad de lo que las personas imaginan. Hoy en día el Made in Brazil todavía no consigue transmitir todos los avances que el país ha conseguido en los últimos tiempos. Dentro de poco la gente va a empezar a percibir lo que hay detrás de Made in Brazil, no sólo en aviación, la carne brasileña es una de las mejores del mundo y eso significa control sanitario, calidad del plantel, desarrollo en el campo biológico, desarrollo en el campo genético. Cuando alguien escucha "Café de Colombia" sabe que es un café de calidad. La carne brasileña ya es un sinónimo de calidad. No tengo ninguna duda que Brasil pasó por un proceso intenso de transformación y necesita un tiempo para ser concretizado. El Acero Brasileño está caracterizado por una productividad fantástica. La gran cantidad de volumen que se vende al exterior de soja brasileña es otro ejemplo, y el bajo precio al que se coloca solo puede ser conseguido si hay tecnología y modernidad agregada al proceso de producción. Estamos en un verdadero proceso de transformación de la percepción que tienen las personas del "Made in Brazil".

Winne cannot be held responsible for unedited transcriptions.

World Investment News Ltd. Top Report on Brazil

Interview with Mr. Mario Garnero President of Brasilinvest

Brasilinvest Av. Brigadeiro Faria Lima, 1485 Sao Paulo, SP- 01480-900 BrazilTel: (55-11) 3813 7011 Fax: (55-11) 3813 7111 Email: [email protected] Website: http://www.brasilinvest.com

In 27 years of history Brasilinvest has already structured investment projects for a value of USD $2 billion and another billion is on its way. From your point of view, what has been the most successful investment period in Brazil and why?

It was during the eighties or a little bit before because of the oil prices but that cannot be compared with what is happening today. Brazil is receiving FDI (Foreign Direct Investment) of around USD $30 billion a year, a larger in terms of what the USA has invested in China. This is due to the fact that Brazil was very attractive to invest in during the eight years mandate of Fernando Henrique Cardoso. The privatization process of several sectors and also certain subjects like the automotive area have brought this huge amount of money.

Brasilinvest has three main missions: Assisting international investors; Identifying partnership and investment opportunities in Brazil; and the assistance to local companies in the formation of international partnerships. Could you give us some concrete examples of your help to international investors?

We won the rights to make the first computer here, the first Brazilian personal computer. The software was made by a subsidiary of Siemens and the construction was prepared by a Brazilian company. If we talk about telecommunications, we have the examples of NEC and AT&T. We made all the steps for the Brazilianization of these two companies, we were the

World Investment News Ltd. Top Report on Brazil largest investors in these two companies when they decided to settle here. If we bring up the case of FIAT, we were the ones who solved some political questions, some kind of participation problems they had with some Brazilian parties. So we do not only give advices but we are guaranteeing, as we are involved in the new venture, that the investment is secure. This gives a comfortable position to both the Brazilians and the foreign companies.

Could you give us now some examples of your assistance to local companies developing international partnerships?

We have just solved a huge problem inside PROFAP, the Brazilian largest car parts company, we solved the problem and found a partner to be one of the shareholders. We have plenty of cases where we have created the conditions and gathered a list of the companies that are interested in partnerships with Brazilian companies. For instance, we have put together USD $500 millions through concessions for the Galeao Airport, as well as in SUDAN, in the North East, also USD $500 millions in a very long-term investment. Now we have the idea of Brazilian companies having to have a softer support because big international companies know how to work by themselves. It is necessary to open the eyes of the Brazilian companies to the opportunities in the transfer of technology to new markets, in exports and imports, and we help them in that expansion, we have the ability to get new partners for them and to increase their market share. So as we look closely at the Brazilian companies we naturally put ourselves in a good position towards the international companies. We find the opportunities then we put together the parties and then we find the financiers for the projects.

If I want to invest some million dollars in Brazil, what would be your recommendation, what sectors offer more opportunities?

Today you clearly have the agribusiness as something with potential. Brazil is producing now around 100 million tones of grains per year. Not only in the sense of export commodities but also has a very large and versatile market waiting for new products. So I think that agribusiness is one. Another one is the electro-electronics where there is also a huge internal market and a good chance of exporting but mostly you have local production that has really increasing in Brazil. We are just looking over the wall because in the FTAA Brazil has a similar position as Mexico, actually Brazil's economy is twice as big as Mexico's, it is a USD 1 trillion economy. It is a country with a huge potential, it is the 5th largest economy in the world and it is getting the recognition of the strategic position it will have after liaisons and contacts with the European Community. You find problems in China, in India or in Australia, everywhere and so in Brazil. But the important thing is that we are open to new horizons and naturally one of these horizons is Asia.

With partners in more than 20 countries Brasilinvest has a clear international profile. Besides Asia, where do you locate the strategy for finding new partners?

The USA and the UE are the places where we will have more opportunities for us and I believe that the FTAA will solve the problems of trade we have. Despite the protectionist position that USA is taking now it is still a very large market and a lot of opportunities could develop. With the European Community the problem was mostly their agriculture, but now you have investments coming from Germany, France, Great Britain and Italy so we started to have a predominant position for a long term where the Europeans have had a very important position. Spain is, after the USA, the second largest investor in Brazil with USD $22 billion in the last four years. Japan also has made large investments in the automotive and telecommunications sectors and there are a large number of Japanese companies here. There is for instance, a huge area to develop that is the services in Brazil for the cellular mobile market.

In all these countries, who do you work with, what is your client profile?

World Investment News Ltd. Top Report on Brazil

We have at least one big bank in each of these countries: ABN AMRO in Holland, in Italy we have Banca Monte Dei Paschi Di Siena, Banco Santander in Spain and Dresdner Bank AG in Germany. And we have other kind of companies in our profile like Agip or Fiat in Italy, Caterpillar and Xerox in USA, Volkswagen in Germany or Nestlé AG in Switzerland. So we can create a lot of synergies amongst these companies and the local ones in Brazil, we are able to put together some opportunities. Besides this I would highlight, in our international operations, the investment of USD $250 million we have done in the Real Estate.

What are the reasons for these investments in the Real Estate?

We are developing something that in Brazil has enormous possibilities: The Tourism. We are talking to some people concerning this business. Tourism requires an infrastructure that was for a long time neglected in Brazil in terms of hotels and resorts. Now it is picking up very quickly so all the big names like Marriott and Accor are coming here, we are working with them in some projects and we intend to keep this going on. In Real Estate specifically we have a large project in Campinas, close to São Paulo, a project of USD $250 million where we will be creating 1,000 residential homes, golf clubs, spas, universities, etc. The second big project is in São Paulo, where we are developing a 250,000 m² multiuse complex, something you find only in the USA and in Europe, a place where you could live, having your work close to your residence and everything you need in the same area. And this large area is also in the center of Sao Paulo. These are the projects that we are concentrating on now.

Brasilinvest is among the 100 largest private groups in Brazil. What was the turnover of the company last year, percentage of growth from year before and expectations for next year?

For all these years we have had a steady growth in USD terms of about 12% and our projects and assets all together are around USD 2 billion. It is quite important to know that the main power in Brazil in terms of moderation is the congress and the President could do a lot but it has to go through the congress as in any normal democracy. Congress in Brazil is very important, a moderate congress closer to the center than to the right or to the left, so any president that take over will have to work together with the congress and this gives confidence to foreign and Brazilian investors. FHC made a new country in 8 years, the country changed a lot but we are now in the process of more fiscal and social reforms to be made. It could be Lula, it could be Serra who wins but the are all now responding to a demand: We do not intend to have anymore inflation, we intend to be an open country in terms of our trade and we would like to be integrated into the world community. Those are points that have to be taken care of by the new President. I feel that our worries are a little premature and do not reflect necessarily what will happen with the Brazilian society. I do believe that stability and the fiscal responsibilities will be kept. You also have the left political parties taking over in Europe and it did not represent a huge change, a revolution.

What ever happens after the elections the export will still be a priority for Brazil. What is the contribution of Brasilinvest to the increase of export?

We created an NGO that takes care of discussing social and economic issues, a nonprofit organization. Next month we will be having the meeting about agriculture. The idea in all these initiatives is always that the only fuel that will keep Brazil going back to a 7% growth economy is working towards having a very good trade balance.

What is there still to be done to be able to achieve this task?

There are a lot of things to be done, above all a fiscal reform and the transportation. Transportation needs a dramatic improvement. The ports are productive, though not all of them, so in two words: reduce costs. Besides this, the efforts of private sector to increase the export of Soy beans has cost them a higher price of production than what Americans and Europeans are spending. The private sector is taking care of a task of the government. This is not only happening in agriculture. To sum up we need a tax reform, a welfare reform, and a modernization, within the next five years, of the Infrastructure. And we will make it.

World Investment News Ltd. Top Report on Brazil

Concerning the FTAA, how do you think the Brazilian economic community should face this kind of international agreements?

To Negotiate, to negotiate and to negotiate. When you are joining a club you have to negotiate under what conditions you are getting in, so either you pay the fee and you become a member of the club or you are out. I do prefer myself to be discussing the issues inside the club than standing outside the club knocking at the door. It is a good opportunity for Brazil as it was for Mexico. I talked recently to President Bush about that, recalling the moment when the first draft of the agreements was submitted, at that time it was commented the eventual lost of sovereign positions and this is something that is just senseless, we are not negotiating some kind of sovereignties we are just negotiating markets.

What kind of advantages and disadvantages would entrepreneurs find when they become part of the Brazilian private sector?

To start with, you will have access to the largest market in the world. But the state of Brazil is not in the position of believing that the industry makers will come from abroad and take care of things. In the present day, most of the big multi-nationals need an industry structure in the country and a small and middle-sized economy settled. That is what Brazil offers. What the Brazilians will have to learn is to negotiate. We have 72 committees studying the best way to get into the ALCA, each one of them specialized in one area. If the American policy protects the sugar we have to think that we produce alcohol and they do not, there is a common interest for both of us in every negotiation. If they present a list of 250 agricultural products and we present 261 we will have to find a way together. The most important thing is that the FTAA will create an economy of around USD $17 trillion for a market of 800 million people, larger than the European Union. We must not loose our preference, we are not talking about ideology, and it is time for Brazil to start discussing how good do we negotiate in a larger environment. This is why we need to have a trade balance that sustains a 7% growth, something absolutely viable as long as we do not feel the constraint of the USD.

In a local media you were announced recently as "The King of the good contacts". It is said in the USA that "contacts often mean contracts", Do you agree with this statement?

It is quite important to open the door, you have to keep your contacts alive. It is not about bothering someone asking or begging for something. You make contacts when you listen and you give a call when you have a nice proposition for them. Personal relations are critical not only in business but also in politics. I believe and hope to become also the king of the contracts but first you have to pay a large telephone bill, dress very nice and be open to other people! The only way you keep a contact is if when you offer a mutual interest. And last but not least, you can never leave a call unanswered.

Winne cannot be held responsible for unedited transcriptions.

Interview with Mr. Rudolf Hohn President of Investe Brazil.

World Investment News Ltd. Top Report on Brazil

Av. General Justo 335, 5th Rio de Janeiro RJ- 20 021-130 Brazil

Tel: (55-21) 2220 0994 Fax: (55-21) 2220 0994 Email: [email protected] Website: http://www.investebrasil.org.br

When Investe Brazil was born, the minister of Planning, Mr. Tavares, defined it as "a gate for investments in Brazil, promoting the country abroad to attract new investors". You are in front of this organization, how would you define Investe Brazil?

Investe Brazil is a resulting from Private sectors and Public financing. When it was created, what we had in mind was to make Investe Brazil become the gateway for investment in the country. Investe Brazil was created about a year ago with the help and encouragement of the government, with the main objective of promoting the country abroad and of attracting new investors. The purpose of this institution, which started functioning in October 2001, is to meet these needs. As you can imagine, a lot of effort has been done into bringing together the different parties involved in foreign investment. Nonetheless, I want to make clear that Investe Brazil is a private managed company; it is not a public company, it is managed by entrepreneurial and professionals recruited in the market

What role does Investe Brazil play in the already existing network for promoting investment in the country?

You are right, in Brazil there have been important activities geared toward attracting investment. However, the participation of Investe Brazil is of acting as an intermediary and coordinator between of the Brazilian government efforts and the foreign companies. Thanks to this position, we will be helping in the necessary process needed by foreign companies to function in this country, so that if there are problems, they can be easily overcome. Think of it as a link between all parties involved in the process of investment: Investors, government, sectors, defining and fulfilling needs, etc.

Of course there is a network for investment promotion in the country, we cannot forget the 24 billion USD of foreign investment that came in the country last year. But Investe Brazil is going to unify criteria and efforts; it will be the one orchestrating and coordinating all the efforts and activities in this field.

World Investment News Ltd. Top Report on Brazil

Business Guides, newsletters, magazines, workshops, international fairs... what are the main tools that Investe Brazil is using to communicate the meaning of "Avança Brazil"?

The tools used are those of any marketing agency. For starter we have created a website: www.investebrazil.com.br or www.investebrazil.org.br. As you well know, Internet is an invaluable and fundamental tool to be used in this day and age, so our web site serves this purpose. We have also evaluated Investment agencies in other countries such as Mexico, who are making an enormous effort in this area. They have developed a very good agency and you can take a look at this and many others on www.waipa.org. As you may understand, a country with Brazil's potential must be at a par with all the rest of the big players.

Nonetheless, we will not be concentrating our activities exclusively online. We will organize face-to-face meetings with big investors, so we can listen to what they have to say and find out what exactly it is they want.

For another part, we want to centralize the work of attracting investment. For the next eight years there are 387 projects, adding up to about 228 billion USD. We want to be service handlers for those projects, playing the role of attracting and retaining investors, a most important task. Our strategy is to give investors the information they need for their sector, avoiding barriers so they will want to stay with us. Our network coordinates these initiatives and lets this be known.

In the training that recently took place in Brasilia on how to target investors for the country, conducted by the UNCTAD and sponsored by the Federal Government, were there specific Brazilian development projects mentioned in the meeting?

Energy, logistics, transport and technology are among the most attractive sectors in Brazil for Investment opportunities. Here, Brazil's main objectives are to improve infrastructure, encourage exports, create jobs and stimulate transfer technology inside the country. We are promoting infrastructure projects with the Ministerio do Planejamento to find investment for the energy, logistics, tourism, Media & Entertainment among other sectors. These investments are aimed to improving the overall competitiveness of the country.

One must remember that Brazil is at the forefront of Latin America in terms of e-commerce, Internet and IT. Brazilian companies have undertaken important investments in these areas, adapting their systems to create new opportunities.

It is estimated that by the year 2006, Brazil will have over 42 million Internet users. This represents enormous potential in terms of e-commerce. Estimates say that by the year 2004, 39 billion USD will be traded through B2B and B2C.

When it was created, each sector was meant to be represented in this institution, ten Ministries for the public sector and ten companies for the private sector. How important is this combination of private and public?

Investe Brazil is a private managed company maintained by 10 representatives, working in partnership with the Government. It is a non-profitable company and we focusing on public interests. The basic objectives of Investe Brazil is to find out the investors needs to attract them with qualified information, and the appropriate investments opportunities.

In Investe Brazil, what companies are representing the private sector? What is the selection criteria?

Investe Brazil is a partnership between the Federal government and an association of the entrepreneurial sector. There will be 20 members in the board of representatives; ten from the private sector, represented by its Confederations and Associations, and ten from the public sector, more specifically from the economic and social areas.

World Investment News Ltd. Top Report on Brazil

The carnival, the huge power in the media that Football has nowadays... it does not look easy to draw foreign investors' attention to other facts, but in four years Brazil is predicted to have more than 42 million Internet users, in two years 56 million customers will use wireless communication, What other facts should big financial and business groups know to have an idea of what investing in Brazil means?

The image of Brazil has changed, aside from carnival and football. As you mentioned, Brazil has now 12 million Internet users and it is a plus. I can give you a lot of other facts and figures, depending on who is the target. The annual ratio of 1,5 billions USD invested between 1980 and 1994, leaped forward and reached 30 billion in 2000 USD, and 24 billion in a difficult year for the world as 2001.

We must not forget that Brazil, in a recent study by MIGA (www.miga.org) where some of the most important companies in the world, were asked which countries were favorite for investment, Brazil was chosen third after USA and China. This proves the international interest to invest in the country.

A market of 700 billion USD, a population of 169 million people... In the biggest market of Latin America opportunities are a fact but, what are the sectors that you recommend "new investors" take a more accurate look?

There are a lot of opportunities in Brazil. I would say that Infrastructure such as Ports, Energy and Transport are attractive sectors for investments and could count with the Brazilian government support once they are strategic areas for development. I would recommend also the Electro-electronics as a sector because of the high-qualified work force and the fiscal conditions.

There are of course other areas that are of interest such as Media & Entertainment That is coming to open for foreign investments. The Telecommunications, that contributed over 7 billion USD to the GNP during 2001, is a sector with a lot of potential. With the final deregulation in 2003, this will be an area of the economy, which will experience a lot of dynamism. Wireless communications is set to reach 56 million customers by the end of 2004. This will include a wide use of new applications and wireless solutions, including 3rd generation mobiles, also known as UMTS. In addition, it will also provide great opportunities for m-commerce (mobile commerce). In Biotechnology we are one of the leaders in Latin America, with several institutes conducting research and development. Progress in this field is led by Fundaçao de Amparo à Pesquisa do Estado de Sao Paulo (FAPESP). The recent mapping of the genetic code of a bacteria (Chromobacterium Violaceum) proves this.

Privatization is drawing to an end. How do you intend to keep investment coming in, when you are having to compete in the IT sector with the Far East.

There is something close to 800 billion USD of investments in 2002 around the globe. There is big competition among all the countries in order to attract those investments and Brazil is the third country in investment intention after USA and China. The political and economic stability in Brazil is a fact, and investors have that in mind when they think about the region. Take into account that the population profile in Europe is not growing, unlike Brazil.

Far eastern countries have been well known IT investment destinations, because they have become specialized in the field and export a lot. We need to do something similar.

Mr. Hohn you share your time between Investe Brazil and other activities. One of them is the philanthropic association "Ação Comunitária Do Brasil". Could you explain to us what exactly this institution does?

"Ação Comunitária Do Brasil" is a non profitable philanthropic association, founded basically by Private Corporations which aims at providing education and opportunities for the excluded population of the slams given them the chance to become part of the society.

World Investment News Ltd. Top Report on Brazil

Winne cannot be held responsible for unedited transcriptions.

World Investment News Ltd. Top Report on Brazil

LINKS

Information

- Embratur: http://www.embratur.gov.br

- Brazil Info: http://www.brazilinfo.com

- Tourist Info: http://www.brazilwebtour.com

- Guide on Sao Paulo: http://www.guiasp.com.br

- General information: http://www.infobrazil.com

- General and Cultural information: http://www.brazilmax.com

- Information on the main Brazilian cities: http://www.veja.com.br

- Information on Sao Paulo, Rio and Curitiba: http://www.apontador.com.br

- Guide on Sao Paulo and its areas: http://www.guiamais.com.br

- US Commercial Service: http://www.focusbrazil.org.br

Travel Destination Guides

- Come to Brazil: http://www.come-to-brazil.com

- Capri Tourism Agency: http://www.capriturismo.com.br

- Brazilian travel: http://www.braziliantravel.com

Newspapers & Medias

- News from Brazil: http://www.brazzil.com

- Diario de Sao Paulo: http://www.diarodesaopaulo.com.br

- Estadao: http://www.estadao.com.br

- Folha: http://www.folhaonline.com.br

- Globo News: http://www.globonews.com

- No: http://www.no.com.br

- Investment News: http://www.investnews.com.br

- Exame Magazine http://www.exame.com.br

- Valor Newspaper: http://www.valor.com.br

World Investment News Ltd. Top Report on Brazil

- Abril Group: http://www.abril.com.br

- Gazeta Mercantil: http://www.gazetamercantil.com.br

- Globo http://www.editoraglobo.com.br

- IDG Computerworld http://www.idg.com.br

- Jornal do Brasil http://www.jb.com.br

Government / Embassies

- Ministry of Culture: http://www.minc.gov.br

- Ministry of Communication: http://www.mc.gov.br

- Ministry of Development, Industry and Commerce: http://www.mdic.gov.br

- Ministry of Environment: http://www.mma.gov.br

- Ministry of Finance: http://www.fazenda.gov.br

- Ministry of Justice: http://www.mj.gov.br

- Ministry of Mines and Energy – MME: http://www.mme.gov.br

- Ministry of Science and Technology: http://www.mct.gov.br

- Ministry of Agriculture: http://www.agricultura.gov.br

- Ministry of Environment:: http://www.mma.gov.br

- Ministry of Planning: http://www.planejamento.gov.br

- Ministry of Foreign relations: http://www.mre.gov.br

- Ministry of Sports and Tourism: http://www.met.gov.br

- Ministry of Transport: http://www.mma.gov.br

- Ministry of Finance: http://www.fazenda.gov.br

- Federal Senate: http://www.senado.gov.br

- National Confederation of Agriculture: http://www.cna-rural.com.br

- National Confederation of Commerce: http://www.cnc.com.br

- National Confederation of Industry: http://www.cni.org.br

- National Confederation of Transportation: http://www.cnt.org.br

- National Confederation of Financial Institutions: http://www.cnf.org.br

- American Chamber of Commerce: http://www.amcham.com.br

- Embassy of the United States of America: http://www.embaixada-americana.org.br/

World Investment News Ltd. Top Report on Brazil

States

- Acre: http://www.ac.gov.br

- Amapa: http://www.amapa.gov.br

- Amazonas: http://www.brasil.gov.br/pref/amaz.htm

- Bahia: http://www.bahia.ba.gov.br

- Ceara: http://www.ceara.gov.br

- Espirito Santo: http://www.anchieta.es.gov.br

- Goias: http://www.goias.gov.br

- Maranhao: http://www.maranhao.gov.br

- Mato Grosso: http://www.mt.gov.br

- Mato Grosso do Sul: http://www.ms.gov.br

- Minas Gerais: http://www.mg.gov.br

- Para: http://www.prodepa.gov.br

- Paraiba: http://www.pb.gov.br

- Parana: http://www.pr.gov.br

- Pernambuco: http://www.perambuco.gov.br

- Rio de Janiero: http://www.governo.rj.gov.br

- Rio Grande do Norte: http://www.rn.gov.br

- Rio Grande do Sul: http://www.estado.rs.gov.br

- Randonia: http://www.randonia.ro.gov.br

- Roraima: http://www.seplan.rr.gov.br

- Santa Catarina: http://www.sc.gov.br

- Sao Paulo: http://www.saopaulo.sp.gov.br

- Sergipe: http://www.governo.se.gov.br

- Tocantins: http://www.to.gov.br

World Investment News Ltd. Top Report on Brazil

Business Opportunities

- Brazilian Association of Internet Providers: http://www.abranet.org.br

- Brazilian Chamber of e-commerce: http://www.camara-e.net

- Brazil Trade Net: http://www.braziltradenet.gov.br

- Invest in BrazilInvestebrasil: http://www.investinbrazil.comhttp://www.investebrasil.org.br

- Euvaldo Lodi Institute: http://www.iel.cni.org.br

- Sao Paulo Association of Trade: http://www.acsp.com.br

- Networks of the Governmental services: http://www.redegoverno.gov.br

- University of Campinas: http://www.ct.unicamp.br

- BrasilInvest: http://www.brasilinvest.com

- Sebrae Sao Paulo: http://www.sebraesp.com.br

Information Technology

- Labone: http://www.labone.net

- National Council of Scientific and Technologic Development : http://www.cnpq.br

- RNP/ Rede nacional de Pesquisa: http://www.rnp.br

- Simpro Brazil: http://www.simpro.org.br

- Cimcorp: http://www.cimcorp.com.br

- Stefanini IT Solutions: http://www.stefanini.com.br

- Finep: http://www.finep.gov.br

- e-Consulting: http://www.e-consultingcorp.com.br

- Vesta: http://www.vesta.com.br

- Promon: http://www.promon.com.br

- Unisys do Brasil: http://www.unisys.com.br

- Pulso: http://www.pulso.com.br

- Conectiva: http://www.conectiva.com.br

- Eversystems: http://www.eversystems.com

- Consist: http://www.consist.com.br

- Review of Information and Technolgy: http://www.revista.unicamp.br

- Softex: http://www.softex.br

- Brazilian Institute of IT Information: http://www.ibict.br

World Investment News Ltd. Top Report on Brazil

- National Institute of Technology: http://www.int.gov.br

- Link Express: http://www.linkexpress.com.br

- Interneting: http://www.interneting.com

- 3com: http://www.3com.com.br

- BMC Software: http://www.bmc.com

- Compuware: http://www.compuware.com

- Itautec Philco: http://www.itautec.com.br

- Boucinhas&Campos: http://www.boucinhas.com.br

- Microsiga: http://www.microsiga.com.br

- Scopus.com: http://www.scopus.com.br

- PromonIP: http://www.promonip.com.br

- E-ratings: http://www.ibope.com.br

- Prodemge: http://www.prodemge.mg.gov.br

- Cyclades : http://www.cyclades.com.br

- Diveo: http://www.diveo.com.br

- Disoft: http://www.disoft.com.br

- Yawl Internet: http://www.yawl.com.br

Shopping On Line

- Pao de Acucar: http://www.paodeacucar.com.br

- Portal Mix : http://www.portal.mix.com.br

- Submarino: http://www.submarino.com.br

- Mercado Electronico: http://www.me.com.br

- Americanas.com: http://www.americanas.com

Banks And Financial Institutions

- CCF Bank: http://www.ccfbrasil.com.br

- Banco Do Brazil: http://www.bancobrasil.com.br

- Banco Itau: http://www.itau.com.br

- Brazilian Bank of Development: http://www.bndes.gov.br

World Investment News Ltd. Top Report on Brazil

- Central Bank of Brazil: http://www.bcb.gov.br

- Banco Bradesco: http://www.bradesco.com.br

- Investshop: http://www.investshop.com.br

- iG Finance: http://www.igfinance.com.br

- Meu Dinheiro Online: http://www.meudinheiroonline.com.br

- BNDES: http://www.bnds.gov.br

- Liquidez: http://www.liquidez.com.br

- ABBC: http://www.abbc.org.br

- Investment Funds: http://www.fundos.com

- Stock Exchange of Sao Paulo: http://www.bovespa.com.br

- Banco Alfa: http://www.bancoalfa.com.br

- Banco1: http://www.banco1.com.br

Venture Capital

- Venture Capital: http://www.venturecapital.com.br

- Dynamo Venture Capital: http://www.dvc.com.br

- Eccelera: http://www.eccelera.com

- Invent: http://www.invent.com.br

- CVC/ Opportunity: http://www.opportunity.com.br

Telecommunications

World Investment News Ltd. Top Report on Brazil

- Embratel: http://www.embratel.com.br

- Brazilian Post Office: http://www.correios.com.br

- Splice: http://www.splice.com.br

- Impsat: http://www.impsat.com

- Americel: http://www.americel.com.br

- ATL: http://www.atl.com.br

- BCP Telecom: http://www.bcp.com.br

- Intelig: http://www.intelig.com.br

- Brasil Telecom: http://www.brasiltelecom.com.br

- Telemar: http://www.telemar.com.br

- Vesper: http://www.vesper.com.br

Transport And Travel

- Brazilian Destinations: http://www.portaldaviagem.com.br

- Varig airlines: http://www.varig.com.br

- Gol Airlines: http://www.voegol.com.br

- Decolar: http://www.decolar.com

- Tam airlines: http://www.tam.com.br

- ViaBrasil: http://www.voeviabrasil.com.br

Event And Public Relations Agencies

- GDS International: http://www.gdsinternational.com

- Planin: http://www.planin.com

- rma Communications: http://www.rmacommunications.com.br

- MVL Communications: http://www.mvl.com.br

- Edelman: http://www.edelman.com

- S2: http://www.s2.com.br

- ML& A Comunicacoes: http://www.mlacomunicacoes.com.br

Where To Stay?

World Investment News Ltd. Top Report on Brazil

- Eron Hotel: http://www.eronhotel.com.br

- Carlton Hotel: http://www.tbanet.com.br/pages/carlton

- Othon Leme Palace: http://www.hoteis-othon.com.br

- Vernon Palace : http://www.vernonhotel.com.br

- Hotel Posada Brig in Maresias: http://www.brig.com.br

- Porto Grande Hotel: http://www.pelotastur.com.br

- Naoum Plaza: http://www.naoumplaza.com.br

- Caesar Park: http://www.caesar-park.com

- Sofitel Rio: http://www.accor-hotels.com

- Le Meridien Copacabana: http://www.lemeridien-copacabana.com

More info on Brazil in our website: http://www.winne.com/dncountry.php?paisid=19