Brazil After the Disaster

totum Year 2 Number 6 Dec 08/ Jan 09

THE WORLD WANTS BARBECUE Asia is being invaded by Brazilian-style barbecues, serving EXECUTIVES UNDER THREAT all-you-can-eat rodízio In times of risk, companies demand new talents and offer LET’S HEAR IT insurance against (honest) FOR BRANDING on-the-job mistakes Companies harness the power of design and ideas to conquer global markets BRAZIL AFTER THE DISASTER Discover what companies are doing to survive in a world that’s traumatized by crisis and threatened with recession GLOBE-TROTTER Buenos Aires: the best way to spend a few hours... or days

Contents COVER STORY A new 24ﬂ ight plan How Brazil’s major companies are facing the crisis – and planning for afterwards Eliana Simonetti 62

58 68 PHOTOS: HANDOUT

ANTENNA MARKETING GASTRONOMY

NEY DOS REIS 10 Gastronomy – a way to win new business 44 Brazil has origin-certifi ed products 68 The world falls in love with Brazilian barbecue 44 Antônio Carlos Santomauro Adriana Setti SURVEY 18 New data on Brazilian TEST RANKINGS internationalization 48 How much do you know about 72 Brazil: win some, lose some Armando Mendes the globalized world? in the latest global surveys Arindam Bhattacharya, James Hemerling and Harold Sirkin Armando Mendes OPINION 20 Will Obama bring Brazil YOUR CARREER EXPORTS a new business climate? 50 Executives today have more 74 Haco fi ghts for top spot in the world labels market Diego Z. Bonomo power – and more risks Maurício Oliveira Christine Puleo INVESTMENT INTERNATIONALIZATION 22 APEX-Brasil is attracting TECHNOLOGY 76 Cinex licks its wounds after an new funds for Brazil 54 Even in the crisis, Totvs has strong client demand internationalization bid turned sour Nely Caixeta Vicente Vilardaga Arlete Lorini

ANALYSIS STRATEGY FAIR TRADE 34 The Itaú-Unibanco merger: 58 How branding can help you win global markets 77 Caboclo turns traditional Brazilian what it really means Flávio Dieguez peasant sandals into European fashion Roberto Luís Troster TALENT Adriana Setti EMERGING NATIONS 62 Top New York fashion designer Francisco Costa Will the BRICs build something new? hails from a small Brazilian town GLOBE-TROTTER 36 :: How to survive Bruno K. Reis Nara Vidal 78 Business Traveler a terrorist attack on your hotel INTERVIEW: RUBENS RICUPERO BIOTECHNOLOGY Express Tourism :: Buenos Aires 40 It all depends on Obama and China 64 Biodiversity spells new products – and good business has more than just tango Nely Caixeta and Armando Mendes Flávio de Carvalho Serpa In Transit :: Rui Porto

4 P I B P I B 5 Editorial

TOTUM EXCELÊNCIA EDITORIAL Nely Caixeta Not Afraid of the Crisis Things were going so well for Brazil just recently, PIB economically speaking, and for Brazilian companies BRAZILIAN COMPANIES around the world. It’s a pity we have to change GO INTERNATIONAL the subject, exactly in our Christmas edition. A TWO-MONTHLY MAGAZINE FOCUSING ON INTERNATIONAL BUSINESS AND But the crisis is with us, in all its depth and fury. We can’t just ECONOMICS, FROM TOTUM

ignore it. There’s a general understanding that we’ll hit bottom Editor sometime in 2009. After that, anyone who’s been doing their Nely Caixeta • [email protected] Contributors to this edition homework properly can hope to reemerge into a different Antonio Carlos Santomauro, Armando Mendes, Bruno K. Reis, Carolina de Sá, Christine Puleo, world, one full of opportunities both in Brazil and abroad. Eliana Simonetti, Flávio de Carvalho Serpa, Flávio In this edition, we gave ourselves the task of discovering just how the Dieguez, Glaucy Vulcano, Marco Rezende, Roberto Luis Troster, Rui Porto e Vicente Vilardaga. major Brazilian companies with international operations are preparing Barcelona: Adriana Setti e Daniel Setti. Florianópolis: Maurício Oliveira. Londres: Nara Vidal. Paris: for the turmoil in their various markets and how they plan to avoid (or at Andréa Flores. Porto Alegre: Arlete Lorini least minimize) the consequences and dangers that lie ahead. Our lead Design Karina Gentile e Maurício Fogaça story by Eliana Simonetti shows how each company in its own way is Página Mestra making the necessary adjustments. The goal of Brazil’s most important cover companies is not just to survive and preserve – as far as possible – their Marcelo Calenda ILlUSTRAtions workforce and clients; they also see it as essential to reposition their Enio Longo activities to account for the drastic shrinkage in other Photo Editor Glaucy Vulcano economies, above all the powerhouse called China. Copydesk and Preparation However, the major Brazilian companies which Márcia Melo Translation produce foodstuffs and other commodities, energy Brian Nicholson e Johann Weber and hi-tech products know that their real opportunity lies in maintaining their ability to produce what ADVERTISING INTERNATIONAL AND BRAZIL the world wants. Like Harold Sirkin, co-author of (55-11) 3097.0849 [email protected] Globality: Competing with Everyone from Everywhere Av. Brigadeiro Faria Lima, 1903, cj. 33 for Everything said: “Brazil has what the world Jardim Paulistano - 01452-911 - São Paulo - SP HANDOUT needs.” When the world starts buying again in large PRINTING Nara Vidal, Editora Parma quantities, companies must be able to deliver. DISTRIBUTION IN BRAZIL from London Support: Edicase - www.edicase.com.br for PIB To help understand what’s happening, we Exclusive distributor: Fernando Chinaglia heard important specialists and academics. One Mailing: Postal House Portugal is ambassador and former finance minister Rubens Ricupero, an Malta Distribuição Av. Paulista, 2001, cj. 815 - 01311-300 - experienced observer of crisis since he served in Washington in São Paulo (SP) - www.maltainternacional.com.br the 1970s. Read his fascinating interview on page 38. Another is Administrative Consultant Roberto Luis Troster, former chief economist of the Brazilian Banking Luiz Fernando Canoa de Oliveira Federation, who analyzes the impact of the merger between Itaú and [email protected] EDITORIAL CORRESPONDENCE Unibanco and the international prospects of this new financial giant. Av. Brigadeiro Faria Lima, 1903, cj. 33 To finish on a lighter note, we decided to upgrade the Globe-Trotter CEP 05426-100 - São Paulo - SP [email protected] section. This now has helpful hints to make your business trips Signed articles do not necessarily represent both useful and enjoyable, tips for some quick tourism in foreign the opinion of the editors. Totum reserves the right to edit or summarize letters. cities, and finally our traditional In Transit section with the Legally responsible journalist personal experiences of some notable global road warriors. Nely Caixeta (MTb 11 409) PIB – Brazilian Companies go International In the same spirit, we have a story from Nara Vidal, born in the is published by Totum Excelência Editorial small interior town of Guarani, who grew up with Francisco Costa, Av. Brigadeiro Faria Lima, 1903, cj. 33 CEP 05426-100 - São Paulo - SP currently a top fashion designer in New York. Vidal has also gone (55-11) 3097.0849 - [email protected] international, living in London where she has a real estate business. Print run for this edition Portuguese – 14.000 English – 6.000 Print run audited by PricewaterhouseCoopers THE EDITORS

6 P I B Letters

Congratulations on the first anniversary of PIB. I am a professor and researcher at the Dom Cabral Foundation, and whenever possible I use your articles with my students. They are always very well received.

ANDERSON ROSSI Dom Cabral Foundation Nova Lima (MG)

PIB Magazine is doing a really worthwhile job. I am delighted to see such high-quality informative material being produced in and for Brazil. ALMEIRI SANTOS Real Trade Magazine Toronto – Canada

I am a 23-year-old university student and reader of your excellent publication, I was delighted to read your which offers a precise panorama story about Votorantim of the international insertion of Brazilian companies and – in the final in PIB Magazine. Our instance – of Brazil itself. Please keep group has always been on producing this fine magazine. focused on overcoming THIAGO PIRES Juiz de Fora (MG) challenges. Business and personnel management After living for 30 years outside of Brazil it for an increasingly was wonderful to receive here in the United global operation is a States a magazine that seeks to report on Brazil’s new imagine in the world. The stories challenge we will spare are interesting, concise and very informative. no effort to overcome. The magazine is headed in the right ANTÔNIO ERMÍRIO DE MORAES direction. We who live abroad need to know President of the Board about Brazil’s successes in today’s world. Votorantim Group SILVIA SCHOTTINGER São Paulo (SP) New Jersey, USA

Please address letters and e-mail to: The Editor, PIB – Avenida Brigadeiro Faria Lima, 1903, cj 33 – São Paulo, SP, 01452-911 – Brazil; [email protected]

8 P I B Antenna AGENCE TV

Brazilian cinema in Canada BRAZILIAN FILMS and music are warming up the chilly Canadian winter. The second edition of Brazil Film Fest/Festival du Film Brésilien, in Toronto and Montreal, celebrated 50 years of Bossa Nova by showing Os Desaﬁ nados (Walter Lima Jr.), Vinicius, by Miguel Faria Jr, and Bossa Nova, by Bruno Bar- reto. The Canadians were also treated to 1960s classics such as Assalto ao Trem Pagador, by Roberto Faria, and some contemporary production including musicals Os Dois Filhos de Francisco, by Breno Silveira and Cazuza, by Walter Carvalho and Sandra Werneck. A total of 25 fi lms were shown between the end of November and the start of December. The Jangada Cultural Associa- tion, which promotes Brazilian cinema abroad, organized the event. French Year starts with business GARY718 / 123RF French invasion HANDOUT NEXT YEAR, 2009, will be French ing centers. The presence of French between 250 and 600 jobs would Smaller cake, Year in Brazil, but the marathon of President Nicolas Sarkozy in Brazil be created at the Helibrás factory in meetings and events started early, at the end of the year will strengthen Itajubá, in Minas Gerais state. French larger slice in November. Directors of more than relations between the two countries Year in Brazil will also include, be- FOR LUIS AFONSO LIMA, 120 French companies came to in a strategic sector: defense. tween April and November of 2009, president of the Brazilian São Paulo for a meeting with rep- Amongst the agreements now in art exhibitions (Matisse, maybe?) Society for the Study of Port of Miami: security has its price resentatives of some 800 Brazilian preparation is one for the manufac- wine fairs, fashion and design, semi- Multinational Companies companies. A huge business fair was ture of helicopters for the Brazilian nars and exhibitions about urban and Economic Globalization Obama and change countries. According to the Amer- set up in an hotel on the Marginal Armed Forces, with work being done transportation and high speed trains, (Sobeet) the crisis will hit AT A RECENT EVENT in the ican participants at the meeting, Pinheiros expressway and each of the by Helibrás, the Brazilian subsidiary all under theme of the French way of foreign direct investment American Chamber of Commerce in principal, nothing will change. French companies, mainly small and of European conglomerate Euro- life, mobility and innovation (collabo- in Brazil and investment by in São Paulo, Brazilian business- The political risk of altering secu- mid-sized concerns, had a small table copter. The company calculates that ration: Andréa Flores). Brazilian companies abroad. men were eager to know what rity arrangements would be very where their executives held face-to- However, not everything is would change in an Obama gov- high, and the priorities for change face talks with Brazilian businessmen “Brazil has gloomy. The total volume ernment with respect of the rigid under the new government will be

interested in various kinds of associa- changed,” AGENCE TV of FDI will diminish with the security measures at US ports for items that have strong support tion or partnership. According to the says Lagarde crisis, but the slice going and customs. These measures among American citizens, such as French Economic Mission in São Paulo to emerging economies is delay deliveries and increase the telephone and Internet wire tap- it is too soon to measure the results, likely to grow, as it has been cost of shipping between the two ping without judicial authority. but the event generated around three doing in recent decades. thousand bilateral business meetings. “The crisis has its origin in French Economy Minister the developed countries, and Christine Lagarde opened the event this will further accelerate São Paulo on the European map alongside São Paulo Mayor Gilberto this trend,” said Lima. From A STUDY ENTITLED European Cities Monitor 2008 asked executives of Kassab. “Brazil has changed,” said the 1980s and 90s until major European countries where they would like to expand in the next fi ve Lagarde explaining the French inter- 2007, according to Unctad, years. São Paulo appeared in fi rst place in the Americas, ahead of New York. est. “Today Brazil is a power in the the share of emerging However it was only 5th in the overall ranking, behind the unbeatable duos same league as Russia.” The French economies in the global fl ow of China and India: Shanghai and Beijing placing 1st and 2nd, and Mumbai have previously held similar meetings of FDI rose from around and New Delhi 3rd and 4th. The annual study is conducted by Cushman & in Hong Kong, Shanghai, New Delhi 15% to around 28%. Wakefi eld, an international real estate company. The 2008 edition of the and Hanoi, amongst other emerg- study voted London the best European city for doing business.

10 P I B P I B 11 Antenna

The Asian Connection Embraer in Florida Hong Kong entices investors with its British IN DECEMBER, Embraer started building its legal system and promisses of chinese growth fi rst factory in the United States, in the city of Melbourne, Florida. Scheduled to start The Hong Kong promotion Interest in Brazil a company wants to set up operating in 2010, the factory will have the agency is in Sao Paulo We see more and more manufacturing operations capacity to assemble eight of its Phenom light and looking to attract Brazilian trade missions in the region, it frequently executive jets per month. The company says it’s Brazilian companies to going through Hong Kong makes sense to register a watching the development of the global crisis, Phenom: the former British colony. on their way to China holding company in Hong like everybody else. So far, however, it has not orders Simon Galpin, director of and other countries, but Kong and to use this to invest received any cancellation or rescheduling of holding up... InvestHK*, spoke with PIB: we believe that, given in China or another country. orders from clients and it currently maintains the size of the Brazilian the projections it made last November, ... for the economy, we could do when it revised downwards its estimates for Why Hong Kong? Diffi cult times executive jet Galpin – Many people know that much more. Many Brazilian The crisis? The companies I delivery for new planes in 2009. The company Hong Kong was handed back to companies are interested in have seen in Brazil seem to expects to deliver 270 planes in 2009, while Chinese control in 1997. What internationalization and are be facing the crisis quite well. estimates made at the end of 2007, before the they don’t know is that Hong evaluating places to locate. I don’t know if it’s because crisis became apparent, suggested delivery of Kong is different from Shanghai What we do is try to show of all the ups and downs that between 315 and 350 airplanes in 2009. or Beijing, thanks to the ‘one the advantages of Hong Brazil has been through, but country, two systems’ concept. Kong to these companies. companies here recognize Hong Kong is part of China but the problem, they know Market pessimism it has its own judicial system, A base for Asia they’ll face a diffi cult period, AERONAUTICAL ANALYSTS predict that based on British law. British and The main advantages but they adopt a pragmatic executive aviation will be severely impacted by Australian judges go to Hong are for management and stance and keep on planning the crisis. British company PMI Media said in Kong to preside over appeal administrative operations. things. That’s great for us. a report published December that the global courts, and we have our own tax Hong Kong is not competitive market for small executive jets (the Very Light policy. The region has substantial for factories, the labor *InvestHK is represented Jet category) between 2008 and 2017 would be autonomy, the legal system is and real estate costs are in Brazil by Kaiser Associates 4,610 planes, a reduction of more than 1,000 in

reliable and taxes are very low. higher than in China. But if www.kaiserassociates.com.br relation to the same estimate made last October. PHOTOS: HANDOUT / EMBRAER

The governments Free Zone made to measure of the region COLOMBIA IS OFFERING foreign investors the possibility of creating a tax-free zone to call their own. They are the so-called have the One-Company Tax-Free Zones (Zonas Francas Uniempresariales) which allow a company to receive the legal and tax benefi ts of bad habit of this status, even if installed outside of a permanent tax-free proclaiming zone, which has geographic limits. To qualify as a Zona Franca Uniempresarial, the law requires factories have a minimum integration and investment of roughly US$35 million and create 150 jobs. The project must also promote industrial restructuring or technology working alone transfer. Brazil’s Votorantim and Germany’s Siemens are among the L A N A C I Ó N , I N A N groups already interested in the special Colombian regulation. Hong Kong: China plus E D I T O R I A L A B O U T the United Kingdom T H E S A U Í P E * ProExport, the Colombian investment agency, has a São Paulo ofﬁ ce SUMMIT MEETING HANDOUT www.proexport.com.co

12 P I B P I B 13 Antenna

From Garage to Greatness ALINA ISAKOVICH/ 123RF Paper against the crisis THE GLOBAL CRISIS forced the LUISA MATSUSHITA, take a bow. Lovefoxxx (sic, three and Internet promotion. “Donkey”, the second CD of Brazilian pulp and paper sector to cut ‘x’s) to her fans is the 24-year-old São Paulo vocalist CSS, was made available for three months, complete back production at the end of 2008. of the Brazilian band Cansei de Ser Sexy (Tired of Be- with the booklet, for free download on the site of the However, Elizabeth de Carvalhaes ing Sexy, known abroad as CSS), an international pop- Trama recording company, which used money from spon- executive president of Bracelpa, the rock success with almost 200,000 records sold in two sors to compensate the band – in the case of CSS, cash industry association, is looking to years. Lovefoxxx has appeared on the cover of British came from Volkswagen. the long term. She believes Brazil will magazines Dazed & Confused and NME, but she Other bands with a similar history include Céu, emerge from the crisis stronger than could probably walk down the street unnoticed Curumin, + 2 (a trio formed by Kassin, Moreno the North Americans and Europeans, in most of Brazil. Before achieving international Veloso and Domenico Lancelotti), Bonde do because it has high productivity success, CSS had some Brazilian fans, princi- Rolê and Trash Pour 4. Less well known than and cutting-edge technology. pally in Rio and São Paulo, but was never a CSS, they are all Brazilian bands and artists “Forests are immune to the crisis,” major national name. who – if they have diffi culty gaining space she said. “Our competitiveness is In fact, the band is the most successful on TV and radio at peak time, and sell few safe.” She’s looking long-term: product of the independent music genera- records in their own country – nevertheless Intelligence: but tion which emerged in Brazil from the start make frequent tours abroad where can you sell it?

of the current decade, but was not warmly they enjoy loyal fans and critical HANDOUT received by major recording companies recognition. Straight from the who thought their product was not garage to the world – some- Biotechnology shows its face commercial. Success Lovefoxxx, thing that used to happen Next year sees the start of a program to encourage Brazilian came through minor pop power only with football play- biotechnology to go international. Three sectors will be priority for recording companies for export ers. (Daniel Setti) 2009: food, pharmaceuticals and cosmetics. The idea is to exploit opportunities to combine theses areas, said Alessandro Teixeira, Brazilian pulp president of APEX-Brasil, the agency heading the program. For takes on the world example: combining foodstuffs and cosmetics with biotechnologi- cal products that meet health needs. Brazilian biotech companies “Do we want a paper factory closer are mainly quite small and don’t have the size or structure to face to the consumer? We might even international market by themselves, said Eduardo Emrich Soares, consider buying one abroad.” First, director-president of the Biominas Foundation, an institute to however, the strategy is to win REX FEATURES / GRUPO KEYSTONE support biobusiness in Minas Gerais State. The APEX program export markets and overtake China will help them rise to the challenge by taking advantage of a as the world’s No. 3 pulp producer – characteristic of the sector, Teixeira said: it is brain-intensive, not Brazil was likely to edge out Sweden capital-intensive. When money is short, that’s an advantage. and Finland to rank 4th in 2008.

Brazilian furniture in Dubai

STOCKXPERT AMERICANS MIGHT HAVE lost their urge to spend in the crisis, but not the Arabs. Believing this, 36 Brazilian furniture makers headed for Dubai at the start of December. They went to show their wares at Index Dubai 2008, the largest furniture show in the Middle East, and came away happy, with US$6 million of new business signed up – 20% more than at a recent fair in the United States, according to José Luiz Diaz Fernan- dez, president of the Brazilian Furniture Industry Association Dubai: want some (Abimovel). Until the crisis Americans purchased 52% of Bra- nice furniture? zilian furniture exports but today that does not exceed 32%.

14 P I B P I B 15 Antenna

Brazilian Flavors From German in the Orient to Mandarin DUBAI in the United Arab Emirates is the venue for an THE HUMBOLDT COLLEGE, event promoting Brazilian food and drink in the Middle a Brazilian-German school in East. The Intercontinental Hotel will receive guests São Paulo, started teaching for a Brazilian dinner prepared by chef Morena Leite Mandarin this year and will re- of the São Paulo restaurant Capim Santo. A series of peat the initiative in 2009. business meetings between Brazilian exporters and Twelve students took the course local companies is also planned. The goal is to enhance which was offered as an extra- Graça: Brasília the image of Brazilian food in a region that imports curricular activity alongside in Milan almost everything and help Brazilian companies ﬁ nd French and Spanish (German local partners. Exhibitors have received guidance about and English are obligatory). Ac-

Islamic food doctrines: Halal certiﬁ cation is essential. HANDOUT cording to deputy-director Her- Graça in Milão The February 21-22 event is a pilot of the Sabores do bert Zorn, all the students did BRAZILIAN PHOTOGRAPHER Graça Seligman, know both for her Brasil (Flavors of Brazil) project run by APEX-Brasil which very well. “Attendance was photojournalism and her portraits and scenes of urban life in cities plans to stage similar events in other parts of the world. above 95% and grades were A like Rome and Brasília (she lived in both) was one of the highlights of or B.” The school introduced the the autumn cultural season in Milan, with a major photography show course in response to requests featuring Brasilia. The exhibition opened in October in the Brazil-Itália Morena Leite: the from students’ parents – some Institute. It shows the principle architectural highlights of the Brazilian ﬂ avor of Capim are executives who do busi- federal capital, bringing out their sculptural lines and the esthetic and Santo in Dubai ness in China and can see beautiful aspects. Graça, who was previously director of institutes such which way the winds of global- as the São Paulo Museum of Image and Sound and the Athos Bulcão ization are blowing. For 2009, foundation in Brasília, pays homage to what she considers to be the Humboldt plans to promote dynamic functionality of the curving lines of the avenues, and the triumph the pioneers and open two new of public art. “My photographic work is essentially a personal vision classes for starters. of a city which is a symbol, the work of many artists, starting with the magnifi cent Oscar Niemeyer,” she said.

Stefanini: 21st place on the Time to Buy international- THE CRISIS AND DROP in the value of the Brazilian ization ranking real obliged Stefanini IT Solutions to rethink the purchase of foreign competitors in 2008, but strategy for 2009 remains international expansion via acquisitions. “We had to be cautious, buying (companies) became more risky and more complex than we imagined,” said HANDOUT HANDOUT Marco Stefanini, founder and president of the IT services consultancy. However, he will continue looking for foreign targets in 2009, particularly in Mexico, the Spain still investing in Latin America United States and Europe. In 2008 Stefanini became BRAZIL WILL HAVE the best economic performance in Latin America next one of Brazil’s most internationalized companies, plac- year, according to a study by the Gavin Anderson & Company PR ing 21st on the “Internationalization Index” produced by fi rm and the IE Business School, surveying Spain’s largest the Dom Cabral Foundation. This measures a company’s companies. For 96% of those interviewed, Brazil will get overseas percentage of sales, assets and personnel. through 2009 in a good or very good situation. The However, Stefanini ranks sixth in terms of the number of Spanish see Brazil as the second most attractive market countries where it operates. Stefanini is in 15 locations, in the region next year, beside Chile but behind Mexico. more than major construction companies and recog- Latin America remains top of the investment list for nized industrial globetrotters like Sabó and Marcopolo.

major Spanish companies in 2009, the study showed. HANDOUT

16 P I B P I B 17 Survey

international participation of some larger abroad than they are at home. 9th and 12th places respectively. That companies was diluted among the This relation between foreign puts them ahead of the giant Petro- groups to which they belong,” he said. and domestic operations can be seen bras which has most of its operations Pause for Thought th In this way, the cement produc- in the points given to FDC’s “Index inside Brazil, and places 16 . Cyrino tion arm of Camargo Correa jumped of Internationalization”, which indi- also notes a trait of Brazilian multina- A new study suggests that after some major international advances, Brazilian into the lead once it was separated cates the proportion of assets, sales tionals revealed by the study: they are from the Camargo Correa SA group and workforce in Brazil and abroad. mainly companies whose advantages companies are now less interested in going international BY ARMANDO MENDES which remained in eighth position. When the index is greater than 0.5, lie in greater production efficiency Camargo Correa Cement has a strong as for the three companies mentioned rather than the creation of brands rom 2002 through 2007, the terested in operating outside of Brazil Camargo Correa Cement in the first presence in Argentina where it con- above, it shows they have a greater and marketing. percentage of major compa- are in fact already doing so, compared place amongst the most international- trols Loma Negra, Artecola made headlines in 2007 nies which still operate only with 2002. In other words, the poten- ized Brazilian companies, taking the the leading ce- Musical chairs by moving aggressively into neighbor- inside Brazil, but which are tial universe of Brazilian companies place occupied last year by Gerdau. ment brand. The ing countries, buying local manufac- The changing ranking of Brazilian companies, according to FDC classifi cation* planning to go international, willing to risk internationalization is This time, FDC classified indi- FDC ranking turers in Chile, Peru, Mexico and Ar- Position Position Internationalization has fallen from 82% to 26%, accord- today closer to exhaustion than it was vidually the Brazilian multinationals shows that the Company gentina. International expansion via F in 2008 in 2007 Index ing to a new study by the Dom Ca- five years ago. which are members of large groups. three first com- acquisitions is a trend. The KPMG Camargo Corrêa 1 – 0,585 bral Foundation (FDC), conducted FDC also released a new ranking For professor Cyrino, this change of- panies on the list, Cimentos consultancy in Brazil registered 66 amongst the largest Brazilian-owned of Brazilian multinationals, calculated fers a better reflection of the real situ- Camargo Correa Construtora such operations in 2007; two of the 2 – 0,571 companies. Does this mean Brazilian on 2007 data according to criteria by ation, because many groups are not as Cement, Con- Norberto Odebrecht largest were the purchases of Chap- companies are losing their interest in Unctad, the United Nations Confer- internationalized as some of their in- strutora Norberto 3 1 Gerdau ** 0,544 arral Steel by Gerdau and of Swift internationalization? ence on Trade and Development. dividual components. “When we look Odebrecht and 4 – Votorantim Cimentos 0,397 Armour agribusiness group by JBS According to Professor Álvaro The biggest change is the arrival of at the conglomerates as a whole, the Gerdau, are today Friboi, both in the US. In 2008, the 5 2 Vale ** 0,376 Cyrino of the FDC, one of those re- number of acquisitions through No- 6 3 Sabó 0,301 sponsible for the study Global Players Loma Negra: Argentine vember was 53, with a sharp fall-off II – Internationalization of Companies subsidiary of the 7 14 Metalfrio 0,286 in the fourth quarter because of the in Latin America, the data does not al- internationalization 8 9 Camargo Corrêa S.A. ** 0,284 international crisis. low for a definite conclusion as to the champion 9 22 Lupatech 0,253 When Brazilian multinationals reason for the fall. However, Cyrino 10 6 Embraer 0,237 are classified by the value of their offers two possible explanations. “It HANDOUT / CAMARGO CORRÊA foreign assets, the smaller compa- 11 23 Aracruz Celulose 0,233 could be the increased participation nies obviously place way down the in the universe of the study, over the 12 12 Artecola 0,212 table: Vale remains the largest Bra- five years, of companies which are 13 4 Marcopolo 0,206 zilian multinational in absolute size, more interested in the domestic mar- 14 8 Tigre 0,206 followed by Petrobras and Gerdau. ket,” he said. This would be the case of 15 10 Duas Rodas 0,170 The 20 largest multinationals have energy companies, for example. 16 18 Petrobras ** 0,166 foreign assets of US$73.8 billion, rep- A second possible explanation resenting almost 57% of the stock of Source: Dom Cabral Foundation – FDC Ranking of Brazilian would be the growth in the number Multinationals, 2008 Edition. * The complete ranking the Brazilian direct investment in comprises 34 companies. ** Corporate group of Brazilian multinationals over the other countries. last five years. Only those compa- presence abroad than in Brazil. This In general terms, the outward nies which do not yet have overseas is a proportional evaluation, meaning flow of Brazilian investments in operations answered this question that relatively small companies can 2007 reached US$7.07 billion, al- in the survey. They are a decreasing place ahead of ones that are much most three times the level of 2005. group within the total universe of the bigger and better known. This was much less than in 2006 survey, representing 27% of all com- Lupatech (engineering) and when outward Brazilian FDI panies questioned in 2002 and 22% Artecola (industrial adhesives) are reached US$28.2 billion. However, in 2007. examples of mid-sized companies 2006 was atypical; the result was The reduced interest in interna- that are not very well known to the distorted by a single, exceptional tionalization, shown in the 2007 an- average consumer. However, a sub- operation of around US$19 billion, swers, could thus simply indicate that stantial part of their activity is outside the acquisition by Vale of Canadian a larger number of the companies in- of Brazil and therefore they appear in Mining Company INCO.

18 P I B P I B 19 Opinion

will seek to implement the platform The Administration were approved by just single-vote All Change in the New Year? of the Democratic Party which has and Congress will majorities in Congress. expanded its majority in the House Finally there are bilateral mea- of Representatives and achieved a be controlled by the sures which are part of the agenda Barack Obama and his ample the Farm Bill are studied closely by majority in the Senate, following Democratic Party, both of the Administration and of the Brazilian government and busi- the elections of November 4. Given Congress and which are currently congressional majority spell ness sector, always seeking to open that Congress in the United States and this alignment under negotiation. If approved, a new business climate for up the North American market to enjoys a constitutional prerogative of interest may these could improve the business Brazilian companies in the exports and to eliminate distortions to formulate the country’s trade help damped down environment for Brazilian compa- caused by the agricultural subsidies policy, the members of Congress nies. The most important of these US – but it might not be better that are granted by the US govern- will undoubtedly be subject to protectionist pressures. is the Double Taxation Treaty. If ap-

HANDOUT BY DIEGO Z. BONOMO* ment to domestic producers. protectionist pressures. Potential- Brazil’s private sector proved, this will establish a legal ba- Since the start of Brazil’s etha- ly, these will be increased because sis for greater cooperation between he start of 2009 will see nol boom, keeping a close eye on of the financial crisis. As a conse- must clearly deﬁ ne the Brazilian Federal Tax Secretar- three factors that will, for the US Energy Bill has become es- quence, important areas of Brazil- its interests iat (Secretaria da Receita Federal

better or worse, determine STOCKXPERT sential for the Brazilian strategy of ian industry and agribusiness may do Brasil) and its U. S. counterpart. the business climate for transforming the sugarcane biofuel find themselves affected by addi- This agreement will also allow for

TBrazilian companies that export to into an international commodity. tional commercial barriers, of both STOCKXPERT reduction or elimination of income or invest in the United States. The New versions of the Energy Bill a tariff and non-tariff nature. taxes paid by Brazilian compa- first two are related to politics: the were approved in 2005 and in 2007, Examples of the potential obsta- nies with operations in the United nature and implementation of the with additional measures approved cles that Brazilian exports and in- States. The legislation would also be agendas of President-elect Barack in 2008 via the most recent Farm vestments may face include chang- a stimulus to widen the structures Obama and the 111th Congress. The Bill. Given the prospects for changes in U.S. legislation which produce of bilateral regulation, which could third factor has to do with econom- es in US energy policy next year, increased commercial protection in the future be expanded through ics and is related to the expansion Brazilian ethanol producers could mechanisms and unilateral instru- the negotiation of more ambitious or retraction of the financial crisis benefit from an eventual reduction ments for market access, or which agreements both in the areas of and its impacts on production, em- or elimination of the US$0.54 per are the result of a future system for market access and investment. ployment and income. gallon additional tariff which cur- control of greenhouse gas emissions More than simply monitoring The new president of the Unit- rently pushes up the cost of ethanol via the imposition of a carbon tax. the implementation of these agen- ed States takes office with a wide- imported from Brazil. Additionally there will be an impor- das, it is up to the Brazilian private ranging agenda that has a declared In terms of taxes, the new ad- tant debate about the maintenance sector to clearly define its interests emphasis on the social area and the ministration is likely to concen- or reform of preferential programs and actively work to have these in- expansion of the participation of trate its political capital on pushing that are of direct benefit to Brazil, cluded amongst the priorities of the the state as a regulator of private through an ample reform to benefit such as the Generalized System of Administration and Congress. economic activity. Energy, taxa- small business: that group of small Preferences (GSP), or others which tion, education, health and welfare and medium companies which is have an indirect effect, for example *Diego Z. Bonomo is Executive Director are priorities for the new admin- responsible for the greatest num- the tariff preferences currently of the Brazil Information Center (BIC), istration. The first of these items Brazilian ethanol ber of jobs in the United States. On granted to Caribbean countries dialogue in Congress, thus avoid- an organization based in Washington is likely to be on the table at the producers could the other hand, large companies which serve as export platforms ing the polarization of positions DC that represents Brazilian business start of Barack Obama’s mandate, beneﬁ t from an may find that the Democratic ad- for processed products containing that was encouraged by President interests. The organization acts on and this spells an important oppor- ministration ends some of the fiscal Brazilian inputs. George W. Bush and which in the three fronts: maintaining a network of tunity for Brazil. eventual reduction benefits that they were granted in However, both the Admin- area of commercial policy result- relationships with areas of the North Brazilian agribusiness execu- or elimination of the the tax reduction plans of President istration and the Congress will ed in the approval of commercial American government and with the tives have over the last two decades George W. Bush. be controlled by the Democratic measures and agreements by very private sector, the media and think grown used to keeping a close eye US$0.54 per gallon Brazilian companies that have Party, and this alignment of inter- narrow margins, thus minimizing tanks; defending the interests of its on US agricultural policy, in par- additional tariff which major investments in the United est may help to damped down the their legitimacy. Both the 2002 members by seeking to monitor and ticular for its impact on the com- currently pushes up States may therefore find they face above-mentioned protectionist Trade Promotion Authority and influence the legislative and regulatory petitiveness of Brazilian products a real increase in federal taxes. pressures. What’s more, President- the free trade agreement with Cen- process; and promoting the image of both in the US market and in third the cost of ethanol Just like the Executive Branch elect Barack Obama has shown a tral American countries and the Brazil. More information: countries. The periodic changes in imported from Brazil of government, the new Congress willingness to rebuild bipartisan Dominican Republic (CAFTA-DR) www.brazilinfocenter.org.

20 P I B P I B 21 Investment Money that enters Apex-Brazil, better known for its trade of Brazilian products. But the two functions complement each other, promotion abroad, is also a powerful engine explains the president of the agency, for attracting investments BY NELY CAIXETA Alessandro Teixeira. “It is a two- way street,” he says. “In attracting razil ranked fourth among to 30% of everything Latin America business to a certain sector in Bra- the emerging countries received during the year. zil, we end up strengthening the that most received foreign In 2009 Apex-Brazil plans to in- entire productive chain here, which direct investments in 2007, vest R$ 50 million in international reinforces our export base.” At the Bwith a total inflow of US$ 34.6 seminars, visits from foreign trade beginning of December, Teixeira, billion – behind only China, Hong missions and other activities to sho- who is also president of the World Kong and Russia. Since then, howe- wcase to potential investors how bu- Association of Investment Promo- ver, the most serious financial cri- siness is done in Brazil. tion Agencies (Waipa), sis in recent history has deflagrated Among the 29 initiatives invited a group of im- around the world. Now the forecast already programmed is portant personalities to for 2009 is a retraction of up to 30% a partnership in a round In lean times, Rio de Janeiro, among in the global flow of transnational of the World Economic those who them the former presi- investments, which reached US$ Forum to be held in Rio know how to dent of Mexico, Vicen- 1.83 trillion in 2007. de Janeiro in April, and te Fox, and Nobel Lau- That said, Brazil could well come the creation of a National attract money reates in Economics out of the crisis in better shape than Investment Attraction will come Joseph Stiglitz (2001) most in terms of attracting these Network with support out on top and Edmund Phelps waning funds. According to calcu- from the World Bank to (2006), to discuss the lations made Apex-Brazil, the fede- orient state governments impact of the crisis on ral trade and investment promotion in how to seek foreign resources. foreign direct investment around agency, no less than US$ 38 billion in This face of Apex-Brazil is less the world. In times of scarcity, coun- direct investment should enter the known than the agency’s traditio- tries with a well-planned strategy to country in 2008. That value is close nal activity of promoting exports attract – and win – the attention of those who have money to invest will be the ones to come out on top. In 2008 alone Apex-Brazil promoted more than two hundred actions related to business intelligence, such as studies of sectors, markets and opportunities. “We have internal teams dedicated to seeking out opportunities around the world,” informs Teixeira. Among Apex-Brazil’s priority targets in its search for investors are China, the United States, Ca- nada, Scandinavia, the United Arab Emirates and Russia, due to their Waipa meeting potential to channel, depending on in Rio: race for investments the case, capital, technologies and

HANDOUT jobs in Brazil.

22 P I B Cover Story

The human face of the crisis: young people search for work in China

After the hard landing s in other historic moments, the glo- provoked by the bal crisis in 2008 will be remembe- A New red with some strong images. In one, paralyzing effect of the thousands of unemployed in the new world crisis on Brazil, and powerful capitalist China stand in major companies in the line for jobs that are evaporating. In country are positioning another,A in New York, employees of Lehman Bro- themselves to hold thers – once an icon among investors, having collap- Flight on to markets, select sed suddenly – shuffle out of the bank’s headquarters carrying personal items in dreary cardboard boxes. opportunities and grow And in Brazil, where car sales smashed records until globally again – as soon October, after filling their own patios and neighbo- as is possible ring spaces, auto assemblers went as far as to rent BY ELIANA SIMONETTI, airport runways (as did Fiat, in Oliveira, MG) to park Plan WITH COLLABORATORS 300,000 new cars that have yet to find buyers. SEAN YONG / REUTERS

24 P I B P I B 25 Cover Story

The closer Christmas approached the more signs appeared that the effects of the financial disaster that dev- astated the rest of the world had arrived in Brazil with the force of a tsunami, not a trickle. Evaporating credit, markets retracting, plummeting prices for products and assets have forced the principal Brazilian companies – almost all exporters with a strong international presence – to take hard measures, review plans, change strategies and build new alliances. The New Year to come will demand a cool head, practical spirit, common sense and lots of flexibility. For the first time since 1982, world trade is expected to fall. Moreover, the flow of capital to developing countries should drop by half. As always occurs in this type of scenario, weak or indebted companies start getting bought up by stronger, well-managed and capitalized competitors, or investment funds – most of them with foreign capital – in a consolidation process that naturally gives more mus- cle to the buyer (see the box on page 32). In November, when the country finally acknowledged the extension and depth of the crisis, the biggest business news of the year took place in the banking sector: Brazil’s third- largest private bank, Itaú, merged with the fifth-largest, Iron ore from Unibanco, combining to form the largest financial in- Vale: 10% stitution in the country and, also, the southern hemi- cut in production

sphere. The new institution has 21.5% of all the money HANDOUT / VALE deposited in bank accounts in Brazil. And, more im- portantly, it has gained scale to evolve into a respected player in the competitive world banking market. State government – and is already studying new deals. guarantees for its high-risk assets. Notable changes have first time in the internal market (with the government’s “The crisis only made us more certain that we should Everything indicates that the coming months will be also occurred in Brazil. Brazilian banks, which typically special blessing) in November it borrowed R$ 2.7 bil- go ahead with the merger, since it strengthens the bank,” very active. “This is a phase of purification, market have a very strong capital base, as Setúbal asserts, are now lion from Banco do Brasil and federal savings bank CEF informed the president of Itaú, Roberto Setúbal, in an in- consolidation,” says former Finance Minister Maílson setting their sights on competing in the international and, in December, R$ 528 billion from the Brazilian terview with PIB magazine. In the midst of today’s som- Nóbrega, partner of Tendências Consultoria Integrada. market, while at the same time fulfilling the “function” Development Bank (BNDES). ber visions, he adopts a positive tone when assessing the “Over the next two years we should see many mergers of a central bank in the internal market, doling out credit “Governments all over the world are making credit financial sector in Brazil. “While the international finan- and acquisitions and then everything will quieten down with an iron hand. Paradoxically, in helping to control available for their companies so they can remain ac- cial system has become very fragile, Brazilian banks will again for a while. Yes, because crises will continue to liquidity, they operate in the opposite direction of the tive,” explained the financial director of Petrobras, weather the crisis far better than banks abroad,” he affirms. occur, and between them the world will get richer.” authorities in Brasília, which are more concerned about Almir Barbassa, to PIB magazine. “We pass through And what about after the crisis? Here Setúbal is a bit more The world will certainly produce again and grow, injecting funds into the economy – in doses, it should be funds in the form of advances to the entire chain of cautious. He says that integrating the two banks will be a but the new scenario appearing in the banking system said, that are much more modest than the measures being companies that supply us with equipment, services, priority and require a long effort, maybe about two years, and among companies is that things will be quite differ- taken to stimulate consumption in the wealthy nations. materials, works …And at a lower cost than if they were but after that Itaú will be ready to compete in the interna- ent after the crisis. It was unthinkable to imagine just a to obtain the funds in the market. If we pulled the brake tional markets. “Everything will depend on short time ago that venerated names like we would derail the entire economy, putting many com- the opportunities that appear,” he observes. Lehman Brothers, Bear Stearns and Ci- Flight to liquidity panies into difficulty and forcing dismissals. Without (see summary of the interview on page 29) tibank, which form part of the history of In another change of roles triggered by the crisis, Petro- activity there is no employment. It would be the path Following the same strategy as Itaú/ The world contemporary capitalism itself, would each bras, the largest company in Brazil and one of the larg- to recession,” notes Barbassa (read the full interview on Unibanco in creating scale and depth to will grow once face its own Calvary. The first broke, the est oil producers in the world, has assumed the function the site www.revistapib.com.br). strengthen amid the crisis, consolidate its again, but it second was sold for a symbolic price to JP of providing liquidity for hundreds of its suppliers. To Besides the responsibility of operating in a strategic position and conquer new markets, Banco Morgan and Citi only survived because it raise cash, its reputation abroad still makes miracles. At sector and serving as the engine for various industrial do Brasil quickly moved to snap up 72% will be a obtained US$ 45 billion in capital from the the beginning of December it raised US$ 750 million in sectors, Petrobras assists its suppliers by maintaining of Banco Nossa Caixa from the São Paulo different world US government, besides US$ 306 billion in a routine operation with Japanese banks. And for the its level of activity and executing its business plan. The

26 P I B P I B 27 Cover Story WORLD CLASS Roberto Setúbal, President of the Itaú Bank, speaks about his plans to grow in the crisis

PIB | Brazilian banks have grown in an environment of great volatility. Have they now the chance to gain markets abroad? Setúbal | In a couple of years, yes, I believe that Bra- Roberto Setúbal zilian banks will be in a privileged situation and able to and Moreira think about international expansion. The international Salles: united fi nancial system has been severely weakened. The com- MARIE HIPPENMEYER ing year (2009) will be a little more diffi cult, but Brazil- ian banks will get through the crisis much better than tions in 2009. Additionally there has been an important international banks. In the same way, I believe that the change: large companies have started borrowing inside Brazilian economy will do better than many others. Brazil, rather than abroad, as they did before. Petrobras is a good example. This is a direct consequence of the What differential can Brazilian banks offer abroad? problem of international liquidity, and it leads to conges- They will have a very strong capital base, while foreign tion in our market, which is of a limited size. However, to banks have severe problems of capital, to the point that all intents and purposes we are operating with a normal several governments have been forced to increase the offer of credit. What we cannot do is meet the volumes Volkswagen capital of these banks. When they face limitations of that are sometimes requested, because there is not the patios: where are the customers? capital capacity, they lose competitive advantage and same liquidity as before.

ANTONIO MILENA / AE will be very concerned with their own problems. Our management posture will aim at taking advantage of How will Brazil face the turbulence in 2009? Will the company, which invests a little less than 13% of its re- whom abroad, where it also began a voluntary retire- opportunities as they arise. economy continue growing? sources in international operations, plans to become one ment program. The mining giant, which employees We are expecting growth of between 2% and 3%, but of the five largest oil producers in the world over the 60 000 people, has also announced a staggered collective In addition to be being well capitalized and offer- there is still a lot of uncertainty about what will happen next five years. Abroad, it operates as a fuel distributor leave program. No less than 5,500 employees will be on ing security for clients, do Brazilian banks have any abroad. The crisis will affect Brazil, but the country is well in five Latin-American countries (Colombia, Paraguay, compulsory vacation. particular differential? placed and may recover with growth that is much greater Uruguay, Argentina and Chile), besides extracting oil off At the beginning of October the company had already The most important is the capital base and the capac- than in the rest of the world. the west coast of Africa, the Gulf of Mexico, the Black announced a 10% cut in production. Soon afterwards it ity to focus more on the client. Sea and Turkey. suspended operations at two pelletization plants in Es- Some people say that now is the time for emerging Nevertheless, Petrobras’ 2009 Business Plan, frozen pírito Santo state and another two owned by Samarco, In the midst of the crisis, banks have in a certain economies to show their strength and that the solu- by the company’s management since October, had yet a subsidiary of the group, in Minas Gerais state. In De- manner taken on functions that are typical of tion to the crisis lies in emerging economies. Is this to receive the green light from its board of directors at cember two plants in the port of Tubarão, also in Espírito monetary authorities, by reducing liquidity in the reality or just wishful thinking? the beginning of December. Barbassa con- Santo, stopped operating. Worldwide, the markets. What will be necessary for Itaú to resume It’s wishful thinking… The economy of the emerging na- firms that the plan is still being reviewed stoppages continue: nickel production was lending at the volume it did before the crisis? tions isn’t big enough to avoid a more severe problem in due to uncertainty about the full extent of interrupted in Canada and Indonesia and The Itaú loans portfolio has been growing without any their own economies, let alone the rest of the world. The the crisis in the coming months. “We are Mergers, goal a processor deactivated in Dalian, China. kind of restriction. What changed is that we are more big difference today is that emerging economies are con- all suffering equally,” he admits. revisions, cost In France, the iron-alloy plant in Dunkirk selective in granting credit, because of the increased tributing to the solution; they are not part of the problem Mergers, revising goals, cost cutting, cutting, and, will remain idle until April 2009. Produc- risk provoked by the more diffi cult economic condi- as they were in other occasions. (Nely Caixeta) a desperate search for cash and, predict- tion at the company’s plant in Mo i Rana, in ably, layoffs, have started to become part predictably, Norway, will be suspended until June 2009 of business for large companies intent on layoffs ostensibly to renovate a furnace. that has driven down the price of ore. Actually, a good However, in an extensive interview with the news- making it across the desert. It is estimated To cut costs Vale has been renegotiat- part of Vale’s stress came from the unexpected retrac- paper O Estado de S. Paulo, Agnelli was more opti- that at least 12,000 jobs were cut through December, ing and building new alliances with parts and equip- tion of the formerly voracious Chinese market, which mistic, although moderately so. “The world grew very a relatively modest volume considering the 5 million ment suppliers and engineering services companies. until recently provided a large part of the company’s rapidly in recent years because of the entry of millions formal positions created in the last three years. It also decided to close various European offices and revenues. “It’s time to get our house in order and shut of people into the consumer market. This happened Vale, the largest producer of iron ore in the world, to concentrate its activities for Europe and the Middle down operations with a high cost,” affirmed the presi- in China, India, and Brazil. Over the short term the was the first large Brazilian company to reduce its work- East in Switzerland. The company’s explanation for dent of the mining giant, Roger Agnelli, on the com- financial crisis will force us to adjust, but this will not force: the company has dismissed 1,300 workers, 300 of all these maneuvers: the drop in international demand pany’s site. “We are in a phase of mutation.” be enough to annul the conquests the world has ob-

28 P I B P I B 29 Cover Story

tained,” he said. In other words Agnelli believes that Petrobras in want to improve their productivity, and for the post-crisis could be favorable for Brazil, because the Gulf this reason we are maintaining our invest- it is unthinkable that the large mass of new Chinese of Mexico: ment plan,” explains Totvs executive vice- consumers will allow itself to be deprived for long of full steam president José Rogério Luiz. the supply of goods and products with which it be- For Nori Lerman of ATP, the largest came accustomed. And it was new Chinese consump- supplier of information-technology servic- tion that stimulated the exports of countries like Brazil es for banks in the country – processing no and raised the prices of commodities like iron ore and less than 45 million documents a month – soybeans to levels never before seen. there is no doubt. “This is a moment when Vale’s CEO forecasts that the squeeze on the com- everyone wants to reduce risks and share pany will continue for about four more months, until resources,” she says. “So for us, it is a time inventories of iron ore abroad begin to fall. After that, of growth.” In fact, companies like Totvs and he predicts that the world will start buying again. In the ATP are comfortable with the knowledge same interview, Agnelli signals the possibility of using that they produce something essential for the company’s solid cash position – it raised US$ 12 the success of any business – selling what billion in a global stock offering in July – to buy foreign Petrobras’ other companies need to buy. Barbassa: companies that are in difficulty or for sale. Vale’s public fi nancing In this sense, for many Brazilian companies posture, however, is that its growth from now on will partners such as commodities exporters, the economic

be more organic, and should not come from acquir- PHOTOS: HANDOUT / PETROBRAS scenario, while currently somber, promises ing other businesses. But it was precisely this model to clear up in the medium term. In a recent of acquisitions that allowed Vale, under the command Steel giant Companhia Siderúrgica Nacional (CSN) Technological remedy visit to São Paulo, Harold L. Sirkin, a senior partner of the of Agnelli, to leap from eighth position to become the reacted to the shock and plunge in steel consumption Some companies are seeking more innovative solutions Boston Consulting Group, considered the prospects lying second-largest mining conglomerate in the world. by reducing production at its units in the US and Por- than the traditional belt tightening to overcome the ahead for a country like Brazil, which is capable of placing In the middle of October, almost two months before tugal. In Brazil, the company suspended purchases of crisis. Words like research, development, innovation large amounts of meat, sugar and alcohol, soybeans, iron announcing the dismissals, Vale’s board of directors ap- raw material and outsourced logistics services for its and technology have special meaning in their strategy ore and steel in the international market at competitive proved a US$ 14.2 billion investment budget for 2009. Volta Redonda plant, with a contract that should re- to securely overcome the uncertainty and turbulence. prices. “Brazil has what the world needs,” affirms Sirkin, The funds are to sustain existing operations (in Brazil, duce costs by 10% a year. “We will wait until January Among the solutions adopted by companies that com- joint author of the book Globality, recently launched in the Canada, Mozambique, Oman, Australia, Indonesia and to make any new decisions,” affirmed the president pete in the international market to improve their per- country. In his opinion, populous economies like China Peru) and research and development, besides support- of the company, Benjamin Steinbruch, at the end of formance in times of crisis and advance in the quest and India which have managed to bring millions of poor ing projects in other sectors. Diversification is the new- a meeting with entrepreneurs in Brasília. “We do not for greater competitiveness is to use technology more to the consumer market in recent years will continue to est among Vale’s formulas for weathering want to lay anyone off, but we have to consistently. Their aim is to have better control over depend on the natural wealth of Brazil to maintain the new the problems created by the international think about the subject.” operations by reducing waste and improving quality. habits of their populations and continue growing. crisis. One of its divisions created in 2003 In a similar predicament is Gerdau, At the end of November, GE Fanuc – a joint venture to explore and produce natural gas had The good news leader in long-steel production in the between General Electric and Japan’s Fanuc – promot- only a small stake in 15 blocks in Brazilian is that Brazil Americas and the 14th largest producer ed a day of debates to showcase successful applications Credit crunch sedimentary basins, in partnership with has what of steel in the world. With 337 industrial of their systems and solutions. One of the companies One of the most insidious aspects of the present crisis other companies. In December, however, units in 14 countries, the Brazilian steel present was Santa Terezinha from Maringá, Paraná – the disappearance of credit for export – threatens the the company announced the purchase of the world company employees more than 46,000 state, which used the technology to modify the con- current success of aircraft giant Embraer, which has Petroleum Geoscience Technology (PGT), wants collaborators. In October the company trol system for its ethanol plants, thereby facilitating its become a postcard for Brazil with its logo painted on specializing in the geological evaluation of cut production at its US plant – Gerdau growth. “In the biofuels sector, having the flexibility to passenger jets across the four corners of the globe. At oil and natural gas exploration and production areas. Ameristeel. “The only thing that our customers are do- alter the production line from sugar to ethanol is funda- the end of 2008 Embraer alerted its employees about The acquisition, according to explanations given in a ing right now is filling significant gaps in their stocks,” mental,” observes Alan Fayad, manager of automation the economic crisis through an internal report in which report to investors, is in line with the mining company’s lamented Gerdau’s director of operations, Terry Sutter, for Santa Terezinha. the timetable for deliveries will involve delays for all strategy of investing in its own natural gas production in in a presentation released on the company’s website. Another sector that apparently does not see a cri- lines of jets in 2009. The company recognizes that the order to fuel operations in Brazil and abroad. At the beginning of December Gerdau informed the sis looming on the horizon is that which supplies inte- lack of credit spreading around the world could threat- Many companies in the United States, Europe, Ja- local metalworkers’ union that it plans to anticipate grated management control systems. Such is the case en payments for ordered airplanes. “This crisis does pan and China that tumbled overnight from profit to maintenance stoppages at its units in Araçariguama, of TOTVS, a Brazilian software supplier present in 23 not come from Brazil,” affirmed the president of the loss have moved quickly to cut costs, suspend produc- São Paulo state, and Riograndense, in Rio Grande do countries, which expects its business to expand in 2009 company, Frederico Curado, in an interview with the tion and dismiss personnel. It has been no different Sul state. Employees in the company’s production and (see report on page 54). “We have a good capital struc- press. “The credit crunch could lead our customers to for Brazilian groups with a strong presence abroad. administrative areas will also be put on collective leave. ture, we sell an essential product for companies that reduce their orders.”

30 P I B P I B 31 Cover Story

Embraer jet: ENTREPRENEURIAL DARWINISM layoffs only as a last resort THE EVOLUTION OF COMPANIES and the survival Until the onslaught of the crisis, Embraer, headquar- of the fi ttest has been evident in this time of crisis, tered in São José dos Campos, São Paulo state, and with when all the investors in the world seem to want com- operations in the United States, France, Portugal, China panies in sectors with growth potential. They know and Singapore, flew high in blue skies. For the first nine the crisis will make quick work of those that are weak months of 2008 the company delivered 145 jets of the or exposed to risk. Companies with the best prospects 215 it planned to sell during the year. For 2009, it has a are being purchased and will grow. In addition to the portfolio of orders for at least 315 aircraft. merger between Unibanco and Itaú, here are some In December, while the economic gloom continued to other deals done in Brazil during the crisis: spread, the company still reported plenty of good news.

Among these was the announcement of the beginning :: ETHANOL HANDOUT / EMBRAER of construction of its first factory in the United States at In November the multinational Monsanto bought the International Airport of Melbourne, Florida, whose two companies involved in the genetic and biotech- Created recently by private investors from the United operations are slated to start in 2010 (see the Antenna nological improvement of sugarcane: Vana Vialis and States, Europe and the Middle East and boasting more column). Embraer also confirmed the construction of Alellyx, which belonged to Aly Participações, part of than US$ 1 billion in cash, the Vital Renewable Energy two factories in Évora, about 200 kilometers from Lisbon, the Votorantim group. Company (VREC) raised its flag in Brazil in October with in 2009. Crowning the good news during the month was HANDOUT / BRASKEM its sights set on ethanol production and generating elec- the final approval of its Phenom 100 executive jet by the :: VEHICLE BUILDERS tricity. It has already begun to build its first mill in the Brazilian Civil Aviation Agency (Anac), attesting that the Ten days before Christmas Volkswagen announced interior of São Paulo state in partnership with the Far- aircraft meets international standards and is airworthy. the sale of its truck and bus division to MAN, for ias group. “Our studies indicate that we will obtain the The third largest manufacturer of airplanes in the R$3.8 billion. Volkswagen will remain in Brazil as a desired return,” informs the president of Vital, Ricardo world after Boeing and Airbus, Embraer was chosen by major producer of automobiles and light commercial Roccia. And ETH Bioenergia, controlled by the Odebrecht JetBlue chairman David Neeleman, creator of Azul – the vehicles. group, is currently negotiating the purchase of NovAmer- newest airline in Brazil – to supply the company’s first ica, one of the largest in the domestic sector, which has 76 jets. Azul began operations in December. Over the :: FOOD found itself in financial trouble and is eagerly in search of last eight years, thanks to heated demand abroad, Em- Tyson Foods (US) in November purchased Macedo a partner, preferring a merger to a sale. ETH, for its part, braer has barely been able to handle the orders. During Agroindustrial and Avícola Itaiopolis (SC) plus 70% prefers to buy since it is in the middle of an expansion, this period the number of employees doubled to 23,000. of the capital of Frangobrás (PR). The aim is to double flush with financing from the Brazilian Development It is now feared that if deliveries fall in 2009, as many as production of Macedo; together the three will pro- Bank (BNDES) to install three new plants in Santa Luzia 4,000 jobs could be cut in São José dos Campos alone. duce 320,000 chickens per day. (MG), Conquista do Pontal (SP) and Rio Claro (GO). Brazilian producers and exporters of chicken, beef Odebrecht, in fact, is taking a proactive stance in and pork smashed a series of sales records in 2008. :: ENERGY several of its areas of performance. Controlled by the These companies are part of a group that sells products Tractebel (Suez Energy group), Brazil’s largest elec- group, Braskem, largest petrochemical company in for which people cannot live without: food. Sadia, one of tric power generator, paid R$213 million in July for Braskem, Latin America, has also been adjusting to the changes Odebrechet: two small hydroelectric power companies, Tupan (SP) the largest processors of meat in the country, even though betting on in the market. Perceiving a drop in demand for ethyl- it suffered heavy losses betting on the exchange rate (like and Hidropower (MT). green plastic ene, used to produce PET, the company interrupted Aracruz and Votorantim, among others) and has been production at its cracker in the Camaçari hub in Bahia forced to postpone new investments, says that it plans to state and the Triunfo complex in Rio Grande do Sul. maintain its growth plans. In 2009 the company intends products with a high aggregate value. While prudent, combined effect of a drop in the price of ethanol, the Nevertheless the slowdown could be short lived, since to inaugurate five new industrial units in Brazil. Never- the executive appeared satisfied: China had just ap- lack of credit and a spike in the price of fertilizers and in mid November orders began pouring in again from theless several important projects have been put on the proved three of its plants for export and the first ship- agricultural defensives. Among these mills, Albertina China. Recently the company informed its employees backburner by former Development Minister Luiz Fer- ments were slated for December. and the João Lyra group had to file for bankruptcy pro- that there will not be any layoffs at the affected units. nando Furlan, once again CEO of the food giant. Among tection. Other companies, however, still have plenty Finally, Braskem says it is still going ahead with its the projects now in limbo are a factory in Brazil with of cash to take advantage of the current situation. The plans to construct a plant to produce “green plastic,” 8,000 jobs and a second unit in Abu Dhabi in the United Ethanol is ours Belgian Alcotra group, one of the largest global ethanol based on ethanol from sugarcane instead petroleum Arab Emirates, one of the company’s main markets. One of the most active sectors in Brazil in recent years trading firms, announced at the beginning of December and using state-of-the-art technology developed inter- “We are going to have to reexamine projects and is the sugar-alcohol industry, which has benefited from that it will inject US$ 400 million into Brazilian mills, nally that has been very well received in the interna- look forward more cautiously,” said Furlan at the be- a strong inflow of investments from both national and either through acquisitions or partnerships. The group tional market. Amid the avalanche of bad news that ginning of December when commemorating the reno- international groups. Nevertheless, due to the crisis, has already visited 30 companies – from which it se- comes out almost daily, decisions such as these should vation and modernization of the company’s plant in some groups have found themselves in difficult finan- lected five –, and does not plan to stop there. Others are be celebrated. Most companies in Brazil already under- Toledo, Paraná state, where it will produce chicken cial straits since they were not able to overcome the beginning to invest in building new plants. stand that the crisis needs to be conquered, not fueled.

32 P I B P I B 33 Analysis

impact because in other countries A crisis like the and more suppliers to take advan- Banking Against the Tide the institution acts as a bridgehead current one should tage of the externalities. for Brazilian companies that want São Paulo offers the best poten- to do business. not frighten a banking tial in Latin America to be a regional Shrugging off the crisis, the of financial products, covering all of The purchase of Nossa Caixa by system that grew financial center. It is well located Brazil and acting internationally. Banco do Brasil impacts the domes- with convenient infrastructure – air- merger of Itaú and Unibanco The strategy is to consolidate tic market. There is complementar- during economic ports, hotels, telephones etc – and it creates value and a major operations in Brazil and push ahead ity between the two structures, with turbulence, with already concentrates Brazilian finan- institution that can compete with internationalization. Unitaú potential economies of scale. Until runaway inﬂ ation. cial activity. Virtually all the Brazilian is already the biggest bank in Latin now the impact of competition on private banks, plus other institutions with the world’s largest banks America and the 20th biggest in margins and the cost of services has It represents an such as BMF&Bovespa, clearing

HANDOUT BY ROBERTO LUIS TROSTER* the world. It is a conglomerate that been slight, because the banking opportunity houses and the CIP are headquar- competes as an equal with institu- market was growing at rates exceed- tered in the São Paulo state capital. he tide has turned. There gaining synergy and scale by join- tions around the world and has good ing 20% a year, so there was little for “Unitaú” and The city also has some disadvantag- were warning signs of ap- ing forces. Both were small banking performance in Argentina, Uruguay, incentive to start a price war. The for São Paulo as es: difficulty in executing contracts, proaching problems, but houses which combined organic Paraguay, Chile and Portugal, with market now expects a slowdown in a ﬁ nancial center an outdated normative structure and nobody anticipated their growth with mergers and acquisi- offices in all the world’s major finan- the expansion of banking services, the tax system. These difficulties Tspeed and intensity. Growth pro- tions of other institutions. Unibanco cial centers. We can expect greater so margins will shrink more quickly mean that Bovespa and the rest of jections have crashed and com- was founded as the Casa Moreira expansion: Mexico and Colombia are and this will require greater effi- The Unitaú operation could the capital market lose business and modities prices with them. A tsu- Sales, and Itaú as the Banco Federal the most logical short-term targets. ciency by institutions. The branch be copied by the Caixa Econômi- jobs to foreign competitors. nami has rolled through the finan- do Crédito, both over half a century As Brazil loses ground abroad networks of Nossa Caixa and Banco ca Federal and Banco do Brasil. The goal of developing a financial market: hundreds of billions of ago by the fathers of their current because of falling commodity pric- do Brasil are complementary and These two institutions have vir- cial center implies the adoption of dollars of wealth have evaporated presidents. From being banks with es, Unitaú is going in the opposite the real estate credit operations of tually identical vocations: they proactive policies designed to mod- and even with the injection of re- just a single branch, they are now direction by exporting banking the São Paulo bank can be replicated are targeted to the national retail ernize the regulatory structure, sources, credit has dried up. Vola- conglomerates offering a full range services. There is also a secondary throughout Brazil. market; they have the same con- simplify legal procedures, eliminate tility dominates the markets and trolling shareholder (the National compulsory deposits, rationalize the future of the world looks differ- Treasury); and they operate nation- taxation and invest in infrastructure. ent. The wave is coming to Brazil ally. Operating as a single institu- If we do this we will generate jobs at a time when the dynamics of the STOCKXPERT tion would create considerable syn- and attract investments to Brazil. economy and of credit were cool- ergies; it is difficult to understand Brazil has a sophisticated banking. The sea has changed. why this merger has not happened. ing structure, and unlike that of Much has been written about There is also room for merger be- other countries it grew in an atmo- the macroeconomic management tween the federal development sphere of economic turbulence, with of the crisis, but there are also some banks: BASA, BNB, and BNDES. runaway inflation and high macro- positive surprises on the horizon. There would be synergies and economic volatility. Nevertheless it The merger of Itaú with Unibanco, economies of scale and consider- managed to provide credit, roll over the purchase of Nossa Caixa by the able transparency to be gained. the public debt, preserve national Banco do Brasil, and São Paulo as Another opportunity would be savings and develop payment sys- a financial center all show things to make São Paulo an international tems, exchanges, financial deriva- being done that run counter to the financial sector along the lines of tives, and safe and efficient compen- crisis. These are steps which gen- New York, Hong Kong and London. sation and settlement institutions. A erate value and show the potential Proximity of companies in the same crisis like the current one should not for even more. sector generates complementarities frighten us. It represents a concrete Unitaú, or whatever name is cho- and generates benefits in the rela- opportunity for Unitaú, a partial ad- sen for the Itaú-Unibanco merger, tionships between institutions, in vance for the Banco do Brasil, and a is born as a major player. The num- the hiring of labor and the purchase chance for São Paulo. bers are impressive: over 100,000 of inputs, in addition obviously to employees and assets exceeding creating advantages for the host * Roberto Luis Troster is a partner one-fifth of Brazilian GDP. Two in- country. This is a process that feeds in Integral Trust, e-mail: stitutions with similar vocations are on itself, attracting more companies [email protected]

34 P I B P I B 35 Emerging Economies ALL CANADA PHOTOS Is Now the Time? FREDERIC JEAN / AG.ISTOE The collapse of the international financial system and the terrible crisis in the developed economies would seem to be opening up an exceptional chance of leadership for emerging economies. But is it? BY BRUNO K. REIS

“We live in a time of torment and wicked winds” (Luís de Camões) Cosipa blast furnace: emerging economies aren’t so independent after all

midst the greatest eco- mies have grown at record levels, fu- led by China would finally enjoy a to emerge. Professor Simão Silber nomic and financial eled by various factors but above all position of importance within the of the Economics Institute at the crisis since the 1930s, the high growth rates in China and world economy. With the leading University of São Paulo believes the world is watch- other countries such as India and capitalist countries unable to act that the picture emerging from the ing the collapse of the Russia. These have benefited from as the driving force in the economy, crisis shows two things: the first financialA system of rich countries exporting to rich countries and have this role would be taken over by is the end of general acceptance and above all that of the world’s enjoyed cheap money to financially emerging nations as the new loco- of the idea of “uncoupling” which largest economy, the United States. support their industrial sector, com- motive of the world. argued that developing economies Major investment banks like Merrill merce and infra-structure. Com- would not be affected by the crisis Lynch, Lehman Brothers and Bear modity exporters like Brazil have New kids in town in developed nations. The second is Stearns, formerly symbols of finan- benefited from the high demand and Taking all this into account it’s that the crisis will significantly af- cial strength, have been sold, rap- high prices for their products on the worth going back to the original fect everybody, without exception. idly rescued to avoid international market. question: has the moment finally As we might expect, the impact will failure, or simply left Thanks to these fac- come for emerging nations? Will not be the same for all countries; it to go under. Major tors there has been the crisis so decisively impacting will reflect their different charac- commercial banks This time, strong growth in major economies give the emerg- teristics. For Silber, what has col- like CitiGroup have the BRICs were emerging economies, ing economies more weight in the lapsed is the mechanism by which required cash from more prepared and they have accu- international economy? the United States absorbed Chinese the sovereign funds mulated significant According to Hélios Herrera, exports and developing countries of developing coun- to face foreign reserves. economics professor at Columbia financed the US debt, while China tries and the support the crisis The internal situ- University in New York, if the cri- and India purchased large volumes of their government ation was also favor- sis shows us anything it is that de- of commodities at high prices from to avoid going down the same path. able, given that emerging countries veloped countries and in particular Brazil and other developing coun- Traditional sectors like the auto- were in a good economic situation the United States are and will con- tries. This equation also included mobile industry run the risk of dis- thanks to the structural adjust- Brazilian soy: big Chinese orders guarantee the bonanza tinue to be the driving force in the oil exporters, who generated enor- appearing and real estate, the first ments they made in the 1990s. Hav- international economy. The slower mous profits through high prices domino which produced the current ing learned the lessons of the crises Unlike the 1990s, emerging na- The fact that the eye of the hur- growth of emerging economies, and increased world consumption. situation, will take many years to re- that shook Asia, Mexico, Russia and tions are now better prepared to ricane lay far away initially led which is likely to worsen in coming When the crisis erupted at the cover. Entire countries, as in the case Brazil between 1997 and 1999, they face the crisis. But it is necessary some people to believe that for the months, makes it clear that an im- heart of the capitalist world, this of Iceland, have simply gone bust. set in motion a process to reduce to remember that today’s crisis, de- first time the emerging economies portant part of their rapid growth structure collapsed and all were af- While rich-country economies their external dependence and ex- spite its magnitude and severity, is would be safe from the storm. Some was based on capital and demand fected equally by the disaster. How- are at the eye of the hurricane, de- pand internal consumption, based different from previous crises be- analysts said this showed the end of from developed countries. ever, for Silber, not even this earth- veloping nations have watched the on policies aimed at the population cause it started and has its epicen- an era – that of the supremacy of the In fact, the idea that emerg- quake is likely to cause a realignment tempest from afar, with unusual with lower spending power, and ter in the world’s principle economy, developed countries – and the start ing nations would be immune to of forces within the international tranquility. After years of unprec- helped by the ample credit available the United States, and then spread of a new paradigm in international the crisis has been losing ground economy. Even the attempts to re- edented growth, developing econo- on the international market. to other industrialized nations. relations where emerging nations as signs of contagion have begun organize the global financial sys-

36 P I B P I B 37 Emerging Economies

tem around the G-20 tional characteristics, If we focus just on the most im- like Brazil are historically vulner- locomotives of the world economy, oping nations. The high level of for- are not likely to bring doesn’t plan on giv- portant emerging nations, the BRICs, able to international price fluctua- there is no doubt that they will grad- eign exchange reserves will also help concrete changes. Emerging ing ground to BRICs it’s easy to see that these are very dif- tions. Ricupero recalls that Brazil ually have a more decisive weight to reduce the negative impacts. Silber believes nations need countries and other ferent, one from the other, and have is no different: like the other Latin within the world economy. It’s an there is simply no cash if they emerging nations. absorbed the impact of the crisis in American countries it grows when inevitable process. The crisis may not As for Brazil… other country that Finally we have different ways. The only thing they commodity prices improve relative transform the emerging economies Harold L. Sirkin, senior partner at can occupy the role want to have the concrete fact have in common is the certainty to the price of imported goods and in to lead actors, but neither will it the Boston Consulting Group, said of the United States a bigger role – as Silber notes – that no one will escape unaffected. it suffers when international de- spell the end of their growth. Even at a recent seminar in São Paulo that as leader of the global that rhetoric is not As Ambassador Rubens Ricupero mand falls. if they do not manage to sustain the Brazil enjoys a privileged situation economy, and neither is any other enough: an expanded role for mentions (see his interview on page The good news is that in the me- growth rate of recent years, in rela- in the international scenario and country really interested in trying to emerging nations would naturally 40) the emerging nations are being dium term emerging nations will re- tive terms they will produce growth that the crisis will have only have assume that role. For Silber, it is also be tied to an increase in their re- impacted in different ways. Russia is cover. Even if they don’t become the rates higher than those of the devel- a short-term impact on the coun- premature to start talking about a sponsibilities, for example contrib- in a bad way, with very serious prob- try. For Sirkin, Brazil has abundant kind of “Bretton Woods 2”, because uting to recapitalizing the IMF and lems stemming from the dramatic fall natural resources, a large and di- the context today is very different the World Bank. But have they the in the price of oil and gas. India has versified energy sector — with the from when the original Bretton money? Even China is reluctant to problems caused by significant cur- highlight on ethanol and the recent Woods agreement was made. The play a leading role in the crisis and rent account deficits. Brazil isn’t in discoveries of sub-salt petroleum original conference and financial has behaved very discreetly, despite a great situation, with exchange rate — huge quantities of minerals and agreements of Bretton Woods were its huge foreign exchange reserves. problems and its commodities facing AGE FOTOSTOCK / KEYSTOCK the most competitive agricultural made possible in the post-war envi- Thus, it would be appropriate to talk shrinking markets and falling prices. in the world. “Brazil has what the ronment, when Europe and Japan of a new culture of coordinate ac- For Ricupero, the only country in a world needs,” said Sirkin. Major were almost completely destroyed tions between central banks, rather good situation is China. That’s why developing nations like China and and the United States had vast avail- than any restructuring of the inter- he says “the only real emerging econ- India with their enormous popula- able resources; also the threat of the national financial system. omy just now is China.” tions will continue to add millions Soviet Union on the Eastern frontier Columbia’s Herrera said that of consumers every year. These of Europe must be remembered. Opportunities? rather than promoting emerging people will have to eat and will re- All this made it possible for the It is frequently said that crisis bring economies to a leading role, the quire infrastructure to match the United States to place its own pro- risk and opportunity, but emerging crisis will test their resistant to ex- growth. This phenomenon will posals on the table, and other West- economies are very heterogeneous ternal shocks, at least in the short not be stopped by the crisis, and ern nations simply had to accept and react differently to both. Some term. The vulnerability of emerging it means that Brazil will gradually them because they had no other already face difficulties: Turkey has nations in relation to the economic gain greater importance within the option. Today, however, the United been severely affected by the crisis, slowdown in the central economies, world economy. States is in a different situation and and Eastern Europe countries like and their dependence on financial Nobody doubts that once the cri- Europe and Japan are looking for Hungary and the Ukraine have had leverage, are still both important, sis passes the emerging economies their own ways to resolve the crisis. to seek IMF help. said Herrera. Commodity exporters will continue to increase their rela- Other real-world truths tend tive importance and this will inten- to weaken the hypothesis that sify in coming decades. It’s a grad- emerging nations may gain ground ual but ongoing process and won’t

and even start to share leadership AP/IMAGE PLUS change in the short term. Developed in the midst of the turmoil. The countries will remain the leading most obvious: developed countries actors in the world economy, with don’t want developing countries to the inevitable inclusion of China. If gain political space; Japan doesn’t emerging nations can overcome the want competition in Asia with an short-term negative impacts, it is in- even more powerful China; and the evitable that they will gain greater European Union, political space which wants to India: Prada, Rome: – for the simple strengthen its po- prosperity when will fact that they will sition in the con- threatened by customers continue to gain text of its transna- the deficit return? economic weight.

38 P I B P I B 39 Interview • Rubens Ricupero Light at the End Ricupero: experienced crisis watcher of the Tunnel For Rubens Ricupero, an ambassador and former fi nance minister, the global economy may well pick up in a couple of years thanks to two factors: Barack Obama and China. Brazil will suffer in 2009, but it’s well placed to prosper in the new post-crisis world BY NELY CAIXETA AND ARMANDO MENDES

mbassador Rubens PIB – After a lifetime dealing with the under. They criticize others for be- Ricupero is an experi- international economy, have you ever ing nationalistic, but don’t think for enced observer of eco- seen such a moment as this? a moment that they think this kind of nomic turmoil, starting Ricupero – Never. Things were thing is funny. These are US symbols. with the petroleum difficult in the 1970s, when I was a crisisA of the 1970s which he went diplomat in the United States. I got Is this really the most serious crisis through as a diplomat in the United there while Richard Nixon was still since 1929? States. He has no doubt that today’s president and watched his impeach- Certainly. The crisis of ’29 got its crisis is the worst since the Great ment in the Watergate scandal. It was name because that was the year of Depression of the 1930s, but he also a terrible moment for US self esteem, the stock market crash, but it really risks an optimistic forecast: the cur- coming together with the collapse in started with a failure of a bank in rent crisis will be brief. The world Vietnam and those helicopters flying Vienna, the Kredit-Anstalt, in 1931. could start growing again in 2010, if from the terrace of the US Embassy That’s when it really took hold and President-elect Barack Obama and in Saigon with people hanging from was to last for years. I hope the cur- his star-studded economic team make the wheels. It was a time of petro- rent crisis doesn’t become a depres- good on their promise of kick-starting leum shocks in 1974 and again in sion, with falling prices, because the American economy. As for Brazil 1979. There were lines at gas stations that would be the worst situation of and other emerging nations, Ricu- and inflation was high. Even so, that all. Japan slipped into such a situa- pero sees difficult days in 2009 with moment was not as serious as to- tion in 1990 and spent 10 or 11 years recovery starting 2010. In the short day. General Motors was founded in without economic growth, despite term, the Brazilian government must 1908 and today it is threatened with huge public works programs. wrestle with a deficit and will not bankruptcy! It survived the Great have enough money to support eco- Depression, but now, without help, it So at least the current crisis may be nomic activity as China will be able to will run out of cash by the end of Feb- shorter? do. Indeed, for Ricupero, China is the ruary. The Americans won’t let it go I hope so. We’re going to have a very only real emerging power. The former proactive American government. finance minister spoke to PIB on the I hope the crisis The voters chose the candidate who same day that he was invited to take is best prepared to deal with a crisis part in a commission which the Gen- doesn’t become a like this. Barack Obama has been eral Assembly of the United Nations depression; Japan impeccable during the transition – is putting together to deal with the started one in 1990 he has not made one bad choice yet, crisis; US economist Joseph Stiglitz, above all in his Treasury Secretary, a well-known critic of financial glo- and went 10 years Tim Geithner, who is a rising star.

HANDOUT balization, will be presiding. without growth When he was director of the Federal

40 P I B P I B 41 Interview • Rubens Ricupero

Reserve in New York, Geithner was the mid-1970s, then again when reserves, close to US$2 trillion, and it did between 1998 and 2002, Brazil Internationalized speak of emerging nations as if they in charge of the Bear Stearns rescue. I returned as ambassador in 1991. won’t have any problem spending on doesn’t grow. When Latin America were all the same. Once again, the tru- So, we will have a very strong pack- The US economy has extraordinary fiscal stimulus packages as was done grew around 5.5%, from 2003 until companies have th is that China is first amongst equals. age of anti-crisis measures, similar vigor and we should never under- during the 1997 Asian crisis. China 2008, Brazil grew less, but it grew. gone through It’s by far the most powerful of these to that which Roosevelt prepared estimate its power to recover. This compensated by expanding internal It’s the same reason – the improve- bad times and countries. It’s also the most discreet. in 1932 when he was elected. It will crisis looks likely to last a couple of investment programs, and they’ll do ment in commodity prices in relation comprise at least three fundamental years, so it’s possible that the recov- this again. They can do this because to the price of imports. And the most survived; they’ll Some people are speaking about a elements. First, a vigorous stimulus ery will start in 2010. I have a lot of they aren’t worried about the deficit. impressive growth in Latin Ameri- get through this one new world economic architecture... for consumption and infrastructure confidence in the new government Not only does Brazil not have domes- ca wasn’t Brazil; it was the mineral We shouldn’t nurture exaggerated investments – highways, energy and which is competent and young, a tic savings, but it has a problem with exporters, above all Peru and Chile. up for lost time, improving bottom- expectations. I don’t believe there the environment. The United States new generation coming into power. the deficit and an expensive debt. So rung consumption and reducing a will be a second Bretton Woods, be- has for a long time allowed its infra- much is this the case that even today So what happens now? little the terrible misery, and now all cause that’s where the world created structure to get outdated. Second, the Will Brazil and the emerging nations Brazil measures its public accounts in Trade was falling even before the cri- this seems to be delayed. We would the current economic and financial package will help people who are suffer much? terms of the primary result, excluding sis. According to the November report have to grow non-stop by at least structure. It’s going through a cri- threatened with losing their homes Emerging nations are already be- financial expenditures, rather than of the World Trade Organization, glo- 5% during 30 or 40 years to absorb sis but it hasn’t been destroyed like in the mortgage crisis. And finally ing affected. Initially some people looking at the nominal balance. This bal trade net of inflation and foreign unemployment – which is still at le- the previous order was destroyed by there will be help for General Mo- thought they were no longer so means the government has less room exchange fluctuations grew by 8.5% in ast 8.5% – and all the accumulated World War Two. In this respect we tors, Chrysler, Ford and the airlines. tightly linked to developed econo- to increase spending. Even the PAC 2006. In 2007 it grew just 6%, and as misery. And that’s not going to ha- are dealing with absolutely enor- The essential thing, as Obama has an- mies but today nobody takes that (the government’s Faster Growth of April the WTO was predicting 4.5% ppen in 2009, unless there’s a global mous interests; people are very con- nounced, and correctly, is to preserve idea seriously. Brazil is one of the Program) will increase investment for 2008. Today, nobody is risking any miracle. Let’s pray. servative and they don’t want major or create jobs. Allowing General Mo- two countries where both the cur- only from 0.5% of GDP to 1% of GDP, kind of forecast. World trade is dro- revolutions. Questions related to re- tors to go under would destroy 2.5 rency and the stock market have seen which is welcome but still very small. pping; demand is down. This means What will be the impact for interna- ference currencies and reserves are million jobs, directly and indirectly. the greatest volatility, which is not a Sadly, the government has spent far competition is increasing and commo- tionalized Brazilian companies? very delicate. Those who are making He doesn’t want to do this. good sign. Strictly speaking, the only too much on current expenditures: dity prices are falling. This will impact They will face problems, but not a ill-thought-out statements are tho- country which is doing a little better the public sector wage bill, hiring Brazil, because we are essentially a catastrophe. Prices will fall and they se who have no money. That’s why How much might a package like this cost? so far, but it is also being impacted, people, and increasing salaries. These commodities exporter. will sell less. If they don’t have heavy the Chinese are very discreet. They Martin Wolf, writing in the Financial is China. Russia is doing very badly, are not productive expenditures. debts they’ll get through this period have US$2 trillion of reserves and Times, estimated it could reach 10% of and India has problems because it But will it continue to fall? Some people thanks to the recently good times. don’t want things to get unstuck. If GDP, which today is estimated at be- had a large current account deficit. What other problems will Brazil face? have a different medium-term vision... Until four or five years ago, iron ore the house falls down, it falls on them. tween US$14 trillion and US$15 tril- Brazil is not in a magnificent situa- In schematic terms, Brazilian depen- I’m talking about the short term, sold to China sold for just one third lion. So, it could reach US$1.5 trillion. tion, unlike what some people have dency is twofold. Because the coun- 2009. In the medium and long term of its shipping cost. The ore itself Will the world emerge from this crisis This is not so extraordinary, because been saying. The only real emerging try does not have sufficient savings the outlook is good. If my optimism was worth nothing. Companies sur- with more regulated markets? they have already approved a US$700 economy just now is China. of its own, it is obliged to use exter- is proven correct, that this will be a vived that, so why not now? Leading countries like the Uni- billion package and spent US$100 bil- nal savings. When these dry up, like relatively short crisis and the world ted States and Great Britain – the lion to prevent the bankruptcy of AIG. What advantages does China? now, Brazil faces a critical problem economy starts growing in 2010, Do you think developing nations mi- two largest financial centers in the China has extremely high domestic of pressure on the currency. I see no then Brazil will be in a good situation ght emerge from this crisis with a gre- world are New York and London – Will this be enough to get the econo- savings, sometimes reaching 44% easy way to resolve in the short term, to resume growth. The country’s we- ater weight in international relations, are unlikely to accept delegating my going again? of GDP. Brazil is 17% or 18% at the because many of the investments alth of natural resources, including as some people expect? supervision of their financial sec- I’m confident that this can get the most, it is not a country that saves. that were destined for Brazil were sub-salt petroleum – all this will be Certainly. They’re already being asked tors to international authorities. In US economy moving. We should Also, China has less need of other attracted by the high commodity more valuable in a growing economy. to play a larger role, and this is not as the US, the financial sector repre- note that there are some lead- countries; it has huge hard-currency prices, which are now falling. new as it might appear; the G-20 was sents 40% of total company profit. ing economists, for example Paul Do you see companies going bankrupt created in 1999 under the auspices of Treasury Secretary Henry Paulson Krugman, this year’s Nobel Prize China saves What is the second problem? in 2009? the World Bank and the IMF after the was against more control, but now winner, who speak of the possibil- Trade. Contrary to what many Bra- Not in Brazil. It will be a difficult crises in Asia, Russia and Brazil in the he’s favorable, so it’s clear there ity of prolonged deflation, maybe 10 of 44% of GDP; zilians think, the behavior of the year, but without recession. Brazil 1990s. The goal was to improve how will be some regulation. But it will years. I don’t believe this, because Brazil hardly Brazilian economy is a direct re- will do OK if it grows 2% or 2.5%, the system works to avoid repetition be done by them, not by us. The the US economy can make an im- reaches 17% and flection of what happens in Latin because population growth in Bra- of such crises, bringing together the Americans provoked this crisis and pressive recovery. I’ve seen it do America. Everything that happens zil is now very low. I don’t see any strongest developing countries with we’re paying a price. Unfortunately this. I served in Washington twice, the government in Latin America happens in Brazil. catastrophe. But it’s a pity, because the group of rich countries. But we that’s how the world is. They do so- first as chief political counselor in spends badly When Latin America goes badly, as we were in the process of making have to be specific; it’s a mistake to mething stupid and we pay for it.

42 P I B P I B 43 Marketing A Birth Certificate Only now is Brazil starting to certify some products by their geographic origin, which will automatically raise their value both domestically and internationally BY ANTONIO CARLOS SANTOMAURO

hampagne, Bohemia products which are protected, and Crystal and Parma Ham which they feel to be superior. – throughout the world Only recently have Brazilian these famous products producers also started to use this carry with them an powerful differential for competi- Caura of quality and exclusivity. The tive advantage. Four geographic in- reason is simple: should imitations dications are now recognized by the or less valued copies appear on National Institute for Intellectual the market, they can easily be de- Property (INPI) – Vinhedos Valley nounced, thanks to the indication of Wine; Cerrado (savannah region) geographic origin which constitutes Coffee; Paraty Cachaça, and Pampa an irrefutable guarantee of quality. Gaucha Beef. Various products are Geographic indications or de- in the process of requesting certifi- nominations of controlled origin cation (see box).

enjoy recognition and protection PHOTOS: GILMAR GOMES under various international commercial agreements. They designate products that have unique Geographic indication characteristics, starting with their of origin for Vinhedos exclusive geographic zone of ori- Valley wines gin. Sparkling wine may be called Champagne only if it comes from a small region of the same name in France. In many cases, including Brazil’s oldest indication of geo- me Milan, executive director of the ing to prevent some sugary syrup Champagne, the denomination of graphic origin dates back just six Association of Fine Wine Produc- from São Paulo or the Northeast of origin also defines a specific and years, to designate the fine wines ers in Vinhedos Valley (Aprovale). the country carrying a label saying traditional method of production. from the Vinhedos Valley in Rio It also allows a producer to get a “Vinhedos Valley”. In Europe, the geographic indi- Grande do Sul State. That region better price: certified wine from cations of origin – called Protected produces just 3% of the 370 million Vinhedo Valley sells abroad for Sustainability Designation of Origin or “PDO” – liters of wine produced annually in US$8 – US$10 per liter, while simi- Coffee producers in the Cerrado are widely used to protect quality Brazil but accounts for 21% of the lar wines without this differential (savannah region) of Minas Gerais White, red and sparkling: products. France alone has more tasting the taste of country’s fine wine exports. sell for US$7 at the most. Before State obtained geographic indi- than 700. The motive is economic: “Vinhedos Valley” “Geographic indication opens Vinhedo wine received INPI cer- cation protection in 2005, even loyal customers will pay more for doors around the world,” said Jai- tification, there was in theory noth- though they were already export-

44 P I B P I B 45 Marketing

CACHAÇA: A MOST BRAZILIAN PRODUCT BRAZILIAN CACHAÇA is the ing 70% of their production. “With find a niche in a market of higher Protection cally endorses all indi- if the country were to world’s second-largest selling this indication of origin we can sell added value: the fashion industry. and potential cations made by other sign the Lisbon Treaty, spirit, after vodka. However, until in Japan for between R$30 – R$50 Gerson Luiz Becker, director of Unfortunately, Brazilian indication of countries. “In Europe, Geographic a 1950s agreement for recently there wasn’t even a spe- more per sack; without this, our the project to obtain geographic in- geographic origin does not automati- however, it’s wise to ob- indication the international rec- cifi c customs classifi cation; it was differential reached no more than dication at the Rio Grande do Sul cally ensure worldwide recognition. tain specific recognition ognition of geographic included amongst R$10,” said José Augusto Rizental, Tanning Industry Association (AIC- Japan is an exception; it automati- valid for the European can boost the indications. “Today, other sugarcane the superintendent of the Council Union,” said Maria Alice price of coffee we still need expen- spirits, as if it were of Associations of Cerrado Coffee Calliari, general coordi- by up to R$50 sive international legal a kind of rum. Producers (Caccer). nator of other registra- support to defend our HANDOUT/SEBRAE Cachaça began In order to receive the Brazilian tions at INPI. per sack certification of origin,” moving up market seal of geographic origin, Cerrado Aprovale (from the he said. late 2001 with Coffee had to obtain more than 75 Vinhedos Vale) did just this and In the opinion of Hulda Gies- a government points in a tasting trial held using the in early 2007 obtained European brecht, an analyst at the Brazilian decree defi ning criteria of the Specialty Coffee Asso- Union recognition for its zone of Support Service for Small Com- expressions such ciation of America (SCAA). This in- production. “Now we can use the panies (Sebrae) who works on ac- as “cachaça”, ternationally recognized test evalu- cess to innovation and technology, “Brazilian cachaça” ates the coffee in 10 items including Brazilian indications of geographic and “caipirinha” as body, acidity, aroma and sweetness. origin are protected internationally applicable only to One example of the investment by TRIPS – the Agreement on Trade producers establi- made by Caccer to prepare for the Related Aspects of Intellectual Cachaça shed in the country. process of certification was the event Property Rights, under the auspic- becomes a For those who held early November in the Center es of the World Trade Organization. citizen of the world, with don’t know, caipi- of Coffee Excellence, established in Amongst other things, TRIPS deter- its own ID rinha is a delicious the city of Patrocínio by the Minas mines the automatic recognition of drink made with Gerais State Secretariat for Agricul- designations of origin by countries cachaça, sugar, limes and ice. A la- ture. At this event Manoel Alves, a which are members of the WTO. ter decree established the basis for Portuguese consultant for the SCAA, Today, Sebrae includes indica- denomination of controlled origin trained 20 professionals to be inter- tion of geographic origin amongst by determining that “Cachaça” is a national coffee tasting judges. its new business projects in vari- typical and exclusive denomination In addition to success in tasting ous sectors. “Indication of origin is for a spirit produced from sugarca- trials, in order to receive certifica- PHOTOS: NEY DOS REIS an effective tool for market access, ne in Brazil with an alcoholic degree tion by Caccer the Cerrado Coffee Sul), said the tanneries seeking the both domestically and abroad, be- between 38% and 48% by volume, had also to comply with other rules seal of origin are currently exporting cause it indicates a differentiated at 20 degrees Celsius, obtained which are today relevant in inter- well below their potential. His own product,” said Giesbrecht. However, from the fermented residue of su- national trade, with respect to en- company, MATS, had 2008 billings merely obtaining the certification garcane, with the possible addition vironmental sustainability. estimated at R$18 million, but just is not enough. Expanding exports of up to 6 grams/liter of sugars.” Leather producers in the Sinos 5% – 7% came from exports. Certifi- of a product that has indication of So far, only Paraty Cachaça Valley in Rio Grande do Sul State cation of geographic origin, currently geographic origin requires showing has obtained geographic registra- are also seeking to associate geo- in the final stages of recognition at it at international fairs and in tast- tion, but other famous cachaças graphic origin and INPI, could improve Consultant Manoel Alves (above) ing sessions, all within a structured from Salinas (Minas Gerais) and sustainability. The this: “When we com- tastes Cerrado Coffee and helps communications and marketing others from Abaira (Bahia) have Sinos Valley is the bine the control of the train new quality judges project. “Anyone who sells or serves registration applications pending. heartland of Brazil’s Certiﬁ cation entire process – start- a certified product must know how Other products awaiting tanning industry and ing with cattle trace- same specifications within Europe to speak about it,” said Calliari. certifi cation include coffee from exports hides used isn’t enough, ability – with environ- that we use in Brazil. A cabernet A database of detailed infor- the Alta Mogiana region, fruit mainly for furniture you have to mental sustainability, sauvignon formerly had to be de- mation also helps convince clients from the São Francisco Valley, and automobile seats. know the the protection of the scribed as red table wine.” to pay more for a special product. honey from Araripi, oysters Producers hope that seal of origin will add For Rizental, of Caccer, Brazil’s “Here at Caccer we know where from Santa Catarina and marble designation of origin product and be substantial value to our indications of geographic origin each of our coffees has come from from Cachoeira do Itapemirin. will help their leather able to sell it products,” said Becker. would receive greater protection and who tasted it,” said Rizental.

46 P I B P I B 47 Test

guese in Brazil by Nova Fronteira, ANSWERS Are You Ready authors and BCG partners Arindam Bhattacharya, James Hemerling and Alternative C. Brazil’s States. But studies by hu- Since 1990 Goodbaby has Quality is so good that ma- Harold L. Sirkin warn us that this 1 Embraer has proven man resources groups registered 2,300 patents, 40 jor competitors like Ka- for Globality? new phenomenon includes the swift to be a creative designer, show that three-quarters of them outside of China. wasaki are importing and and impressive rise of companies lo- acutely aware of customer of these graduates will ••• selling Bajaj motorbikes cated in rapidly developing econo- needs and a tough com- still require substantial Alternative D. Tech- in other markets. What’s your Globality Quotient, or GQ? Try this quiz mies. These companies do business petitor in international on-the-job training. 4 nicians at Haier, a ••• to see how much you’re in tune with today’s world in innovative ways and are challeng- markets. Its boldest bid to ••• Chinese household equip- Alternative A. Polish ing their traditional competitors. date is the ERJ 145 family of Alternative A. Since ment company, were re- 7 executives work for an They are redefining their sectors of commuter jets which shook 3 it was founded in 1990, ceiving numerous calls average of 1,984 hours per GLOBALITY ISN’T JUST a new that operates in 38 countries, global- the economy and staking out lead- up traditional jet design by Goodbaby has given top to unblock the piping in year, compared with 1,777 term or a different way of saying ity is what’s coming next. In their ership positions around the world. making the top of the cabin priority to innovation and their customers’ wash- hours for Americans and globalization. For the Boston Con- book “Globality: Competing with Check out your own GQ, or Glo- wider than the bottom, thus speed of production. The ing machines. They dis- 1,362 for Germans. sulting Group (BCG), a leader in Everyone from Everywhere for Ev- bality Quotient, by answering a quiz increasing space and com- company started when its covered that their clients ••• strategy and business consulting erything” now published in Portu- prepared by the authors: fort for passengers. founder had so many si- were using the machines Alternative D. John- ••• multaneous offers to buy to wash sweet potatoes. 8son Electric of Hong Alternative C. Edu- his new design of baby Haier saw this as an op- Kong started life making QUESTIONS 2 cation is a priority for carriage that he decided to portunity and adapted its small electric motors for emerging economies be- make it himself. Since then washing machines to the toys, but soon expanded its Which is world’s An upstart appliance India-based Bajaj Johnson Electric, cause, contrary to popular Goodbaby has won 80% market, adding a cycle for business to make motors 1 largest producer of 4 manufacturer in 6 Auto is the number- 8 the world’s largest belief, these countries face of the Chinese market for washing vegetables. for household appliances, small commercial jets Asia has designed a one seller of two-stroke independent maker of difficulties both in educa- baby carriages, plus 24% ••• which offer a greater profit (up to 120 seats)? clothes washer for the motorbikes in which micromotors, is based in: tion and in employability. of the American market. Alternative C. In margin. It then started sup- a. France Chinese market that emerging market a. Dayton, United States Together, China and In- The company has research 5 March of 2008, Indian plying electric motors to the b. Russia also does what? country/countries? You b. Seoul, Korea dia will graduate 1.5 mil- and development centers group Tata paid US$2 bil- German automobile indus- c. Brazil a. Removes wrinkles may choose more than c. Mannheim, Germany lion students in science in China, Germany, France, lion in cash for the luxury try. Today Johnson Electric d. Korea b. Steams rice one alternative: d. Hong Kong, China and engineering, 12 times the United Kingdom, the Jaguar and Land Rover au- has 45,000 employees and c. Dry cleans silk a. Sri Lanka e. Vancouver, Canada the number in the United United States and Japan. tomobile marques which is the world’s largest sup- By 2010, India d. Washes vegetables b. Colombia then belonged to the Ford plier of micromotors for the 2 and China e. Heats the kitchen c. Bangladesh The largest Motor Company. It was automobile industry. together will graduate d. Mexico 9 acquisition by a Latin the latest in a series of ••• approximately how Which company now e. Peru American company was mergers and acquisitions, Alternative B. In many science and 5 owns the prestigious f. Egypt made in which country: including the Anglo-Dutch 9 2006 Vale, a Brazilian engineering students? Jaguar and Land Rover a. United States steel company Corus (for mining company, made a. 250,000 lines of automobiles? Choose the correct b. Canada US$13 billion) and Tetley the largest-ever acquisi- b. 500,000 a. Cerberus Capital, 7 order below of the c. Mexico Tea (for US$432 million). tion by a Latin American c. 1.5 million of the United States total hours worked per d. India Tata operates in segments company when it bought d. 4 million b. Ford Motor, of the year by white-collar e. Brazil as varied as steel, automo- Inco, a Canadian nickel United States workers in the following biles, food and technology, mining company, for Chinese baby c. Tata Group, of India countries -- from As of April and is becoming a major US$19 billion. It was a ma- 3 goods maker d. M+M/Renault, highest to lowest: 10 2008, what global player. jor step in Vale’s strategy Goodbaby innovates of France a. Poland, United percentage of major ••• to build global strength. at the rate of one new e. Mitsubishi States, Germany league baseball players All the alternatives. ••• product development Motors, of Japan b. United States, was foreign born? 6 Indian group Bajaj is every __ hours: Poland, Germany a. 8% a world leader in produc- 10 Alternative C. a. 12 hours c. Poland, Germany, b. 16% tion of small cheap mo- 24 hours United States 28% (*) For more information:

b. c. ILLUSTRATION: ÊNIO LONGO torbikes. In 2007, its bikes c. 36 hours d. Germany, Poland, d. 32% were sold in 50 countries www.bcg.com/globality; d. 48 hours United States and exports grew by 77%. www.globalidade.com.br

48 P I B P I B 49 Your Career

Fatima Zorza- costs, negotiating better collection to, Brazil Coun- terms and overall, improving busi- In the Eye of the Storm try Manager of ness results,” says Marcelo Mari- multinational aca of Mariaca, a São Paulo-based headhunter Rus- HR consulting firm. According to Internationalization sell Reynolds Zorzato, companies need execu- of companies gives Associates, high- tives who are strong leaders, who lights a sense of can exercise enough autonomy executives more power, urgency as a key to skillfully lead and protect the but leaves them more attribute needed welfare of their companies, even vulnerable to risk for success. “To against the will of controlling be successful, ex- shareholders. “We need people with BY CHRISTINE PULEO ecutives need to courage to say ‘no’ sometimes,” she create a greater says. “It’s not just about saying ‘yes he globalized world re- impact and gen- sir’ and getting your bonus.” quires Brazilian execu- erate immediate The senior executives involved tives who are up to the Isac Zagury of results,” she says. in the currency bets were once the Aracruz: whose challenge: they must “In the past it darlings of the business commu- fault, really?

take swift but effective LEO PINHEIRO/VALOR RJ/FOLHA IMAGEM took at least four nity, but now they find themselves Tdecisions on their own authority; years to evaluate under an unwelcome spotlight. be prepared to take ever-increasing an executive’s performance. Now, Aracruz shareholders recently vot- risks and deal with constant pres- the board of directors and share- ed to sue Isac Zagury, the compa- sures – while still delivering con- holders make up their minds in ny’s former chief financial officer, sistent results. less than a year.” for its massive foreign exchange Hiring top-level executives In her view, however, this pres- losses. According to an Aracruz had become a more selective and sure to achieve dramatic results spokesperson, “the next steps will demanding process even before does not justify the actions taken be decided by lawyers for Ara- the tsunami that swept over the by the executives involved in the cruz.” Sadia is also carefully study- global economy, and this trend has “Brazilian subprime”. ing who to blame for only been accentuated by the crisis. Zorzato places a large their financial mis- While an impressive remuneration share of the blame haps. Once the losses package is the standard reward for squarely on the exec- Aracruz, Sadia were revealed, Sadia those selected, the high expecta- utives. “They agreed and Votorantim dismissed its chief tions of those in command have to go along with these seek those financial officer and sometimes been just too great. risky financial bets. finance manager, and Consequences have been dramatic, In many cases, it responsible launched a special for example the massive currency looked like they lost for losses audit by KPMG that swap losses incurred by major Bra- their senses. It was a found flaws in finan- zilian companies in 2008. company decision, but at the end cial reporting. An additional audit Quite probably this need to im- of the day an executive needs to by BDO Trevisan will determine press the uppermost echelon is at alert his board to a risk. It is their who is responsible for the losses. least partly responsible for what responsibility,” she said. “Once responsibility is determined is being called the “Brazilian sub- With the end of the crisis no- the company will take appropriate prime” – executives from Sadia, Ara- where in sight, a more competi- action,” says Alessandra Wolff Ter- cruz and Votorantim invested heav- tive climate will continue well into ceiro, spokesperson for Sadia. ily in currency contracts, betting 2009. “From now on, executives There’s also bad news from against the US dollar in a move that will need to show more hands-on abroad for the Brazilian execu- Leaving Lehman eventually cost their companies bil- Brothers: executives experience in improving tangible tives accused of poor management lions with the dollar’s recent spike hit by the collapse business results, such as growing or fraud. Saxena White, a small but

in value against the Brazilian real. ANDREW WINNING / REUTERS sales, improving prices, reducing powerful US-based law firm that

50 P I B P I B 51 Your Career

specializes in protecting shareholders against alleged wrongdo- A GROWING MARKET FOR ing by executives – who can be held D&O INSURANCE AGAINST civilly and criminally responsible – filed a Securities Fraud Class EXECUTIVE BLUNDERS Action suit against Aracruz. The allegation, made in the name of a IN THE UNITED STATES, virtu- to rise 15% by the end of this year. group of US shareholders, charges ally all companies supply their “It is in the interests of the corpo- that the bets against the dollar vio- executives with Directors and Of- ration to protect its administrators lated company security policy and ficers Liability Insurance (D&O), so that they can have more peace of were larger than were necessary an insurance payable to company mind to make day-to-day decisions to hedge normal business opera- executives or to the corporation for the organization,” said Angelo tions. Additionally, the Securities itself to cover legal costs if execu- Colombo, director of Major Risks at and Exchange Commission of Bra-

tives are sued for losses or any ac- Allianz Seguros of Brazil. “Today, zil (CVM – Comissão de Valores PHOTOS: HANDOUT tion taken while at the company. we see many managers demand- Mobiliários) said it may investigate Fátima Zorzato: “the executive has a duty to say no” Mariaca: “executive will need new skills in 2009” However, D&O does ing a D&O policy as companies and executives involved not apply to cases of a benefit before they in the “Brazilian subprime”. of the “Brazilian subprime” will be for professionals with specific ex- courted in Brazil. Hiring foreigners fraud and intentional accept a position.” It is possible that some of these punished professionally forever,” pertise in change itself. “We are could supply the skills increasingly wrong-doing. Brazil Brazil is a Experts agree on executives may be covered by a type he says. “This did not occur in bad seeing increased interest in change needed by Brazil-based companies, has the same insur- growing market one thing: no one will of insurance extremely common in faith; it was an error of judgment. If process management, people who Mantovani said, but businesses still ance, where it’s also for policies face criminal charges the US, that is becoming more popu- there is blame, it cannot fall just on have experience in restructuring. favor a Brazilian executive who can known as D&O: both arising from the “Bra- lar in Brazil: Directors and Officers one person.” Fernando Mantovani, For example, many banks and com- better understand the Brazilian the name and the to protect zilian subprime”, as Liability Insurance (“D&O”), which the branch manager at Robert Half panies are looking for this type of market and culture. concept were import- managers most experts do not can cover defense costs if executives Brasil, an international recruiting professional.” This interdisciplin- “Having experience and past ed by multinationals see any legal wrong- are sued for losses or any action tak- company, agrees. He sees the losses ary job function is at the nexus of IT, success in very difficult and even operating in Brazil. Just as in the doing. João Burke of Nehring e As- en while at the company (see box). as an effect of market conditions. “I management and communication; hostile environments such as start- US, Brazilian D&O covers litigation sociados Advocacia explains that Experts disagree, however, on am dealing right now with an ex- most broadly this ups and turnarounds costs and protects an executive’s Brazilian law will punish execu- the consequences for those in- ecutive from one of the companies role involves business will count a great assets, but does not offer cover- tives who exceed their powers, or volved. “If executives have made affected by the currency bets,” Man- change management deal,” says Mariaca. age in cases of fraud and willful act against the law. “But there is bad bets – especially without ad- tovani says. “The interviewing com- and subsequent tech- Opportunity Mantovani also sees wrongdoing. no special rule concerning an ag- vance approval by their boards, or pany is aware of this, and still wants nology implementa- for executives an up-side where oth- The need for D&O in Brazil is gressive business approach, which if they approved risks beyond their to interview, and possibly hire, him. tions. Mantovani re- who know ers see only disaster. growing and the product is finding appears to be the case in ‘Brazil- levels of expertise or possibly their ports that those who “Working for com- a new market in small and medium- ian subprime’,” he said. This con- levels of authority – it will end ca- The Good News have worked with how to panies that suffered sized companies. “I have always trasts with the likely fall-out from reers and have a lasting impact as Despite the crisis and reduction restructuring or with manage change from the bad currency advised executives to have this the US subprime crisis. “There will much as stealing or breaches of in hiring at the end of 2008, the very tight credit will bets represents a good kind of insurance,” says Gilberto be criminal charges in the United ethics have in the past,” said Ma- forecast for Brazilian executives also be in high demand. opportunity,” he said. “Existing ex- Guimarães, an IBMEC-SP professor States,” said Joe Murphy, coun- riaca. “They need to be upfront and still remains relatively bright. In Another area of specialization ecutives or new hires face the chal- and HR consultant. Interest in this sel at Compliance Legal Systems be prepared for negative evaluation some areas, the Brazilian market in high demand is direct experi- lenge of rebuilding the companies type of insurance, currently offered in New Jersey, and author of 501 about their judgment, ethical stan- has more opportunities than quali- ence in mergers and acquisitions and can add that to their resumes.” by about a dozen insurers in Brazil, Ideas for Your Compliance and Eth- dards and intelligence.” fied candidates, particularly among (M&A). The crisis and resulting Of course, Brazil’s tradition of in- is growing, according to Fernando ics Program. That’s because the Gilberto Guimarães, a professor high-level executives. “We simply fall in stock prices has increased stability has helped Brazilian execu- Mantovani of Robert Half. “D&O US subprime mess undoubtedly at the IBMEC-SP business school don’t have the qualified workforce the possibility of mergers in Bra- tive take the recent shocks in their policies are more and more com- involves cases of fraud, although and an HR consultant and author, we need, particularly in the oil, gas, zil, and executives with financial stride. “Brazilian executives are mon and are more popular than the complexity of the crisis means said he agrees in part: a fired execu- property, construction and bio-en- markets experience – particularly famous for their adaptability, good ever,” he said. The area reached that it will take time for investiga- tive must be upfront about involve- ergy sectors,” says Mantovani. those who have worked on complex people skills, overall leadership and R$96 million in premiums in 2007, tors to sort through evidence and ment, Guimarães said, but he will Every change – be it positive or transactions in mature markets like ability to learn fast,” says Mariaca. up 9% since 2006, and is expected pinpoint blame, Murphy said. eventually bounce back. “I do not negative – brings opportunity, and Tokyo, New York and London – “Learning from past crisis situations believe that anyone fired as a result Guimarães sees particular demand will find themselves aggressively has been part of our history.”

52 P I B P I B 53 Technology

The Buenos pendence on the US Aires offi ces economy. Similar of Totvs, and in form and opera- Totvs’ Big Bet Cosentino: tion to the Brazil- profi t in crisis ian head office, the The need for integrated management technology national software company with Mexican subsidiary enough scale and capacity to com- counts on 185 employees and attends by midsized and small companies continues in pete globally. Since floating a R$ 460 to a base of 350 customers. times of crisis and continues to drive the software million initial public offering (IPO) in Totvs has organized its operations 2006, Totvs has made no less than sev- in Latin America with command business, even abroad VICENTE VILARDAGA en acquisitions. In July the company centers in Buenos Aires and Mexico took a new leap with the purchase of City. Based in these cities, the com- f the global environment now or countries with a high degree of IT Datasul in a deal valued at R$ 700 mil- pany attends to an area that includes appears to be more hostile use generally postpone investments lion. The acquisition gave Totvs access 14 countries. From Lisbon, where to business, with the finan- in times of crisis,” notes Consentino. to countries where did not formerly Totvs’ European office is located, cial crisis and the threat of “This is not the case with smaller operate – like Colombia –, besides the company also spearheads its op- a world recession, for Totvs companies, which need to continue creating synergies and strengthening erations in Africa, especially Angola I(pronounced “Totus”), the biggest investing in technology in order to and Mozambique. In order to serve software house in Brazil and ninth- gain competitiveness.” Portuguese and Spanish-speaking largest manufacturer of integrated Totvs has a growth strategy based markets, Totvs concentrates its soft-

HANDOUT management systems on the planet on acquisitions and conquering mar- ware development in São Paulo and – competing directly with giants like kets that is also supported by the Bra- in Córdoba, Argentina. SAP and Oracle, both in Brazil and zilian Development Bank (BNDES), “Totvs was created to consolidate abroad –, the seas are calm. The at- which favors the existence of a large the systems-management market mosphere at the company’s beautiful in Latin America and has become headquarters, surrounded by gardens very competitive in the international in a tree-lined neighborhood in the arena,” affirms Cosentino. “We have city of São Paulo, inspires a profound SNAPSHOT gained scale, and between 2006 and sense of peace. The president of the TOTVS – Microsiga until 2005 – is the largest Brazilian company in the area 2008 our profit margin increased from company, Laércio Cosentino, who of integrated management software, and the 9th in the world. 14% to 21%.” For its international op- likes to cook personally for customers erations Totvs has adopted a hybrid and friends in a professional kitchen :: Number of active clients: 22,500 business model along the same lines as installed in the building where he :: Countries of operation: Chile, Paraguay, Argentina, Uruguay, its operations in Brazil, where it com- works, is the personification of that Bolivia, Peru, Colombia, Puerto Rico, Mexico, Portugal, bines its own units with franchises. serenity. A 48 year-old engineer with Angola, Mozambique, Ecuador, Venezuela, Guatemala, Costa Rica, These franchises assist in both distri- a degree from the University of São United States ( 17 countries) bution and systems development. Paulo (USP), Cosentino is sure that While the integrated management FREDERIC JEAN / AG. ISTOÉ the Brazilian software industry will :: Share of the Brazilian market for integrated management software: software market is expected to grow weather the crisis unscathed and 38% (Totvs + Datasul; source: IDC) operations where both companies had ny’s competitors in these markets are less in 2009, it should still grow. Ac- even continue to grow domestically already set up shop, including Argen- generally small and lack the capacity cording to a recent study of the Latin Billing in 2007: R$439.67 million (Totvs) and R$222.60 million (Datasul) and abroad despite the new scenario. :: tina and Mexico. “Overlapping only to meet demand. Cosentino informs American market conducted by the His optimistic prognosis is based :: Billing in 2008 (through September): R$611.40 Million (Totvs + Datasul) occurred in Buenos Aires and Mexico that there has not yet been a wide- consulting firm IDC and divulged at on the demand in Totvs’ customer City, where each company has its own spread drop in economic activity in the end of November, IT investments portfolio, consisting mostly of small :: Share of foreign sales in total billing: 6% units,” explains Cosentino. “In all the the countries where Totvs operates, in the region should increase 7.8% next and midsized companies in Brazil, :: Average number of new clients per month: 200 other regions franchises operated.” although he recognizes a certain sec- year (before the crisis, IDC’s estimate where the company has a 38% share Today Totvs’ foreign sales, con- torial cooling among Latin-American was 13.7%). In Brazil the company’s of the market, not to mention abroad, :: Number of acquisitions: 17 (Totvs: Logocenter, RM Sistemas, centrated above all in Latin America customers related to the American growth forecast has been adjusted where it has a good presence and BMI, Midbyte) (Totvs + Datasul: BMS, Setware, Datasul) and Africa, represent about 6% of automotive industry. The Mexican downwards from 14.4% to 9.1%. strong ambitions. “Large corpora- (Datasul: Informenge, Meya, Próxima, Ilog, YMF, Soft Team, its revenue and have been growing market tends to be the most affected The IDC study shows that the tions that are already computerized Bonagura, Gens, Tools, Tech Solution) steadily but sustainably. The compa- in the short term, due to its strong de- Latin American IT market will be one

54 P I B P I B 55 Technology Direct Treasury Totvs in system, for example, it São Paulo: is necessary to attend growing to a plethora of legal Safety and profitability, abroad prerequisites that are uncommon in other That’s our role. markets. This ends up generating complex products that are both flex- ible and have broad applications. The financial market clearly ap- proves of Totvs’ performance. While the São Paulo Stock Exchange’s Ibovespa index fell 33% between September 30 and October 31, the company’s shares only dropped 21%. Even with the abrupt plunge in No- vember, Totvs’ stock has appreciated 18.75% since opening its capital in HANDOUT March 2006. “We did everything we of the least affected by the global cri- penses and guide restructuring proj- intended to do, consolidating into the sis. Projections for software sales and ects. “During a crisis, businesses need largest software company in Brazil services related to increasing produc- to increase control over their opera- through a series of acquisitions and tivity and improving performance for tions in order to survive,” he observes. have given a good return to our inves- companies have fallen very little in the “When things are going well, prepar- tors,” asserts Consentino. region. In the case of software, until ing for growth becomes strategic.” In the third quarter of 2008 the September a 12.1% growth in sales was Cosentino’s optimism is sustained company’s turnover increased for the expected for 2009. By November, the on solid grounds. The corporate soft- 15th consecutive quarter, conquering estimate had only fallen to 10%. In ware market has been growing con- 705 new customers over the period terms of services, the projected ex- stantly for years, without jolts and and bringing its current portfolio to pansion for next year was reduced independent of crises. Totvs in par- more than 22,500. Net revenue rose from 10.7% to 8.6%. As for integrated ticular maintains vulnerability at bay to R$ 218.5 million, 29.7% higher than management systems and customer thanks to a broad portfolio of prod- for the same period in 2007, while ad- relationship manage- ucts targeted to vari- justed net profit jumped to R$ 34 mil- ment (CRM) software, ous sectors, diver- lion. At the end of September Totvs IDC says purchase in- sifying the risk that boasted no less than R$ 144 million tentions still run high. “Anyone with a a specific segment in cash. If Datasul is included, the “Although the full tank and new suffers more or less combined company turned over R$ market as a whole is tires will grow with the financial and 662.27 million during the first nine growing, we have no- macroeconomic psy- months of 2008. ticed that the crisis when things chodrama spreading “We have always grown more dur- has impacted large start up again” around the world. ing periods of crisis than in normalcy,” companies and some An interesting notes Cosentino, referring to the his- specific sectors,” notes Cosentino. competitive advantage for the Brazil- tory of Microsiga, the company that “The smaller a company is, the less af- ian management software industry is gave origin to Totvs, created 25 years For the Federal Government, to democratize is also to offer all Brazilians access to government bonds. That is fected it will be in the short term.” In that it has been able to create reliable ago during a period of great political why it has created the Direct Treasury, a program to sell public debts bonds through the Internet, with the National his view, as much in periods of pros- and high-performance applications for turbulence and high inflation. “We Treasury’s assurance. An excellent choice of investment, in the short, medium or long run, for you as well. perity as in difficulty, investments in the international market based on the need to go into 2009 lean, without management systems tend to grow local reality. Brazil is an almost byzan- any extra fat,” says Cosentino. “Every because companies need to improve tine country in terms of tax and labor crisis has an opening and anyone who DIRECT TREASURY, MORE OF BRAZIL FOR MORE BRAZILIANS. their efficiency and understand their questions. To develop an accounting has a full tank and new tires has a great processes better in order to reduce ex- or human-resources management chance to grow.” National Treasury Ministry For more information, go to: www.tesourodireto.gov.br Secretariat of Finance 56 P I B Strategy

Havaianas uct, as it is in Mo- international rocco for middle ads: the class consumers.” Not Just a Name freedom of bare Throughout the feet; life with world, depending more meaning said. Variations were created based on the place, the How branding helped Havaianas, Natura on an analysis of customs: “You have price of Havaianas and other companies establish a position to know the local fashion culture to can vary from US$15 to US$300. in global markets BY FLÁVIO DIEGUEZ do branding in a case like this.” Sales in the United States represent Havaianas were a good product 15% of the total. for decades, Porto said, and ex- According to Ronald Kapaz of n a strictly technical sense, One of the people responsible ported well. But now they have be- Oz Design, one of the stars of Bra- branding means building a for upgrading the old thong sandal come a brand, and sell in virtually zilian branding, communications brand. But this simple defi- to a value-added object of consumer all the world’s major cities thanks to strategies no longer see the consum- nition does not do justice desire was advertising specialist Rui branding. “We have yet to conquer er as a simple sales target. “Branding to the power that this tech- Porto of São Paulo Alpargatas. The Tokyo, but Havaianas are already a looks at the world in a new way. We Inique has given Brazilian companies strategy had basically one theme, fad in Paris, London and New York. put the person back at the center in their efforts to conquer global based on the concept of “emotional They sell almost as much in the of the question and use design to markets in recent years. It has to be comfort” allied to a well-made, ro- Philippines as they do in the US, ensure that products and objects seen to be believed. “The best known bust product – already a charac- our principal export market. We also have sense and importance in and most impressive example,” said teristic of Brazilian sandals. “The don’t sell so much in India because our lives,” he said. Kapaz believes Maurício de Almeida Prado of the DNA is always the same,” Porto there it’s a relatively expensive prod- Havaianas were successful because Plano 1 communications agency, they tapped into the universal de- “was the transformation of the sire for “disurbanization” – the de- Havaiana sandal, basically a simple sire to take off one’s shoes and feel product, into an object of desire for one’s naked feet: “Havaianas sym- consumers around the world.” To- PHOTOS: HANDOUT bolize lightness, a carefree attitude day Havaianas sell in 100 countries in a world full of competition, ef- with dozens of very distinct prod- ficiency, results and performance.” ucts to satisfy different consumers: The new popularity of Havaianas leopard skin patterns in Australia; has caused surprise – for example blue and white flags to satisfy Ar- they found their way into a presen- gentine national pride; thick macho tation made by Sergio Barcellos, an straps for American feet; and thin analyst at INPI, Brazil’s patent of- straps in screaming colors for India. fice. “I discovered in specialist mag- None of this is a miracle: the cha- azines that Havaianas were as well meleon-like metamorphosis of the known in the United States as the brand between such varied peoples VW Beetle or Boeing,” he said. The and markets was the result of work success of its branding strategy last that started in 2000, seeking to en- year won Havaianas the title of best dow the thong sandal with so-called intangible asset (“Brazilian brand” intangible, emotional values – ones category), awarded by national con- that may be difficult to evaluate but sulting companies DOM Strategy which can make all the difference to Partners and Grupo Padrão. the purchaser if they are well matched Another brand that has enjoyed to the specific exceptional international perfor- Ronald Kapaz: market in terms design is part of mance with branding firmly posi- of color, symbols, branding, a new tioned on the concept of sustain- strap width and way of seeing ability is cosmetics giant Natura. other details. something Now the company is launching a

58 P I B P I B 59 Strategy

Sadia gets tancy at the Univer- out the sity of São Paulo. message in This year, Queiroz Saudi Arabi published a study of São Paulo Alpar- gatas as the first chapter of a book entitled The Internationalization of Brazilian Companies (“Internacion- alicação das Empresas Brasileiras”) which was edited by Eduardo Vas- concellos of the same university. In the study, Queiroz argues that intangible values are also extremely real because they contributed to more than doubling the value of company shares in just a short time. “What’s more,” he said, “it made a great con- Natura’s Villares: In other words, Latin America has ing team) grew by 41.4% to exceed Peru. This year in Mexico Natura tribution to overturning the inferior outlets in Mexico enormous potential for growth.” Vil- 111,000. There are six service cen- received two prizes in the category image of Brazilian-made products

PHOTOS: HANDOUT and Colombia (left) lares said he went to Chile in Sep- ters – so called Natura Houses – in of social responsibility, another stra- in foreign markets.” tember to work on positioning the Buenos Aires (Argentina), Cali and tegic question for the company. For Queiroz, many companies campaign to conquer Latin Ameri- nia searching for inspiration and Natura brand, based on the concept Bogota (Colombia), Lima (Peru) and Branding in Brazil has been en- that have already achieved inter- can markets with a campaign based collecting aromas, flavors and local of sustainability in the context of two in Mexico City. Natura hoped hanced by the success of Havaianas national success would neverthe- on the cultural links and habits that sounds. Each of the environments the local culture. “We’re going to to inaugurate three more service and Natura. Today any academic less stand to gain if they achieved a unite the countries of the region. yielded exclusive essential oils, publish a map of sustainability pro- centers in Latin America by the analysis of internationalization stronger brand positioning abroad. “We are questioning the physi- amongst other things, and what is duced by Natura. We mapped San- end of 2008. Service strategy includes He gave as examples Sadia, Marco- cal frontiers and emphasizing the most important, they are obtained tiago for places for recycling, parks is a central part of the branding as an es- polo and even giants such as Ger- culture of the region,” said innova- sustainably. and where you can ride a bicycle,” he company’s operations, sential element for dau and Vale. While these compa- tion marketing director Joel Ponte. “We’re just getting started,” said explained. “It resulted in a 200-page and for this reason it is Branding can many companies. “I nies do not operate directly at the He explained that last March, be- Pedro Villares, operations director guide with nine maps.” commemorating the make a real have no doubt of this,” retail level, they could evolve in this fore launching “Natura Love of for the region. “In the whole of Latin In an evaluation made in Octo- fact it was recently contribution to said Mauricio Jucá de direction via branding: “What’s to America” (Natura Amor America), America Natura bills around US$100 ber, the Latin American offensive considered one of the Queiroz of the Faculty stop Sadia from selling meat directly two perfume specialists travelled million, which is just a fraction of our shows that the number of consul- best places to work in international of Economics, Admin- over the counter instead of just dis- throughout the Andes and Patago- total billing of around US$2.5 billion. tants (as Natura calls its direct sell- Argentina, Chile, and success istration and Accoun- tributing to third parties?”

THE ALLURE OF THE DOMESTIC MARKET money to buy an alternative.” Know- tioned a campaign he was involved take a friend.” The tendency to use also argues in favor of a bolder ing this, companies are investing in in for the Oral B electric toothbrush. ever-bolder branding as a weapon approach. Kashani argues that a ACCORDING TO RESEARCHER powder) in the window to show branding. Almeida Prado, of Plano “We decided to associate the brand against the crisis is consistent with major crisis presents a challenge Karen Perrotta of Mackenzie Uni- their neighbors that they can afford 1, predicts an increase in the battle with a youthful experience: the various recent facts and analysis, of the same proportions: “Market- versity in São Paulo, branding as a the more expensive brands.” between price and brand as a result customer buying the toothbrush as can be seen by the Cinescent ing professionals should be more tool offers enormous potential in Another area where brand of the worsening international crisis. received a free bungee jump.” initiative, tested in German cin- than ever prepared to show that the Brazilian domestic market by competes well against price, said “Brands that are not very well estab- In another case, that of Veet emas in July: an advertising film for they are comfortable with changes, adding intangible and emotional Perrotta, is foodstuffs. “There is lished may fall back to competing on hair removing cream, which was sun block screen showed people and that they are ahead of the attributions to brands which can great aversion to risk,” she said. price while investment in branding targeted at adolescents, the choice on the beach, then the product’s curve. They must make innova- grow amongst low-income consu- “Children acquire preferences at may suffer a reduction in some sec- was to go for sophistication. “We perfume was injected into the tion an integral part of their work, mers. “What we notice is that in school and if parents don’t buy what tors.” On the other hand, branding ran a competition in which the prize cinema via the air conditioning. creating new ideas in all aspects low income neighborhoods, people the kids want they won’t eat it, and will probably become bolder, he said. was a shopping trip to Paris, London Kamran Kashani, a professor at of the business from branding put packages of Omo (washing frequently the parents don´t have the As an example of this, Prado men- and New York with the right to the IMD Business School in Geneva, through prices and distribution.”

60 P I B P I B 61 Talent

inas Gerais is a Bra- ment a show at which his favorite theme is Yesterday Guarani, zilian State with a the guest of honor was Guarani. His work has lot of stories to tell. Elke Maravilha, then a been bought by collec- Some come from top Brazilian TV pre- tors in various parts of Today the World! the small town of senter. I was just eight the world, from Gua- MGuarani, in the so called Zona da years old and was des- rani to Israel. Mata region. More than 9,000 peo- perate to be invited to My friend Alex- Francisco Costa, designer for Calvin Klein in the ple now live in Guarani, but before take part in a Marelena andre Gaudereto – United States and twice winner of the “Oscar” the arrival of the railroad and be- fashion show, but the known as Tati – is a fore Guarani became a municipal- invitation never came. disciple of Ornellas of US fashion, is one of the talents exported by ity in its own right, at the start of The telephone never who works in lithog- this small Brazilian town BY NARA VIDAL* the last century, it was just a dot on rang. Thousands of raphy, drawing and the map in the southeast of Minas times I almost spoke to painting. His style Gerais, known by the colorful name Costa but then finally I verges on the infantile Francisco, fashion Oscar-winner, with of Espírito Santo do Cemitério. In plucked up courage and with almost primitive its own way the Guarani of today asked my friend Liliana technique, bringing friend Eva Mendes PHOTOS: HANDOUT is also present in globalization and to phone him “suggest- Drummer Paulinho Braga, another famous son of Guarani (above) to life the characters the growing internationalization of ing” that I should take of his imagination Brazil as a brand. Francisco Costa, part in a parade. She was blunt together in Guarani listening to sto- or even his loved ones in vibrant chief designer for Calvin Klein, about it: “Are there any clothes that rytellers on old farms, wrapped in color and strong shades. Last April, who has twice won the CFDA Nara could wear in a fashion show? thick blankets and sitting happily in Gaudereto took part in exhibitions Award, the “Oscar for Fashion” of She’s so good at it!” From the other front of blazing log fires in the win- in Frankfurt, Vienna and Warsaw. the United States, was born and end of the line, to my relief, came ter. Paulinho Braga couldn’t stand Of course, none of these “sons of bought up in Guarani. the answer: “But of course! Tell her math at school, but he soon made Guarani” has enjoyed such fame as Dedê, as Costa was known in to come and do a rehearsal today.” a name for beating out a rhythm on Costa, at the peak of international our group of childhood friends in Right, that was it! I had the green the school desks. This was to win fashion. With his apparent shyness Guarani, is certainly the city’s best- light to take part in the show for him a place in the Lira Guarani- and the quiet caution that is typi- known son: the famous Calvin Klein Elke Maravilha, and coming from ense, a local band, and he was the cal of people from Minas Gerais, designer now rules in Manhattan Costa himself, an emotion that I city’s greatest drummer of the time. Costa still insists on telling people and is known worldwide. But when will never forget. Later Braga went to Rio de Janeiro he comes from the small town of he went to New York at the start of My work since and played with such Guarani. I imagine that for him, our the 1980s, seeking to conquer the then has taken me legends as Tom Jo- little home town represents a safe capital of the world, he had to over- away from Brazil, but bin, Elis Regina, Mil- haven of affection and happy mem- come many problems and hone up not as a fashion model. In addition ton Nascimento, Ivan ories, a place that he would like to the artistic sense he had inherited I have been living for to fashion, Lins and Tim Maia, revisit at least yearly. Guarani will from his mother, Dona Lita. Owner seven years in Lon- Guarani grabs amongst others. To- never have the fame and bustle of of the local Confecções Marelena don where I have a day he’s a member of New York, where Costa lives and clothes shop, Dona Lita gave great real estate investment honors in music the fantastic Trio Jo- works today. But who knows, one encouragement to her son. Thanks company. Before mov- and painting bin, playing alongside day we may see him with his muse to Dona Lita’s shop, all the kids ing to the Old World, the son and grandson and friend Eva Mendes, a talented wanted clothes rather than toys. I thought of being a dancer on a of Tom Jobin. actress, strolling through the little Doryleia, the chief seamstress, pro- children’s TV show, a singer or TV Guarani also produced at least town square after eating a pizza at duced the best children’s clothes in or theater actress. Luckily my “tal- two contemporary artists who have Cesar’s Bar? the region. ent” was not recognized in Brazil become well known and won prizes. I remember I was once asked and like other sons and daughters Roberto Ornellas studied at Rio de *Additional research by Alcyone Vi- to help try out some little suits and of Guarani I became an expatriate, Janeiro’s National Fine Arts School dal Neves. Neves was a childhood dresses that months later would more mature and today married to and became known at the 1963 Na- colleague of Paulinho Braga and the be shown at the Repentinos, the a charming Englishman. tional Modern Art Salon in Rio de teacher of Costa and Gaudereto. She local club. And I remember with Various other talents emerged Janeiro. He has shown in galleries collects works by Ornellas and is the

HANDOUT a smile and not a little embarrass- from that group of kids that grew up and museums in Brazil and abroad: mother of the author of this text.

62 P I B P I B 63 Biotechnology

n recent years, Brazil has tially offers great success for retard- achieved considerable visibil- ing the ageing process – this at least ity in high-technology markets was the result of giving the drug to

PHOTOS: HANDOUT (Embraer airplanes), energy laboratory rats in large doses. Sadly (ethanol and petroleum) and it does not also offer the pleasures Idesign (fashion). Now, the world is of a good glass of wine. looking at Brazilian biotechnology. Until Souto was a pioneer in studying recently, this news would have referred resveratrol before it became fashion- just to Brazil’s recognized competitive able. “I have been researching resvera- advantage in biodiversity – the country trol since 1999” he said. “Recently the has more than 20% of the world’s flora scientific literature has shown that this and fauna, and is a storehouse envied is a super molecule with a wide spec- by researchers around the world. Now, trum of action, as an antioxidant, an however, thanks to innovative research anti-inflammatory, an antiviral, a car- by Brazilian scientists and pharmacolo- dioprotector, a neuroprotector and a gists, and the interest of new Brazilian chemical anti-carcinogenic, as well as biotechnology firms, the protecting against in- country “is heading for a fection and ischemia, transition from imitator reducing obesity and to innovator in prod- From preventing ageing.” ucts related to health.” imitation to Eurofarma de- This is the conclusion innovation in cided to research new of a detailed analysis forms of resveratrol, published in the Cana- health-related Souto said, and dis- dian magazine Nature products covered its concen- Biotechnology by the tration in vine roots is McLaughlin-Rotman Center for Global 100 times greater than in the grape. Health, connected to Toronto Univer- “This was the first patent we regis- sity. The study sheds global light on tered. Another was an invention to Brazilian potential to innovate at a sub- avoid the rapid elimination of resve- stantially lower cost than the major mul- ratrol in the organism. This is impor- tinational pharmaceutical companies. tant; it could lead to a medicine for All cases of Brazilian pharmaceu- Type 2 Diabetes.” Eurofarma, which tical success have involved exploita- licensed the patents, plans to market tion of Brazilian biodiversity, still in the medicine in 2013. its infancy. One example is the aging The all-Brazilian company has retardant developed by the Euro- ambitious plans. “Our goal is to farma Laboratory, which licensed cover 90% of Latin America with patents registered by chemist André our own operation by 2015,” said Innovation: Arigony Souto of the Chemistry Fac- Maria de Pilar Muñoz, director for ulty at the Catholic University of Rio institutional affairs at Eurofarma. Brazilian research Grande do Sul. In 2007, the company received laboratories are creating The drug is based on resvera- the green light from the European new products with the trol – a molecule present in wine Medicines Agency, the EU regula- The Best and grape juice. This poten- tory body, for a line of products. “We are now preparing to compete more potential to generate Muñoz, of good business – and even Eurofarma, and aggressively, seeking certification the company’s new from international agencies to allow foreign earnings HQ: chasing the export of products made in Brazil,” Medicine BY FLÁVIO DE CARVALHO SERPA international market said Muñoz.

64 P I B P I B 65 Biotechnology

The fine new Arigony, with pharmaceutical industry faces specif- laboratory to produce serum for an factory built beside his Sorrel: ic challenges in its quest for growth. outbreak of bubonic plague in the Port the Castello Branco two patents “Unlike what happens in many other of Santos in 1889, and today enjoys a Highway in Itapevi, in hand countries, what’s holding Brazil back global reputation for competence in near São Paulo city, has nothing to do with the country’s the field of vaccines. Now Butantan will have a fundamental role in this scientific competence, which is world is working on dengue fever, and this strategy. It was planned in accordance class,” he said. “Unfortunately Brazil- brought it to the attention of Bill and with standards laid down by the US ian progress is hampered by a series Melinda Gates. Food and Drug Administration (FDA) of relatively minor challenges.” One Using money from the founda- and will meet the current and future such is the lack of an official financing tion set up by the creator and major needs of the company both for sup- policy for the sector. Producing a re- shareholder in Microsoft and from plying the Brazilian domestic market ally innovative medicine from scratch the US National Institutes of Health and for the planned exportation and takes investments of several hundred (NIH), Butantan will over the next GILSON OLIVEIRA internationalization of operations. HANDOUT million dollars. two years invest R$20 million to “Our new installations were prepared of others which are also based on Bra- pany Pele Nova Biotecnologia. Silva, duction process.” He noted an ad- Calixto says he thinks Brazilian create a vaccine against dengue fe- to meet the most rigorous interna- zilian biodiversity. Additionally, we are former CEO of Embraer, Varig and ditional advantage: “Our product is biotechnology will continue to ad- ver. Initially this will be produced in tional quality standards,” said Muñoz. always looking for new partnerships Petrobras, brings his huge experience natural, which has enormous appeal vance and will resolve its problems. a pilot scale for clinical testing. After Eurofarma is already testing its with universities and research institu- to the world of pharmaceuticals focus- on the world market.” One of the most immediate options testing in human beings, the dengue first phytotherapeutic product for tions to develop innovative research ing on the use of natural substances. Another major step was taken by is the incremental improvement of vaccine will be made at Butantan muscular pain based on Aleurites programs in Brazil,” he said. Alonso Silva has been enthusiastic about the João Batista Calixto, a professor and medicines. “It is always possible to and sold by the Brazilian Ministry of moluccanus, sometimes called the reckoned the new medicine will be country’s natural resources ever since researcher in the pharmacology de- make small improvements to some- Health, for free application in areas Candle Berry or Indian Walnut, a on pharmacy shelves in 2012. he served as a flight lieutenant at the partment at the Federal University of thing which is already on the market, of risk in Brazil. It will also be ex- medium-sized tree which grows in start of his career in the Brazilian air Santa Catarina. After some 10 years of this is a niche which the multination- ported in commercial scale to other Old and New World tropics. World class force in Belém, in Pará State in the research he developed the first com- als ignore,” he said. “If there’s a med- countries such as South Korea and Wolney Alonso, innovation direc- Brazilian biodiversity also provides eastern Amazon. “Brazilian biodiver- pletely Brazilian medicine, an anti- icine which is good, but which has the United States which take part in tor at Eurofarma, said other projects inspiration for Ozires Silva, a partner sity is famous all around the world, but inflammatory called Acheflan which some side effects, we can improve the the clinical testing. are in the pipeline. “This is just the first and board president at the new com- Brazil makes little use of it. Anvisa (the is now sold by Aché Laboratories, a formula to make it more effective.” Brazilian agency responsible for the 100% Brazilian-capital pharmaceuti- This is a process that works well RICARDO BENICHIO quality of pharmaceutical products) cal company. in today’s market, which is eager for Ozires and Good Herbs reports that 90% of medicines used in Acheflan also represents the first more natural cures. One of the secrets Biocure: Practical applications of the new medicines based on Brazilian biodiversity Brazil are imported,” said Silva. major step in Aché’s internationaliza- of Acheflan’s success over similar new skin Pele Nova Biotecnologia was cre- tion plans. The product will be sold products, such as the popular Cataflan Vegetable Active from latex origin Product ingredient Function ated in 2003 based on the work of two in Canada and the United States in and generic equivalents, is that it is researchers from the University of São a partnership with RFI Ingredients, produced from vegetable extracts and Still without Resveratrol, the Antioxidant, anti-infl ammatory, a commercial Paulo who discovered the regenera- while in Mexico the partnership dat- not from chemical substances. Sorrel (Rumex same substance antiviral, cardioprotector, name; to be tive properties of natural latex in the ing from 2006 is with a local pharma- acetosa) responsible for neuroprotector, chemical launched 2013 the benefi cial anti-carcinogenic, as well tissues of the esophagus. The product, ceutical company called Silanes. Bill Gates is watching by Eurofarma effects of wine as reducing obesity Laboratories which carries the commercial name Aché invested over R$190 mil- São Paulo’s Butantan Institute, a of Biocure, is awaiting patent registra- lion in a new industrial complex to long-established and venerated insti- Cordia, aka Wild- An anti-infl ammatory indicated Sage, Black-Sage, for the treatment of chronic tion in 60 countries. It has been ap- bring its production laboratories up tution that is internation- Erva Baleeira, Achefl an, sold by Alpha- tendinitis and muscular pains. proved by Anvisa and has various ap- to international standards, with state- ally known for snake re- Maria Milagrosa Aché Laboratory humuleno It is just as effective as Catafl an plications ranging from healing ulcers of-the-art equipment that meets the search, comes under the (Cordia verbenacea) (Diclofenac diethylammonium), without collateral effects to treatment of severe burns. most rigid regulatory norms. Exports State Health Secretari- “This is an exceptional business,” by the Brazilian company currently at. Today, the institute is Para rubber tree Biocure, of Pele Serves as a matrix for tissue (Hevea brasiliensis) Nova Biotecno- Latex regeneration following said Silva. “We have created the represent just a small portion of its also making its contri- logia; on sale burns or internal lesions prospect of a range of absolutely new billing, around R$4 million a year, ba- bution to the develop- products, which are normally pro- sically to Latin American neighbors. ment of new medicines, Indian Walnut Aleurites, now Vegetable (Aleurites testing with extract with Painkiller and duced with very expensive technolo- Peter Singer, the doctor who co- with enormous commer- moluccanus) the Eurofarma various active anti-infl ammatory gies, not just in terms of the research authored the study published in Na- cial potential. Butantan Laboratory ingredients but also the extremely complex pro- ture Biotechnology, said the Brazilian started as an emergency

66 P I B P I B 67 Gastronomy

Fogo Samba, Brazil Churrasco, the “Brazilian” in Singapore: it all churrascaria in looks Brazilian, Macau: rodízio but it isn’t...

lent would have, and with the ex- Martin Spikerman was chosen as ception of the occasional oriental general manager for the planned Sin- detail which creeps into the buffet gapore restaurant. His first step was “Some More it might seem totally Brazilian. But to spend four months at the Churras- in fact, it’s the initiative of three caria Palace, a traditional Rio restau- businessmen born and bred in this rant next to the Copacabana Palace Asian tiger where the population is Hotel. There he learned the ins and Steak, Sir?” split between Chinese, Malay, and outs of the business. On his return, Indians. In Singapore, people are in addition to know-how, Spikerman more accustomed to eating with took with him eight churrascaria Entrepreneurs from around the world have copied chopsticks or with their fingers than waiters, often called passadores in PHOTOS: HANDOUT Brazilian barbecue know-how: churrascaria meat with a sharp knife and fork. Brazil, and the word entered Sin- At the end of the 1980s the part- gapore vocabulary. Architect Jean- restaurants are even conquering Asia BY ADRIANA SETTI ners found themselves in a Brazil- Claude Pardon, also responsible for ian churrascaria in Lisbon, Portugal, the Churrascaria Palace, was chosen succulent slice of barbe- stonework that distinguishes one of where they wolfed down massive to design the new restaurant. He cov- Another “Brazilian” cued rump steak slides the world’s most famous beaches, quantities of barbecued meat. It ered the walls with large oil paintings restaurant in Saigon, on to the customer’s however, this synthetic cloth pattern was an unforgettable experience, signed by Brazilian artists such as Vietnam: a Swiss owner plate and nestles be- serves as a mere visual reference to so much so that in 1993, the prin- Lenita Holtz. PHOTOS: HANDOUT tween ample piles of the exotic Rio de Janeiro seafront ciple partner David Gabriel, then in “We conceived our restaurant with more flavor and texture,” ex- Malaysian capital of Kuala Lumpur mixedA salad, as colorful as the Rio half a world away. But around nine the business of ship refurbishing, to be luminous and airy; we tried to plained Gabriel. “Eating red meat is (called Carnaval, because of prob- Carnival. Waiters zigzag between the o’clock on a Friday night, the Brazil flew to Rio de Janeiro for a closer capture a little of the atmosphere of not so widespread in our culture, so lems registering the name) and one tables with meat-laden spits while the Churrasco restaurant is one of the look at the churrascaria business. Rio which, for us, spells sunshine, I preferred to go with something that in Ho Chi Minh City in Vietnam. delicious aroma of meat fat sizzling busiest in Singapore’s fashionable After three days cranking up his fun and cosmopolitan people who people are already used to. I love Bra- Joint ventures are under discus- over the grill wafts around the restau- Sixth Avenue. cholesterol in the city’s principal like to enjoy life,” said owner David zilian meat, but I’m in a minority on sion for the coming years with res- rant, a mouth-watering enticement The restaurant operates the rodizio restaurants he decided the Gabriel. His Asian clientele loves the that,” he said. Similarly, the desserts taurants in India, Indonesia, and for patrons still waiting at the door. rodizio system where patrons help concept would work in Singapore, barbecued rump steak and chicken are a little less sweet than in Brazil. Kuwait. “We are proud of our food Outside, where thermometers nudge themselves to salad from a buffet a city where the importance of gas- hearts but he had to cut back on salt The formula has been a great and also of the fact that the Brazil- 36º C and the humidity hangs heavy, and waiters bring barbecued meat tronomy in the local culture can be to respect local taste. Also, the meat success. In 14 years the restaurant ian ambassador to Singapore is one the sidewalk is covered with wavy until gorged customers wave them seen in the innumerable “eateries” is Australian. “People in this part of has served around one million cus- of our customers,” Gabriel said. black and white designs like Copa- away. The Singapore restaurant has – centers with several food stalls, the world aren’t used to Brazilian tomers and expanded to two sub- Brazil Churrasco is far from be- cabana. Rather than the Portuguese everything that a Brazilian equiva- which are packed all day long. meat, which has a stronger aroma sidiaries in Singapore, one in the ing the only such restaurant to find

68 P I B P I B 69 Gastronomy

In order to adapt to refined Spanish tastes, the Rubayat has had to further enhance its reputation for quality. “The Spanish are much more demanding in terms of cuts of meat and seasonal products,” said Belarmino Filho, in charge of group internationalization. “If artichoke is in season, the customer will demand artichoke. The gastronomic culture in Spain is much stronger than it is in Brazil and this has meant that I also have become more demanding.” To get the Madrid operation off the ground, Belarmino Filho battled to get work visas for 140 Brazilian Belarmino Filho, employees; 60 have already been se- Fogo de Chão in who took the Washington: one Rubayat to Buenos duced away by competitors: “I have of 11 in the US Aires and Madrid become a great trainer and supplier

PHOTOS: HANDOUT of labor in Madrid.” red the the sophisticated Rodizio Rico al- geles. Three more were due to be The Spanish restaurants of the success in the Orient. Its main com- However, the know-how to open other. And because the restaurant ready has three restaurants and en- inaugurated in the United States Rubayat group serve 16,000 custom- petitor in Vietnam, Au Lac do Brazil, the restaurant came from Adriano is inside a casino, the indicators joys success amongst both home- through the end of 2008, adding to ers per month, who eat their way has three restaurants in the country. Villela, a Brazilian executive, who resemble roulette chips. When he sick Brazilians and the local British the six restaurants already existing through four tonnes of meat and The first was inaugurated in Ho Chi despite being responsible just for was hired to manage the restaurant, public. In Barcelona, the Rodizio in Brazil. Unlike Porcão, which is generate billing of ¤8 million per year. Minh City, formerly Saigon, in 2003. the business accounting side has Brazilian Iuri Martins Volcato was, (not connected with the London geared more to the local Brazilian Nevertheless, Belarmino Filho, who Three years later one opened in Ha- been a churrasco fan since he was believe it or not, a magician. Vol- restaurant) is packed out for lunch community, the Fogo de Chão bets came back to live in Brazil in Febru- noi, and last September a new sub- a child. As might be expected, the cato also starred in a famous real- and dinner. on attracting more American trade ary of this year, decided to put on hold sidiary was opened in Ho Chi Minh restaurant attracts many Brazilians ity show in Macau, and customers The insatiable foreign appetite and has found favor with a list of his European expansion plans which City. Despite serv- who are homesick still beg autographs. The restaurant for unlimited quantities of barbe- customers that even includes ex- included new restaurants in Lis- ing caipirinha made for their favorite owners decided that, despite hav- cued meat confirms a tendency president George Bush. bon, Barcelona and London through with rum – “cachaça national dish, seeking absolutely no prior experience noted by Brazilian entrepreneurs. The Rubayat, one of Brazil’s 2010. “I over-estimated the European is very expensive In Shanghai, ing to add a good in the area, Volcato would give it One of the pioneers in the inter- most famous churrascarias and the market in volume,” he said. “I’m not here,” owner Jan where everything protein boost to the the essential Brazilian touch. NBA nationalization of the sector was winner of many awards, started its interested in anything smaller than Stromler explained local diet based on stars and singers Sting and Celine Porcão, a Rio de Janeiro restau- internationalization project via Ar- Madrid, so Barcelona and Lisbon are – the restaurant is superlative, rice and vegetables. Dion have been spotted enjoying the rant belonging to the Mocellin gentina and in 2006 established a simply out of the picture,” he said. serves 12 types of there are over Among them is Bra- caipirinhas and rump steak. family, which opened its first US foothold in Spain, the native land But what about London? The Brazilian meat and 40 Brazilian zilian Ambassador The Carnaval Restaurant in restaurant in Miami in 1992. To- of Belarmino Fernandez Iglesias problems that Belarmino faced also has feijoada to Vietnam João Kuala Lumpur (a subsidiary of Bra- day Porcão has branches in New who founded the chain after com- when trying to get work visas for his black bean stew churrascarias Mendonça. zil Churrasco) has various competi- York, Lisbon and Milan. In 1997 the ing to Brazil in the 1950s. The proj- Brazilian employees, plus the reces- and arroz carreteiro In Macau, the tors. One is Bom Brazil in the bus- first Fogo de Chão restaurant was ect for the Rubayat Madrid started sion which now threatens Europe, (rice with chopped jerky) on the most famous restaurant in the Ve- tling bohemian night-life region opened in Dallas, Texas, by broth- in 1998 but it was only in 2005 that have led him to redirect his focus side. Stromler, a Swede married to netian Macau Resort, a luxury hotel of Bukit Bintang. In Shanghai, in ers Arri and Jair Coser together the owners of the Cabo Maior res- to Latin America. Mexico City and a local woman, uses meat from New casino, is the Fogo Samba. It oper- China, where everything is in the with partners Aleixo and Jorge taurant finally agreed all the details Santiago in Chile are top targets for Zealand, but the chicken comes ates as a rodizio with traditional side superlative, there are more than 40 Ongaratto. This venture into the of the negotiation and rented their the next two years. “This is the time from Brazil as does the salt to mari- dishes including kale, roast manioc churrascarias, know as “Brazilian US market was so successful that prime location on Rua Juan Ramon to be cautious and to study things; nate the rump steak. Just like the flour and cheese bread. The Brazil- style barbecue”. Fogo de Chão now has a total of 11 Giménez. Today the group has three when the situation gets better we’ll churrascaria owners in Singapore, ian atmosphere includes table indi- The wave of meat restaurants subsidiaries, including restaurants restaurants in the Spanish capital, take another look at expanding in Stromler fell in love with Brazilian cators used to tell the waiter if you run by foreign businessman is not in major cities such as Washing- one of which, the Porto Rubayat, Europe.” Might that also be the mo- churrasco during a visit to Portugal. want more meat: green one side, restricted to the Orient. In London, ton, Atlanta, Chicago and Los An- specializes in sea food. ment for churrascarias in Asia?

70 P I B P I B 71 Rankings The champions for doing business 1 New York 2 Tokyo Growing doesn’t always improve things Are Rio de Janeiro and 3 Paris COSTA RICA showed well in another ranking, this time for quality of life in 4 London Latin America and the Caribbean, published by the InterAmerican Develop- 5 Hong Kong ment Bank. On scale of 1 to 10, where 10 is best, Costa Ricans scored 7.4 against São Paulo global cities? 6 Singapore 6.2 for Brazilians who placed 9th in the overall list of 23 countries. Economic growth doesn’t always translate into immediate satisfaction: in Chile, Peru, 7 Seoul Ecuador and Trinidad and A ranking by Foreign Policy magazine places the two volvement. On the overall ranking, 8 Shanghai Tobago, GDP per capita great Brazilian metropolises fi rmly on the path of São Paulo placed behind three major 9 Beijing growth was high between BRICs metropolitan regions: Beijing 2001 and 2006, but citi- 10 Amsterdam globalization, but the drawback is always the same: (12th); Moscow (19th) and Shanghai zens declared they were th 11 Frankfurt inadequate human capital BY ARMANDO MENDES (20 ), but ahead of two others: New less satisfied than their Delhi (41st) and Mumbai (49th). With- 12 Chicago counterparts in Guatema- in Latin America, São Paulo lost out to la, Jamaica, and Colombia,

13 Vienna MARCELO CARNAVAL / AGÊNCIA O GLOBO EVERY YEAR BRINGS a fresh crop tions with Hong Kong lying 5th (see Mexico City (25th) but came narrowly where per-capita growth of rankings and projections. The full story: www.foreignpolicy.com/ ahead of Buenos Aires (23rd). 14 Madrid was lower. Citizens of most recent list of globalized cities story/cms.php?story_id=4509). However, the relative strengths Haiti declared themselves Costa Rica: good 15 Los Angeles standard of living placed São Paulo and Rio de Janeiro The study, conducted in part- and weaknesses of each city can best least satisfied of all. 16 São Paulo amongst the most globalized met- nership with A.T. Kearney and the be seen in the individual categories. ropolitan regions in the world, and Chicago Council on Global Affairs, São Paulo placed global 16th in the rank 17 Bangkok Brazil’s standing could be measured sought to measure the influence and of best places to do business, but this 18 Brussels against other BRICs countries and degree of international integration was the only category where the city Emerging economies looking bad 19 Taipei continental neighbors in terms of of 60 global metropolises – just two showed amongst the world’s top 20. DRAWING WITH THE ITALIANS, less honest than companies from competitiveness, quality of life and were from Brazil. The creators of São Paulo performed worst in 20 Sydney the richest nations but cleaner than those from other BRICs. That’s future prospects. the ranking claim it is a genuine in- terms of human capital; it dropped to cationClassifi based citieson which cescompanieshouseof headoffi listed theinFortune Global 500;cities where thelargest40 service companies ces; have the offi strength of the capital markets;ow of goods the and fl the number of global conventions they host how Brazilian multinationals appear in a 2008 ranking called the Bri- São Paulo placed 31st and Rio de dex of globalization, a phenomena 36th position, pulling down its over- be Payers Index, drawn up by Transparency International. The NGO Janeiro placed 47th on index of glob- in some ways matching the urban- all ranking. Buenos Aires and Mexico asked 2,742 executives which were the countries whose multinational al cities published by Foreign Policy ization of the planet. City placed better than São Paulo in Brazil’s more companies were most likely to pay bribes to win contracts abroad. The magazine, part of The Washington The index weighted 24 criteria in this important question, 18th and 19th competitive, but ranking has 22 countries and Brazil appears in 17th place beside Italy. Post publishing group. The usual sus- five groups: business environment; respectively. Unlike São Paulo they In first place with the cleanest hands are companies from Belgium pects – New York, London, Paris and human capital; information exchange; both scored better than their general not much.... and Canada. In last place was Russia; while China, Mexico and India Tokyo – grabbed the first four posi- cultural experience and political in- ranking in terms of human capital. BRAZIL HAS RISEN in the Glob- appear between the Russians and the Brazilians. al Competitiveness Index pub- São Paulo: in lished by the World Economic the top 20 for Forum, the debating society of business the advanced economies. It rose Global diplomat from 72nd position in 2007 to 64th in 2008. But it’s still not IT’S THE YEAR 2021: China, India and the United States are on the brink of

MARCOS HIRAKAWA/ IMAGEPLUS time to celebrate: Brazil is the war to control supply routes for gas and petroleum. Only one country enjoys least competitive of the four the confidence of the three super-powers to undertake diplomatic negotia- BRICs nations, behind China tions and avoid disaster. That country is Brazil. Is this empty futurology? No: (30th place) India (50th) and this is one of the scenarios foreseen in the document called Global Trends Russia (51st). In Latin America, 2025: A Transformed World, prepared by the National Intelligence Council Brazil was soundly beaten by (NIC), a Washington think-tank which brings together national security agen- Chile (28th) and still trailed the cies and advices the American government. In the study – the most recent in second squad composed of Pana- a series of political and strategic projections made by the NIC – the fictitious ma (58th), Costa Rica (59th) and Brazilian foreign minister in 2021 writes to a former president revealing his Mexico (60th, but falling). strategy for breaking the ice between the coming super powers: he schedules a round of negotiations for Rio de Janeiro at the height of Carnival.

72 P I B P I B 73 Exports

ince 1958, Haco has been Ricardo Lowndes. “We are analyz- responsible for what many ing each possibility with great care.” soccer fans might see as one He has also not yet decided if Haco of the most important jobs will undertake the Asian investment in the world: it makes the by itself, by opening Sofficial team shirt badge of the Brazi- a subsidiary, or if it HACO: X-RAY lian Football Confederation. Founded will acquire a com- Production line 80 years ago in Blumenau, in the Ita- petitor. :: Founded: May 1928, in in Blumenau: labels for top Blumenau (SC). jaí Valley in Santa Catarina, Southern Haco first estab- brands like Calvin Brazil, the company still makes the lished a presence :: Billing: divided between Klein and Dior badges for virtually all of Brazil’s top outside Brazil 15 cloth labels (52%), laces teams, but the main line of business is years ago, in Eu- (17%), prints (11%), printed often less visible. Almost 65% of Haco’s rope, when it set up labels (11%), synthetic She renamed ing. It installed its first computer billing comes from the production and a factory in the Por- labels (9%). Value not the company as controlled systems and electronic sale of labels for clothing and accesso- tuguese city of Co- published. Haco, a name looms in 1980 and has not stopped ries, items which sometimes are hidden vilhã, an important :: Employees: 2,400. compose of the since. The next technological leap almost out of sight. Nevertheless, the textile industry cen- initials of her will be popularization of a label fi ve – Blumenau, company’s client list is just as star-stud- ter between Lisbon :: Factories: husband Hein- that allows for identification via Massaranduba and ded and globally known as the Brazilian and Oporto. “This rich who was radio frequency. “This means for Criciúma (Santa Catarina soccer team: Calvin Klein, Christian was our headquar- opposed to the example that people would be au- State), Eusébio (Ceará Dior, Guess, Gucci, Hugo Boss, Gren- ters for expansion family staying in tomatically authorized to enter an State) and Covilhã dene, Adidas, Nike and Victoria’s Secret, into Europe,” said Brazil. event just by wearing a t-shirt with (Portugal). amongst many others. Many of these fa- Lowndes. “Now we The couple the badge, which has a micro chip mous clients buy more than just labels; plan to do the same :: Exports: 33 countries. directed the built into it,” said Alberto. Haco’s 800 looms and specialized ma- thing in Asia.” The Half of sales destined to business until Another of Haco’s secrets can be chines make Jacquard cloth and deco- mission of oversee- US market, 25% to Europe, 1960 when Hein- found at its thread processing plant rative components for women’s shoes, ing international- 20% to Latin America rich died. Haco, at Massaranduba, 20 km from Blu- carrier bags, handbag handles, laces ization is increas- by then special- menau, where the company has its and other such items. ingly entrusted to Alberto Conrad izing in labels, passed to the con- own dyeing operation. This makes Haco now produces over six billion Lowndes, 26, the youngest of Ricar- trol of Carl, their son, and made its Haco the only major company in items a year, and in Brazil enjoys 75% do’s three sons who holds a degree first export sale in 1976, to Germany. its sector in the world with the ca- Lowndes: mission is to command Haco’s of the label market. The company was in business administration from the In 1999, with the death of Carl, the pacity to color its own raw mate- internationalization for a long time global leader in its sector, IBMEC business school in Rio de Ja- group presidency passed to son-in- rial – competitors buy their threads

PHOTOS: CRISTIANE FONTINHA with over 100 clients in 33 countries, neiro and has already been named as law Ricardo Lowndes. ready dyed. “This means we can get but last year it fell to second place when official successor to his father in the In addition to the headquarters exactly the color the client wants,” US conglomerate Avery Dennison final- general management of the company. and the Portuguese subsidiary, Haco said Alberto. ized the acquisition of two competitors. has factories in Criciúma and Mas- Another company differential Haco does not publish its earnings, but In the family saranduba, both in Santa Catarina, lies in the fact that Haco does not said billings grew 18% in 2007 and were Haco makes no secret of being a and since 2000 a factory at Eusébio just produce items to order. A team Hidden predicted to rise a further 23% in 2008. genuine family company and is in the Northeast state of Ceará. This of 20 people including designers and Winning back global leadership will convinced that for the time being is the company’s second largest in- stylists is available to help create new require more than simply fast growth. this model will not change. The stallation, capable of producing two designs and to suggest possible al- There’s no way to be world number company was created in 1928 by Al- billion items per year, and is located terations to items ordered by clients. one without establishing a presence in berto’s great-grandmother, Johanna close to the Port of Pecém, a plus The company also enhances its repu- Treasure Asia, today the global center for cloth- Conrad, who came from Germany factor for the company’s interna- tation by sticking rigidly to the punc- ing manufacture. Haco predicts it will to visit a sister in Brazil, fell in love tional expansion plans. tuality requirement instilled by Jo- High technology, punctuality and exclusive services be established on the continent within with the country and decided to hanna. “This is absolutely essential. a couple of years. “India looks like one stay. Johanna bought a small cot- High technology Can you imagine a top brand produc- help Haco fi ght for world leadership in production of of the better alternatives, but it’s not the ton shoe-lace factory with six looms The company is betting on cutting- tion line grinding to a halt because of labels for clothing BY MAURÍCIO OLIVEIRA, IN BLUMENAU only option,” said company president and 10 employees in a wooden shed. edge technology to keep on grow- a lack of labels?” said Alberto.

74 P I B P I B 75 Internationalization Fair Trade César Cine, of Cinex: knowing when to advance; when to pull back The idea was to continue sup- plying the North American market, Made in Cariri using the advantages of the NAFTA free trade pact and the lower production costs, principally lower Caboclo, a Brazilian store in Barcelona, labor cost. While the average salary of a Cinex worker in the United has transformed peasant sandals from the States was US$2,400 per month, in Northeast drylands into a sensation amongst Mexico it was just US$400. “But Europeans BY ADRIANA SETTI, IN BARCELONA the lower salary was just an illu- sion,” said Cine. “The Mexican employees were irresponsible with no he traditional leather peas- HANDOUT work ethic.” ant sandals of the Brazilian Despite being so close to the Northeast have made a long

United States, the costs on the fron- journey from Cariri, deep in PHOTOS: HANDOUT Foreign Clients? tier could outweigh the advantages. Tthe drylands of Ceará, to the pages Model Mireia is helping to promote “To reduce the costs of transporta- of sophisticated Spanish editions of traditional sandals from the Brazilian Only for Exports tion you have to ship full containers, magazines such as Elle and InStyle. Northeast: ¤48 in Lima’s Spanish store which is difficult for a small com- Entirely hand-made by a cooperative goal has been to boost exports to 20% pany with small scale production,” of craftsmen in Ceará, with a sole of After two frustrated attempts to set up said Cine. Using full containers his recycled tire and rough leather, the a factory abroad, Cinex has decided freight costs represented at most sandals have become a sensation 10% of production cost, but when in Barcelona thanks to São Paulo to concentrate production at home he was forced to use split contain- businessman Juliano Lima. He’s the BY ARLETE LORINI, IN PORTO ALEGRE (RS) ers, freight costs could be as high as owner of Caboclo, which is a retail 50%. The lower value of the dollar store and wholesaler located in the was a further complication for the heart of Barcelona’s Gothic Quarter usinessman César Cine has of billings as a way of reducing opera- foreign subsidiary, given that part and dedicated exclusively to prod- Cariri. They sell in the Catalonian taken four important deci- tional risks. But last year foreign sales of the raw materials were brought ucts made by poor communities in capital for ¤48 and are exported sions in the last six years were just 4% of the company’s total from Brazil. “We ended up being Brazil. Everything is produced in to France, the United King- about the internationaliza- billings of R$39.5 million. uncompetitive in the American line with Fair Trade rules which fa- dom and Germany. They’re Btion of Cinex, his company which Cinex’s foreign adventures con- market,” he said. vor family-scale production and ban also going to Bulgaria, where makes aluminum and glass doors sumed investment of approximately Plans were for the Mexican fac- practices such as the unreasonable Caboclo has just opened its first for furniture at its headquarters US$2 million. The first attempt, in tory to reach annual billings of US$8 exploitation of labor. “Working with franchise in the resort of Varna, the in Bento Goncalves, in the moun- the United States, came after two million, but it never exceeded US$3 this kind of product is more than just Ibiza of Eastern Europe. “The Scan- designs. The ecological jewels are tainous Serra Gaucha region of Rio years of exportations to that coun- million. Amongst all the problems he a trend, it’s an obligation,” Lima said. dinavians are more aware of the im- distributed throughout Europe and Grande do Sul State. Two decisions try. It was a bid to be closer to cli- faced operating abroad, Cine identi- The sandals are the most popu- portance of Fair Trade, and they fell account for the majority of Cabo- were bold: to open factories in the ents and to reduce logistics cost. fied labor as the most challenging. lar product for the super-hip shop- in love with my sandals at first sight,” clo’s annual ¤110,000 billing, but United States, in 2002, and in Mex- The experiment failed in part be- “Before starting any international pers at Caboclo. But the product Lima said. that could soon grow. A new col- ico, in 2005. The other two were cause of disagreements with the venture, you have to have the right has been slightly modified to sell The company doesn’t exist just lection dubbed “Jungle Chic” (Selva more painful: to close down these North American partner, and in part person to manage the foreign opera- in Europe. “It was necessary to cut on esthetics. To start up Caboclo in Chic) was launched last September two foreign outposts in 2005 and through immigration problems for tion,” said Cine. “It’s no good trying the rubber in a more ergonometric 2005, Lima toured Brazil looking for in Madrid at a splash party starring 2007 respectively. “We lost money, employees following the September to administer something from afar.” form, improve the type of glue used products that were ecologically and model Mireia Canalda, former girl- but that’s just the price of experi- 11th terrorist attacks. Cine thought Cinex gave up the idea of manufac- and make a few improvements to politically correct that might find friend of Brazilian soccer legend ence,” said Cine. everything would be different when turing abroad just as the company the design, and it’s successful,” he favor with Europeans. In Belém, a Ronaldo. Designer was Brazilian The company will still seek for- he switched the American factory in Brazil was experiencing a boom, said. Lima took an initial stock of major city at the mouth of the Am- Marzio Fiorini, known in Europe eign customers, mainly in South and for a Mexican location. He growing 20% in 2008. “With civil 200 pairs of sandals to Caboclo in azon, he found Ecojóias, a small and the US as the “man of rubber” America, but from now on production chose the city of Saltillo, close to the construction growing so fast, the 2006, then in 2007 the volume rose company making jewelry from for his sculptural jewelry made – as will be concentrated in Brazil. Since U.S. border, and went ahead without Brazilian domestic market was once to 700. And this summer, no less seeds and other recycled Amazon the name would imply – from an- the company was created in 1997, the any local partner. again great for us,” said Cine. than 1,400 pairs were shipped from materials, but with sophisticated other of Brazil’s Amazon riches.

76 P I B P I B 77 Globe-Trotter – Business Traveler

Africa: Flying The Best Dangerously Business Hotels PHOTOS: HANDOUT FLYING IS BECOMING ever safer, but not necessarily in Africa and some other regions. FORBES MAGAZINE LOVES According to data from the International making lists, not least its much- Airline Passengers Association (IAPA) the awaited “400 richest people in the average of accidents involving airplanes world’. At the end of November, built in Western nations, which carry 90% Forbes ranked the world’s best of global traffi c, fell by half between 1996 hotels for business travelers. One and 2005, when there was one fatality essential these days is a good per four million ﬂ ights. In Africa, the ac- workout room, and here two hotels cident rate is 100 times greater than in the came out top: The Peninsula, in United States. It’s not for nothing that the Chicago, has a spa of almost 5,000 great majority of airlines on the European square meters, while the Westin Union Transport Department blacklist are Palace in Madrid has a penthouse from Africa. Included on the list – and so China via fi tness center with a view over the banned from Europe skies – are the national Frankfurt: city. No Brazilian hotel made the shorter companies of Indonesia (Garuda), Afghani-

list: www.forbes.com/2008/11/17/ AP / IMAGE PLUS stan (Ariana), North Korea (Air Koryo) and hotels-travel-best-forbeslife- Angola (TAAG). Check out the full list: http:// Westin Palace, cx_pl_1117travel_slide_7. Getting to China ec.europa.eu/transport/air-ban/list pt.htm Madrid: a penthouse spa html?thisSpeed=30000 AIR CHINA stopped fl ying direct from São Paulo (Guarulhos) to Beijing via Madrid shortly after the 2008 Olympic Games. However, there’s a Lufthansa/Air China fl ight from São Paulo In Paris, a to Beijing with a connection in Frankfurt. This is the quickest Unclaimed Baggage How to Survive a room with route, and takes only 24 hours. a view CAROLINA DE SÁ FIRST-WORLD AIRLINE companies Terrorist Attack on lost 15.4 items of baggage for every 1,000 China Night Out passengers in 2007, up almost 3% on the rate Your Hotel the year before. In 2006 a total of 30 million items WHILE THE CHANCES OF being in an hotel IF YOU WANT TO fi nd out how the new capitalists of China went missing. The annual cost to the airlines is over US$2.5 that’s attacked by terrorists are pretty slight, get their fun, one good address is the Red Capital Club. A mix- billion or US$90 per wandering suitcase. Frequent travelers maybe the same as winning the lottery, that’s ture of hotel, restaurant and bar, this occupies a luxurious tra- know the importance of having good identifi cation on your what happened to travelers recently at the ditional mansion with internal courtyards set in an old hutong bag, both inside and outside. At check-in, make sure your Mumbai Taj Hotel. At the end of November (narrow alleyway) off Dongsi Jiutiao Avenue. Guests can smoke luggage label matches your destination, and if possible terrorists machine-gunned innocent guests cigars in the cigar room, but perhaps the biggest surprise is the take direct fl ights: 10% of luggage is lost in connections. in the lobby, corridors and rooms. A similar menu based on the favorites of Communist Party leaders from thing happened at the Marriot in Islamabad, the 1950s and 60s. Reservations: www.redcapitalclub.com.cn Pakistan, last September when the hotel was A Quick Nap destroyed by a truck bomb. Dozens were NEXT TIME you fi nd yourself in São Paulo’s Guarulhos Interna- killed. Jeffrey Goldberg, a specialist writing Home Sweet Home tional Airport and facing a long fl ight delay, don’t despair: there’s in The Atlantic Magazine offers hints on how a new “day hotel” on the ground fl oor of Terminal 2 (Zone C). The to survive in such a tragedy. Two tips: choose IF YOU’RE STAYING for any length of time, temporary Fast Sleep offers comfort- hotels which have already suffered a terrorist apartments are often better than hotels: they cost less and able rest cabins similar to attack; and get a room between the 4th and offer comfort similar to home. In order to compete, the best a train. Basic cost for the 6th fl oors: you’ll be far enough from the lobby temporary apartments in the world’s leading capitals now offer minimum one hour peri- where the worst things normally happen, but fl at-screen TVs, broad-band internet and a kitchen stocked with od is R$52.50, or R$68.25 low enough to climb down a fi reman’s ladder. good wine glasses. For temporary apartments in New York, Paris with a full private bath- Check out all Goldberg’s tips: http://jeffrey- and Rome check out, respectively: www.furnishedquarters.com, room. Per additional hour Guarulhos Airport: goldberg.theatlantic.com/archives/2008/11/ www.monparis.fr and www.romanreference.com sleep while you wait the charge is R$15. how_to_stay_alive_in_a_terrori.php.

78 P I B P I B 79 Globe-Trotter – Express Tourism Just a few hours… GRAB A CAB and check out what’s new in the traditional neighborhood of Palermo. Until the start of the 1990s people went to Palermo only for a car repair shop or to visit old relatives. To- day Palermo is one of the liveliest and most interesting places in town, with boutique hotels, restaurants and the coolest stores. Focus on the six blocks within calles Gurruchaga, Costa Rica, Malábia and Gorriti. To fi nd what interests you most, there’s a map with all the shops and streets: www.saberadondeir.com. The empanadas ar. There’s no time for lunch or dinner, but fi t in a quick stop at La at La Cupertina, Buenos Aires Cupertina (Cabrera, 5,300) where owner Cecília Hermann makes in Palermo Beyond Calle fabulous empanadas – half the size and double the ﬂ avor! TOCKFOOD / KEYSTOCK Florida If you have a whole day… DINNER AND A TANGO show, DON’T BE IN A HURRY, because stantini. If you’d like to try what the shopping on the Calle Florida and the best shops open after 11 and the Óleo Guide rates as the city’s best Sunday morning at the San Telmo museums not until midday. If you meat, book a lunch table at the lit- antique fair. Well, we all know KEYSTONE GRUPO / PRESS ANP wake up early, take a stroll in the tle La Cabrera restaurant. The atmo- Buenos Aires has much more to Botanical Gardens (next to the Zoo) sphere combines refi ned simplicity offer. If you have any time left after which has specimens from all over and a (false) lack of pretention, and work, a few hours or days, here are the world and a small area delicately the wines are excellent. Ten minutes some things worth checking out in perfumed with aromatic herbs. Then by cab then gets you to the Patio the Argentine capital: go to the Latin American Art Muse- Bulrich, the city’s most fashionable um (MALBA), between Recoleta and shopping mall where you’ll fi nd ab- Palermo – and don’t miss Tarsila do solutely everything, including the La Amaral’s enigmatic Abapuru at the Martina store with high-fashion polo top of the escalator. MALBA offers and horse riding gear. A tiring day de- excellent architecture, an excellent serves a civilized rest in the gardens of collection and a wonderful example the new Palácio Duhau – Park Hyatt Malba Museum: don’t of private philanthropy, because the Hotel, with an excellent espresso or Miss Tarsila’s Abapuru whole collection was given to the afternoon tea, while you watch the city by businessman Eduardo Con- early evening lights go on.

If you have a weekend… Faena: IN ADDITION TO THE ABOVE, prepare for two or three profound gastronomic champagne mojito experiences. In Puerto Madero, the Faena Hotel (also know as the Universo Ho- CAROLINA DE SÁ tel) is a post-modern cathedral shaped like an industrial warehouse, designed by architect Philippe Starck. It’s a place to see and drink an aperitif – try the Mojito de Champagne. For dinner, book ahead of time at the Casa Cruz (www.casa-cruz.com): a top-quality contemporary menu; an excellent national and international wine list; and a sensual, sophisticated and discrete atmosphere. It’s the preferred choice for local executives and leading politicians. For something completely Casa Cruz: different try Nectarine, an excellent French restaurant: small, classic, sensual elegant and intimate (+54-1-4813-6993). With the Teatro Colón still closed for a seemingly endless renovation, there are two other excellent cultural options: the hilarious musical El Fugor Argentino (yes, the Argentines do laugh at themselves!) every Saturday at 10 o’clock in Buenos Aires: the Catalinas Arena Theater (www.catalinasur.com.ar). And the Ballet atmosphere is Argentino group, led by Julio Poka, especially if dancer Hernan Diquin

AGE FOTOSTOCK / IMAGEPLUS guaranteed will be performing (check the program at www.juliobocca.com).

80 P I B HANDOUT P I B 81 In Transit • by Rui Porto*

Don’t Be Afraid to Enjoy Yourself! How to enhance your personal life and further your career by using business trips to transform information into knowledge – and have a good time

MY PROFESSIONAL RESPONSIBILITIES Companies that are concerned about their skilled have for several years led me to travel abroad professionals have encouraged executives to broaden their quite frequently, and I have noted that many horizons outside of their specifi c areas, for example into executives seem to follow an unwritten rule music, art, gastronomy and literature. But the fact remains which says that business trips must be as that many people voluntarily impose upon themselves an miserable as possible, and can’t be productive absolute separation between work and pleasure, with no for the company unless they involve nothing relaxation. You don’t need much time for great experiences but hard work, stress and exhaustion. – visit a major museum, grab some minutes in an art Obviously the main objective of a business gallery along the way, catch a good concert or simply walk trip – to attend a sales convention, visit clients or around new places. It’s personally having new experiences whatever – is always the job. In this respect the that helps transform information into knowledge. Brazil was always famous for its natural beauties. professional must be mature enough to know I have my own guidelines to help make business what his company expects him to do, and when trips more productive and entertaining: Today it is also well-known for its aircraft exports. and how. Nevertheless, when work’s over there’s Always take a different route between the hotel and work; no law says you have to sit in front of your laptop Take an interest in things you maybe just catch a with whatever room service can provide, or go glance of: new streets, a new building with interesting to the same fast-food outlet beside the hotel. If architecture, or attractive shop windows – these in particular you fi nish work on a Friday why not extend your offer a wealth of information for anyone in sales; Brazil is progressively renowned all over the world for stay – at your own cost, of course – in cities like Invite colleagues to escape from the hotel snack bar and Buenos Aires, New York, Lisbon or wherever, and have lunch in a nice place, or who knows have a sandwich in a the technological sophistication and innovation of turn a routine trip into an enriching experience. pleasant park. The second half of your day will be more fruitful; Hotel fi tness centers are its aircrafts, automobiles and electronic equipment. normally pretty dreary places, For the entrepreneurship of its companies that reach HANDOUT so if there’s time, opt instead for a walk or a jog in local streets new boundaries. For the leadership of its deep water or a park. Hotels normally have oil exploration as well as for the good quality of its maps with suggested routes; Take advantage of the hotel ethanol and biodiesel. For its researches in seed, concierge. He can normally give you vaccine and medical drug production. Also, for great tips about interesting things in the city and in the immediate conquering all this with social inclusion and respect neighborhood of the hotel; to citizenship. The sum of all those achievements Never forget to pick up a good guidebook for the city you’re visiting. makes Brazil a robust economy and a respected Everything you can learn about the commercial partner world-wide. place will help improve the quality of your trip and some moment will prove useful in your career.

Rui Porto is director of communications and media at São Paulo Alpargatas and a columnist for the Viagem & Turismo magazine. The world has learned to respect Brazil.

82 P I B And Brazil trusts in Brazilians.