National Franchises on All Continents

WHAT THERE IS TO SEE IN EXPRESS Year IV TOURISM ¤ 5,00 Number 16 NOV/DEC 2011

BARCELONA totum R$ 12,00

Brazilian brands take off National franchises spread around the world and already account for 700 retail outlets on all continents

INTERNATIONALIZATION ARCHITECTURE BEACON Companies buy Brazilians make plans for Gérard Moss, The and invest houses and commercial man who ﬂ ies in to abroad again buildings abroad protect water supplies

Contents

50 HAndout/WEG MARCo PAStoRi MARCo

GuiLHERME toSEtto GuiLHERME 46 78 10

BEACON Gérard Moss aims to show how Flying Rivers carry 28 water vapor from Amazonia to the fertile land in the South Andressa Rovani and Armando Mendes DEE CONWAy DEE AGRICULTURE 32 Ceará fi rm starts to grow melons in Senegal for the European market Andréa Flores

ANTENNA INTERVIEW Rio dancers Thiago Soares and Roberta Marquez 46 Marco Stefanini wanted to be a geologist but 10 in the spotlight at the Royal Ballet, in London ended up as the owner of Brazil’s biggest IT Ligia Aguilhar company, represented in 21 counties Nely Caixeta WASHINGTON OBSERVATORy 26 What happened to the American dream? INTERNATIONALIZATION Unemployment and inequality are reelection 50 After the the post-crisis slowdown Brazilian threats to Obama’s multinationals invest in the world market again Flávia Carbonari Suzana Camargo

4 P I B 36 CoveR Brazilian brands, from shoes to ice cream, spread around the world through franchises Lilian Primi HAndout/ GiRAFFAS/FABiAno SiLVA GiRAFFAS/FABiAno HAndout/

GLoBE-tRottER 74 EXECUTIVE TRAVEL ARCHITECTURE Refurbished Lisbon hotel regains its fame, and 60 Brazilian architects ser foot on other continents a traditional parisian delicacy again, from North America to Africa Marco Rezende Lilian Primi EXPRESS TOURISM ARTICLE 78 Barcelona, proud capital of Catalonia, seen 68 Swiss canton development agency executive comes through the eyes of a Brazilian from Minas to Brazil to look at technology companies and Brasilia who has settled down Jocelyne Pepin Fabiano Fontenelle

FINANCE IN TRANSIT 70 Overseas investors gain new funds specializing in 82 How to use INDyCAR racing to sell Brazilian Brazilian shares and bonds sweets and chocolates to American customers Rosa Symanski Rafael do Prado Ribeiro

P I B 5 Editorial totUM exCelÊNCiA eDitoRiAl Nely Caixeta

PiB BRAZiliAN CoMPANieS Go iNteRNAtioNAl

A TWO-MONTHLY MAGAZINE FOCUSING ON The Brazilian INTERNATIONAL BUSINESS AND ECONOMICS Publisher Nely Caixeta • [email protected] way of living Editors Armando Mendes and Marco Antonio Rezende Contributors to this edition Andrea Flores, Paris; Andressa Rovani; Caio Sakagami; Filipe Pelepka; Fabiano Fontenelle, Barcelona; Flávia in the world Carbonari, Washington; Lilian Primi; Lígia Aguilhar; Lizia Bydlowski; Nara Vida, Londres; Rosa Symanski; Suzana Camargo For the traveler who arrives in a foreign city, it is always a pleasant Photo editor: Guilherme Tosetto surprise, among unknown (or global) names, to find at a street corner Designer or in a corridor in a shopping centre, a familiar brand name. For a Bra- Renato Dantas zilian, it will probably be a clothes shop or a shoe shop or a parfumerie Cover or a fast-food chain- generally a franchise of a brand he or she sees and Andrea Ebert

consumes at home. Together they form a little-known and studied Copydesk and Preparation niche in the internationalization of our national economy: the rapid Mary Ferrarini expansion of Brazilian franchises around the world. Translation Chistine Puleo; John Fitzpatrick; John Jardine About ten years ago, there were only 15 of them; today there are al- Paul Steele - Tristar Traduções Ltda most 70, with 700 franchised units throughout the world. And this is ADVERTISING no exaggeration. Today Brazilian Brands can be found in Saudi Arabia, INTERNATIONAL AND BRAZIL (55-11) 3097.0849 In Portugal, in Australia and the United States, as well as in Angola, [email protected] Mozambique and Japan. The reporter Lilian Primi listened to business Av. Brigadeiro Faria Lima, 1903, cj. 33 Jardim Paulistano - 01452-911 - São Paulo - SP executives, civil servants and also academics who are beginning to stu- SCREENMEDIA F: 55 11 3451.0012 dy the area and trace an outline of this form of internationalization. Of Celso Marino (11) 9141.2938 course it does not have quite the political and economic weight as the [email protected] Emilio Ruffo (11) 8585.4192 world expansion of the industrial and extractive giants we all know, but [email protected] Letra MÍDIA it carries with it a strong element that publicizes the Brazilian “way of Rua Teodoro Sampaio, 1020 - cj. 1302 life” and the image of brazil as a global country. CEP 05406-050 - Pinheiros - São Paulo –SP F: 55 11 3062.5405 | 55 11 3853.0606 But this does not mean we should cease to care about the “traditio- PRINTING nal” forms of internationalization. The reporter Suzana Camargo has IBEP Gráfi ca Ltda taken a look at the movement of big Brazilian multinationals after the DISTRIBUTION IN BRAZIL credit crunch of 2008/9. Researchers and research studies consulted Support: DPA Cons.Editoriais Ltda. agree that they are in good shape, picking up again on their rate of ac- (55-11) 3935-5524 – [email protected] quisitions and investments around the world, after an almost inevitable Where to buy past copies: direct from the publisher pause brought on by the crisis. The internationalization of Brazilian Administrative Consultant companies is keeping up with the rate of growth of the internal Bra- Luiz Fernando Canoa de Oliveira zilian market, which certainly represents an excellent performance. [email protected] EDITORIAL CORRESPONDENCE In the Beacon section, we highlight the steps of a man who has cho- Av. Brigadeiro Faria Lima, 1903, cj. 33 sen Brazilian nationality, the businessman, aviator and environmenta- CEP 01452-911 - São Paulo - SP [email protected] list Gérard Moss, who is dedicated to trying to protect this country’s Signed articles do not necessarily represent the opinion of the editors. Totum reserves the right to edit waters, one of its greatest but most neglected heritages. Finally, the or summarize letters. Washington Observatory column- news of the US capital through Bra- Legally responsible journalist zilian eyes- will cease to be written by our competent Flávia Carbonari Nely Caixeta (MTb 11 409) PiB – Brazilian Companies go international after this edition. she is taking up new professional commitments whi- is published by Totum Excelência Editorial ch will not allow her to do so. But happily she will continue to contri- Av. Brigadeiro Faria Lima, 1903, cj. 33 CEP 01452-911 - São Paulo - SP bute to PIB in other ways in Washington. (55-11) 3097.0849 - [email protected] Nely Caixeta Print run for this edition Portuguese – 15.000 English – 5.000 Print run audited by 6 P I B THE EXPRESS CHARMTOURISM

Year IV 5,00 ¤ Letters Number 15 OF PUNTA DEL ESTE SEP/OCT 2011

totum R$ 12,00 R$

From apprenticeto teacher Dear editors, I enjoyed the interview with Daniela Barone Soares very much, as published in Edition 15 Brazil becomes an international cooperation player, of PIB. Unfortunately, a lot of people still see transferring successful experiences in agriculture, health and training to poorPAY countries ATTENTION NGOs as a kind of weekend charity, or even as WORK ABROAD TO HER! EMERGING CLIENTS Footwear specialists and Daniela Barone is a way of diverting public funds. I believe that Global banks pilots from Rio Grande teaching British NGOs put Brazil at the do Sul set up Brazilian to be more efﬁ cient center of their colonies in China NGOs play a fundamental role for the proper world strategies 16/10/11 05:32 functioning of society as a whole, although the 1 importance of both individuals and corporations PIB15-ENG.indb is clear in so far as them adopting the challenge of obtaining meaningful social results with seriousness and professionalism. The interview was certainly inspirational. Congratulations for another edition replete with excellent articles. Ana Caroline Barreto Sanita BUSiNeSS MANAGeR SÃo PAUlo – SP

I am Controller of a Brazilian company with business in Latin America. I read with interest the relevant material that PIB has published in its bi-monthly editions about the business of internationalized Brazilian companies. The articles underscore our conﬁ dence that, with a lot of hard work and local entrepreneurial talent, the business opportunities around the world will become even more interesting and promising. Having followed Brazil for over a quarter Congratulations for the excellent work you do. century now, I see PIB astestament to the JoSÉ lUiZ DoRiGHello development of Brazil from a somewhat insular SÃo PAUlo – SP countryto a country integrated in the World. As a European, I am particularlypleased to The September/October of PIB was, without a see the strong ties that Brazil has developed shadow of doubt, the best of the year. I particularly with Europeancountries, as explained in the enjoyed the article on the work that Embrapa is last issue of PIB. In my own university Imeet doing to help the government of Mozambique to Brazilian students and researchers almost implement modern agriculture in the country’s every day and, as afrequent visitor to Brazil, savannahs. When the company is cited in any article I see a country eager to receive the World. we get to know a little more about the enormous PIB keeps me up to date, not just on business efforts our researchers are making to develop new and development, but alsoon research and technologies – and this is something Embrapa culture, reminding us why Brazil is now among does the best. Thanks to its researchers, Brazil is theleading developing economies of the World. currently a world leader in the sectors of agriculture BeNt JoRGeNSeN and livestock. PRofeSSoR, DePARtMeNt of MAtHeMAtiCS ClAUBeR BARBoSA De AlCANtARA AND CoMPUteR SCieNCe, UNiveRSitY PAtRoCÍNio - MG of SoUtHeRN DeNMARK oDeNSe - DeNMARK

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RESERVATION CENTER BLUE TREE HOTELS • São Paulo: (11) 3018 1848 • Fax: (11) 2185 2501 • Other locations in Brazil: 0300 150 5000 [email protected] 10 liGia aGUilHar Antenna P IB P IB and attractinternationalstars”. muscle tokeeptheathleteshere players, togetherwiththeeconomic revealing thenaturallymost gifted of providingacombination will beinthefortunateposition over thenextfewyears,andBrazil strong willgraduallyloseimportance although themarketsstillcurrently not dissociatedwiththeeconomy, is Fernando PintoFerreira,“football to thePluriconsultoriaeconomist, and Kaká,RealMadrid.According tied ineighthThiagoSilva,Milan, Pato (6),Milan,Hulk(7),Porto,and Dani Alves(5),Barcelona,Alexandre In thesamelistinAmericasare: Alves (Barcelona),in19thposition. world aretheBrazilianplayerDani the 20mostvaluableplayersin Brazil inthissurvey. Alsoincludedin in action,thebestrankingeverfor the bestplayersinworldare in fourthplaceamongthosewhich remaining inBrazilputsthecountry The studyalsoindicatesthatNeymar ranking, LionelMessi,ofBarcelona. of thenumberoneplayerinworld million (R$122million),halfthevalue player’s marketvalueis(Euros)50 made bytheconsultancyfi rm,the world. Accordingtotheevaluation in theAmericasandsixth valuable playerinBrazil,thesecond Pluri Consultoria,heisratedthemost the world.Inasurveycarriedoutby one ofthemostimportantplayersin Santos strikerNeymariscurrently soccer playerintheworld2011, Ball, awardedbyFifatothebest group ofcontendersfortheGolden Although notincludedinthefi nal rising neymar 1

FiFA 1 The cost of Neymar: 1st in 2 Brazil, 2nd in A new global the Americas an 6th in the world car in São Bernardo 2 VW Designer: Not only new foreign auto makers are betting on new centre Brazil.With an eye on the growing competition, in the ABC the Brazilian affiliates already installed here integrated for some time are increasing their investments into world in the country. In December, Ford announced technology that it has earmarked R$800 million for the production of a new global car in São Bernardo 3 HSBC: more than half Latin 1 do Campo, in ABC Paulista. The new model, America’s which, based on market speculation, could profit comes well be a replacement for the KA, will arrive from here on dealers’ forecourts before 2015. “Until then, 100% of our cars will be global”, said the president of Ford Brasil and Mercosul, Marcos de Oliveira. In total, Ford plans to invest R$4.5 billion in Brazil between 2011 and 2015. Volkswagen decided to expand its Design Center, at its Anchieta unit, in São Bernardo do Campo, to house the entire process of creating new projects. The Center has a total area of 2,360 m² and is integrated and connected with the Group’s global technology. “This is an important step in ensuring our interaction with the headquarters and even other companies in the Volkswagen Group; is quicker and more flexible”, highlights the vice-president of Product Development at Volkswagen do Brasil, Egon Feichter. H andout

3 From Mexico City to São Paulo HSBC is transferring is headquarters in Latin America from Mexico City to Sao Paulo from February 2012 onwards. In charge of the move is the Argentinean Antonio Losada, who is currently directing operations in Argentina and will be the new executive-head for the region. he will replace the Brazilian Emilson Alonso, who has been the CEO for Latin America since 20087, but is now retiring. Currently, Brazilian operations account for more than half HSBC’s profit in Latin America. With this move, the bank aims to cut costs and strengthen its position in the region. H andout

P I B 11 Antenna 1 Blood, Sweat and Bunyons

This is the harsh reality of the two Brazilians Thiago Soares and Roberta Marquez, prima ballerinas at the Royal Ballet in London. Being members of one of the world’s most prestigious corps de ballet has its price: care over personal appearance, innumerable engagements in the name of the company- before the Queen of England, even- and military discipline, to perform complex roles on stage with the smile and the lightness that characterize classical ballet. Soares is from São Gonçalo, in Rio. He began as a street artist - doing street dance, capoeira and learning circus techniques. He only came into contact with classical ballet when he was 16, almost by chance. “My teachers noticed that although I liked street dance, my long arms and legs were almost perfect for classical ballet,” he recalls. “From then on, I began to work with people who believed in my potential .” Before reaching London, he did a year’s training at the legendary Kirov Theatre in Moscow. Roberta, the daughter of a Portuguese father and a Peruvian mother, has a different story. She began to dance when she was three years old- “in Brazil, boys learn football and girls learn ballet,” she says- and never wanted to do anything else. She trained at the Municipal Theatre Ballet School in Rio de Janeiro and became the prima ballerina of the most traditional Brazilian ballet company before being invited by Natalia Makarova to dance with the London Royal Ballet. In 2004, she was invited to become a member of the all-star London company. As stage partners, Roberta and Thiago danced together at the Municipal Theater in Rio de janeiro and won important prizes in Moscow in 2001. They met again at the Royal Ballet — a dream for any classical ballet dancer, a feat achieved with talent, persistence and incredibly hard work by these two young Brazilians. y C onwa D ee

12 P I B 1 1 Rio dancers Roberta 2 Rock in Rio goes Marquez and Thiago to the banks Soares in the corps de to finance the ballet of the Opera House: internationalization hard work and prestige of the festival

Rock in Rio seeks partners for festivals abroad The Medina family is seeking partners, through BTG Pactual Bank, to make it viable to hold Rock in Rio music festivals outside Brazil. Businessman Roberto Medina, who founded the franchise, wants to organize a new European edition in the United Kingdom or in Germany; one in the USA and another in Latin America, with Mexico and Colombia as likely destinations. According to Medina’s daughter, national and international firms are on the list of potential partners, but none are yet close to a deal. The family plans to keep a majority share in the business and attract a partner with the profile of an investor to reduce the risks of the expansion. The last festivals held in Europe, in Lisbon and Madrid, are believed to have cost around 25 million euros. The costs of the Brazilian version were estimated at around 95 million reais.

2 rudaemmim /G H andout

P I B 13

Antenna

Angra is the biggest exporter

The municipal district of Angra dos Reis (R.J.) Brazilian balance of trade by municipal district leads Brazilian exporters for the second year in succession. Data from Secex (the Ministry of Brazilian exports between January and October 2011 Development, Industry and Commerce’s External Trade Secretariat) show that in the ﬁ rst months MUNICIPAL TOTAL of 2011, Angra was the country’s biggest exporter, DISTRICT STATE EXPORTED (US$) with a total of US$12 billion, almost double the amount in the same period of last year, when 1 Angra dos Reis RJ 12,068,691,004 exports were US$6.9 billion. The main product 2 Parauapebas PA 9,740,981,071 exported from Angra dos Reis is oil, sent mainly 3 São Paulo SP 7,190,478,638 to China, the USA, Chile and India. After that, among the municpal districts that exported most 4 Rio de Janeiro RJ 5,300,642,177 between January and October are Parauapebas- 5 Santos SP 4,442,269,860 PA (US$ 9.74 bilhões), São Paulo-SP (US$ 7.19 São José dos 6 SP 4,323,082,336 bilhões), Rio de Janeiro-RJ (US$ 5.3 bilhão) e Campos Santos-SP (US$ 4.44 bilhões). See graph. 7 Vitória ES 4,168,671,357 São Bernardo do 8 SP 4,141,786,194 Campo 9 Paranaguá PR 4,095,852,770 10 Nova Lima MG 3,851,883,810 11 Anchieta ES 3,567,973,446 12 Itabira MG 3,100,775,908 13 Itajaí SC 2,807,827,084 14 Macaé RJ 2,749,266,952 15 Guarulhos SP 2,278,839,395 HAndout

16 P I B Natura: in search of partners to take its cosmetics to new places 2 around the world HANDOUT natura seeks partners for international expansion

The biggest company in the Brazilian an exporter and became a manufacturer, cosmetics sector is seeking overseas partners producing part of its portfolio in Argentina. to make its international expansion viable. In 2011, the same happened in Colombia and This is revealed in an interview given by the Mexico, by means of local partnerships. Director of Natura, Alessandro Carlucci, to Currently, 8.8% of the company’s turnover- the British newspaper Financial Times. R$5.1 billion in 2010- comes from international He said the company plans to set up joint operations, a volume which does not yet justify ventures in countries like the UK, the USA the company making goods itself, but does and Russia in its expansion outside Brazil. The allow it to operate by means of outsourcing, reason for this is that Natura has given up its besides being a more sustainable measure plan of setting up its own overseas operations in the company’s view. Natura’s receipts outside Latin America and for that reason abroad recorded a rise of 38.8% in the ﬁ rst is seeking partner companies, especially in nine months of 2011, totaling R$ 344.3 million, markets where its strategy of direct sales has and the expectations are that in less than 2 proved popular. “We realized there are cultural years, 50% of the company’s turnover from factors and ways of doing business in other international operations will come from countries that we are not aware of.” he stated. products manufactured outside Brazil. Natura has not conﬁ rmed these points, but The company’s international expansion began the direction the internationalization process in South America, in the 1980s. Today the has been taking since 2010 indicates that company has operations in Chile, Bolivia, these new partnership could really occur. In Argentina, Colombia, Mexico (photo) and Peru. October 2010, the company announced it was In 2005, Natura carried out its only experiment looking for new suppliers in Brazil and abroad. outside Latin America, setting aside its direct At that time, Natura stopped being merely sales model to open a shop in Paris, France.

P I B 17 Antenna

1 Serafina comes to São Paulo São Paulo was the city of choice for the renowned New York chain of restaurants Serafina to open its first store outside the United States, in 2010. And this move appears to have paid off. In only four months, revenues at the first outlet, in Jardins, reached R$ 5.5million, almost doubling the total estimated revenue of R$13 million in 2011. As a result of this success, the MPRD Group owned by businessmen Marcelo Alcantara, Paulo Torre, Rubens Zogbi and Davide Bernacca, responsible for bringing the chain to Brazil, intends to open five more units before the end of 2012, three of which will be in São Paulo, one in Rio de Janeiro and another in Brasília.

2 asconcellos V C assio 1 Brazilians open in Paris The renowned Brazilian chef, Alex Atala, and designers Fernando and Humberto Campana are the first Brazilians to take part in Paris des Chefs, an event held annually in Paris that gathers chefs, photographers, designers and artists making all kinds of presentations in pairs about new ideas from their respective countries in articles published in Gastronomia Artística. The event, that is held between January 22 and 24 at the Maison de La Mutualité, is in its fourth edition and attracts more than 1,500 professionals from the sector. During the three days of the event, visitors can assist demonstrations in large auditoriums and visit the stands set up N emeth by various companies to see the new ideas in kitchen accessories, culinary

books, olive oils, jams and other products related to gastronomy. W ellington

18 P I B 1 Alex Atala at ‘Paris des Chefs’: gastronomy, photography and design

BB accelerates in Patagonia 2 Restaurant 3 Serafina: five Since it acquired Banco Patagonia, two years more outlets in ago, Banco do Brasil (BB) has dedicated Brazil in 2012 itself to cleaning house and starting the process of integrating the two institutions. 3 Banco However, the bank has more ambitious Patagonia: plans for 2012. The aim is to attract mid BB took its and small-sized companies to its portfolio strong points of clients, strengthen its operations in the to Argentina credit card and insurance segments and implement the Brazilian payroll credit system in Argentina. “We want to take our strong points to Patagonia and take advantage of the know-how acquired In

the Brazilian market”, said the regional H andout vice-president of Banco Patagonia, João Carlos Nóbrega Pecego. To ensure these objectives are reached, he has convinced 200 strategy is to strengthen the corporate sector companies currently included in the bank’s by developing a structure that allows its portfolio of corporate clients to migrate Argentine subsidiary to become a benchmark their payrolls to the institution. Having among the companies involved In the import/ done this, BB will finally be able to offer export sectors between Brazil and Argentina. loans discounted directly from employees’ “We believe that South America will still be payrolls. BB’s core business is not focused an economic block and we are not scared on Patagonia’s strong point to now in of the potential effects the European crisis individual lending, and small businesses. The may have in the region”, emphasizes the VP.

Amazon arrives in Brazil Amazon has not yet brought its online store to Brazil. The company decided to start up its operations in Brazil with Amazon Web Services (AWS), a cloud computing service that in just a few weeks has attracted some sizeable Brazilian clients, such as Gol Transportes Aéreos and Peixe Urbano. The company’s aim is to provide this service throughout Latin America from Brazil. According to the senior vice-president of Amazon Web Services, Andy Jassy, with the local operation, the clients that already used the service in the United States, Europe and Asia can now run their applications in Brazil, which reduces the latency. In addition, the system also resolves the problem of potential clients, such as banks, governments and insurance companies, which, for regulatory reasons, cannot store their data abroad.

P I B 19 Antenna

Quick news :: Vale is the second Brazilian company to have its credit rating upgraded to A- by the risk classifi cation agency Standard & Brazilian Poor’s(S&P). The rating, which indicates the company’s credit risk is below average, had previously been extended to Ambev. In attraction compensation, Vale reduced its investment plan for 2012 by 11% Three different surveys to US$21.4 billion, of which 71% will be dedicated to actions in released at the end of Brazil. The president of the mining giant, Murilo Ferreira, denied 2011 identifi ed Brazil as any link to the crisis saying that this change was an option for one of the most attractive more fi nancial discipline and precision in terms of the company’s countries in Latin America allocation of capital. for foreign investment. The fi rst of these, a study :: Embraer Defesa e Segurança (Defense and Security) and Por- carried out by Citigroup, tuguese companies OGMA - Indústria Aeronáutica de Portugal indicates that global and EEA - Empresa de Engenharia Aeronáutica, signed partner- institutional investors ship agreements to develop engineering components for the are more optimistic KC-390 twin-engine military transport and refueling aircraft. about the performance of The contract underscores Portugal’s commitment to purchasing shares in Latin America. the KC-390. According to the survey, 47% of those interviewed :: The results of Brazil’s participation in the 29th edition of the believe that Brazil is the International Havana Trade Fair (FIHAV 2011), in November, most attractive market were well above expectations voiced by the business people in the region, followed by taking part. The event generated approximately US$10 million Colombia (20%), Mexico in business,which is expected to total US$50 million next year, (12%) and Chile (11%). almost 70% more than forecast. The most optimistic are the investors based in the :: The World Travel Market Latin America, a business fair for US, followed by Brazilians. the tourism sector that has been held for 32 years in London, will For the most part, (89%) have a Latin-American version in 2013, in São Paulo. This will be believe that the Ibovespa the fi rst time this event will be replicated in another location. will reach 64,555 points before the end of 2012, :: The Supreme Court of Peru plans to send a delegation of which would represent an judges to Brazil in February, to get to know the IT project being appreciation of 15.2%. A implemented by the Judiciary, developed by the National Judicial survey by the consultancy Council (CNJ). The Peruvian Judiciary will be evaluating the pos- fi rm A.T. Kearney indicates sibility of computerizing the court system in the country. that among the emerging countries, Brazil, India :: American company Direct Edge intends to open a stock and China receive the exchange in Rio de Janeiro in the last quarter of the next year to most in terms of foreign compete with Bovespa, which effectively has a monopoly in the direct investment (FDI). country. This will be the company’s fi rst business foray outside Brazil went from 4th to the US. The plan is to invest in quality and speed as differentials. 3rd place and already attracts more than one :: The story of Brazilian design was the theme of the show + half of the investment 55 Brazil Exhibition, held at The Gallery@ The Civic, in South destined for Latin America. yorkshire, in England. The event’s curator was David Sinclair, and brands such as Melissa, Carbono and Havaianas took part.

20 P I B

Antenna

All roads lead to Brazil Brazil received a series of missions from Europe and the United States in the last quarter of 2011, most of which were strictly interested in developing trade relations with the country, given It is seen as an important player in the current global scenario. Check out what went on during some of the main missions during the period:

1. Scotch Whisky for cachaça A committee of Scottish authorities led by for Brazilian cachaça. The reason for this the country’s Secretary of State, Michael was the 130% increase in sales of Scotch Moore, and 23 representatives from in Brazil in the last decade, which is seen various companies in segments such as as a great market opportunity. Trade agriculture, education and sports, were in agreements were also made, the main Brazil at the end of November. The group one being the partnership between the UK showed an interest in setting up trading Department of Export Credit and HSBC, partnerships in several areas, notably the which guarantees a line of credit of US$ oil and gas and beverage sectors. They 1 billion to fi nance investment programs want to establish a trade agreement to In oil exploration and installations on facilitate the exchange of Scotch whisky the east coast of Brazil by Petrobras.

2. Wind and solar energy in the sights of the dutch Among other visitorslooking for business opportunities was the Minister of Agriculture and Foreign Trade from Holland, Henk Bleker. The Dutch accounted for 28% of Foreign Direct Investment last year in Brazil. The interest is mainly in partnerships in the energy sector, such as offshore oil and gas exploration and sustainable alternatives such as wind and solar. During the visit, the opening of a new offi ce of the Dutch Foreign Investment Agency (NFIA) in Brazil was announced, probably in São Paulo.

22 P I B Michael Moore (center), head of the Scottish mission in São Paulo: energy and beverages 3. Massachusetts focuses on innovation At the beginning of December, it was the turn of the governor de Massachusetts, Deval Patrick, to lead another trade mission to Brazil. The areas of interest in terms of potential collaboration are biotechnology, biopharmaceuticals, information technology (TI), telecommunications and fi nancial services. The committee also exchanged information with businesspeople from the main Brazilian digital players. In spite of the level of interest, the low rates of innovation in Brazil did not go unnoticed. For the governor of Massachusetts, a state famous for its universities and high-tech centers such as MIT, private businesses need to build up ties with the academic community and increase investment aimed at innovation. uk in BRAZiL in uk 4. is China here? Another recent visitor was the governor of Florida, Rick Scott. Brazil is currently the main trading partner with this American state. Exports to Brazil totaled US$13.7 billion in 2010, an increase of 29.6% compared to 2009, and sales of Brazilian goods to the US, via Florida, totaled US$2.1 billion in 2010. Brazil is the seventh supplier to the United States, with Florida as the main port of entry — a fact which leads to Brazil being considered the China of Florida. Fabio yamada, director of Enterprise Florida, the state’s investment agency in Brazil, said that the Americans are interested in attracting manufacturing plants, restaurants and retail companies. “We are also interested in energy, ethanol, biotechnology and Brazilian aerospace engineering”, said yamada. “The State has 17 ports, and would certainly like to receive

HAndout more shipments of Brazilian products.”

P I B 23 t i s n o w r a z i l s t u r n i B ’ . B e o n e o f t h e f i r s t t o ta k e a d va n ta g e . a d v e r t i s e i n PiB m a g a z i n e .

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THE EXPRESS Year IV CHARMTOURISM ¤ 5,00 Number 15 SEP/OCT 2011 OF PUNTA DEL ESTE

totum R$ 12,00

From apprentice to teacher

Brazil becomes an international cooperation player, transferring successful experiences in agriculture, health and training to poor countries

EMERGING CLIENTS WORK ABROAD PAY ATTENTION Global banks Footwear specialists and TO HER! put Brazil at the pilots from Rio Grande Daniela Barone is center of their do Sul set up Brazilian teaching British NGOs world strategies colonies in China to be more efﬁ cient

PIB15-ENG.indb 1 16/10/11 05:32

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Calhau-PIB-DUPLA-ENG.indd 42-43 23/12/11 13:10 t i s n o w r a z i l s t u r n i B ’ . B e o n e o f t h e f i r s t t o ta k e a d va n ta g e . a d v e r t i s e i n PiB m a g a z i n e .

The magazine appears in Portuguese and English and is distributed in embassies, universities and the most important international trade fairs.

THE EXPRESS Year IV CHARMTOURISM ¤ 5,00 Number 15 SEP/OCT 2011 OF PUNTA DEL ESTE

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From apprentice to teacher

Brazil becomes an international cooperation player, transferring successful experiences in agriculture, health and training to poor countries

PIB15-ENG.indb 1 16/10/11 05:32

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Calhau-PIB-DUPLA-ENG.indd 42-43 23/12/11 13:10 A View from Capitol Hill news from the US with a brazilian slant flÁVia carbonari

The United States has always been pointed to public policies as the villains seen as a land of opportunity, destined in the story (taxes, campaign fi nancing for greatness. These dreams have rules, labor laws, etc.), notably those seemingly been shattered over the past over the past three decades, which have few years. Barack Obama was elected, always tended to favor the wealthier. in 2008, on the promise of changes that Between 1979 and 2006, middle-class could rebuild them. But the balance income rose 21% while the share of the of his government during this term of poorest grew 11%; as for the richest 1% pre-election 2012 debates suggests a of the population, their income reached country divided, with Congress split: a new peak, with a 276% increase. The republicans on the attack, and many dream of the land of opportunities has democrats on the verge of disillusion. reached a stalemate. The year 2011 was one in which the Fareed Zakaria, one of the most in- government almost ground to a halt fl uential journalists in the US, published twice due to discord about the country’s in 2011 an updated version of his book defi cit; with members fi ghting to extend “The Post American World”. He analy- tax cuts and unemployment benefi ts; ses the effects of the fi nancial crisis and with the country risk downgraded; mil- Obama’s election. To explain the de- lions occupying Wall Street to protest cline in US power, Zakaria emphasizes about the lack of jobs and growing “the rise of the rest”, notably emerging Where inequality. countries such as China, Brazil and In- In its last edition of 2011, the dia. The dream of the Manifest Destiny, has the renowned magazine Foreign Affairs of a country destined for greatness carried a controversial message on the and hegemony, has also dissipated. A front cover: Is America Over? In refer- government that came to power based Great ence to the headline, the magazine on the hope of rebuilding social justice included articles that showed inequal- and restoring some prestige for the US American ity, on the one hand, and budget indisci- swings into its last year in offi ce with pline and the external policy approach, meager accomplishments. As a result, dream on the other, have contributed to the the delusion of millions of Americans loss of US global hegemony. In the fi rst may well be what tips the balance for article: The Broken Contract – Inequality or against Barack Obama in the 2012 gone? and American Decline), George Packer elections.

Dilma, a powerful voice in the new Global South In its second edition of the “100 Top Global Think- also emphasized Dilma’s aims to continue to boost ers” of the year, the infl uentialForeign Policy included the country in the globalized world and praised her president Dilma Roussef among the names cited in priorities to reduce poverty and inequality. Also on the 2011 as representing a “powerful voice in the new list were the Argentine, Luis Moreno Ocampo, a judge ‘Global South”. The Brazilian president was at number in the International Criminal Court (44 in the rank- 42 on the list. Remembering her past as a guerrilla who ing); the Cuban blogger, yoani Sánchez (88); and the fought against the military dictatorship, the magazine Venezuelan Teodoro Petkoff (99), the main opposition contrasted Dilma’s “low-profi le” style, given Brazil’s leader against the Chavez government. At the top of favorable economic scenario, compared to other lead- the list were 14 leaders of Arab Spring or Arab Awaken- ers who resort increasingly to populism. The magazine ing revolutionary group.

26 P I B 1 Obama: 2 Dilma: reelection among the in 2012 in global thinkers doubt in 2011

Visa Waivers on

the agenda BC HANDOUT in 2012 Democracy, want Confi rmation is expected to buy some? in the fi rst semester of 2012 Latin America is currently living of Dilma Roussef’s visit to through the longest period of democ- the United States. As well racy in its history. The authoritarian- as energy and ethanol, the ism of the past now appears remote, private sector in both coun- although other specters may under- tries has already included a mine these democracies, which led Visa Waiver Program on the the Organization of American States, agenda. The program would the OAS, to publish the study “Poli- dispense with the need to tics, Money and Power: a dilemma get a visa prior to travelling for Latin American Democracies”. for visits of up to 90 days Released in December in Mexico, the for countries with low levels report indicates this relation as one of illegal immigration into of the main challenges to the demo- the US. The lobby group in cratic regimes in the XXI century. The favor of this move is strong study analyses the impacts of money in Florida, one of the favorite on the electoral processes and the destinations for the 1.2 mil- exercise of power. It recommends, lion Brazilians that visited over and above anything else, legisla- the country in 2010, inject- tive reforms to increase the regula- ing US$5.9 billion into the tions related to fi nancing political North-American economy. activities and reducing the infl uence of the large economic groups and the ruling political parties. Things

PETE SOUZA PETE are going well in Brazil regarding the item related to specifi c fi nancing for female candidates — 5% of public resources and 10% of free electoral propaganda time for each party is allocated to them. Brazil is also the only country in Latin America where fi gures related to political donations are disclosed to a high degree. It also bans the use of commercial advertising time for election campaigns (offering free air time on radio and TV

ROBERTO STUCKERT FILHO/PRESIDÊNCIA STUCKERT ROBERTO instead) – which is not the case in the 2 US, for example.

P I B 27 Beacon local initiatives and innovations in a global world

Pilot and environmentalist, Gérard Moss tries to convince Brazil that the entire country depends on the Amazon for food production and survival ANDReSSA RovANi AND ARMANDo MeNDeS

en years ago, while that it needed to be changed. planet). Created in 2003, the Bra- making his second trip With a degree in mechanical sil das Águas (Brazil of the Waters) around the world by pla- engineering, Gérard came to Bra- project was the first result of this ne, Gérard Moss, now 56 zil to work in sea freight export of transformation. Concerned about years old, came to reali- soybeans. When gave up his Rio the degradation of rivers, Gérard tze that contrary to what mankind de Janeiro-based company in or- devised a way to collect water sam- had always believed, the world’s der to finance his first world tour ples from Brazilian water sources, natural resources are, in fact, finite. in 1989, he went from businessman all while aboard an amphibian plane. Gérard was flying a motor glider, a to environmentalist. Supported by educa- small monoplane that “surfs” the A naturalized Brazi- tional and research atmosphere’s lee waves and thermal lian citizen, the en- Gérard institutions and com- columns, using the motor for auxi- trepreneur who once has made panies committed to liary propulsion. While flying over helped sell the Bra- environmental is- the planet at low altitude, on a long zilian soybean began two trips sues, he flew 120,000 journey soaring over 50 countries, to preach the impor- around the km - equivalent to he witnessed firsthand the true tance of the Amazon world in locally more than two trips fragility of the Earth’s surface, on to grain producers. “I around the Earth - to which human beings live, and the felt the need to show made planes. collect 1,160 freshwa- consequent and constant aggres- Brazil as a country of ter samples from 524 sions it suffers. Upon returning to waters,” he says. “Abroad, it is best rivers and lakes spread across the Brazil, where he has lived since 1983, known as a country of football and country. Gérard - born in England and raised Carnival, despite our potential” (the The results served as a type of in Switzerland – was certain of two Brazilian territory is home to the X-ray to determine the health of ri- things: that this was his country and largest fresh water reserve on the vers in Brazil. This was followed by

28 P I B The Embraer Romeo soaring over the Andes, searching The wind for fl ying rivers.

southern and southeastern Brazil that an issue that is seemingly specific to the Amazon is actually both a national and continental problem. hunter Being geographically distant, the populations of most other Brazilian regions tend to view environmental problems in the Amazon with a certain sense of indifference. The businessman turned environmentalist wants to change that. “The southerners of Brazil have to realize that they are integrally connected to the North and therefore should take more interest in the decisions being made concerning the Ama- zon,” he explains. The Flying Rivers

HANDOUT PROJETO RIOS VOADORES RIOS PROJETO HANDOUT project, which began four years ago, depends on two factors to achieve its objectives: the foundation and collection of scientific data and the educational approach, which aims to transform the way Brazil sees the the Sete Rios (Seven Rivers) project, through the sky carrying moisture Amazon. “The idea is to help scienti- aimed to raise shoreline communi- to areas further south. Pushed wes- fic research advance in the develop-2 ties’ awareness regarding conserva- tward by the winds coming from the ment of this concept of flying rivers, tion of water resources. But it was Atlantic, these “flying rivers” collide as well as to develop content that is in 2007, following extensive discus- with the face of the Andes mountain understood by the population as a sion and dialogue with Amazonian range and are then diverted towards valuable resource,” says the aviator climate researchers, that the idea the south. Therefore, it is the Ama- and environmentalist. “We must de- of yet another project took shape- zon rainforest that sustains, though monstrate each tree’s importance in this time adding the study of the indirectly, part of its contribution to the atmosphere into the water formula. the moisture that water vapors in all re- “We started looking at water vapor, causes the rainfall the gions of Brazil.” which is just as important as surface in other regions of Flying As Gérard travels water,” Gérard confirms. The sim- the continent and the country collecting ple yet provocative question – do fertilizes the vast Rivers carry samples to study the you know where your city’s rainfall quadrangle cove- Amazonian water vapors’ currents, comes from? – gave birth to Flying ring land from São humidity cities were chosen to Rivers’ second expedition, which is Paulo and Mato participate in the edu- now in its second phase. Grosso to Buenos south cational arm of the The concept of “flying rivers” is Aires and the Ar- project via programs at the key to the project. The term is gentine pampas - the very heartland local schools. Nine hundred and six- used to map the routes traveled by of agricultural production in both ty teachers were trained and 50,000 the water vapor which forms over countries. children have received the project’s the Amazon, as if they were invisible With this observation, Gérard educational material. Small inland atmospheric waterways, which pass seeks to convince his audience in cities in agricultural regions, such

P I B 29 Farol 1 Moss, in 2... and a the cockpit: balloon to trace aircraft... waters’ paths

as Uberlândia in the state of Mi- region. The state of Mato Grosso, nas Gerais, and Londrina in Paraná, the center of Brazilian agribusi- were given priority - since they are ness, will probably rank first in de- ce Charles himself at Buckingham so far from the coast, they depend pendence on this Amazonian vapor, Palace in London. The distinction much more on these water vapor notes Gérard. “Brazil must be aware awards social service that merits contributions from the North. “We of the fact that part of the country’s public recognition. After spending are very intent on showing people extensive and successful agricul- 25 years in Rio, Gérard and his wife that they have to open their eyes a tural production is a result of two traded their penthouse apartment bit and become more aware of the accidents of geography: the Andes in Urca for a small farm in Brasília, in the center of the country, equi- distant from the North and South.

1 2 risks they are subject to as a result of mountain range and the tropical Today, the couple lives in the Brasí- nature’s radical changes,” says Gé- forests in the North,” he states. The lia neighborhood Lago Sul, where rard, whose expedition partner is shift in focus of this issue has led they live just two miles away from his wife, Margi. Born in Kenya, Afri- major rural producers to believe in the airport in which they keep their ca, Margi is responsible for written the evidence and realize that the expedition plane. “My friends from and photographic documentation conservation of the Amazon rain- Rio think I’m crazy,” he says. “But of projects. The Flying Rivers re- forest is a necessity for the survival once they visit me, they understand; ceives R $ 1.5 million annually from and success of their business. The I’ve already identified 160 species its sponsor, the Brazilian company project’s main objective, according of birds in my own backyard.” No- Petrobras. to its creator, is to directly change twithstanding, he admits to certain M oss

As a result of the second phase, people’s behavior-- to make even setbacks in Brasília. “We have iden- argi /M which will come to an end soon, the those skeptical or neutral active in tified a shift in the way people think,

project is preparing to outline the defending the Amazon and its tro- but government leaders and others V oadores

water vapor’s origin point in each pical, humid rainforest. in power don’t seem to take action R ios of the country’s regions, within the Gradually, Gérard’s is gaining in order to change the situation in

last 12 months. With this informa- international attention. The most the Amazon,” says the pilot-ecolo- P rojeto tion, the importance of water vapor recent recognition came in Novem- gist. “That’s the frustrating part of

flows coming from the Amazon can ber when he received a medal and my job.” The next step, he says, is H andout : be determined - and, consequently, the title of Member of the Order working to change this link in the

of the forest itself - for any given of the British Empire from Prin- environmental awareness chain. P ictures

30 P I B Job: 18194-003 -- Empresa: Neogama -- Arquivo: 18194-003-AFDA-BRA-AN Mapa Logo transparente 20.2x26.6_pag001.pdf Registro: 62588 -- Data: 15:54:50 21/12/2011 Agriculture LuiS ALVAREZ LuiS ALVAREZ 1 The fruits of Africa Agrícola Famosa, from Ceará, starts cultivating melons in Senegal to serve its European clients ANDRÉA floReS

uropeans and other resi- Senegal, a country in the extreme exported one hundred thousand dents of the cold North- west of Africa, half way between tons of fruit from irrigated farms in ern Hemisphere love eat- the Northeast of Brazil and Europe. the states of Ceará and Rio Grande ing melons for breakfast. Fieldwork began in September and do Norte - as well as melons and However, to be healthy is already at the stage of soil prepa- watermelons (the company does not eand tasty, the fruit requires a semi- ration and taking delivery of irriga- disclose sales figures). Great Britain, arid climate and little rain - condi- tion equipment. The first harvest on Holland, Italy, Portugal and Spain tions more common to the tropical African land is forecast for February are its main markets. However, the zones of the planet. To compensate 2012. However, to get to this point, Northeast of Brazil is at a disadvan- for this mismatch between growers some important decisions had to be tage for fruit growers: the March and consumers, Agrícola Famosa, taken. rains’, or more precisely, the annual the largest Brazilian exporter of the Agrícola Famosa was started in rainy season between February and fruit, is starting to grow melons in 1995 and in the 2010/2011 period, April when the quality of fruit liter-

32 P I B PAuLo dAntAS dE MELo dE dAntAS PAuLo 2

ally drowns. To continue serving its the Northeast of Brazil and the ab- the Ministry of Agriculture and of European clients without hiccups sence of tribal or religious conflicts. the Senegal Development Agency, in supply, the Brazilian executives The numbers involved are simple, (the country was a French colony decided to internationalize produc- he explains. After harvesting, treat- until 1960). Estimated at 9 million tion and went in search of agricul- ment and packaging, the shelf life of Euros, the total capital investment tural regions with good economic the fruit is 30 days. From Chile or includes the transfer of materials conditions and favorable climate - it Peru, across the Pacific Ocean, takes and technology to the plantation was crucial that a region be found 20 days to southern Europe, which area. As there are no private agri- where there is no rain reduces the life of the cultural properties in the country - during the Brazilian product to 10 days land was nationalized after indepen- summer. the fi rst and increases freight dence - all licenses and permits for The company’s harvest costs by 30%. “But its use had to be negotiated directly agronomists found fa- of melons from Senegal, it takes with local communities. These gave vorable areas in Peru only 10 days, giving the Brazilian group a 20-year con- and Chile, as well as is scheduled an extra 20 days for cession to cultivate 600 hectares. in African regions. for February marketing the prod- According to Luiz Roberto, the Nevertheless, accord- 2012 uct”, he concludes. Brazilian company for its part un- ing to lawyer Luiz Ro- With the country berto Barcelos, one decided upon, Agríc- of the partners of the company, no ola Famosa chose the ideal location 1 Baobabs 2 ...and Brazilian candidate beat Senegal, chosen for for the enterprise - the Thilmakha in the melons: climate its many advantages: proximity to region, around 120 kilometers from African similar to the Europe, similarity of its climate to the capital, Dakar - with the help of savannah... Northeast

P I B 33 Agriculture LUIS ALVAREZ LUIS ALVAREZ

dertakes not only to employ local exclusively on its own resources. “We do not intend to maintain a labor, but also to establish schools Although the BNDES offers credit Brazilian team full time in Senegal”, and a medical center for the com- lines for investment in Africa, Luiz predicts Luiz Roberto. However, to munity located near the farm. The Roberto, born in the interior of São monitor the start of African opera- Senegal government will invest in Paulo to a farming family, says the tions, ten of the company’s special- basic infrastructure, such as the company has not had to resort to ists, headed by the Spanish engineer roads and installation of electricity such help. “Our European clients Luis Alvarez, arrived in Senegal in adjacent to the area not only have bought September, where they expect to where the Brazilian the entire first har- stay for six months. To get round the melons will be cul- the company vest, but have already language difficulties (the languages tivated. Spread over will train paid 30% up front”, spoken in the region are French and a three-year period, reveals the executive. the local language, Wolof,), the Sen- the Brazilian compa- Senegalese Embrapa was unable egalese supervisors will learn Por- ny’s investment will workers to act in an advisory tuguese. In addition, the expatriate rise progressively. In and build capacity as the state- Brazilians need to become accus- the first year, it will owned company for tomed to the cultural and religious plant 150 hectares of schools agricultural research differences. “I will never forget my land, employ 375 lo- does not currently of- first lunch in Senegal”, remembers cal workers and spend 2.25 million fer technical assistance melon cul- Luiz Roberto. “The house owner Euros on the costs of the plantation; tivation, says Luiz Roberto. Agrí- had three wives; the trays were during the second year, the land cola Famosa will also cover the cost placed on beautiful carpets, on the planted increases to 300 hectares, of training the local workers, who floor, and we ate with our hands”. the number of local workers to 700 should form and direct the teams and costs to 4.5 million Euros. Fi- responsible for the project. Ten Sen- nally, in the third year, these figures egalese workers spent the month of double. August at the company’s Northeast Alvarez (front left) To launch this international plantations, kicking off the training with the team: adventure, Agrícola Famosa relies exchange. training in Brazil

34 P I B An_Estaleiro_202x266mm-v1.pdf 1 12/22/11 7:39 PM Cover

Brazilian franchises take wings In the last ten years, almost 70 Brazilian chains have been launched into the global world, taking their goods and services to 700 franchise outlets in 50 countries. liliAN PRiMi

oN tHe WoRlD MAP (THE PERCENTAGES SHOW THE DISTRIBUTION OF THE FRANCHISERS By CONTINENT) 10.7% SoMe exAMPleS of the advance of in noRtH Brazilian brands: AMERiCA

A D E I AGiraffas: Rice, beans, and ‘farofa’ [manioc fl our] in Florida G 16% F in CEntRAL AMERiCA B Mister Sheik: s fi h a s in Angola 42.7% in SoutH AMERiCA H G E D Cantão: C BoB’S: hamburgers fashionable in Portugal and Angola clothes for sunny countries

E o Boticário: tropical perfumes in Japan and Mozambique

36 P I B mong the surprises provoked by the suc- model for all the stores in the chain is that of franchise, cess of the introduction of yoghurt ice which allows rapid expansion and meets the require- cream in the Brazilian market, Marcelo ments of the business which has a leading position in Bae, the founder of the franchise network a product which has become fashionable. Yogoberry is Yogoberry, stumbled upon an invitation to one of dozens of franchise brands of a Brazilian origin openA a unit overseas — in Iran, of all unlikely places. In that have embarked on expansion into the global market July 2011, after an explosion in consumption which led in the last few years, giving credence to an aspect as yet to the creation of 107 stores in Brazil in a little over three little exploited in terms of the global internationaliza- years, he inaugurated a unit in Teheran, the Iranian capi- tion move of Brazilian companies: according to the Bra- tal. “I had not thought of internationalizing, as I am still zilian Franchising Association, there are approximately managing the expansion in domestic consumption”, said 70 internationalized Brazilian franchises, with over 700 Bae. “But an investor from an Iranian group appeared units spread across 50 countries. who wished to take the chain to the Persian Gulf”. The The move overseas includes stores for shoes and

J Yogoberry: yoghurt ice cream, the latest in Iran

14.7% 9.3% in in Europe Asia H F F C H E I Carmen Steffens: D I I J shoes for the Arab G Emirates 2.7% E in AFRICA H I

B C

H Lilica Ripilica: for children in D 4% Europe and the USA in Oceania

F Colcci: at the seaside around the world G Via Uno: on almost all continents : H andout : F otos

P I B 37 Cover Giraffas in Florida: new appearance in Brazil

accessories, such as Via Uno, from manufacturer and provider of in- Novo Hamburgo, in the state of Rio formation technology services, to Grande do Sul, which has opened in franchise representatives through- Egypt and the Philippines; and its out the Americas, from Chile and competitor Carmen Steffens, from Argentina to Canada, in addition to Franca, in São Paulo, which has Africa, in Angola and Mozambique; spread as far as Japan and Australia meanwhile Boticário has opened (both brand names are also pres- its perfume stores throughout the ent in the United Arab Emirates). world, sometimes in places as re- It has also led Totvs, the software mote as Saudi Arabia. Almost a quar-

tHe BRAZiliAN CHAMPioNS

AltHoUGH iNteRNAtioNAl- in the last two years”, says Lívia iZAtioN of Brazilian franchises Barakat, professor of the Interna- is still very recent, researchers are tional Business Nucleus of FDC, and predicting future growth. The sales responsible for the research. Of the obtained from the units abroad, for 53 companies which were consulted the companies studied by Thelma by FDC, through a questionnaire, 15 Valéria Rocha, of ESPM, do not even responded, and participated in the reach 5% of the total sales of the 2011 Ranking. “This is a good level of franchising companies, but even so, participation considering that it is the all the businessmen have evaluated fi rst year, and that few of the compa- these operations in a positive man- nies knew about it”, evaluates Lívia. ner. Around 30% affi rm that they The criteria used in the general have achieved a better than ex- internationalization ranking – per- pected market share in their foreign centage of assets, revenues and franchises; 25% expressed surprise employees abroad, compared to about their productivity; 20% said the company total – does not make that they were pleased with the sense for franchises, seeing that the sales obtained from their interna- franchisee bears the cost of capital. tional units, and 10% affi rmed that “Many franchises do not have access choice is also more risky”, explains the return on investment was much to this information”, she affi rms. Professor Lívia. “For this reason, higher than they had imagined. Thus, the classifi cation of the fran- these companies have advantages The success of the Brazilian chises by FDC is carried out based over others in the ranking”. change in the last few years has led on other criteria: in number of units According to these criteria, rank- the Dom Cabral foundation, from opened abroad, in proportion to the ing in fi rst position is Via Uno, the Nova Lima, in the state of Minas total, the amount of royalties and manufacturer of shoes and personal Gerais, to include a special chapter fees received, revenues from the sale accessories, which operates abroad on franchises in its 2011 Ranking of of products (valid for manufacturers through franchises as well as its own Brazilian Trans-nationals. “We have who use the franchise to distribute units. Of the 276 units of the brand, carried out a specifi c ranking for this their product) and revenue from units 116 are abroad, distributed across area, because the characteristics of owned abroad, which is the option Argentina, Chile, Peru, Colombia, internationalization of very differ- taken by many companies wishing Panama, Venezuela, Mexico, France, ent, and the move in the direction of to get to know a given market, as Spain, Italy, Portugal, Australia, foreign markets has grown sub- well as to fi nd franchisees. “As this South Africa, Philippines, United stantially for this business model involves greater investment, this Arab Emirates, Jordan, Guadalupe,

38 P I B HANDOUT/ GIRAFFAS/FABIANO SILVA GIRAFFAS/FABIANO HANDOUT/ the Dominican Republic, Costa Rica and surprisingly, Cuba, where internationalization ranking the management model to be adjusted to the peculiarities of the by FDC of Brazilian franchises socialist system on that island. 1 Via Uno - Personal 8 Vivenda do Camarão - Food Despite an unfavorable exchange Accessories and Shoes 9 Koni Store - Food rate, between 2009 and 2010, 2 LinkWell - 10 Arezzo - Personal Accesso- Via Uno managed to increase its Communications ries and Shoes sales volume, achieving a growth 3 Showcolate - Food 11 Hering - Garments of 28.6% in terms of revenue from 4 Localiza - Car Rental 12 Marisol - Garments the sale of products to franchisees 5 Fábrica di Chocolate - Food 13 Morana - Personal Accesso- abroad. As Rodrigo Matos, the 6 Spoleto - Food ries and Shoes company’s export director ex- 7 Escolas Fisk - 14 Puket - Garments plains, this gain was only possible Language School 15 Giraffas - Food as a result of the increase in brand name value.

P I B 39 Cover

ter of the Brazilian brand names that where companies have not accepted a Brazilian company that is well cap- have been internationalized through a franchise request, and have ended italized, to open operations abroad”, franchising are for sports items and up being cloned abroad”. he said. This second factor — the services, health, beauty and leisure; These spontaneous demands opportunity opened by the stagna- other sectors well represented our are inspired by Brazil’s good image tion of rich countries — is well dem- food, clothing, shoes and accessories abroad, as well as the global eco- onstrated by the case of Giraffas, a and education (principally language nomic crisis. Daniela observed that Brazilian fast food chain which is schools). A little over a decade ago, Brazil’s good performance during taking the ordinary Brazilian dish in 2000, there were just 15 Brazilian franchises that had a presence in the international market. Growth has been more than 300%, with strong expansion from 2005 onwards. But what has led to this explosion of Bra- zilian brands throughout the world? One of the answers — perhaps surprisingly, but confirmed by the

case of Yogoberry — is simple de- XXXXXXXXXXX mand on the part of customers or 1 2 foreign entrepreneurs who, one way or another, have become enamored of Brazilian brands and have become interested in taking them to their various countries. The Ira- nian businessman who opened Yo- goberry in Teheran, for example, learned about the product when on vacation in Rio de Janeiro, the city where the brand was started. The model is valid both for a family start- up company, as in the case of Bae’s yoghurt ice cream chain, as well as a company that has already been well established, with an existing export history, such as Via Uno, present in 25 countries around the world. Re- searcher Daniela Khauaja has studied the internationalization process of 10 Brazilian chains, to form the basis of a doctorate thesis which she defended before the administration the first wave of the crisis, in 2009, of beans, rice and farofa (fried man- department of the economic faculty created an extremely positive im- dioc flour) to Miami, in the United of USP. She ascertained that almost age. “The mere fact that a company States, where in 2011, it opened its all began their incursion into foreign is Brazilian is regarded as an advan- first restaurant abroad. “We have markets in this way. “In actuality, it tage over its competitors”, she said. taken advantage of the fact that the is almost obligatory”, said the re- The president of the Brazilian Fran- price of commercial sales premises searcher, who investigated the role chising Association (ABF), Ricardo has fallen”, recounted the chain’s of the brand names in the interna- Figueiredo Bomeny, agrees. “Brazil planning and finance director, Al- tional expansion process of the Bra- is enjoyinng buoyant phase and, exandre Guerra. In this first stage, zilian franchises. “I know of cases with the crisis, it is now cheaper for the company plans the opening of 5

40 P I B Via Uno in Cuba: the most international Brazilian company

to 10 of its own units in the United of success; I don’t wish to overreach States, before beginning to expand myself”, he affirmed. This charac- through local franchises. “We are as- teristic of the franchise model — the ing well capitalized, come from an suming all the risks, but in this way possibility of beginning an opera- emerging market country”, cites we have the freedom to develop the tion in an overseas market without economist Frederico Turolla, one project”, explains Guerra. The chain the need for the franchisor to make of the consultants to the World In- intends to invest R$ 2 million in its major investment, seeing that the vestment Report 2011 published by internationalization project. costs of the new unit are borne by Unctad — the United Nations Con- the franchisee — is another reason ference on Commerce and Develop- for the increase in the international- ment — about the flow of interna- ization of these chains, says Bomeny, tional investment (this latest edition the president of ABF. “This move- of the report has a special chapter ment has intensified over the last on franchises and other types of in- five years, with double-digit growth ternational businesses, which do not every year”. require direct investment). Teacher Thelma Valéria Rocha, Why the reference to the condi- from the Masters Program in In- tion of an emerging market country?

XXXXXXXXXXX ternational Management from the For the economist, the readjust- 3 College of Advertising and Market- ments provoked by the crisis have ing (ESPM), is the au- created new oppor- thor of the study “The tunities for these Internationalization of Many Brazilian economies. Tur- Brazilian Franchises” olla highlights the (2010, with co-authors brands go strength of the in- Felipe Borini and Edu- abroad to ternational expan- ardo Spers), identified meet demand sion of the Brazil- some of the specific ian franchises in the difficulties encoun- from overseas 2011 Unctad report, tered by businessman clients making use of the who chose franchising data from Thelma’s as an internationaliza- study. In contrast to tion model. One of these difficulties other countries at a similar econom- shows itself to be a dilemma, which ic stage, Brazil is a franchise market can also be a great opportunity. As with a two-way street, observes the the domestic market is in a rapid ex- economist: it is a destination for pansion phase, businessmen have all major global brands, but it also has the incentives to concentrate their strong brands that are expanding efforts here, instead of venturing throughout the world. Emerging HANDOUT VIA UNO VIA HANDOUT out into a world that is unknown market countries, in contrast, usu- to them, and worse still, affected ally operate on only one side of this Meanwhile Bae, of Yogoberry, by a crisis with an uncertain out- equation: being the destination for does not need to invest anything. come. This scenario has led many global brand names created in de- “We have been receiving royalties, people to stamp on the brakes at veloped countries, and not a source with no investment at all”, he jokes. the moment of taking this step into of locally created brand names. Con- Even so, he prefers to take his inter- foreign markets, said Bomeny. Oth- tributing to this self-assured growth national expansion gradually. “We ers, however, preferred to view the by Brazilian businessmen in this are now planning the opening of a situation from the perspective of scenario, is a characteristic which unit in Portugal”, he reveals. “I want opportunity. “It is the crisis which in other circumstances would be to study the market well and only is creating the growth, and the Bra- considered to be negative: the so- open where there is a real chance zilian companies, in addition to be- called jeitinho (the Brazilian way)

P I B 41 Cover

fi rms the researcher. Initiatives by these organizations, alone, will not be suffi cient to drive this movement by companies, but they do provide important support, in Daniela’s opinion. This support can take various forms. The director of business at Apex-Brasil, Rogério Bellini, says that since 2006 the agency has developed a series of specifi c internationalization projects for franchises, in partnership with the ABF. The most recent of this began last year, and will run to 2012, focused on the markets of Australia, Canada, Co- lombia, Spain, Mexico and Panama, which will serve as a door to the Caribbean. “These countries were identifi ed by intelligence research as being the most attractive for companies”, he explains. The project also 1 studies markets which have potential, such as China and the United 1 SOUSA DE EDUARDO Arab Emirates, but where entry is more diffi cult. “We have products SUPPoRt foR tHoSe WiSHiNG which would be good for these markets, but the competition is little to exPAND ABRoAD different and involves differentiated DANielA KHAUAJA’S thesis (Brazilian Franchising Associa- brand names”, explains the execu- shows that there has been a change tion) as providers of assistance, as tive. Implementation and format- for the better in terms of private- well as periodic initiatives by the ting of the business becomes slower sector and governmental incentives Endeavour Institute, Firjan and Today, 24 companies participate for companies which are becoming the Brazilian Association for the in missions, trade fairs, and the internationalized. “The companies Personal Hygiene, Perfumery and Comprador and Imagem (buyer and particularly cite Apex and ABF Cosmetic Industry (Abihpec)”, af- image) project, developed by Apex.

here understood as willingness and Turolla. The jeitinho, in this context, instability. “When applied to situa- flexibility to cope with unexpected translates into the creation of con- tions that are more acceptable, they difficulties. “Brazilian franchisors tracts and business models which go very well”, says the economist. have experience in uncertain mar- take into account the uncertainty For Thelma, of ESPM, more than kets and are accustomed to dealing of the economic environment, be- the expansion itself, Brazilian com- with difficult situations”, affirms ing sufficiently flexible to live with panies also seek access to techno-

42 P I B 1 Daniela: being 2 Alexandre, Brazilian is an of Giraffas: taking advantage for advantage of a franchise the moment

market”, she explains. At Giraffas, for example, the first innovation adopted from abroad was in visual ruling, and the functioning of the communication. “The restaurant in judicial system in a given country”, In addition to participation at Miami redesigned the visual aspect says Daniela. The protocol, signed international events, which of the restaurants to adapt them by more than 80 countries, permits serve to launch franchises, and to the American profile, and we the registration of a brand by one assess the markets, a business brought this new design to Brazil”, of the countries to be valid for all mission is being organized to recounts Alexandre Guerra. This the others. As Brazil did not sign Canada in the second half of new visual aspect is present in the the treaty for bureaucratic reasons next year. Among those se- restaurants at the Guarulhos, ABC — Brazilian government bodies are lected are sporting events, such Plaza and Poli shopping centres, in not adequately equipped to guaran- as Formula Indy, where major São Paulo. “We have also looked at tee the rapid registration of foreign networking is planned. “It is a line of equipment, that is much brands, in contrast with the rapid easier to meet CEOs at these more advanced”, says Guerra. “This timeframe that other countries can great events, than to create a equipment can deliver a dish of a offer to Brazilian brands —, the Bra- formal agenda”, says Bellini. higher quality in a shorter time”. zilian businessmen needs to register “There are 12 races in the USA”. The executive emphasizes that, de- his brand individually. “Offices ex- Another important aspect spite the crisis, the food sector is still ist that carry out this task very ef- of support is at the business growing in the United States, which ficiently, but it is still complicated”, centers which the agency continues to be one of the largest 2 maintains at strategic locations, food markets in the world. “We such as Miami. “We used this chose to begin internationalization centre to begin the process, and in the United States, because if we we still have our offi ce there manage to stand out from the crowd today; it has been essential”, in that market, the growth possibili- 2 affi rms the planning and ties will be much greater than in any fi nance director of the Giraffas other part of the world.” chain, Alexandre Guerra. These Daniela Khauaja said that the centers even offer warehous- fact that the internationalization ing for products, functioning as of Brazilian franchises has taken logistics support for Brazilian place more as a function of ex- companies. Bellini says that ternal demand, than the result of these initiatives are an attempt strategic planning, has created a to inform Brazilian companies series of difficulties. “Even when that the franchising model a company avoids embarking on works very well for those wish- expansion without planning, there ing to begin internationaliza- are problems” she says. “In the tion. “It is a cheaper and quicker case which I cited previously, in method of expanding abroad”, which a company was cloned, for he guarantees. example, there is now an ongoing court case”. Problems involving different types of legislation ap- pear in the study by Thelma Rocha logical innovations and know-how as being one of the principal diffi- in more developed markets. “This culties faced by internationalized contact creates a process of learn- franchise holders. “In the case of ing, which will help them to make brand registration, as Brazil has the most of the buoyant period be- not signed the Madrid Protocol, the

ing experienced in the domestic company is dependent on a judge’s HANDOUT

P I B 43 Cover

explains Daniele. It is expensive. withdrew from it, transforming it which began in São Paulo in 1987 Other problems involve the legal into an Argentinean unit operating which today is the property of Grupo requirements and bureaucracy for on a franchise. Even so, Andrade Abril – has strengthened its presence the export of products that supply said that it did not prove simple to abroad in the last two years, particu- the units abroad, in the case of the find partners in other markets in the larly in Latin America. “We began in franchising of the sale of products; region, in which the company wish Peru 10 years ago in a modest way, competition with more powerful in- to subsequently expand. “Precisely and subsequently moved on to Pan- ternational and experienced brand because the brand name was not ama”, said the president of Casa Cor, names; little knowledge of Brazil- known”, he said. The way round Angelo Derenzi. “But the watershed ian brand names abroad, and the this was to look for companies in was two years ago, when he went to difficulty of managing activities in the automotive sector, with its ser- Paraguay, which came up as an op- a foreign country. “This latter indi- vice profile, with investment capac- portunity, and thence to Chile”. The cates that many of the companies ity. The initial capital required to set event in Uruguay was held in Punta researched do not consider them- up a Localiza agency is US$ 600,000 del Este in January, a quiet period selves equipped to operate in other for the vehicle fleet alone. in the Brazilian decoration market, markets other than the domestic Localiza is present in seven but precisely the month in which market”, evaluates Thelma. How- countries in South America, with that city sees an invasion of summer ever, what matters a franchise chain tourists, particularly Argentinians most, in the end, is in each one, which and Brazilians. “In Chile, the show the difficulty in find- Finding the represents 50% of was an enormous success”, he said. ing a local partner. right partner is the agencies in the “Brazilian designs and architecture “Brazilian franchisors company’s franchise were well received as innovations.” still depend a great generally the division, and 20% deal on this part- hardest part of in terms of business ner, both in terms of international volume. “We have learning about the our own units in market as well as expansion Brazil’s state capitals, the publicizing of its but outside these, all brand name”, opines Daniela. Ac- the agencies are franchised”, he ex- cording to the research, finding a plains. Overcoming the language reliable partner is the most compli- barrier –”portinhol”, despite best cated aspect of the process. “Gener- efforts, is not sufficient in a working ally speaking, partners are changed environment – and to incorporate various times, before the right one the Hispanic culture in the day-to- is found”, she says. “On average, it day running of the business, are all is usually third time lucky”. problems which Andrade has iden- To deal with this problem, Lo- tified in operating in neighboring caliza, the car rental chain from countries. Despite the difficulties, Belo Horizonte, entered into a joint the company maintains an opera- venture to set up its first unit out- tion which is 100% integrated. “For side Brazil. “We needed to expand example, we have a customer loyalty our coverage on the continent, and program which allows the client to as we had experience with Argen- accumulate points from any unit, in tinean clients in Santa Catarina any country”, he says. “The global and Buzios, we chose Argentina to reservation system also offers the begin the process”, said the chain’s possibility of travel agencies any- franchise director, Bruno Andrade. where in the world making reserva- The executive said that the unit re- tions with any of our agencies”. mained operating as a joint venture Also in the service area, Casa Cor

for two years, before the company – the design and decoration trade fair HANDOUT/CASACOR

44 P I B Casa Cor in Chile: Latin American expansion

To set up a Casa Casa Cor example, we have the Cor franchise re- support of Master- quires an investment plans card, Red Label and exports”, recounts Rodrigo Matos, of US$ 50 - 100,000, to invest Chrysler”, he says. the export director of the company, in addition to the in the “Everyone wants to founded in 1991. With the interna- payment of royalties link the brand name tionalization process at an advanced of between 10% and united to design, as a sign stage, the objective was to create 15%, on total sales. States of being up to date greater visibility for the brand name The model is to al- with the times. It is in the markets in which Via Uno op- ways look for a lo- shop window, open erated. From Chile, the stores have cal franchisee. “We need to get to and modern, for trends.” spread to 20 countries, on almost know the market in order to achieve Chile was also the initial choice every continent, and today exports success, and for this reason, a local of Via Uno, the manufacturer of to franchisees represent 20% of the partner is essential, even when we shoes and accessories, being the company’s revenue. The creation of take our show to other Brazilian company that is the most inter- a chain of brand-name stores guar- states”, says Derenzi. For 2012, the nationalized of all the Brazilian antees Via Uno’s business in the plan is to consolidate the brand in franchises, according to the rank- world, even when Brazilian shoes Latin America, and invest in Miami. ing published by the Dom Cabral have been losing market share, due With shows in 17 Brazilian states, Foundation this year. “We began in to the appreciation in the Brazilian and four in other countries, Casa Chile, in 2004, when our products Real, among other reasons. Matos Cor not only attracts companies in and already reached approximately says that a reduction in the rate of the decoration sector. “In Chile, for 80 countries, through multi-brand expansion has been observed, at least in some markets, as a result of the international crisis. “We are seeking to expand in new markets while also perfecting the management of existing stores, which has positive repercussions”, he affirms. Researchers and businessmen are unanimous in affirming that the process of internationalizing franchises is still recent in Brazil, and requires more in-depth research. Thelma says that next year she intends to follow up on her initial research. “I want to identify the differences between the companies, and classify them”, she says. The movement of franchise internationalization, although strong, started in Brazil 20 years later than in other countries. “I am intrigued about the long maturation time needed for the franchise model in Brazil to embark on internationalization”, she says. “We have franchises here that have been in existence for more than 40 years, and only in the last five has the movement abroad gained mo- mentum.”

P I B 45 46 Marco Stefanini Marco Interview P IB

guilherme tosetto The geologist who

becameTo realize his dream of travelling a businessman the world and ridding himself of suit and tie, Marco Stefanini chose to become a geologist. He ended up owning one of the largest Brazilian IT companies, with a presence in 21 countries. Nely Caixeta

econd in the ranking of much – as well as hit the road; ob- Did your love of travel contributed to the most international- viously: Marco and his family, who the process of your company’s inter- ized Brazilian companies have already visited more than 80 nationalization? by the Dom Cabral Foun- countries, are going to take advan- Yes, I always loved to travel. dation, and with 40% of tage of the year-end break to visit There were two important points. Sits operations overseas, Stefanini Myanmar, formerly Burma. One was to be able to travel and see is the result achieved to date by an the world. The second is that I al- accidental geologist who survived You are often referred to as the “one ways believed in the talent of Brazil- the so-called “black decade”, which billion-dollar geologist”. How did you ian professionals. I would not go as was in fact a little more than this: get to this point? far as saying that Brazilian profes- as it was almost twenty years of I always loved precision and sionals are well recognized globally, difficulties that, however, taught always said I wanted to be an elec- but when compared to the other Brazilian business persons a lot. tronics engineer. I was even accep- countries I operate in, I see that we For Marco Stefanini, it was this ted at several private universities, really do have the ability to do a good experience that allowed him to but my first choice at USP (Univer- job, with flexibility and creativity. transform a small domestic com- sity of Sao Paulo) was Geology, also pany in 21 years into the largest a precision science, involving phy- Why did you decide to focus on busi- Brazilian transnational It special- sics and chemistry, which I liked; I ness outside Brazil? ist, with 14,000 employees and an could travel, and it was a less formal Well, herein lies the dream. annual revenue of RS$1.25 billion. course, one which also meant I ne- That is to say, I always understood Marco, 51, graduated in Geology, ver had to wear a suit and tie. The that the global market, obviously, but only needed to work for three only thing was that when I gradua- is much bigger than Brazil and in months in a cassiterite mine in the ted, at the beginning of the eighties, 1996 we set foot In Argentina, then interior of Goiás to discover that he there was a monstrous crisis and I Chile, mainly to learn. Our inter- was not happy and accepted an offer did not have a job. And the banks national reference was minimal at to join the IT team at Bradesco. “I were training people in the area of that time. did a six-month intensive full-time computer systems and information course and got a job”, he remem- technology. So I decided to give it a When did the acquisitions start? bers. In this interview, he better go. There were twenty six engineers At the end of 2007 we realized explains the experience that he training at Bradesco, a mathemati- that, to have any reasonable over- gained during the crisis, defines cian and me, the geologist. I learned seas volume, it was not enough to what he believes to be the Brazilian to like what I was doing. I hated ties count on just organic growth. We differential in what is a fast-paced and all that paraphernalia, but that spent three years looking for a com- and competitive global technology has changed slightly; although still pany to acquire. When we found one, market and tells of what he would not my favorite way to dress, I am at the end of 2010, we made three like to do now he has achieved so not that bothered anymore. acquisitions one after the other.

P I B 47 Interview • Marco Stefanini

The first, and the biggest, was Tech advantages, of course - everything began to look more at services than Team, an American company with a in life has a good and a bad side, the training. At that time I was turning global operation and a presence in 14 positives and negatives. The negative over US$100,000 a year. I was almost countries. Half the revenue, of in the in this case is the spending on en- a one-man band. I had to do every- region of US$200 million, was from ergy and capital. Normally a foreign thing for my company from billing, outside the United States. A part of operation has a lower margin than selling, delivering, and meeting ser- it was sold that was owned by the US in Brazil. And on the positive side? vice deadlines. army, and we purchased it with 2,400 First, it opens one’s mind, provides employees and a revenue stream of access to the best practices around Who were your main competitors? around US$140 million. Immediately the world. It also takes more capac- There were hundreds back then. afterwards, in February of the same ity for planning and organization, the The sector was fiercely competitive year, we acquired CXI, also American, quality certifications. Another point for a small company. Then some of but smaller (300 employees), and In- is that we open up markets, and the the smaller operations began to fall formática e Tecnologia, a Colombian outlook for growth is far higher in by the wayside and now there is a company of about the same size. We the United States than here. In gen- bit of everything, from the global gi- then spent the rest of the year trying eral, I would say that there are posi- ants and mid-sized multinationals to to consolidate these companies. tives than negatives. the small fry. Just to get an idea, for about five years Stefanini was part of What has the challenge been like try- a group of eight, ten large Brazilian ing to grow productivity in countries companies. At least two were three where people ﬁ ght for the right to work times as large as us. Of that group, increasingly less, with such strong Stefanini runs Stefanini is the only Brazilian com- unions? a company that pany left. Almost half of these com- Well, in the case of Tech Team, the serves the nine panies went bankrupt and the others results were not actually that bad. It were sold to foreign companies. We was a company with a three-year his- largest Brazilian are now six or seven times larger than tory of falling revenue and making a banks and operates the second-placed company, but this loss. We expect it to make a small in 21 countries is not only the result of growth – but profit this year, and it will grow, that also the general denationalization of is to say, it has already changed, al- the IT services sector. though it still does not have the face of Stefanini. This is my biggest chal- How did you go from being an it tech- Did living through and surviving the lenge over the next few years. I would nician to owner of Stefanini? so-called “black decade” help form say that our success abroad is partial, I ran IT courses back in 1987. It Stefanini? exactly because we still need to work was a boom time for training, as the That is a good point, as we have harder on the issue of culture. One companies here needed more people a culture forged during an extremely way of doing this is to put someone in the area and there were a lot of challenging period. It is a culture that from Stefanini to run the foreign courses, and institutions. IBM out- attributes value to capital, money, units and implement a work ethic sourced its instruction and I saw an and the belief in a lot of hard work, and culture to work hard to produce opportunity to start my company. I to be simpler, focused on the client more. I will let you know how we are worked from home for a year before and with a less hierarchical structure. doing two years from now. opening an office of 38 square meters I learned not to be hierarchical at In the Conjunto Nacional, on Avenida Engesa (a manufacturer of armored Does your expansion into the global Paulista. I had a small office and a fighting vehicles, that filed for bank- market have any limit? classroom for up to 12 students. ruptcy at the beginning of the nine- I would like to have 50% of our ties), where I went to work after I operations, or even slightly more, Did the company already write soft- left Bradesco. Engesa had certain abroad. I intend to reach this target ware? principles that were completely op- quite soon, maybe in the next two No. The main activity was IT posite to the bank. As well as being years. One has to remember that training. I gave a lot of classes. Be- extremely hierarchical, the company internationalization also has its dis- tween 1990 and 1991 is when we spent more than it earned. In addi-

48 P I B

tion, there was no meritocracy, as it right. But my practical vision of the is there a possibility of the company having a well-known surname or be- company combines with somebody growing in China? ing the friend of the owners helped else’s theory and process. it worked. We are already in Asia, in Thai- more in your career. And that both- Over time we gave more and more land, the Philippines, India, Aus- ered me a lot. At the end of the day, value to people. We looked more tralia and even China. We want to all these characteristics were molded at the behavioral side, the positive create a large service center in the during difficult times and now are a energy and attitude of exactly what north of Chinese territory, in a prov- great asset to the company. I usually knowledge was needed. One can ac- ince called Jilin, which is in the old say that at the beginning, between quire knowledge. Manchuria. It was occupied by Japan 1992 and 1997, was our Golden Age. for a time and has a population that From then on, the work was just to the indians have grown a lot in the speaks Japanese. Our two initial ob- improve. Growing beyond Brazil’s world of it. is there any niche that Ste- jectives are to serve the multination- borders began in 1996 in Argentina, fanini has more of a chance of develop- als, which are our potential clients, but the focus on foreign operations ing than in other emerging countries? and Japan. The next step would be to only sharpened up in 2001. The Indians, in fact, are well work with the Chinese, and to export. ahead of everyone, as they created China is a good example of how we What would a good example of this the concept of the “workshop”, ex- operate, as we develop a presence in hard case scenario of learning be? porting services. As a result I believe the country through acquisitions, to The Plano Collor was one of the meet the demands of clients there – biggest travesties in this country. and all Americans ask: “So, are you When you tell this story to someone going into China”? We will also younger nowadays, they have no way With 14,000 count on the support of our advisor of understanding what happened. employees, revenue in Europe, A Brazilian Portuguese It was only fair in 1990, the year in who has already set up a factory in which I was to start to get going. I in 2011 is expected to China and knows the Chinese model. had scheduled 31 courses – I will reach R$1.25 billion, never forget that number – three of which 40% is Do you intend to list Stefanini? or four months beforehand, more We were planning an IPO in 2008 classes than I had given in the entire from foreign units but gave up the idea due to the global previous year. With the Plano Collor, economic crisis. At that time we had one course remained and I only got to establish a three-stage plan: the paid four months later. Besides the first being to get through the crisis, confiscation of all the money I had, it would be wrong to adopt the In- which we did. The second, to make which being a scrooge I had saved. I dians as a parameter - as without acquisitions, which we did. The third, went through a period of horrendous doubt they will be the leaders for an IPO. But we are not planning financial difficulties, but this gave me many years in relation to any other this in 2012, as even in an improv- and other Brazilian businessmen a country. But India has a weak doing market, we do not have the full brutal resilience, which Europeans, mestic market, the inverse of in scope and range necessary to do this for example, don’t have. Brazil, which has a strong domes- successfully. We still need to make tic IT market. The idea that Bra- a few more acquisitions, we are still Did you learn your management skills zilians are creative and flexible is growing, and we have to consolidate in the ﬁ eld so to speak? widely accepted, as well as having all these operations to leverage them, I never did a Business manage- been tried and tested during sev- and there is just no time to spend on ment course, but I am a good listen- eral crises, which has differentiated an IPO at the moment. er. Although I love to talk, as I am IT solutions here. Hyperinflation a salesman, I always listened a lot. I obliged the banks to invent systems Where will Stefanini expand? would say that my management was to protect money. We have innova- I really don’t know. We will take a learned listening to people, reading tional products that other countries look back in three years. Our market a lot, of realizing when I did some- do not have and do not use. But we is so dynamic. if you fall asleep at the thing wrong and not being fright- need to streamline our organization wheel, rather than just grow; most ened to admit it and go back and get and planning companies end up being taken over.

P I B 49 Internationalization WEG from Santa Catarina: expansion in China, Europe and the Americas

Time to go shopping After the post-recession downturn in business, Brazilian multinationals are starting to invest in the global market again.

SUZana CamarGO

he electrical equipment to WEG, Iochpe-Maxion (also from manufacturer based in the South of Brazil) purchased the the state of Santa Cateri- American company, Hayes Lem- na, WEG, announced the merz International a few months acquisition of Watt Drive earlier, a manufacturer of wheels tlast November, an Austrian compa- and auto parts, in a deal worth ny specializing in the power trans- R$725 million. Also in the second mission sector (an Austrian corpora- semester of 2011, Brasil Foods (BRF) tion that designs and manufactures – created through the merger of Sa- gearboxes, gear motors, drives and dia and Perdigão, also invested in cases, as Votorantim, Gerdau, Vale control systems), with a produc- two new acquisitions overseas. do Rio Doce, Petrobrás, Bradesco tion plant near Vienna and assem- The Brazilian company acquired and Camargo Corrêa were among bly units in Germany corporate control other Brazilian companies that and Singapore. Watt (two-thirds) of Avex, made acquisitions in foreign coun- Drive’s revenues in Companies an Argentine poul- tries after the global crisis. Several 2011 are estimated to gain assets, try producer and ex- made sizeable acquisitions, of more reach 30 million. In revenues porter together with than US$100 million. “There was a addition to this ac- its new partner, Flora slight decline in 2009, as a result quisition, and in the and Dánica, a manufac- of the global economic crisis, but same period, WEG employees turer of food prod- Brazilian companies began invest- also acquired Elec- abroad ucts. In the financial ing again in 2010, increasing their tric Machinery, a unit market, Banco Safra assets, revenues and employees owned by GE Con- announced the pur- overseas”, stated Lívia Barakat, pro- verteam, in the United States and chase of a stake in the Swiss bank, fessor at the International Business Pulverlux, in Argentina, specializ- Sarasin, at the end of November for Center at the Dom Cabral Founda- ing in the manufacturing and sale of US$1.13 billion. tion. Lívia was one of the research- powder paints. In a similar fashion And these were not isolated ers responsible for the 6th Edition

50 P I B HAndout/WEG

of the Ranking of Brazilian Transna- period between 2007 billion overseas. According to the tionals, prepared by the Foundation. and 2010. In 2008, foreign direct Central Bank, the companies that In her view, there was an evident re- investment (both by individuals and received foreign investments from sumption in process of overseas ex- corporations) totaled Brazil were, for the pansion among national companies. almost US$212 mil- most part, large caps, “Companies appreciably accelerated lion. In the follow- total Foreign with individual Bra- the process of acquisitions, merg- ing year, 2009, there direct zilian capital inter- ers and the opening of subsidiaries was an increase of investment ests of more than abroad”. slightly more than US$1 billion. Fiscal Published by the Central Bank US$10 million in this (Fdi) in Brazil tax havens such as last December, the result of the sur- figure, which reached totaled uS$ the Cayman Islands, vey of Brazilian Capital Overseas US$223 million. 189.2 billion the British Virgin (CBE) underscores that in the last However, from 2009 Islands and the Ba- three years there has been a growth to 2010, the total of hamas continued to in asset stocks abroad owned by direct investment jumped by US$50 attract investors and together re- both individuals and corporations million, reaching US$274 million. In ceived something in the range of resident in Brazil. Conducted since 2010 alone, Brazilian companies de- 34% of Brazilian investment, which 2001, the current edition is for the clared an asset volume of US$228.9 makes any realistic estimate impre-

P I B 51 Internationalization

cise in relation to the effective des- of 223% in its level of international- has become more competitive, as tination of this capital — and very ization, based on the transnational it has improved its production and often external investment makes a index calculated by the foundation. marketing processes, and invested “stopover” in a fiscal tax haven be- This leap up the ranking was the in its sales force”. fore arriving at their final destina- result of the acquisition of three Stefanini opened a new affili- tion. The sectors that foreign companies in ate in the city of Jilin, in Northern received the biggest 2010, one in Colom- China at the end of 2011. The com- injections of Brazil- For some bia and two in the pany, which already had an office in ian capital were ag- companies, it United States. The Shanghai, is paying particular atten- riculture, livestock has already acquisition of the tion to the auto manufacturer mul- and mining, the oil American company; tinationals in the country. “The IT and gas industry and become TechTeam, which Market abroad is huge, and there are financial sectors and diffi cult to already had a size- abundant business opportunities”, food. grow in Brazil able footprint in ten said Stefanini. The Brazilian multi- One of the high- countries, gave Ste- national projects a revenue stream lights in the ranking fanini access to these of US$1.25 billion in 2011. Of this of transnationals most involved in markets in one fell swoop. “The in- total, 40% should be generated by internationalization in the study (see ternationalized Brazilian companies its international operations. the list on page XX) was the technol- that have grown stronger in the past For the economist and profes- ogy company Stefanini IT Solutions. few years have, generally speaking, sor at PUC-SP, Antonio Corrêa de Placed 17th in the previous year’s become more globally competitive”, Lacerda, the growing strength of ranking, the company jumped to said Marco Stefanini, the company’s Brazilian companies abroad is part number two, registering a growth founder and president. “Stefanini of a structural movement that began PiCtuRES: HAndout PiCtuRES:

52 P I B WEG in China and recent acquisitions by BRF (Plusfood, Holland), Stefanini (TechTeam, USA) and Braskem (Sunoco, USA). aFTEr THE CriSiS Brazilian multinationals made large acquisitions in 2010, the year in which the Brazilian economy grew 7.5%. Some of them are listed below: (US$ MILLION) PURCHASER ACQUIRED COUNTRY VALUE Vale BSG Resources Guinea United Kingdom 2,500 Camargo Correa Portugal SGPS Cimpor Cimentos de Portugal Portugal 1,894 Gerdau Gerdau Ameristeel Corp. Canada 1,607 Marfrig Alimentos Keystone Foods LLC Estados Unidos 1,260 Votorantim Cimpor Cimentos de Portugal Portugal 1,192 Votorantim Metais Cia. Minera Milpo SAA Peru 419 Petrobras Pasadena Refi ning System Inc. EUA 350 Braskem Sunoco Chemicals Inc EUA 350 Petrobras Devon Energy Corp-Cascade Inc. EUA 180 Banco Bradesco IBI Mexico Mexico 164

SOURCE: ECONOMIC COMMISSION FOR LATIN AMERICA AND THE CARIBBEAN, 2011: FOREIGN DIRECT INVESTMENT IN LATIN AMERICA AND THE CARIBBEAN, 2010.

P I B 53 Internationalization

some time ago, driven by a variety of factors: the stepped-up competition, easier access to the capital markets, and the possibility of removing tariff barriers and generating revenues in foreign currencies. “Brazil, which until the decade of the 1990s was characterized as one of the largest emerging markets in the world in terms of inflow of external capital, has since transformed itself into an foreign investor”, explained the economist. As a result of the ongoing developments in terms of domestic businesses, for some companies the local market became saturated, as is the case for the biggest players in several segments, such as: JBS-Friboi, a Gerdau, Camargo Corrêa or Vale do Rio Doce, which need to seek out new opportunities in other countries. “Some companies already have the biggest national market share and are finding it difficult to expand in Brazil”, explained Lívia Barakat. “In this case, the company usually has a presence in every Brazilian state, supplies most of the domestic consumption and needs to take advantage of opportunities outside of Brazil to grow”. If, on the other hand, Brazil still offers growth potential, a balance needs to be found between

PRofitABilitY HiGH tHe NeW wave of internationaliza- als was the increase in their profi t abroad had reached 15.6%, almost tion among Brazilian multinationals margins abroad, which were close the same as the domestic level of also proves the entrepreneurs and to domestic margins. Historically, 15.8%. executives at the helm of these this difference was signifi cant — in For Livia Barakat, the change companies are more experienced. 2009, the profi t margin abroad shows the companies’ increased ca- A surprising result revealed in the for the companies included in the pacity to manage international busi- survey by the Dom Cabral Founda- survey was 6.9%, and the domestic nesses, as the increase in profit mar- tion about Brazilian transnation- margin 13.9%. By 2010, the margin gin has come at a higher proportion

54 P I B Lívia, of the Dom Cabral Foundation: picking up again after a pause

the internal and external opportunities, bearing in mind the Brazilian anti-trust rules of competition that prohibit the concentration of any excessive market share in the hands of any one company. “When we are talking about growth through acquisitions, the best opportunities are generally in the external market, mainly due to the restrictions imposed in the Brazilian market since the merger of Perdigão and Sadia”, explained Wilson Mello, vice-president of corporate affairs at Brasil Foods (the company created by the merg- 3 er). However, the domestic market is still important for the company, particularly in this sector – food – which has been expanding at faster than Brazilian GDP for several years now. For the BRF executive, one of the secrets of the company’s success is the balance maintained between the external and internal markets. Historically, the company’s senior executive stated that BRF’s performance in terms of revenues is close to 45% from abroad and 55% in the domestic market, which gives it the chance to tailor its operations to the improvements and/or dete- rioration in these markets. “The international market is not a priority, but has always been strategic for the

GUILHERME BERGAMINI GUILHERME company, and we are well aware of the potential”, says Mello. The next strategic step for Brasil Foods is to than the growth in revenues. “This abroad, have developed a global complete the construction of a plant shows us that the companies are vision and developed intercultural in the Arab Emirates, scheduled to becoming more efficient in the pro- skills”, she added. “Our compa- start up in 2013, together with the duction and management of costs”, nies have been extremely success- continued operations of its three she explains. The FDC researcher ful with their strategies as they are existing international plants, in the believes that Brazilian managers more capable of dealing with mo- United Kingdom, Holland and Ar- are now far more experienced. ments and scenarios of uncertainty gentina. An investment of US$120 “Our executives have worked more and instability”. million with a production capacity of 80,000 tons /year of processed chicken, the unit in the Emirates

P I B 55 Internationalization

will supply the entire Middle East, which accounts for approximately 32% of the company’s exports, and even North Africa if necessary. Other companies are reinforc- ing their foreign expansion as part of a strategic objective. This is the case for one of the pioneering industries in terms of the internationalization of Brazilian companies, Eletromotores WEG, based in Jaraguá do Sul, in Santa Catarina state — now one of the largest electrical equipment manufacturers in the world. “We have a presence in all the world’s continents and our aim is to have 20% of production outside Brazil”, said Harry Schmel- zer Jr., the company’s president. HAndout “We are well on our way in terms 1 of achieving this”. According to more of a share in our production strategy: as it now has 15 industri- Schmelzer, increasing investment volumes and results”, says the CEO. al units in Brazil and eight abroad, in production outside Brazil is a With its extremely low-profile im- with a presence in countries such as priority. “We would like our for- age, WEG has adopted an extremely China, India and South Africa. eign manufacturing units to have aggressive and successful corporate For many companies, the Brazil

tHe WoRlD oN tHe RADAR SCReeN WHAt HAS changed for Brazilian imperativefor Brazilian companies, which is refl ected in the stability of businessmen in the last decade in which are currently benefi tting theindicators of external invest- termsof the internationalization of from aswiftly expanding domestic ment monitored by Sobeet. These national companies? The outlook market. arerelative, explains the econo- haschanged, says Reynaldo Pas- “To a certain extent, Brazil- mist: they measure the degree sanezi, director and vice-president ian companies have no real need of acompany’s internationaliza- ofSobeet - the Bazilian Society of tointernationalize right now, in the tion in relation to their domestic Studies on Transnational Compa- sense that they need to lookfurther activity.“The numbers are stable niesand Economic Globalization. afi eld as the domestic market does in relation to the domestic market”, Today, he says, the possibility of not offer any growthopportuni- saysPassanezi. “As the domestic openingan international operation ties”, says Passanezi. External market expands more, it will be is on the radar screen of large, mid expansion, given thisscenario, is an morediffi cult for internationaliza- andsmall-sized companies, and is alternative to be considered, but tion to grow much more”. That part of their strategic planning — can be left for alater date, given is to say:stable indicators indi- evenif not adopted immediately. the opportunities opening up in cate that external investment by This is because, on the other side the Brazilianmarket. Even so, the Braziliantransnationals has been of thecoin, internationalization cross-border movement of compa- proportional to domestic market at this point in time, is not an nies is in linewith economic growth, growth, whichhas been healthy.

56 P I B “Some companies with primarily export driven revenue streams start to open manufacturing subsidiaries, thus benefiting from the strong real”. On the other hand, contrary to this favorable effect, the economic crisis being faced today by many countries in Europe and the United States could also negatively affect Brazil’s global expansion, in ways still to be seen. The fact is that Eu- ropean banks have already reduced the volume of credit on offer. And in spite of speculation in the domestic Market that Brazilian companies are awaiting future privatizations in in- debted countries in Europe, such as Italy, Spain and Portugal — forced to HAndout/WEG divest themselves of state-controlled 2 assets to cover their fiscal “black Cost and recent appreciation in the to define its internationalization holes”— some businessmen believe exchange rate are factors that drive policy for national companies more that these business opportunities the moves to purchase or install new clearly”. Oliveira Júnior states that, may be very risky at the moment. manufacturing units on foreign soil. depending on the sector of operation “The American and European mar- “Producing here has become more and model adopted, foreign produc- kets are going through troubled expensive with the appreciation tion can often be cheaper. “The high times, consequently the companies in the real”, says Marco Stefanini. production costs in Brazil, and the in these countries are moderately at- “As well as the exchange rate, the depreciation in the US dollar could tractive”, said Marco Stefanini. The tax burden on final products is also directly affect Brazilian companies’ president of WEG stated that the high”. Organizer and co-author exports, leading many of them to set experience obtained working for of the book: Brazil- themselves up out- years in an unstable economy such as ian Multinationals, side Brazil”, agrees Brazil gave the company the experi- which recently won the Schmelzer Júnior, ence necessary to explore the growth the Jabuti Prize overvalued president of WEG. opportunities that opened up, even in the category of As well as the fa- during times of less growth. “Our Economics, Admin- real provides vorable exchange business model is based on the diver- istration and Busi- an incentive for rate for the real, the sification of risk”, said the executive. ness, the econom- companies to crisis in EU countries “We are Always seeking to diversify ics professor at USP, has also contributed our exposure, and not concentrated Moacir de Miranda go abroad to opening up opin a single sector, segment, industry Oliveira Júnior rein- portunities for new or geographical location”, he added. forces this perception of Brazilian mergers and acquisitions, as foreign For Professor Oliveira Júnior, the entrepreneurs. “Surveys show that assets are priced lower. “The ex- acquisitions in Europe really need the main challenges faced by multi- change rate strongly favors corpo- nationals are not abroad, but in the rate expansion, as it is unfavorable Brazilian institutional environment, to exports, and many companies see particularly associated with infra- foreign production as an alternative 1 Dánica: BRF 2 Inauguration structure problems, variations in the to not suffering the effects of the has targeted of WEG in India: exchange rate as well as, to a certain over-appreciated real for exports”, Argentina for presence in the extent, the need for the government believes Lívia Barakat, of the FDC. food production emerging markets

P I B 57 Internationalization

PUttiNG oN MUSCle The more transnationalized Brazilian companies in 2011 (in relation to their total size) INDEX COMPANIES OF TRANS NATIONALITY 1 JBS-Friboi Food 0.596 2 Stefanini IT Solutions Information Technology 0.469 3 Gerdau Mining and Steel 0.462 4 Ibope Market Survey and Opinion 0.423 5 Marfrig Food 0.380 6 Metalfrio Commercial Refrigeration 0.337 7 Odebrecht Construction 0.327 8 SuzanoPulp and Paper 0.315 9 Sabó Auto Parts 0.311 10 Vale Mining 0.292 11 Magnesita Refractory Products 0.288 to be well evaluated. “The current scenario is pointing to a period of 12 Tigre Construction Material 0.263 economic stagnation that will lead 13 Lupatech Equipment and Parts 0.238 to a drop in competitiveness”, he warns. “It is not a matter of buying 14 Artecola Chemical Products 0.220 just because it is cheap, you have to 15 Votorantim Cement, Metallurgy, Pulp and Paper 0.205 generate value, revenue, innovation and knowledge”. In the opinion of 16 Weg Electrical Machinery and Materials 0.199 the economist, we will not see a solution to the crisis in Europe and a 17 Brasil Foods Food 0.195 more stable Euro this decade, and 18 Embraer Aviation 0.187 the weakness of the EU currency will affect the whole idea of the 19 Ci&T Software Information Technology 0.158 Union as a supranational community, something that has never hap- 20 Marcopolo Auto Vehicles and Coachwork 0.158 pened since the euro was created. Less interested in the so-called SOURCE: THE DOM CABRAL FOUNDATION mature markets, Brasil Foods sees

oN tHe RoAD eveN WitH the concern and their internationalization in the tion to 2012; it will be a diffi cult insecurity about the future of the next few years. Almost 90% of year because of the international global economy and the possible them have plans for foreign acqui- crisis, although one with plenty contagion in Brazil, the Brazilian sitions, mergers and partnerships. of opportunities in our business”, multinationals are still confi dent. In 2012, the companies confi rmed believes Wilson Mello, of BRF. “We Of the 49 companies that took part they expect to see an improve- will move into areas that were in the survey conducted by the ment in performance in terms of previously supplied by European Dom Cabral Foundation, only 12.8 sales and market share. “We are industries and there is still the pos- % are not considering expanding concerned, but optimistic in rela- sibility of opening up new markets

58 P I B A coking plant owned by Vale in Mozambique: betting on Africa

ing international space. “Brazilian companies had the correct approach that they needed to become part of the large global production chains, particularly to ensure they do not become easy acquisition targets for their main competitors”, said economist and professor at PUC-SP, An- tonio Corrêa de Lacerda. But the depreciation in international assets and the strong real have also created a worrying movement towards the Brazilian domestic market. “This

AGÊNCIA VALE AGÊNCIA attracts foreign investment here, in the so-called backyard of the Brazil- the main growth opportunities competitive places to produce food ian multinationals and these com- in the foreign emerging markets. products, together with Argentina panies need to protect themselves However, in these countries that are and the United States. from the advances being made by weathering the storm of the global What some specialists are ask- foreign multinationals”, emphasiz- crisis better, the companies there ing, Oliveira Júnior among them, is es Oliveira Júnior, the organizer of are not getting any cheaper — on whether the current the book Brazilian the contrary, they are appreciating global crisis will be no Multinationals. The in value as a result. BRF has just fi- more than a reordering WEG aims to economist cites the nalized a joint-venture in China, and of global capitalism as have 20% financial sector as has high hopes for its operation in a result of the lack of of its an example, as in Argentina. “Argentina is very similar corporate competi- the past few years to Brazil, it has a growing domestic tiveness in more devel- manufacturing Brazil has seen the market, together with very competi- oped countries, which facilities entry of several tive production costs in the food sec- is associated with the abroad foreign financial tor” says Wilson Mello. “We believe elevated cost and diffi- institutions inter- that the domestic market in Argen- culty in differentiating ested in a slice of tina is as interesting as in Brazil, and in relation to the emerging multina- the pie in this fiercely competitive is also an exporting platform”. For tionals, which opens up the possibil- segment, and which has been grow- BRF, Brazil is still one of the most ity of these new competitors gaining extremely quickly.

for Brazilian products, such as sell- “The strengthening by Stefanini “Investments outside Brazil are ing our pork to Japan and Korea”. in the international area has been long-term projects for BRF”, stated Stefanini already has ambi- planned and executed for 15 years, the vice-president for corporate tious plans for 2012: investing and the global economic crisis affairs. “The question of the ap- US$120 million in new acquisitions merely helped a little in this pro- preciation or depreciation in the before 2013, 60% of this total in cess”, said the company’s presi- real does not interfere with our foreign companies; increasing the dent. Brasil Foods also minimized long-term strategy and our deci- revenues from foreign affi liates the importance of the global crisis sions are based on this strategy, by 60% to 50% of total business. in terms of its business growth. not on a one-off scenario”.

P I B 59 Architecture Co m i/Wiki pe di a Si m on e 1 Homes Brazilian style A half century after the modernist masters’ generation, Brazilian architecture is again advancing in other continents

Lilian Primi

s soon as she graduated she recalls. Today, she is working in the wake of the large Brazilian in 1989, Débora Aguiar on 15 projects either completed or construction companies that have was recommended by in progress and commands a team begun to operate outside Brazil or at a friend to a Brazil- of 50. And her clients are not only the hands of Brazilians buying prop- ian family wanting to Brazilian. Among other work, she erty overseas, the majority of archi- buildA in Orlando, Florida. The first has a condo project in Palm Beach, tects have begun to attend Brazilian meeting was in a hotel in São Paulo Florida as well as jobs in New York, clients with overseas projects, these and Débora felt insecure. “There Miami and Luanda (Angola). serving as a bridge to foreign cus- was this enormous table and every- Débora’s story has been repeat- tomers. For Miguel Pereira, director one spoke in English, a language of ed with other Brazilian architects of international affairs for the In- which I had only a modest grasp’, over the past few years. Following stitute of Architects of Brazil (IAB),

60 P I B EduARdo BARCELoS EduARdo 2 the ready acceptance of our archi- were invited by governments and combination of factors: the need to tects reflects the story of Brazilian clients from other countries thanks rebuild the country following a long architecture, which began to con- to the innovative nature of their in- civil war and the cultural affinities quer the world by creating a tropical dividual projects. Today, our archi- between two countries that speak version of the modernist movement tects are venturing principally into the same language and are linked in the middle of the 20th century. markets which have opened up to a by ties of ethnicity from the time “We developed an important inter- greater presence of Brazilian com- that Brazil received a massive influx national profile with panies with a global of Africans as slaves. “In Luanda, it names such as Oscar outlook: Miami in is Brazil which is calling the shots Niemeyer, Lelé (João the new the United States, Lu- in the architectural market”, says Filgueiras Lima) markets anda in Angola and Débora. In Dubai, on the other hand, and Paulo Mendes can be as Dubai in the Emirates, it is the market that is opening in a da Rocha”, Pereira among others. There city which is an international busi- explains (Niemeyer contrasting is no single reason for ness hub, attracting professionals and Mendes da Ro- as Luanda this. In Miami, the at- and service providers from all over cha won the Pritz- and Miami traction is the large the world. ker Prize, the most number of Brazil- But the Brazilian architects important interna- ians who have bought themselves detect another factor tional award in the area). The cur- homes and apartments there. In in their favor which is difficult to rent movement is different however. 2010, there was a 5 percentage point “ It’s more directed to providing ser- increase in the number of Brazilians vices, benefiting from heritage that among foreign property buyers ac- the masters have left behind”, he cording to a National Association of 1 Mondadori, 2...and Belas Park, says. Realtors (NAR) report in the Unit- in Italy: in LuandaLuanda: Miguel explains that in the six- ed States. In Angola, the Brazilian Niemeyer two generations ties, the leading Brazilian architects presence is growing because of a in 1975... of architecture

P I B 61 Architecture

measure but perceptible in the day- can neighbors (Chile, Uruguay and of Brazilian companies and profes- to-day relationship with clients and Argentina) as well as tougher mar- sionals along the entire construction in market surveys: Brazilians are kets such as Portugal and France in chain. Still at the incipient stage, in- accustomed to giving personal and Europe; or New York and Canada in ternationalization is vital for Brazil- individualized treatment to their North America. A quantitative sur- ian offices, affirms Ronaldo Rezende, clients which is not common in oth- vey by Abea shows that in 2010, five Asbea’s president. “Brazil is being er countries where the project and affiliated offices finalized contracts invaded by foreigners seeking part- construction usually follow more worth a total of US$ 4.118 million in nerships with local offices to exe- standardized rules and at an indus- Angola, the US, Mexico, Lebanon trial rhythm. “Our architect listens and France. The larger part of this to the client, adapts to his needs, is total – about 80% - is represented by avic /R H andout 1 patient and accepts changes at any commercial projects. “The outlook stage of the process”, explains the is that this number will increase by manager of the internationalization about 50% this year”, says Carina. project for the Associação Brasileira But the signs are that the numbers cute projects here” he says. “This is dos Escritórios de Arquitetura - As- may go higher, “We are right now what is called globalization and we bea (Brazilian Association of Archi- trying to create a database for extra- have to learn to live with it.” Seeking tecture Offices), Carina Carvalho. Brazil activities but we are still find- opportunities in other countries is a “We always try to find a way to do ing a lot of difficulty in accessing inform of defense against this influx. what the client wants”, concludes formation”, the executive explains. Says Ronaldo, this is still a recent Débora Aguiar. Asbea’s internationalization process which would explain the Armed with this unexpected project is being developed in part- lack of reliable figures. “The proj- competitive edge, the Brazilians are nership with Apex Brasil as part ect is in line with a trend that has beginning to make incursions into of the Brazil Casa Design Program, been taking place over the past ten the markets of their South Ameri- which disseminates the availability years on a sporadic basis”, says the

62 P I B 1 Condo inAngola: 2 ...noticed similarities with a by architect, Brazilian home... Telma Santini

architect. “We are learning how to projects for residences and com- present ourselves”. mercial spaces in such different One of the ways of doing this is countries? It all depends on the to promote missions for prospect- situation and the moment of each States, and called in architects, Fer- ing and opening up markets in other market. In Miami, in the richest nanda Negrelli and Andrea Teixeira countries. Delegations have already country in the world, Brazilians to decorate the property, thus bridg- been to Dubai, Colombia and in the are seen as foreigners whose investing the gap between Brazilian pro- middle of last November, South Af- ments are helping to offset stagna- fessionals and foreign clients. The

1 arreiras P B ia

2 rica and Mozambique. Ronaldo sees tion in the American economy since two architects hired a local office to a parallel with the Associação Na- the 2008/2009 financial crisis. execute the project to make things cional dos Fabricantes de Cerâmica “Here we are called happy Brazil- easier. “It’s that the measures are - Anfacer (the National Association ian people”, says Virgínia Mendes, different, in feet, and you need the of Ceramics Manufacturers). “Ten a Brazilian realtor that lives and authorization of city hall for every- years ago when they began to in- works in Miami for six months of thing – really, everything, even to ternationalize with the support the year. “People like to relate to us change the position of a light switch, of Apex, Brazil was in fifth place and work with us.” Virginia bought and there is still a problem with among ceramics exporters and to- an apartment in Trump Tower, a decorative accessories in the home”, day we only lose out to China”. high class condo brand name which says Fernanda. But what is it like to work on is spreading throughout the United Once again it’s the problem of

P I B 63 Architecture

standardization. Furniture and nanda has been in Miami for seven Roberto Castro de Mello, director decorative items in the United years and says that the competition of the office, Botti & Rubin of São States, while of an excellent qual- has increased considerably of late. “I Paulo, which has commercial cen- ity, come off a production line. have friends moving here to work as ter projects in Luanda for the con- Since clients want exclusivity, this decorators”, she says. struction company, Odebrecht. He becomes a problem. “Everything Angola is a totally different re- cautions that he does not feel he has which is not standard, is expensive ality with huge social inequalities the right to opine on the behavior of and complicated; in the end I had and a very poor population despite a population that has experienced to bring in a lot of things from Bra- its enormous mineral wealth – the and continues to experience such

1 2 S cavone arcio /M H andout 1 2 zil”. In this context, Fernanda says country is a major producer of oil difficulties. “There are certainly she won brownie points since she is and diamonds. Says Débora Aguiar, some conflicts with the Brazilians able design exclusive items in wood, there exists a certain resentment of who go to work there… and for un- not common in the US. “As our con- foreigners, who with a privileged derstandable reasons”, he declares. struction systems are more labor local minority, enjoy a standard of “On many occasions we are viewed intensive, we are used to this sort of living which is totally unattainable as colonial invaders, but with time demand”, she explains “Most Brazil- for the local population. The scars this will certainly change.” Despite ian architects work like this”. Fer- of war are still to be seen, explains the eventual conflicts, Roberto

64 P I B highlights the familiarity between Northeast. “They use this kitchen At another point on the architec- the two people. “We are brothers”, for family reunions and to prepare tonic scale, Botti & Rubin was one of he declares. “The streets of Luanda, their meals every day” says Telma the offices responsible for the Belas despite the destruction of war still Santini of the office, Ravic which Business Park, a complex with 18 apparent, are very familiar: we rec- has its head office in Luanda and a residential and commercial tower ognize ourselves in them.” branch in São Caetano do Sul in Bra- blocks and a shopping mall in the For the architects, the familiarity zil. Telma says she opened her office Luanda Sul district, launched by the also appears in some cultural traits: in Angola five years ago, just after the Brazilian constructor, Odebrecht the taste for colors and the institu- civil war had ended when she went in 2006. In addition to Belas Busi- ness Park, Odebrecht has already launched another five real estate projects in Luanda with apartments and houses of between 120 and 490 square meters. Luanda Sul is where the majority of Brazilian-inspired projects are located and includes the most affluent areas of the city: Tala- tona, Ilha de Luanda and Miramar – where urban renewal has most advanced. But the Angolans that can access these projects are few and far between. The Belas Park project, for example, has as its core market the expatriate community in Luanda. There, the majority of architects work for expatriates or for high income Angolans, who represent just 5% of the population, says Roberto de Castro Mello. Débora Aguiar says that there is no middle class in Lu- anda. “Either they are millionaires or they are on the bread line.” But Telma Santini believes the rebirth of this segment of the population is beginning. “The government is investing in popular housing and there are Angolan investors, my clients, who are beginning to build for the middle class”, she says. “We sell everything S tudio quickly since the demand is much

M idan greater than supply”. Decoration projects however are only for the tion of the “service” kitchen installed there with her ex-husband who was AA group, the only one to have the in the leisure areas in the external working for a construction compa- financial clout to hire an architect. part of the houses – exactly like the ny. She returned to Brazil when she town residences of farmers in up- separated and opened a branch in state São Paulo. Because of the heat, the ABC - greater São Paulo metro- these outside kitchens open onto en- politan area. Ravic does projects in 1 Débora 2 ...among veloping verandas in the same way Luanda principally for investors that Aguiar:fifteen them, in as in the “sertão” of the Brazilian finance high-end condos. overseas projects... Luanda

P I B 65 Architecture

But not all in the internationalization of Brazilian architectural services has the wind in its sails. The global crisis resulting from the meltdown in the US real estate market in 2008 has put a damper on things: while the emerging world builds, the developed world cancels or post- pones investments. Débora Agu- iar knows all about this. She has six projects on the drawing board overseas but another in Dubai is at a standstill – the client is an American in the financial market. She began work on shops for a chain of cafes in Montreal, Canada with plans for global expansion. But again, the client is also waiting for better times. A solution to the crisis in the developed world might be the enhanc- ing of services. Maurício Queiróz, for example, manages an office in

BUilt BY BRAZil

BetWeeN 2009 and 2010, the says. A survey has thrown up these declares Ronaldo Rezende, Asbea’s aim of the fi rst phase of Asbea’s opportunities in global markets. In president. There is still major po- internationalization project was to Africa - Angola for example - there tential in the tourism sector which introduce a representative brand, is demand for low income housing demands more than just hotel Built by Brazil, in overseas markets. projects, an area where Brazil has construction — the entire chain for “It positions Brazilian architecture something to offer. Other require- serving the visitor, such as restau- as architecture associated with ments are new public and urban rants, stores and leisure complexes, a strong constructive experience, spaces for leisure with a focus on still has to be installed. Outside refl ecting the creativity and versa- social inclusion (theaters, exhibition Africa, Asbea identifi es potential in tility of the Brazilians and is based areas, museums and parks). “They Panama thanks to the widening of on the concepts that enhance the are areas in which we have a com- the canal linking the Atlantic with human being and the environment”, petitive edge”, Carina believes. To- the Pacifi c. “The principal project explains Carina Carvalho, the proj- day in Africa, however, the greatest has spawned many smaller adja- ect’s manager. In the second phase opportunities lie in Mozambique. cent ones, which could be a good between 2011 and 2012, Carina This is another large Portuguese- opportunity for us”, says Rezende. explains that the project will focus speaking African country where But there, the Brazilians will have to on a system of market and sector demand for construction work is in- meet strong competition from the information. “We want to create a creasing. “Mozambique is growing Americans who already have a solid central database and investigate at an annual average of 12% and footprint in the country. A prospect- export opportunities for Brazil- has various infrastructure projects ing mission has already been sent

ian architectural companies”, she backed by international credit lines”, to Colombia, another growth mar- HANDOUT PICTURES:

66 P I B 1 Mauricio 2 Gabriela and Queiroz: Tatiana: the Service makes party in Miami the difference is not going to in retailing last for ever Brazil specialized in commercial projects, focusing on product design. Right now he is working with a Portuguese chain of watch retailers, and chairs so that the client can sit Boutique dos Relógios. “ The chain’s while being attended and then ac- executives came here to do market companying him to the door long research and, besides retaining after the transaction has been con- my office for revamping the stores, cluded. Maurício says that in Europe, took a lot of new ideas customer service away with them on involves rigid rules how to take the busi- odebrecht and in the USA, re- ness forward”, he ex- has launched tailing works with plains. One was credit six projects well defined sys- sales. “They adopted tems and processes. installment payments with residence “The Brazilian has and saw an explosion and offi ces in more flexibility”, he in sales”, he says. Mau- Luanda explains, recalling rício mentions that the that the Portuguese Portuguese executives executives revealed were also impressed with the way to him that they go to two places in the sales people attend customers search of new ideas: New York, for here. For example, offering a table concepts, and São Paulo for service. 1

2 ket. “Our intention is to expand our investment in this country in 2012”, says Carina. The party in Miami looks like lasting, although not forever. “ In 1992, when I began, prices in Miami were low – US$ 2,000 m² for the top end – and here in Brazil, high”, says Gabriela Haddad, one of the partners of Halmoral, a Brazilian realtor that has been working the Florida- São Paulo axis for ten years. “Just like now, everyone invested there”. With the increase in values, 95% of these pur- chasers sold their property at a profi t. “The Brazilian market is inversely proportional to the American market”, says Gabriela, who manages the company together with her partner in the business, Tatiana Mosaner. “When prices drop there, they go up here, and that’s going to happen again”.

P I B 67 Article Magnified Reality An executive from the developement agency of a Swiss Canton comes to Brazil to get to know technology companies. Jocelyne Pepin*

: iMAX G ames iMAX : Pi c tu res

iven the number of Bra- realize the sheer immensity of the the equivalent of two large Swiss zilians seeking to move country. It is on an entirely diffe- cities. to Europe, the “New rent scale. Just getting from one I went to see inventive small and Companies” unit of the end of the city of São Paulo to the midsized companies which started Swiss canton (or state) other takes two hours. The average up in the rich countryside of São Gof Valais has designated Brazil as population of the towns in State of Paulo State, companies in interes- one of the countries in which to São Paulo is 350,000, which cor- ting sectors for the canton, like build its economic development responds to the entire population medical technologies, plant biote- network. That is how I found my- of the canton of Valais. Even the chnologies, as well as information self in São Paulo. My stay, which technology parks assume unima- and telecommunications. I had the required several months of prepa- ginable dimensions. One day, I vi- chance to visit a range of companies, ration, turned out to be extremely sited a university department that for example, Imax Games, a corpo- constructive. is affiliated with an incubator; in ration that develops games and te- The five days on site were ama- walking through the structure, I chnologies related to augmented zing. Before going to Brazil, I didn’t had the impression of traversing reality. Their office is a detached

68 P I B 1 Day at work in 2 ...and iMax; interactive discussion about wall... new games house in a residential area of São tween our two countries. The way titutes and universities. That would Carlos, a city on the north of São the technology centers function and never have been possible by telepho- Paulo. It is a very special working their links with the universities are ne. The work of Hamilton Belizario, environment. Moreover, the em- among the most vivid examples. In Director of the Greater Geneva Ber- ployees are very young. I would say this domain, Switzerland and Brazil ne area for Brazil, also helped me a that they were all between 20 and 40 share the same expectations. I think lot. He serves as our representative years old. The atmosphere, too, was that our backgrounds really comple- to local businesses, and he was the unusual: people were wearing je- ment one another. The connections one who managed my trip. ans and t-shirts, spending 20 hours established with the various enter- Communication was made all a day in front of a computer scre- prises during my stay were enor- the easier by the openness and

en and always thinking over new mously enriching. The fact of being curiosity of our interviewees regar- ideas. I also visited companies like able to personally meet with local ding what we had to offer them. I Cablevision, which specializes in actors allowed me to learn more was struck by how kind people were. telecommunications, Dabi Atlante, about the needs of these corpora- In some economic areas, you can- which makes instruments for den- tions. For some of them, the need is a not take these attitudes for granted, tal surgery, Deltronix, a supplier of logistical one: how to maximize con- and it was a very rewarding aspect hospital equipment, and Ouro Fino, tact with their European customers of my trip. Companies working in in the area of agrifood and veterina- whereas for others, it means finding such conditions are precisely those ry products. The ambience was very new target groups or creating new that the canton of Valais is seeking different from what I saw at Imax partnerships with highly ranked ins- to attract. Game, but still I was impressed by the entrepreneurs’ friendliness and the warmth of their welcome. * Jocelyne Pepin is head of the “New Companies” unit within the economic development office During my trip, I observed a of the canton of Valais in Switzerland. This canton is a member of the Greater Geneva Berne certain number of similarities be- area, i.e. the economic development agency of Western Switzerland.

P I B 69 Finance The São Paulo Stock Exchange: investments from overseas

In the foreigners sights Fund managers are setting up funds especially designed for foreign investors with an appetite for Brazilian bonds and equities. RoSA SYMANSKi

wo years ago, BB DTVM, offices in other countries or signing funds backed by Brazilian securi- an arm of Banco do Bra- joint ventures with foreign broker- ties in two continents: Europe and sil and one of the largest ages to bolster the offers to foreign Asia. In the Mirae case, the fund is fund managers in the investors that are now viewing the made up of Treasury bills, posting country, set up an in- country as a good home for their an annual return of 12%, and has tvestment fund in Japan with 80% resources. raised US$ 1 billion. “The demand of its units in government securi- Besides BB DTVM, other market was surprising”, says Luciana Pa- ties — Brazilian government bonds players are also seeking to leverage zos, head of wealth management — and 20% in dividend-yielding the attraction that for Mirae Securities securities of Brazilian companies Brazil is beginning in São Paulo. such as the giants, Petrobras and to exercise with in- Foreign The success of the Vale. The fund received a rapturous vestors from other investors learn product has been an reception from Japanese investors. countries. A case in incentive to Mirae to Since then the fund has raised the point is the Korean to see Brazil create new products equivalent of R$ 100 million. “It’s Mirae, one of the as a good supported by Brazil- an example of how this demand largest fund man- home for their ian assets for offering can be surprising”, declares Carlos agers in the world overseas investors. Takahashi, president of BB DTVM. which five months investments “In 2012, we are plan- “Brazil has been much sought after ago, launched a ning to launch a real by investors interested in its assets”. fund supported by Brazilian fixed estate receivables fund, that is, with To explore this promising tendency income instruments. Again, there the underlying securities backed to the full – driven by the good fun- is HSBC Global Asset Management, by real estate credits, among other damentals for the Brazilian econo- a subsidiary of the British bank, funds linked to Brazilian paper ”, my – fund managers are opening HSBC, which is offering investment adds the executive.

70 P I B HAndout/ BoVESPA HAndout/

The experience of these manag- USA and the uncertainties of the sectors seen as the most promising ers shows that not all investors be- European economy, have both at- thanks to the country’s growth. “It’s have the same way. Alcindo Costa, tracted a group of investors to other going to be a small-cap fund, in oth- distribution director at HSBC Glob- types of fund — those of the fixed er words, shares of small companies al Asset Management, notes that, income type. “They discovered that with major potential for expansion when selecting investment vehicles, because of the interest rates prac- in long-term projects”, Costa adds. the North American investor dis- ticed in Brazil, fixed income funds “The idea is to offer this fund ini- plays very specific preferences. “He yield much more here”, he explains. tially to the European market and prefers to buy global strategies such “As a result, we wit- then in Japan”. as regional funds which invest in nessed an immense Among the Bra- Latin America”, he says. For the pe- demand for this type HSBC is zilian banks, Itaú riod between 2009 and 2010, how- of product. However, preparing a Unibanco plans ever, one of the portfolio manager’s with the introduction to constitute two funds, which offers positions in of such measures as fund with new investment shares of Brazilian companies and the IOF, Financial Tax, equities of funds for foreign is traded overseas, raised as much we have seen this de- infrastructure investors in 2012, as US$ 10 billion. “This is a fund mand weaken”, says according to Pau- where the asset management is in Costa. companies lo Corchaki, the Brazil and was well received by the HSBC’s strategy Portfolio Man- market”, the executive notes. Cos- to offer foreigners new Brazilian- agement director for Itaú Asset ta points out that the global crisis, based investment opportunities Management in an interview with combined with the recent collapse does not stop there. The bank is get- the Dow Jones news agency. Cur- in the bourses around the world due ting ready to launch another fund in rently, about 10% of the bank’s asset to the subprime meltdown in the the infrastructure area, one of the portfolio of US$ 200 billion is in

P I B 71 Finance HAndout/ BoVESPA HAndout/

1 the hands of foreign investors — a a global tendency. “This is a market Takahashi explains. “Demand has large part of which, Japanese. Itaú with a lot of competition and where been excellent”. Unibanco’s target is to double this innovation is fundamental”, he says. In Colombia, the Banco do Brasil share to 20%, declared Corchaki in “And internationalization is a form fund manager has gone into a joint the same interview. of innovation”. venture with the brokerage house, Experts in financial movement For BB DTVM, which was al- Interbolsa, one of the largest invest- note that this tendency towards ready present in Europe, United ment groups in Latin America, as a internationalization in the funds States and Asia, this has also means of gaining penetration in the area is a process meant beginning to market. BB DTVM’s first initiative that should gather BB dtVM penetrate the Latin in Colombia was a fund, launched in pace. “There is no American market July of this year, which has already going back”, says is opening for placing Brazilian raised US$ 30 million from per- Moacir de Oliveira up markets securities via invest- sonal investors. “This is an equity Júnior, international for Brazilian ment funds — with income fund, but with a dynamic business professor at results better than profile, that is to say it is constantly FEA/USP and FIA securities in expected according changing positions in the light of and author of Multi- South America to Carlos Takahashi. the scenario”, affirms Takahashi. nacionais Brasileiras: In Chile, for example, “It is able focus either on corporate Internacionalização, in the second half of shares or switch towards a greater Inovação e Estratégia Global (Bra- the year, BB DTVM went into part- emphasis on fixed income, for ex- zilian Multinationals: Internation- nership with Principal, a company ample”. The creation of this fund in alization, Innovation and Global associated with BrasilPrevi, and Colombia coincides with a period in Strategy). For Oliveira Júnior, just has already raised US$ 50 million which the country is seeing a major as is happening with Brazilian in a fund directed at high income transformation, recovering from a companies, so funds are pursuing investors. “It’s a small cap fund”, decades-old image associated with

72 P I B 1 Screens at the 2 HSBC’s Costa: SP Exchange: with an eye on small foreign interest cap with potential

of 201o. Today, the funds have total assets under management of US$ 8 billion. The head office is in Dublin, chosen because just as in Luxem- burg, it is an important financial center and a tax haven. Out of Dub- lin, BB DTVM can offer off-shore funds – located overseas and subject to an advantageous tax regime — for international investors, domestic funds in European countries and even portfolios focused on Brazil- ian funds, which are now allowed to apply part of their resources overseas. “We manage various funds for large Brazilian corporations with branches overseas”, says Takahashi. “We saw that there was a repressed demand in this area, which matched

HAndout our need for overseas growth”. BB DTVM expects to focus its 2 attention on Portugal, Singapore narcotics trafficking and civil war. vesting outside their own country”, and China next. “The crisis of con- “The capital markets are still at a1 the executive suggests. In addition fidence in the Portuguese financial nascent stage, such that you don’t to South America, BB’s dealer is also market makes the country an at- see foreign banks there”, Takahashi making incursions into the North tractive proposition for a portfolio notes, leaving implicit the opportu- American market, spearheaded by manager as ours which has such nity that is opening for Brazilian a fund for private bank customers an excellent rating”, the executive financial institutions. — high net worth individuals with declares. Meanwhile, Singapore He reveals that BB DTVM is also financial assets over R$1 million — and China are part of a strategy to studying opportuni- in Miami. Launched penetrate Asia, which has the base ties in other South despite this year, it has raised in Japan as its platform and where American markets, US$ 43 million. “Our the dealer is already located. All among them Peru the crisis, idea is to move slowly this movement confirms the opin- and Argentina. The Europe is into such competitive ion of the experts such as Profes- Banco do Brasil re- part of plans markets as the USA”, sor Oliveira Júnior of FEA/USP and cently acquired the says Takahashi. “We Fabio Gallo, Professor in Finances Banco Patagonia in to expand opted to break in at FGV (Getúlio Vargas Foundation) the latter country Brazilian funds gradually”. and PUC-SP: the advance of the Bra- and is currently ex- Although in the zilian fund managers towards other amining its position middle of a severe markets is irreversible. “It’s hap- and strategy in the region. “An idea economic and political crisis, not pening everywhere, but in Brazil it is that we should begin to operate even Europe has been excluded is assuming major proportions due in Uruguay as well to offer funds to from the Brazilian portfolio manag- to the economy’s favorable phase”, Argentines since we have detected ers’ plans. The same BB DTVM saw Gallo notes. “There is a market of that they like to invest outside Ar- Ireland as an opportunity for new foreign investors out there avid for gentina, feeling more secure in in- investment funds in the second half our investment paper”.

P I B 73 Globe-Trot ter • Executive Travel Marco rezende

WINES GASTRONOMY Cheers, TAP! Paris – the Wines of the Wing, the annual ranking by Global good old days Traveler magazine of the best wines served on the Thirty meters from Place world´s main air companies, has chosen TAP Portu- de la Concorde in Paris, where gal – led by the Brazilian executive Fernando Pinto the guillotine operated through- – as one of the Top Five in the executive class wines out the French Revolution, at 2 category. The choice was made by a panel of 31 jury Rue Cambon, there is a bras- members who met in New York to sample 136 wines serie that requires a little effort served in the first and the executive classes of 28 to find but it is a real discovery: international air lines. Les Flottes. Features: small, The Portuguese wines came out well. Casa de San- one table very close to the other, tar Reserva 2007, a D.O.C. from the Dão region, was informal, venerable atmosphere chosen as the best red wine served in executive class with dark wood and red velvet on international flights. Luis Pato 2010 was third in and extremely pleasant waiters.

the sparkling category and Paulo Laureano Reserva H andout Traditional French food from the 2010, a white D.O.C. from the Alentejo region, was Auvergne, which means duck chosen as the fourth best wine. www.flytap.com

74 P I B HotelS MeDiA 1 Hotel Corinthia in How to speak Watch out, Cnn Lisbon (left): free meetings Brazilian in Lisbon exeCUtiveS WHo WoRK in the Middle tHe CoRiNtHiA Hotel in Lisbon, East and in the Arab world in general have 2 Below, “_oeuf which is owned by a Libyan group of become used to the excellent English-language mayonnaise_” at Les Flottes investors, has undergone a complete programs of the Al Jazeera television network facelift and now has a world class which is controlled by the Qatar royal family. spa. The hotel is close to the Praça de This insightful and independent look at the lo-

LE MAURICE/ROUGEMON LE Espanha in the fi nancial area and near cal scene has closely followed the crises which the Fundação Calouste Gulbenkian and have swept through countries like Tunisia, the El Corte Inglés store, with a view of Libya, Egypt, Syria and yemen and has started the Monsanto Park and the Águas Livres to attract viewers who are looking for alterna- Aqueduct. Guests on executive fl oors tives to the BBC and CNN. However, Al Jazeera have private breakfast in the executive will face strong competition from within the club in the penthouse where a table with region from the beginning of 2012. That is when sweets, sandwiches and drinks is laid on hotels in the Arab world will tune in (or connect during the afternoon. Promotions are by Internet channels) to new stations such as held at certain times of the year which Sky Arabia, a partnership between British Sky offer the hotel´s paying guests free ser- Broadcasting (i.e. Rupert Murdoch) and the Abu vices for meetings – including equipped Dhabi Media Investment group, controlled by rooms, coffee-breaks, and mobile Sheik Mansour bin Zayed al-Nahyan, from the phones for participants, digital infra- ruling dynasty in the Emirate. Prince Walid bin structure, etc. Brazilian guests are wel- Talal, a Saudi billionaire who controls the Ro- comed personally by the Public Relations tana media empire, has also formed a partner- Director, Beth Jardel, the widow of the ship with Bloomberg to launch the new Alarab actor Jardel Filho, who has been living in network at the beginning of the year. The big Lisbon for decades. www.corinthia.pt Western media outfi ts are also strengthening their positions more directly: the UK launched the BBC Arabic Television service some time ago

HANDOUT/ CORINTHIA HOTEL CORINTHIA HANDOUT/ and the US is fi nancing the Al Hurra network. 1

of all kinds, foie gras, a beef tartar which does justice to the name, pork ribs with organic vegetables and, above all, fresh seafood out of season. High points: Michel, the head waiter, seeks out small wine producers in the best production regions and usually suggests large bottles that bring an excellent cost-benefi t ratio. The restaurant´s oeuf dur mayonnaise won the prize as the best of its kind in Paris in 2011. Like the cafés and bistrôs that were used by workers last century, this simple dish of boiled egg covered in mayonnaise has disappeared from the good bistrôs and restaurants. One of the reasons was because the cost and fi nal price was too low to be commercially viable. The annual prize is given by a group of traditional gastronomes who created a kind of NGO to prevent the dish becoming extinct - ASOM – As- sociation pour la Sauvegarde de l´Oeuf Mayo. www.brasserie-fl ottes.fr/restaurant 2 HANDOUT

P I B 75 Globe-Trotter • Executive Travel

ART Leonardo at the court of London

The exhibition Leonardo: Painter at the Court of Milan at the National Gallery in London brings together most of the few paintings that are acknowledged to have been made by the artist for the first time. The exhibition was made possible by unprecedented loans from museums such as the Vatican and the Hermitage of Saint Petersburg. The two versions of the Virgin of the Rock – from the National Gallery and the Louvre – can be seen side by side for the first time. There is also a life-sized reproduction of the immense fresco The Last Supper which Leonardo da Vinci painted on the wall of the refectory of the Dominican order in Milan. The show, which has become as popular as a pop concert with a frantic scramble for tickets, ends on February 15. Tickets through the Internet (which even guarantee time of entry to the exhibition) are sold out, but hundreds are still on sale at the ticket counters every morning. However, expect to queue for up to 3 hours to buy one and V inci

another 3 hours to get in. http://www.national- da gallery.org.uk/whats-on/exhibitions/leonardo-da-

vinci-painter-at-the-court-of-milan L eonardo 1

FLYING Bankruptcy, for the time being American Airlines has negative assets and did what any serious company would do: it filed for bankruptcy protection to give it time to reorganize its finances and refinance its immense debt of 29 billion dollars which compares with its shareholders’ equity of 26 billion dollars. AA has almost 900 planes and flew 100 million passengers last year. It dominates the market between Latin American and the United States. No flight was or should be cancelled as a result of the bankruptcy protection move and the company´s fleet mod- ernization program is continuing. Like many other large Ameri- can companies that preceded it, the airline, which replaced the respected Pan Am in the popular imagination as of the symbol of

B riYY Z aviation, should survive the financial turbulence. www.aa.com

76 P I B CIGARS 1 “Virgin of the Rock”, at left: Leonardo in London

2 Havana (at left): festival of cigars as a pretext for a visit

3 The new Beijing- Shangai bullet train (below): crisis? what crisis? SXC 2 Visit Cuba while the present able to sample the freshly-made cigars in a format system is still in place created especially for the event and witness if not the The 15th Festival del Habano Cigar will be held beginning of democracy, at least the beginning of the in Cuba in the last week of February. Neither Fidel end of state economy. The event will include visits Castro, nor his brother Raul, the current president, is to the Vuelta Abajo production zone, gastronomic likely to take part as he did on the first few occa- dinners and even a concert at the Karl Marx Theater. sions. However, anyone who goes to Cuba will be www.habanos.com

TRAINS The Shanghai 3 express Half of the new Chinese high- speed train network – planned to cover a total 30,000 kilometers – will be ready by the end of 2012. The route between Beijing and Shanghai 2 is already operating and competing with air travel. The 1,300 kilo- 3 H andout meters are covered in 5 hours at a speed of up to 312 km per hour which is displayed on electronic panels installed in each carriage. Everything has been done in the Chinese way: modern and comfort- able trains (three classes), ultra- modern stations and pleasant on-board welcoming service. H andout

P I B 77 Globe-Trotter - Express Tourism

Barcelona, by Fabiano Fontenelle

razilian Fabiano Fontenelle Bwas won over by Catalo- nia’s capital city when he arrived in 1999 for a post-grad- uate course. Since then this ‘mineiro-candango ‘ (see right for photo) has also become a Barcelonan by choice – with a Catalan wife and daughter, he is now the commercial director of a company that manages business and convention centers. With a population of 1.6 million, the second largest city in Spain plays host to over 6.5 million tourists every year. To understand why, you need no more than step foot once in Barcelona, says Fabiano, our guide on this tour.

If you have a few hours... A glance at a map reveals that a large known as the manzana de la discordia). section of Barcelona has been designed on Further on is Casa Milà (La Pedrera), a grid system. This area is the Eixample, by Gaudí, the best known of the trio. I the city’s model for growth designed in recommend a visit to the Gaudí Center on 1860 by the visionary urban planner, Ilde- the top floor, and a walk on the rooftop fons Cerdà. We begin here. For the visitor with its singular chimneys. Fans of La pressed for time, a walk along Passeig de Pedrera will also want to take a look at Gràcia – the city’s legendary avenue and the architect’s other masterpieces: the central nervous system – beginning at unfinished church of the Sagrada Família Plaça Catalunya, provides a condensed and Park Güell, both reachable by a short and meaningful overview of this Mediter- taxi ride. Before leaving, I suggest a ranean capital. The architecture of the art stop at one of the area’s restaurants. A nouveau (here known as Catalan Modern- classic venue is Ciudad Condal, on Rambla ist) buildings is striking. There is a head-on Catalunya (parallel to Passeig de Gràcia). encounter of different interpretations of Enjoyable and always full, it is famous for the style at the intersection with Aragó its tapas (small portions that accompany street, by three of its most renowned archi- a drink). tects: Casa Batlló, by Antoni Gaudí, Casa Not far from there, Fonda Gaig serves Lleó Morera by Lluís Domènech i Montaner traditional Catalan food – in other words and Casa Amatller by Josep Puig i Cada- cod fish, scallops, meats and pasta – in a falch (this block – manzana in Spanish – is modern setting.

78 P I B 1 The Sagrada 2 La Pedrera, 3 ... and outside, Família towers: a another Gaudi on Passeig

C ollection Barcelona icon work: inside... de Gràcia P ersonal XXXXXX SXC 1

2 SXC SXC XXXXXX 2 3

P I B 79 Globe-Trotter - Express Tourism 1 if you have the entire day... 2 CARRY oN to MoNtJUiC park, to the south of the city. Barcelona was the birthplace and home of great artists, and the park is the location of the museum/ foundation dedicated to one of its greatest: Joan Miró. The Miró Foundation is my favorite museum here. The castle at the top of the mountain, accessed by cable car, is the ideal place for a panoramic view of the city. Back in the historic center, it’s time to visit the Picasso Museum. The artist spent his formative years in Barcelona and the museum in his name takes up two mansions HANDOUT/SAGARDI on Montcada street, in the Born area. Its archives hold works from his earlier period. The Born has become a reference with its 3 large variety of boutiques and restaurants. Also found here is the gothic Santa María del Mar church, for many the most beautiful in Barcelona. I usually take visitors to a great Basque restaurant, Sagardi, a few steps from the church. Make sure you try the cod cogote and the txuletón (beef ribs). A ten-minute walk away, the Santa Caterina market in the old town features 19th century architecture restored in a boldly modern style. And it houses Cuines Santa Caterina, a restaurant serving dishes from sushi to Catalan market food (which I recommend). Leaving the Born, cross Vía Laietana to enter the Gothic quarter, Barcelona’s medieval center. The labyrinth of narrow streets and small squares take us through old Barcino (the city’s Roman name).

The Cathedral, the Història de la Ciutat Mu- HANDOUT seum and Plaça Reial are worth a visit. SXC

80 P I B 1 The Miró 2 Pintxos at 3 Tickets: 4 Egg with 5 SONAR: the Museum, in Sagardi, in the tapas by liquid salad largest electronic Montjuic: Born: Basque Adriá at Lasarte: music festival unmissable snacks Michelin stars in the world If you have the entire weekend... Barcelona is a food lovers’ city and if I had to Let’s finally get to the Rambla, the best-known recommend only one restaurant, it would without a street in Barcelona. It is worth facing the sea of tour- doubt be the unique Tickets: where else can you find ists (and card sharks) to get to the delights of the the haute cuisine of Ferran Adriá, Catalonia’s star Boquería market. There are records of a food market chef, applied to the small portions of a tapas bar? But on this site from the 13th century onwards! But take reserve well in advance. The elegant Lasarte, from note: the best prices and produce are usually further chef Martin Berasategui, is another exceptional place inside, beyond the first row of stands. A few meters and holder of two Michelin stars, with creative dishes, away, the Gran Teatre del Liceu is one of Europe’s great quality and high prices. Don’t miss the foie terrine opera houses. This is also a musical city and it is quite and smoked angulas! In a different style, Envalira is normal to find a ‘Sold Out’ sign on the ticket booths another favorite. Off the tourist track and a little snug, of the show houses and concert halls of all genres, excellent food is served in a homely environment. I including SONAR (www.sonar.es), the most important recommend the fried artichokes and rice dishes. electronic music festival in the world. Make sure you plan in advance. 4 Barcelona has kilometers of beaches, but hasn’t always enjoyed them: the beachfront used to be occupied by industrial warehouses and fishing grounds. Urban planning for the 1992 Olympic Games opened up the city to the sea again. A large seafront walkway and beaches reaching to the north created a new public (and tourist) area. The vicinity of Vila Olímpica holds a cluster of restaurants and nightclubs visited by Barcelona residents and visitors, such as Shôko and CDLC. After dinner (which in Spain is very late), these venues are cleared of their tables and ickets /T transformed into nightclubs. The atmosphere is young, and full of beautiful people. H andout H andout

P I B 81 Ad Gulfstream - PIB:Layout 1 23/12/11 16:32 Page 1

Globe-Trotter • In Transit Rafael do Prado Ribeiro* Rafael at the Indy: Sweet Brazil logo on Kanaan’s car THE ENTIRELY NEWG650 Candy, FASTEST. FARTHEST. LARGEST. With a maximum operating speed of Mach 0.925, the G650® offers the longest range and fastest speed of any other business jet flying today. chocolates and Imagine going farther, reaching your destination faster and accomplishing more in a day than ever before. Imagine no more. The world’s most remote racing destinations lie well within the G650’s nonstop range, and worldwide city Brazilian executive tells how to sweeten pairs are never more than a single refueling stop away. the taste of American buyers

For more information: Collection /Personal Prado Ribeiro Brasil: (11) 3704-7070 – Gulfstream exclusive representative Rafael do EUA: (00XX1) 912 965-6161 – Bill Arrazola www.gulfstream.com ne and a half years ago, I pa- interaction with our opposite numbers at the meetings. From cked my bags and left Bahia on route Chicago, we invited our potential clients to the centenary of the Oto São Paulo to take over management Indianapolis 500-mile race, the most traditional race of the of the export sector of ABICAB – Brazilian Formula Indy series, taking place during the weekend. Apex- Association for the Chocolate, Cocoa, Peanuts, -Brasil is one of the sponsors of Formula Indy giving ABICAB Candy and Derivatives Industry (Associação special access to the trials. On way to the racetrack, our bus had Brasileira da Indústria de Chocolate, Cacau, a police escort, freeing it from the traffic congestion, common on Amendoim, Balas e Derivados). Exports of our racing days. A VIP area was available to guests, with free access products have been growing at an annual rate to the paddocks and boxes - and the chance to taste the products of 12.5%: in 2010, they were US$ 303 million of Brazilian companies participating at the event. In this setting, and by October 2011, they already stood at the American buyers were pleasantly surprised and relaxed. In US$ 282 million. the 2011 race, the car of the Brazilian driver, Tony Kanaan, bore As with any other executive in the area, the Sweet Brazil logo, the export brand of ABICAB. He started international trips are part of my routine and, 20th and finished 4th, and we joked, saying it was the power of with each trip, the return luggage is always Sweet that gave him the edge on the racetrack. more than on the outward journey not only Months later, in October, I met one of the race guests at an because of the usual material brought back event in Tampa, Florida. The spirit of the race clearly still had a from abroad, but also, even more so, because hold on him, saying he had been going to the circuit for 10 years of knowledge gained. I had a remarkable expe- but this last had been his best experience in Indianapolis confir- rience in April 2011 during a trip to the United ming the leverage Formula Indy Project has on doing business States. and participating in fairs in Chicago, (where companies made 223 In partnership with ApexBrasil — Agên- contacts and closed deals worth around US$ 1.0 million). For the cia Brasileira de Promoção de Exportações next 12 months, the outlook is for a further US$ 6.8 million of e Investimentos – a company associated exports. with ABICAB, we went to Chicago in the US For us, it was proof that the mixing of Sport & Business, so Mid-West. This was a business trip during ingrained in American culture, works very well to break the ice of which, as well as doing the rounds of fairs and serious business negotiations. If the combination is well develo- technical visits, the companies would contact ped, it can bring excellent results and accelerate business for the potential buyers of Brazilian products, each participating companies. We plan to increase our participation in company having 30 minutes to talk with its the Project in 2012. potential clients. But, how to accelerate these negotiations? The answer was to turn what would have * Rafael do Prado Ribeiro is Export Manager for ABICAB - Associação Brasileira been only one day of talks into three days of da Indústria de Chocolate, Cacau, Amendoim, Balas e Derivados. e d a r d n

82 P I B a r Ad Gulfstream - PIB:Layout 1 23/12/11 16:32 Page 1

THE ENTIRELY NEW 650 G FASTEST. FARTHEST. LARGEST.

With a maximum operating speed of Mach 0.925, the G650® offers the longest range and fastest speed of any other business jet flying today. Imagine going farther, reaching your destination faster and accomplishing more in a day than ever before. Imagine no more. The world’s most remote destinations lie well within the G650’s nonstop range, and worldwide city pairs are never more than a single refueling stop away.

For more information: Brasil: (11) 3704-7070 – Gulfstream exclusive representative EUA: (00XX1) 912 965-6161 – Bill Arrazola www.gulfstream.com e d a r d n a r