Brazil improves its participation in global ranking of innovation

Brazil got two additional positions in the world ranking in research and development carried out by US consultancy Booz & Co. The country had five companies in the last two editions of the ranking – Petrobras, Vale, CPFL Energia, Totvs and Embraer – and now has seven, with the addition of Gerdau and Companhia Paranaense de Energia (Copel).

“The insertion of these two companies is not surprising, as they are from capital-intensive sectors (energy and steel), which need R&D to apply that money efficiently,” Gustavo Roxo, partner of Booz & Company in Brazil, told Valor.

Of the companies that were on previous lists, all improved their rankings. The biggest gain was CPFL Energia’s. The electric utility leaped 71 positions, to the 634th place from 705th. The consultancy’s survey has been conducted since 2005 and takes into consideration the 1,000 largest publicly listed companies in the world.

With the Brazilian companies’ results, the country totaled $3.7 billion, a $1.6 billion increase from 2010. The country nearly doubled its participation in global R&D spending. Brazil’s share, which was 0.39% in 2010, rose to 0.63% in 2011.

Mr. Roxo says that Brazil’s performance is positive, but Brazilian companies need to improve their investments so that the country can close in on developing nations such as China and India. Together, these two nations had the largest increase in R&D investments in the world in 2011: 27.1%, at $16.3 billion. Of this total, China accounted for more than 90%. The country has over 40 companies on the list of the most innovative. India, even though it has less investment than Brazil, at $2 billion, has nine companies on the list.

The issue, according to Mr. Roxo, is not just increasing the volume of money invested in this activity, but also to be more attentive to the classification of these investments in earnings reports. “A lot of this information isn’t clear in earnings reports. Spending on R&D ends up going in as regular investments. And it’s also important to highlight that to value what the company does,” he said.

Globally, R&D investments of the 1,000 largest companies were up 9.6% to $603 billion. It’s the second year in a row that they have grown, after contractions due to the world’s economic crisis in 2008 and 2009. Mr. Roxo says investment picking up was stimulated by the US.

Source http://www.valor.com.br/international

Brazilian import-export company expands corn exports to Middle East

Egypt increases purchases of maize by 899.4%, from 90,310 tons in 2011 to 902,550 tons in 2012, according to Scot Consultoria.

BrazArtis, an import-export company based in Rio de Janeiro, Brazil, is set to expand its soybean and corn exports to the Middle East, an endeavour that is aligned with the growing Brazilian grain harvest and exports.

Driven by soybean and corn production, Brazilian grain harvest is estimated to exceed 180 million tons from 170 million last year. The soybean harvest alone for 2012/13 is set to increase by 20% and reach 81 million tons, from 66 million last year. Ranked as the second agricultural commodity export from Brazil, maize production is set to increase by 7% from 66 million tons to 70 million tons.

In the period of January to August of this year, Egypt has increased its purchases of maize by 899.4%, from 90,310 tons in 2011 to 902,550 tons in 2012, according to Scot Consultoria. Saudi Arabia has increased its purchases of corn from 159,770 to 402,190 tons in the same period, an increase of 151.7%.

Jan Dabrowa, Business Development Director at BrazArtis, said, “The value of the Brazilian agribusiness has reached a peak, and it is set to reach $100bn in 2012. Current exports of oilseeds are being fuelled by changing market dynamics that have set the stage for another successful harvest in 2013. In light of the decreased exports by Argentina and unfavorable weather conditions that affected the US crops, Brazil took up a leadership role as one of the main producer and exporter of soybeans and corn.”

On another hand, corn exports to Iran decreased by 26.9% from 951,890 to 695,620 metric tons, but the country still stands as one of the leading importers of Brazilian corn in the Region.

The exports of soybeans in 2012 are set to reach 17.5 million tons, a 20% boost from 2011. In 2013, a provision for 10% increase in planting and 11% improvement in average productivity should result in 27.5 million acres planted and potential harvest of 81 million tons of grain. Approximately 48% of the total production, equivalent to 39 million tons of oilseed will be destined for export.

It is projected by the Brazilian Ministry of Agriculture that the agribusiness exports will reach a record of $100bn in 2012. In 2010 Brazilian agricultural exports surpassed $76.4bn worldwide, an 18% increase from 2009. They attained a new record in 2011 by totaling $94.59bn, 24% higher than in 2010.

Brazil’s exports span across the whole GCC region including KSA, UAE, Qatar, Jordan, Bahrain, Kuwait, Lebanon, Syria and Oman.

Source: www.middle-east-online.com

Chinese automakers to tap Brazil through local production

Chinese carmakers are setting up production bases in Brazil, which is currently the world’s fifth-largest auto market, to tap into the surging business opportunities offered by the South American country, Shanghai’s First Financial Daily reports.

On Oct. 23, Brazilian car distributor Districar announced that it will be adding Changan and Haima to the list of Chinese auto brands it distributes, including Chery and JAC, in Brazil from early next year.

The announcement preceded the Sao Paulo International Motor Show, which opened on the following day, where China’s Great Wall Motors unveiled its plan to enter the Brazilian market in the second half of 2013 and to set up factories in the country.

Great Wall, which was taking part in the Sao Paulo motor show for the first time, said its planned factories in the country would help it avoid the high import taxes.

In fact, similar plans were revealed by Mou Gang, vice president of Lifan Group, in a recent interview with the newspaper, following the completion of its acquisition of Paraguay-based auto company Besiney.

With newly acquired Besiney, Lifan plans to build factories in both Paraguay and Brazil, which are expected to commence production in 2014, with an annual capacity for producing 10,000 cars, the newspaper said.

Chery’s factories in Brazil, which are currently under construction, are expected to begin production in 2013.

While Brazil was ranked as the world’s fifth-largest auto market in 2011, with sales of 3.6 million cars, the industry predicted that the country will climb to third place by 2016.

Chinese cars accounted for 25% of the car imports of Brazil in 2011, after Chinese brands successfully captured the middle to low income consumer market in the country, the newspaper said.

However, the Brazilian government’s move in April to protect local manufacturers by imposing a 30% industrial product tax on imported cars, had at one point created an impediment for JAC’s planned investment in Brazil, the newspaper said.

The tax imposed on foreign-made cars dragged down JAC’s monthly sales in Brazil from 3,000 to 1,800 cars, the newspaper noted.

Brazil announced on Oct. 7 the latest plan for the development of the country’s auto industry, which will offer tax deductions to car companies, which source at least 65% of the components from Brazil or member states of the South American trade bloc Mercosur.

On that same day, JAC announced its US$450 million project to build its first factory in Brazil, which is set to begin producing 100,000 cars every year from the second half of 2014.

JAC’s decision also reflected how local government policies would affect Chinese car companies’ plans for expansion into the Brazilian market, the newspaper said.

Source: http://www.wantchinatimes.com

Brazil and India lead way in innovation

Innovation in business has begun to shift to emerging markets, according to a new report

Traditionally business innovation has occurred in established markets like the US, Europe and Japan, but as the global economy shifts towards fast-growing developing markets, new techniques and ideas are starting to emerge in these regions.

According to a recent study published by the Institute of Development Studies, countries like Brazil, India and China are leading the way in developing new techniques. The report specifically focused on new value chains in the Brazilian auto and Indian software industries, according to lead researcher Hubert Schmitz.

The Brazilian auto industry has increasingly spent more money on R&D during the last decade, multiplying six times by 2010 and hitting $2bn. This was led by firms such as Arteb and Letande.

India’s software industry has also been engaging in significant R&D, with more than 60 percent of firms increasing their spending on new research.

The report says: “Such new activities are likely to be concentrated in the technology and knowledge domains in which engineering and science in the new powers are particularly strong: materials science and biofuels engineering in the Brazilian auto industry, and exploration of new software languages in India. Further investments in these fields can provide the means for effective problem framing and solutions in the future.”

The consequences of the shift in focus, says Schmitz, are that either established markets like the US and Europe will evolve and benefit from Brazil and India’s innovation, or they will see a rapid decline in jobs and innovation as new businesses drive prosperity.

Source: www.theneweconomy.com

Ducati Brazil Opens for Business with Local Manufacturing

To further boost its growing success, Ducati has founded a subsidiary in Brazil, terminating its business relationship with the Izzo Group and starting “Ducati do Brasil Indústria e Comércio de Motocicletas Ltda.”. This will enable the company to fully manage the distribution of Ducati motorcycles and other Ducati-branded products in Brazil.

Starting from October 2012, “Ducati do Brasil Indústria e Comércio de Motocicletas Ltda.” will manage the distribution and service Ducati products all over the national territory. Ducati Motor Holding S.p.A has full control of the new company and has appointed Ricardo Susini as its Managing Director and Marco Truzzi as Service & After Sales Manager. The new structure is based in Sao Paulo and, after completing all necessary formalities, will operate through an efficient sales network covering the entire Brazilian territory.

Ducati Motor Holding S.p.A. also confirms its cooperation with DAFRA da Amazônia Indústria e Comércio de Motocicletas Ltda. for CKD assembly of Ducati motorcycles in Brazil.  Local assembly in Brazil will allow the company to avoid stiff import taxes.  Production at the Manaus plant will start within the next few weeks, with the first motorcycles delivered to a constantly growing and impressively evolving market. Ducati will carry out an increasingly important and strategic role in Brazil, confirming a positive growth trend world-wide, which has characterised this iconic manufacturer over the past few years.

“The Brazilian motorcycle market is one of the most interesting and the third biggest in the world,” said Gabriele Del Torchio, CEO of Ducati Motor Holding S.p.A. during the press conference announcing the creation of Ducati do Brasil.

“Ducati has a very strong image in this country and we have the enthusiastic support of many Ducatisti, motorcyclists and fans in general. The opening of this new subsidiary and the fact that our motorcycles will be assembled in the Manaus plant is evidence of our focus on the Brazilian market. We wish to offer our customers here the best possible sale and after-sales service, and confirm the strategic importance assigned to this market by Ducati.”

“I am especially proud of having been selected for this great, new venture,” said Ricardo Susini, Managing Director of Ducati do Brasil. “I have spent my entire life in the world of motorcycling and now being part of such a prestigious, prominent and famous brand strongly motivates me to achieve new goals.”

Source: http://www.beltdrivebetty.com/

China replaces the US as top exporter to Brazil

By Marta Watanabe | São Paulo

Even with the drastic slowdown of Chinese automobile exports to Brazil, the Asian country became in 2012 the top seller to Brazil. China now occupies a place that until last year was historically a US post. The new Chinese ranking in Brazilian imports, according to economists, is here to stay because it’s the result of a structural and long-term shift in the trade balance between both countries. Moreover, the rise of Chinese investments in Brazil will also boost intracompany trade, still small between China and Brazil.

In 2002 China was the seventh most important supplier to Brazil on the global market, responding for 3.3% of the country’s imports. The Chinese share of Brazilian-bound shipments has increased every year. In 2012, such figure up to September was 15.2% of the total, with R$25.1 billion. During the same period, the US sold to Brazil a total of R$23.8 billion. The Americans, which ten years ago supplied 21.8% of Brazil’s imports, currently have 14.4%. The data is from the Ministry of Development, Industry and Foreign Trade (MDIC). 

 Former Foreign Trade secretary Welber Barral 

Former Foreign Trade secretary Welber Barral says China’s exports to Brazil have diversified a lot more than those from the US. In 2002, airplanes, helicopters and their spare parts, besides turbojet engines, were among the main items purchased from the US by Brazil. Ten years ago, coking coal and anthracite were among the main Brazilian imports from China. Those products have surrendered their place to manufactured goods including electronics and their spare parts, besides transportation goods. 

Trade between the US and Brazil, Mr. Barral says, changed less because it’s more dependent on intracompany trade. Chinese exports to Brazil, meanwhile, mirror the production diversification undergone by the Asian country in the period. Mr. Barral estimates the Chinese will continue being the main international supplier to Brazil, especially as Chinese investments in Brazil mature. Besides China’s diversified exports, trade between Brazil and China will also start to be affected by intracompany trade.

According to data from Renai, a MDIC agency, China became in 2011 the country with the 12th highest announced investments in Brazil. China’s share of all foreign investments announced in Brazil last year was 3.8%.

The Chinese expansion in intracompany trade, says José Augusto de Castro, vice president of the Brazilian Foreign Trade Association (AEB), will accelerate in the next few years. “The pace will be swift because Chinese investments are growing, very different from American investments, almost all of them already in the mature stages.”

Mr. Castro also calls attention to the shift in the exports of the Asian country. China’s sales abroad, which before featured products with low aggregate value, have become increasingly sophisticated, with greater technological intensity. “China’s exports no longer consist only of trinkets, or textiles and shoes. Today we’re importing Chinese capital goods.”

MDIC data shows that in 2002, capital goods responded for 13.4% of Brazilian imports of Chinese products. The share has advanced to 23.4% today. Intermediary goods, which were 67.3% ten years ago, now represent 56.6%.

That Chinese advancement into more technology-intensive products, including machines and equipment, Mr. Castro says, has been a result of the Asian country’s above-average growth over the last ten years. The US, on the other hand, reached a growth peak in 2002 and saw several companies switch production to Chinese territory, due to low labor costs and other production factors. American growth had its peak in the last decade in 2004, expanding 3.5%. China’s peak growth was in 2007: 11.2%. This year, the IMF estimates growth of 7.8% in China and 2.2% in the US.

An expert in foreign trade, Fernando Ribeiro, research and planning specialist at the Institute of Applied Economic Research (Ipea), also makes a similar point. “It’s not just about China’s growth. The performance of American corporate exports in the period was also weak.”

Mr. Ribeiro says the expansion of Chinese exports is not restricted to Brazil. “It’s about a structural change in which China became with time the main supplier to several countries, with global market-share gains.”

Gradually, the Ipea researcher says, China went from being a supplier of simpler products to more sophisticated goods, winning market share from traditional suppliers of capital goods, like the US, Germany and other European countries.

Data from Abimaq, the Brazilian capital-goods trade group, show that China in 2002 was the 14th largest foreign supplier of mechanic capital goods to Brazil. At the time, the Chinese sold less than $100 million of that equipment to Brazilians. This year, up to August, China is the second most important source of those machines, with $2.8 billion sold to Brazil. Americans still remain on top, with $5 billion, but losing ground. In 2002, the US was responsible for 38% of mechanic capital goods shipped to Brazil. Now it responds for 25%. The Chinese performance has already left behind Germany, traditionally the second biggest foreign supplier of the machines. In the year up to August, Germany sold $2.5 billion in machines to Brazil.

Mr. Ribeiro says that China’s rise as the main Brazilian supplier is already consolidated and is likely to continue. “China’s exports are growing faster than the global average for a while now and that won’t change,” he says. The economist says that even with the slowdown of its economy, China will continue growing at a relatively fast pace.

source  http://www.valor.com.br/international/