Dynamic Export

Advanced exporters

Brazil has, for many decades been leading the world in the development of alternative energy sources, notably ethanol and other biofuels, and 45 percent of Brazil’s energy is already drawn from renewable sources, according to the National Bank for Economic and Social Development, compared to only  six percent from developed countries. In 2008, ethanol made from homegrown sugarcane outsold gasoline and 90 percent of new Brazilian cars and light trucks can run on biofuel, petroleum or both!

Australian cleantech companies, product-providers, consultants and suppliers should go to Brazil to research the significant progress and commitment being made to the renewable energy sector, not just in ethanol and biofuels but also in hydroelectric power, solar and wind farms, and look for opportunities to compare notes, collaborate and export products, services and technology to the Brazilian market.

The Brazilian financial services industry offers a wide range of products, services and opportunities that attract numerous new entrants each year. Having survived the Latin American debt crisis of the 1970s and the Mexican devaluation in 1995, Brazil’s banking and finance sector has been under the microscope of the International Monetary Fund and the World Bank for many years and is now among the most well regulated in the world.

Furthermore, the Brazilian Government is run by a sophisticated technocracy of top economists and international bankers, many of whom held top positions in leading international banks, and has allowed Brazil to develop a financial services sector, which is thriving in the post-global financial crisis environment. Opportunities exist across the board for Australia’s financial services sector to participate in the growth of Brazil’s banking, wealth management, funds management and insurance sectors.

Barriers

Brazil offers many challenges for Australian exporters and this would explain, to some extent, the reticence of Australian companies to make the long flight across the Pacific Ocean to engage with a country which has for many years been associated with the burdens of Latin American debt, hyperinflation, military dictatorships and extreme violence and poverty.

Furthermore, with high tariffs, onerous red tape, bureaucracy and language challenges—unlike most other Latin American countries, Brazilians speak Portuguese rather than Spanish—Brazil continues to offer many challenges for Australian exporters.

However, Brazil is committed to a program of structural reform, including a raft of changes to labour, taxation and infrastructure programs, which will alleviate some of the current challenges over time. But, in the meantime, Australian exporters should be prepared for complex and onerous export documentation and customs clearance issues, which calls for advice, support—and patience!

The future

During this century, Brazil will become one of the largest economies in the world, taking its place behind China, USA, India and Russia as the dominant markets for business, trade and investment.

Brazil will lead the world in many sectors that complement, enhance and offer opportunities for Australian business, particularly in agriculture, resources and renewable energy. Leading Australian businesses can’t ignore the chance to gain a foothold in this large and significant long-term market. My advice would be to:

• Do your research. A good place to start is the Brazil pages on Austrade’s website (www.austrade.gov.au)
• Talk to Greg Wallis, Austrade’s senior trade commissioner in Sao Paulo.
• Meet with Brazil’s ambassador to Australia, Fernando de Mello Barreto who I have found to be extremely personable, approachable and supportive in all my dealings with Brazil.
• Talk to other Australian companies that are doing business in Brazil.
• Join the Australia Brazil Chamber of Commerce (www.australiabrazil.com.au)
• Get some advice on how to develop a market entry strategy for Brazil; Think Global can help.
• Go to Brazil. Start in Sao Paulo and Rio de Janeiro, target companies in your sector and develop relationships with local business leaders and centres of influence. With much of Brazil’s commerce tightly held by a small group of influential families and high net worth individuals, you may find it easier than you think to develop important connections.
• Get started. Do something small, gain a foothold and then build up slowly and progressively. Create business targets and milestones, gain confidence and move forwards. You’ll be rewarded over the long term!

—David Thomas is CEO of Think Global Consulting (www.thinkglobal.com.au) and a BRIC expert, highly respected for his experience, credibility and passion for identifying, building and facilitating business and investment relationships between developed and emerging countries.

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