Brand owners target Brazil

20 August 2012
RIO DE JANEIRO: Over three-quarters of major brand owners believe that Brazil presents increasing opportunities for growth, with firms like McDonald's, Fiat and Royal Caribbean all targeting the country.

Ernst & Young, the advisory group, polled 250 senior executives, some 78.4% of which saw Brazil as the most attractive Latin American nation to be trading in, beating Argentina on 44.6% and Chile on 42.9%.

Looking ahead, 83.4% of interviewees agreed the country's appeal would rise in the coming three years, alongside 13.6% anticipating no change and 2.3% forecasting a decline.

"Three years ago, my position was based in Miami and now it is in Brazil, the world's second top office in terms of results," Ricardo Amaral, chief executive of Royal Caribbean International, the cruise company, said.

When assessing the qualities possessed by Brazil, an 86.5% majority of the panel cited the domestic market, Labour skills logged 68.5%, R&D capabilities hit 61.7% and the regulatory climate posted 61.7%.

"The country must have a clear and stable regulatory framework to continue attracting investors," said André Araujo, president of Shell Brazil. "It's a long journey in which the Government and the private sector should be working together. I believe we are on the right track."

When asked which categories would drive growth, oil and gas received 44.2%, followed by real estate and construction on 27.7%. Tourism came next on 27.3%, trailed by agriculture and food on 27.3%.

Automotive and transport secured 20.7% on this measure, and consumer goods yielded 20.3%. Demand should rise from a middle class that has expanded by around 30m people in the last decade, and should grow by a further 12m by 2014.

"Considering that our per capita income has been approaching that of more mature economies, there is room for growth," said Ivan Zarur, chief financial officer of McDonald in Brazil, which is among the firm's top ten and fastest-growing markets.

Similarly, automotive sales rose by 3.4% in 2011, reaching 3.6m units. Around 45 brands and more than 2,000 models are now available in the country, reflecting great competition and possibilities.

"In Brazil, where there is one car for every six people, there is still great demand to be met," said Cledorvino Belini, chairman of Fiat Brazil. "As a market with potential for vehicle sales expansion, we lag behind only the US and China."

A 30.1% share of the sample thought Brazil would be a leader in the energy sector in 2020, as did 23.8% for the green economy. Manufacturing was on 23.2%, topping tourism on 13% and R&D on 17.7%. Some 13% of participants also agreed the nation may become a local or global hub.

Data sourced from Ernst & Young; additional content by Warc staff
Share with a colleague
Your email address
Your colleague’s email address
Comment (max 150 characters)