I am a native of Brazil, and looking at this country against my broad travel experience, I am still impressed with its beauty, lively atmosphere and huge range of business and investment opportunities. It’s simply a fun and opportune place to live and work.
What does this mean for Canadian business? We have economic and political stability, low risk of political violence, and openness to foreign investment.
- World’s 5th largest country; 7th by GDP
- Population exceeds 200 million
- Largest trading partners: U.S., China, Argentina
- Bilateral trade with Canada (2012): over $6 billion
- Canadian direct investment in Brazil (2011): nearly $10 billion
Many sectors stand out for Canadian expertise. An obvious one is oil and gas, especially because of Brazil’s massive offshore reserves. Increasingly too, onshore activity is gaining momentum. EDC provides financing to Petrobras for its investments in Brazil and other countries, such as Argentina and the U.S., to promote the purchase of Canadian goods and services in those markets.
Likewise, mining is huge here, and EDC serves many transactions between Canadian exporters and Vale for its operations in Brazil, Canada and beyond – such as Mozambique and Peru.
There are so many other sectors to exploit in this large country: from telecommunications to transportation – think rail, metros, roads, airports, ports – and from power to water treatment, or just about any type of infrastructure.
All of this is doubly important in the run up to the 2014 World Cup and 2016 Olympics – along with projects related to the sports events, such as venues, hotels and security.
I work closely with my EDC colleagues and Canada’s trade commissioners in Brazil – and in Uruguay, Paraguay and Argentina – to help our customers here expand their supply chains, and to explore new niche opportunities for Canadian exporters in general and match them up with interested local firms.
Mind your language
Brazilians are a proud people…but I will admit to a few challenges to doing business here. Although I don’t find that Brazil and Canada have a wide cultural gap, the business mindset can be quite different. For example, Brazil is still very domestically focused and a relatively closed economy compared to Canada’s. This contributes to higher complexity in the bureaucracy, tax and legal frameworks.
So you have to focus on long-term returns, which can be very rewarding, but it often takes a long time until contracts are signed – all of which makes it tougher for smaller businesses. But far from impossible.
To overcome cultural barriers, it’s important to develop long-term relationships here and perhaps establish a joint venture or acquire a local company. This helps you ensure local laws and customs are respected. In general, it’s advisable to work with someone who speaks the local language (Portuguese), whether an employee or reliable local representative who is well acquainted with this market.
I work with many Canadian companies who are getting this formula right. For example, most of Canada’s major engineering-consulting firms have operations here. Just last year, Canada’s Hatch Group acquired Brazil’s MEK Engenharia to serve Latin America’s power sector.
We also serve growing small and mid-sized firms, like Ottawa-based Alscott Air Systems – providing heating, ventilation and air conditioning (HVAC) for ships and oil and gas facilities – which recently formed a joint venture with a Brazilian company.
As I wrote at the beginning, this place is full of action. Até breve – see you soon!
Fernanda de A. Custodio, Senior Regional Manager, Brazil, based in Rio de Janeiro