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totum
Year 1
Number 2
Dec 07/
Jan 08
TAVEX
New addition
to Santista
stable wants to
MARKETING dress Europe
Coffee from in denim
the Cerrado
wins customers HISTORY
in Japan Two centuries
ago, Brazil
became part
of the world
CAREERS
Brazilians
are going
to school to
learn global
business
The
ethanol Ethanol is showing the
way, and Brazil leads
effect
the world in the race
for clean energy.
The chance is there –
it’s just a question
of getting it right
A NEW BRAND,
WITH THE SAME
V A L U E S. Vale’s new brand speaks to the company’s
globalization and mineral diversification
today. However, our values and policies
have not changed; our commitment to
ethics, corporate social responsibility,
discipline in capital allocation and risk
management remains strong and steadfast.
The constant quest to transform mineral
resources into essential elements present
in our lives is Vale’s passion.
www.vale.com
Contents
ANTENNA
Illustration: marcelo calenda
12 Oskar Metsavaht, the Amazon
and the Dom Cabral Foundation
TRENDS
20 A study by economists Jeffrey
Sachs and Karl Sauvant sees an
increase in global FDI flows
SPECIAL
Cover Story 26 Tavex, controlled by Santista of Brazil,
32 Aforclear road wants all of Europe to wear its denim
ethanol By Adriana Setti, in Casablanca
Brazil has the chance to lead a global MARKETING
revolution in clean fuel, and it’s got an 48 Coffee from the Brazilian
ace up its sleeve: mastery of all stages Cerrado is filling cups in Japan
of production technology, from high- By Nely Caixeta
productivity sugarcane plantations HISTORY
through design and manufacture of
the world’s most modern distilleries.
52 Two centuries ago, Brazil
became part of the world
Sugarcane ethanol is undoubtedly
By Ricardo Galuppo
today’s most efficient substitute for
gasoline, new fuels are being tested and NEW MARKETS
the countryside is modernizing. 56 Key steps to break into the
By João Paulo Nucci, Marcelo Cabral, Vicente powerful Chinese market
Vilardaga and Armando Mendes By Juliana Valle, in Beijing
CAREERS
58 How Petrobras trains the
executives who will live abroad
62 Internationalization can
be learned at college
IDEAS
66 American elections are less and less
important to the Brazilian economy
By Paulo Moreira Leite
FINANCE
Tavex
worker in
68 Itau strengthens its position in Chile
Marco Pomárico; handout; illustration marcelo calenda; handout
Morocco 26 48 71 Companies with investment grade
rating conquer the world more quickly
Itau’s OPINION
Marino
in Chile 74 Innovation is the key to
success in the global market
By Bruno Reis, in New York
77 The importance of knowing the
laws in your country of destination
GLOBE-TROTTER
78 Brazil around the world
IN TRANSIT
52 68 82 The human touch
By Chieko Aoki
4 PIB
Since moving my business to London,
IÕm hardly ever there
As the UK Government’s
international business
development organisation, we
can help your company get to
where it needs to be.
If you’re a UK firm, we can help
you export successfully, giving
you unique access to contacts
in every industry in every
country, as well as bespoke
research and advice.
If you’re an international
company looking to expand
globally, we offer impartial,
quality, tailored advice and
access to networks that
will help you use the UK’s
remarkable potential to your
full advantage.
To realise your company’s true international business potential,
contact UK Trade & Investment today.
www.uktradeinvest.gov.uk
Editorial
Totum
Excelência Editorial
Clayton Netz
Nely Caixeta
Ricardo Galuppo
On a Wave of PIB
Clean Energy
BRAZILIAN COMPANIES
GO INTERNATIONAL
A TWO-MONTHLY MAGAZINE FOCUSING
ON INTERNATIONAL BUSINESS AND
ECONOMICS, FROM TOTUM
Editors
Clayton Netz • clayton@revistapib.com.br
PIB was born with the mission of telling you what Nely Caixeta • nely@revistapib.com.br
Ricardo Galuppo • ricardo@revistapib.com.br
matters at the cutting edge of the Brazilian economy – Contributors to this edition
where companies accept the challenge of fighting for Adriana Setti, in Barcelona and Casablanca, Andréa
Flores, in Paris, Armando Mendes, Bruno Reis, in
space in global markets, and the competition grows New York, Chieko Aoki, Habih Nasser, João Paulo
Nucci, Juliana Garçon, Lia Vasconcelos, Lucianne
Carneiro, in London, Juliana Vale, in Beijing, Marcelo
tougher in proportion to the potential for profit. Reaction to our first Cabral, Marco Losso, Maria Helena Tachinardi,
edition, as measured by the quantity of letters we received, and the peo- Mário Grangeia, Paulo Moreira Leite, Patu
Antunes, in Barcelona, Rachel Verano, in Valencia,
ple who signed them, was proof that there really is space in the market Rebeca de Moraes, Renata Penna Franca.
Design and Layout
for a publication such as ours. We, the editors, have had absolutely no Maurício Fogaça / Karina Gentile
Página Mestra
doubts of this ever since our first edition was launched at an event in the Cover and Illustrations
Brazilian British Centre, in São Paulo, with the presence of the Minister Marcelo Calenda
of Development, Industry and Foreign Trade, Miguel Jorge; the May- Photo Editor
Mônica Maia - Revelar Brasil
or of São Paulo, Gilberto Kassab; the Lord Mayor of the City of London, Copydesk and Preparation
Márcia Melo
John Stuttard; businessman Marcelo Odebrecht, president of the Con- Translation
strutora Norberto Odebrecht; and the then Communications Secretary Brian Nicholson
of São Paulo, Hubert Alqueres, rep- ADVERTISING
resenting State Governor José Serra. Arines Garbin
Consultant
The process of international-
INTERNATIONAL AND BRAZIL
ization that attracted our inter- (EXCEPT RIO DE JANEIRO)
(55-11) 3097.0849
est goes way beyond the expansion publicidade@revistapib.com.br
Av. Brigadeiro Faria Lima, 1903 cj 33
of Brazil’s most modern and com- Jardim América - 01452-911 - São Paulo - SP
Rio de Janeiro
petitive companies into new mar- Paulo Avril • pavril@terra.com.br
(55-21) 2557.8580
Launching PIB: kets around the world. It includes
Álvaro Motta
Rua Silveira Martins 156/704 - Flamengo -
wide appeal the modernization of the domestic 22221-000 - Rio de Janeiro - RJ
PRINTING
and impact market that comes from the day- PROL Editora Gráfica
Av. Papaiz, 581 - CEP 09931-610 - Diadema - SP
to-day experience of working with DISTRIBUTION IN BRAZIL
relevant global partners. That’s what’s happening, for example, in the Support: Edicase - www.edicase.com.br
Exclusive distributor: Fernando Chinaglia
super-strategic area of clean energy production. For the first time in Mailing: Postal House
Rua Benta Pereira, 431 – São Paulo – SP
its history, Brazil has a real chance of leading an economic revolution 02451-000 – www.postalhouse.com.br
of great global importance. This opportunity isn’t limited just to mak-
EDITORIAL SUPPORT
ing ethanol, it includes mastering all stages of the production technolo- Eliane Montes and Etiene Colhado
gy. And as we show in a series of cover stories in this edition, it includes EDITORIAL CORRESPONDENCE
Av. Brigadeiro Faria Lima, 1903 cj. 33 -
leadership in the production of machinery and equipment used to pro- CEP 05426-100 São Paulo SP
redacao@revistapib.com.br
duce ethanol. The intelligence that made possible the flex-fuel motor Signed articles do not necessarily represent
the opinion of the editors. Totum reserves
is another vital ingredient, as is the determination to make progress in the right to edit or summarize letters.
production of another clean fuel, biodiesel, and with the commercial- RESPONSIBLE JOURNALIST:
ization of carbon credits. A final part of the equation is the concern that Ricardo Galuppo (MTb 3528-MG)
the agricultural sector should adopt labor relations as modern as the PIB – Brazilian Companies go International
is published by Totum Excelência Editorial -
fuel it makes from sugarcane. Av. Brigadeiro Faria Lima, 1903, cj. 33 -
CEP 05426-100 - São Paulo, SP
Good reading! (55-11) 3097.0849. contato@totumex.com.br
Print run for this edition
Portuguese – 18,000
THE EDITORS English – 7,000
Print run audited by PricewaterhouseCoopers
8 PIB
Letters
ies
of metanational compan
creator of the concept
The ideas of José Santos,
PIB magazine fills a new I really liked the
totum
Year 1
Number 1
niche in a new Brazil. I’m design, art, layout,
Sept/Oct
2007 sure it will be a success. and subjects chosen.
All three of you, Ricardo, The magazine will
GO INTERNATIONAL
Nely and Clayton, have be a success, I’m
BRAZILIAN COMPANIES
successful track records. sure. I wish you great
This new magazine will professional success
surely be the same. with this new project.
Maílson da Nóbrega Ordélio Azevedo Sette
Former Finance Minister, Azevedo Sette Lawyers
partner in Tendências – Belo Horizonte – MG
Consultoria Integrada
São Paulo – SP It’s good to know
that Brazil now has a
PIB is excellent. It was publication like PIB to
with pride and pleasure show people here and
TbbT]c_XPb [
that I read it in the abroad the country’s
reception room of the potential to conquer
bcT
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president of a company
in Panama.
international markets.
Congratulations for
cWTf^a[S
Congratulations the initiative and for
to all involved. making it happen.
f b gr L:
fu n
io ee
r o eet O
el
we w N
Count on my support.
po he s HA
Careers: examplesa
José Dirceu
T ET
Learn with of how to become Former Chief of Presidential Kiki Moretti and team
Arezzo how to global executive
break into China
Staff, business consultant In Press Porter Novelli
São Paulo – SP São Paulo – SP
I was honored to receive Thanks for sending
Wishing you all possible the first edition of the PIB me “PIB Brazilian
success with PIB, which is – Brazilian Companies Companies Go
Go International. It really International”, and
being launched atononon
just the is a great idea publishing congratulations. It’s
right momentnonononono
in Brazil’s a magazine in English, not only informative
history, when its companies are you are providing a rich but also looks
source of material for very good. Brazil
rapidly going international. research on business. and its companies
John Stuttard Bali Moniaga deserve this.
The Lord Mayor Ambassador of the Republic of Liu Wei Ling Kao
The Mansion House Indonesia Beijing – China
London, UK Brasília – DF
Please accept my
When I was present at best wishes for
an event in Washington, the success of PIB.
It was a pleasure to participate I received a very You can tell from
in the launch of PIB. I wish you interesting magazine: the name that it
PIB. Congratulations. indicates ambitious
success with the new venture. With my best wishes, plans for the future.
Marcelo Odebrecht Armando Guerra Jr. Fred Melo Paiva
Construtora Norberto Odebrecht Business consultant O Estado de S.Paulo
São Paulo – SP São Paulo – SP São Paulo – SP
10 PIBYou guys are stars, top I was flicking through Congratulations!!! PIB I have just received PIB,
line. Everything is great: magazines on the news looks really great and which looks very nice. Con-
text, art, choice of subject stand here in São Carlos the stories are excellent. gratulations to all the team.
matter. Good luck with when PIB caught my I was delighted to see a Ricardo A. Setti
this new venture. eye and I checked out to publication with such Journalist
Luiz González see who was behind it. a modern outlook.
Lua Branca When I saw the names Patricia Y. Malentaqui I was delighted to see you
São Paulo – SP in the team, I didn’t have Acting Executive Director all undertaking such a ma-
to look any further. I Brazil Information Center jor project. Congratula-
Congratulations on bought a copy and took Washington, USA tions. I hope that you have
the new magazine! I it home. Congratulations all the success you deserve.
love the idea of PIB. for the brilliant idea and I really liked PIB. The Cláudia Vassallo
Laurel Wentz content. Awesome! interview with José Santos Newsroom director
Advertising Age Jorge Reti was very good. Paulo EXAME magazine
Nova York Press relations Sotero and Maria Helena São Paulo – SP
Embrapa Pecuária Sudeste Tachinardi are excellent
The magazine is light, São Carlos – São Paulo names to have involved. I read your magazine,
looks good, it’s well laid Plinio Mario Nastari which is top line. Congrat-
out and well edited. I had the pleasure of Datagro ulations, and keep it up!
You’ve got a first class receiving a copy of the São Paulo – Brazil Ricardo Arnt
team and I’m certain that first edition of PIB, and Communications advisor
you’ll also be successful liked it very much. I Congratulations for the to the presidency
as entrepreneurs. believe the market has magazine. The theme is Natura
Silvana Quaglio gained a publication that more than opportune, you São Paulo – SP
Análise Editorial fills a gap for anyone have excellent collabora-
São Paulo – SP looking for a good tors, and it looks just right. I received a copy of PIB
option for information. I wish your publication during a meeting of the
Lovely magazine! Congratulations to all a long and fruitful life. Arab-Brazil Chamber
And with good- the Totum team. Adélia Borges of Commerce in São
looking advertisers. Valdeci Verdelho Journalist, design consultant Paulo, and read it back
Congratulations! Vice-President and former president of the in Brasilia where I live.
Hermes Zambini Andreoli Manning Museum of the Brazilian Family I liked it very much.
Volume 4 Selvage & Lee Publicis Groupe (Museu da Casa Brasileira) Liliane Oliveira
São Paulo – SP São Paulo – SP São Paulo – SP Brasília – DF
From reader to writer
Among the various letters we received about the first edi-
tion of PIB, one stood out. It was from Bruno Koltai Reis, who is
from São Paulo but is currently in New York, participating in a pro-
gram at Columbia University where he is a visiting scholar. Work-
ing under the supervision of Albert Fishlow and other professors,
Reis is studying the internationalization of Brazilian companies.
Reis, 30, is studying for a Ph.D. at FEA-USP, and holds a master’s
degree in international relations from the Université de Paris I
Sorbonne. He suggested collaborating with PIB, for example with
articles, research and interviews with people connected to the
academic and business world. We jumped at the suggestion, and
his first article is published on page 74 of this edition.
PIB 11Antenna
A Fashion-Made Man
Talk about Rio resident Oskar Metsavaht and it’s quite OK to use the
worn old phrase about “the right man in the right place.” Metsavaht
has never stopped chasing his two great passions – surfing and seeking
adventure in the planet’s snow-covered mountains – but he’s also built up
one of Brazil’s most successful international brands – Osklen. The secret was
to mix the latest trends of the fashion world with the best of Brazilian style,
using slogans such as “Brazilian soul” or “cool and Brazilian”.
There’s no denying the international success of his sports clothes –
or the brand owner. In 1997, Chrysler invited Metsavaht to design
a limited number of off-road vehicles. That was the start of
the Jeep Cherokee Osklen Series. Four years later, the Andy
Warhol Foundation asked him to create a summer collection
inspired by the pop-art master. After being feted by Cartier,
Metsavaht was contacted by jeweler H.Stern to create the
concept and style of a line of sports watches. He already met
the designer Valentino backstage at one of his fashion shows
praising his brands to anyone and everyone around. Calvin
Klein said he’s a fan and a regular customer. And last year,
when Mick Jagger disappeared from Rio de Janeiro after the
Rolling Stones show on Copacabana Beach, who was he with?
With Metsavaht, of course. Just a dinner amongst friends.
It all started in 1986 when, aged 25, Metsavaht was just a
doctor who specialized in sports medicine. By chance, he designed
a snow jacket for an expedition to Mount Aconcagua. Two years
later Osklen was born, with a store in Buzios, up the coast from Rio.
His first project outside of Brazil was inaugurated in 2002 in Chiado, the
fashionable neighborhood of Lisbon. Now there are seven stores: three in
Portugal, one in the United States, one in Switzerland and two in Italy, his
most recent bet.
This year should still see two other important steps: opening a store
Léo Pinheiro/Valor/Folha Imagem
in Tokyo and another space in Milan, this time for Royal Label, which is
Osklen’s luxury label. If it depends on the Italian press, success looks
Metsavaht: guaranteed - Il Giornale called Metsavaht “the Ralph Lauren of Brazil”.
building an There’s no indication that the US designer climbs mountains or surfs the
empire without beaches of the world, but without a doubt the business touch is the same.
stopping surfing (Rachel Verano, from Valencia)
I don’t believe in the possibility of resolving
complex problems of harmonizing social,
environmental and economic policies simply
through the interplay of market forces
I gnac y S achs , honorar y professor at the P aris S chool for A d v anced S ocial
S cience S t u dies and creator of the C enter for S t u dies of C ontemporar y B ra z il
12 PIBThe Sneaker that Caught
the French by the Feet
A real Brazilian took the they learned into the Juste Planet
limelight at the Ethical Fashion project (www.justeplanete.
Show, an October event in Paris org) and soon looked for ways
for brands that practice fair trade. to put their ideas into practice.
Star of the show was the Veja, Veja is made from ecological
a sports shoe made in Brazil cotton produced by small family
that has won the hearts and farmers in Ceará, wild rubber from
minds of France’s fashionable the Amazon and sheep skin from The Amazon
crowd since it was launched in
February of 2005, and has sent
Rio Grande do Sul. The brand
buys four tonnes a year of raw for Americans
fans crowding into the most material produced in ways that Between April and July
“in” stores in the country. preserve the environment. They of next year, the world’s
The “Vejá”, as the French call make 50,000 pairs a year at a cost greatest metropolis will be
it, is a hit even before appearing of €1 million. A pair costs US$85 home to a representative
in the country where it was born. because the raw material price sample of the world’s
greatest tropical forest.
Amazônia Brasil, sponsored
The Veja: by Alcoa, will take over
fair trade and some of New York’s most
fashion flair famous spots including
the UN plaza, Pier 17 and
the Smithsonian museum.
Organizers aim to show
visitors the cultural diversity
of the peoples who live in the
ha
ndo
ut
Amazon forest and to warn
about the threat of climate
change for its ecosystem.
Pier 17 will house the main
“Because of the (Brazilian) news is deliberately higher to allow pavilion where there will
magazine of the same name, we a good return for producers. be reconstructions of a
still cannot sell it in Brazil,” said Plentiful marketing has typical riverside village and
Aurélie Dumont, responsible propelled Veja beyond the an Indian dwelling. The
for Veja communications. “We ecological community and into the event is being organized by
must change the brand.” world of fashion. Its debut involved the Center for Advanced
Inspired by Brazilian volleyball a gigantic party at the Palais de Studies and Social and
shoes of the 1970s, with a touch Tokyo, a top Paris hotspot, and Environmental Promotion,
of classic Adidas and Puma, the even participation in famous based in Santarem, Para, a
Veja was created by French design fairs such as Bread & Butter, in body that groups hundreds
duo François Ghislain Morillion Barcelona. There was also an of NGOs in the North of
and Sébastien Kopp. After invitation from designer Christine the country. Last year a
finishing university the young Phung to sign a collection. After similar exhibition in German
men – both then 28 – travelled all, even if the soul is organic, attracted 120,000 visitors.
the world studying sustainable marketing is still the heart of
commerce. They put everything any business. (Adriana Setti)
PIB 13Kátia Ferreira - Grife Apoena Exporter project run by Apex-Brasil/ABIT
With Apex-Brasil, my products reach the world. For me, discovering Apex-Brasil was like discovering a whole new world. I can use trade fairs, events and business match-making rounds to show the world the quality of my colorful designs. Today I’m exporting successfully to Kuwait, Spain and the United Arab Emirates, all thanks to commercial intelligence work that identified new markets and helped me adjust my collection to international requirements. Apex-Brasil. The exporter’s partner www.apexbrasil.com.br
Antenna
At the Forefront of Internationalization
The steel sector is leading the pack when it comes Ranking criteria for internationalization include
to the internationalization of Brazilian companies. Ger- sales volume, asset value and the number of employ-
dau and Vale (formerly CVRD) both now have huge oper- ees that each company has overseas. The index, of
ations in North America, and they head a new ranking of course, is proportional to the size of each company.
Brazil-based multinationals that has just been released This means that Artecola, a midsized company from
by the Dom Cabral Foundation, a business school and the chemicals sector, appears between giants Andrade
think tank in Belo Horizonte. The study was partnered by Gutierrez and CSN.
Columbia University of the United States. It was the sec- Although the ranking excludes companies in the fi-
ond time the ranking has been published, and the second nancial sector, one striking fact about the results is the
time that Gerdau appears in top diversity of the sectors repre-
slot. The 2006 study, however, sented. In addition to steel,
followed a different methodol- In the global arena there are companies from the
ogy, so the results can’t be com- The most internationalized Brazilian companies, vehicle industry like Sabó (au-
pared directly. “We have refined according to the Dom Cabral Foundation toparts), Marcopolo (bus bod-
our study to make it compatible Company Index of ies) and Randon (truck trail-
with 12 other emerging nations internationalization* ers), major constructors like
that are preparing similar rank- 1 Gerdau 0.464 Odebrecht, Camargo Corrêa
ings,” said Prof. Luiz Carlos Fer- and Andrade Gutierrez, and
2 Vale 0.292
reira de Carvalho – popularly companies using cutting-edge
known as “Lical” – coordinator 3 Sabó Autopeças 0.285 technology like Embraer (jet
of the Nucleus for International 4 Marcopolo 0.274 aircraft) and Itautec and Tot-
Business at the FDC. 5 Odebrecht 0.273 vs, both of them in IT. “There’s
The Brazilian study, based a great diversity of top-level
6 Embraer 0.233
on 2006 data, was the first to sectors,” said Lical.
publish results within the proj- 7 Weg 0.218
Perhaps the biggest ab-
ect being coordinated by Co- 8 Tigre Tubos e Conexões 0.202 sence in Brazilian internation-
lumbia which will generate an 9 Camargo Corrêa 0.190 alization, the professor noted,
international ranking of trans- 10 Duas Rodas 0.176 is smaller companies, although
national companies by 2010. one honorable exception is Be-
11 Andrade Gutierrez 0.172
“Each country faces its own matech, in the commercial au-
problems to complete the work. 12 Artecola 0.169 tomation sector. “Small and
Getting information in China, 13 CSN 0.162 medium companies have yet
for example, is extremely diffi- 14 Metalfrio 0,158 to discover that going global
cult,” said Lical. is a path to growth and con-
15 Itautec 0.149
In Brazil, the method used ditions for this are much more
was to collect information di- 16 Portobello 0.146 favorable these days,” he said,
rectly from the companies, giv- 17 Natura 0.135 adding that today’s exchange
en that the universe of compa- 18 Petrobras 0.119 rate made investment abroad
nies in the country obliged to much easier. Moreover, both
19 ALL 0.117
publish balance sheets is still official and private banks have
quite small. Questionnaires 20 Perdigão 0.110
specific credit lines for for-
were sent to 90 of the roughly 21 Método Engenharia 0.086 eign investment. “It’s a great
800 Brazilian companies which 22 Lupatech 0.069 window of opportunity that
have some form of foreign ac- 23 Aracruz Celulose 0.067 people should take advan-
tivity. The 32 that replied are in- tage of,” he said. “Conditions
24 Votorantim Participações 0.060
cluded in the ranking. Of these, won’t always be so good.”
the top 25 are listed here. 25 Totvs 0.042 (João Paulo Nucci)
* Average of the ratios of assets, employees and sales overseas (excluding exports from Brazil) to total assets, employees and sales for the whole group.
16 PIBBrazil Creates Channels in Panama
Expansion of the Panama Canal, due to start
work 2010, looks set to involve Brazilian companies.
Major constructors like Camargo Corrêa, Andrade
Gutierrez, Queiroz Galvão and Odebrecht are gearing up
to participate in the consortium that will undertake the
boldest infrastructure project in Latin America in the next
two decades. Work involves construction of a third set of
locks and building of a petroleum refinery, with the total
cost estimated at US$15 billion.
In addition to the construction giants, a series of small
and medium Brazilian companies are likely to take part in
the project. Ambassador Paulo Tarso Flecha de Lima and
Latinlink Consultoria President Ruy Coutinho are looking
for service companies that can give support to the cons-
truction companies in various tasks.
Harvey Lloyd/Getty Images
The project comes at a good moment for Panama, whi-
Panama: the
ch has been experiencing rapid economic growth. In recent
financial center
is driving
513763_202x133_316.pdf December 1, 2007 02:08:33 years, the country has been chosen as location by various
1 de 1
economic growth global financial institutions, and the financial center is gro-
wing at a rate of 18% a year. (Renata Penna Franca)
PIB 17Antenna
A Less
Safe World
Global warming and its
major catastrophes – the most
recent are the floods in Mexi-
co and the fires in California –
are already provoking a direct
impact in the global insurance
business, according to Lord Pe-
London Eye: ter Levene, president of Lloyd’s
photos: handout
Bradesco of London, the world’s principal
arrives in the insurance and reinsurance mar-
British capital ket. While assets are becoming
more vulnerable, policy prices
Feet in London, Eyes on the Middle East are falling. “The current decade
can already be defined as the
Bradesco is just waiting for an OK from Brazil’s Central Bank to open decade of disasters,” he said
a brokerage in London. This will allow it to start operations in the first during a speech in São Paulo at
quarter of 2008, after getting the go-ahead from British regulators. The the end of October. “There’s a
bank’s New York brokerage, Bradesco Securities, has operated since 2002. growing range of scenarios that
The goal in London is to expand the placement of stocks and can generate losses in the order
bonds of Brazilian companies and gain access to investors not just in of US$100 billion.”
Europe but also the Middle East. “London is today one of the world’s As Brazil is off the route
principal financial centers,” said Luiz Galvão, director of Banco Bradesco for hurricanes and far from
de Investimento (BBI). “An important number of major funds are earthquake zones, Lord Levene
established in the city.” The operation will consume initial investments came because of the long-
of US$5 million. awaited liberation of the
In addition to this European base, the bank is building up its presence reinsurance market in Brazil.
in Chile. An agreement with the Banco do Chile will allow it to manage “There is already strong
funds and develop investment products. The main goal is to catch the eye local interest in working with
of the rich local pension funds. (Lucianne Carneiro) London,” he said. So far, Lloyd’s
is active in Brazil guaranteeing
insurance in sectors such
Virtual Contact Rio Branco has been displaying
its wares on the Foreign Trade
as petroleum, shipping,
automobiles and aircraft.
Dental Rio Branco faced prob- Counter (“Balcão de Comércio
lems in exporting the medical and Exterior”), a service created by Lord Levene: “We’re living
hospital equipment and surgi- the Banco do Brasil on the In- in the decade of disasters”
cal materials that it sells in Bra- ternet to bring Brazilian compa-
zil. The company is located in Rio nies closer to possible partners in
Branco, the capital of Acre State, other countries. The company’s
250 km from the frontier with Bo- first major deal using this system
livia, and accepted foreign orders was the sale to a Bolivian hospi-
only if they were pre-paid. But tal of an intensive care unit cost-
the foreign customers didn’t feel ing US$3.6 million. In addition to
too happy about sending money acting as a showcase for Brazilian
for something without being cer- products, the Counter offers con-
tain that they would receive their sulting and various other services.
orders. The solution for Dental (Juliana Garçon)
18 PIBTrends
Full Speed Ahead
for Investment
A study by economists Jeffrey Sachs and Karl Sauvant points to increasing global
investment flows, despite the current financial turbulence By M a r c e l o C ab r al
D
uring 2007 the Economist In- diately following a cycle of rapid expansion.
telligence Unit, a consultancy, But the tendency thereafter is for things to
worked on a study seeking to settle on a smooth upwards path.
predict the tendencies through Among the reasons for growth are the
2011 for global flows of Foreign investments in companies in developing
Direct Investment (FDI), money that com- countries, seeking cheaper labor, and the in-
panies, banks and investment funds steer crease in offshoring of services. The pres-
into projects in various countries. sures of competition and for improve-
Carried out in partnership with ment in the business environment in
Columbia University profes- most countries are also relevant. In
sors Jeffrey Sachs and Karl the case of Brazil, which ranks 14th
Sauvant, the study was pub- in the world as a destination for
lished in September of 2007 FDI, the study recognizes the
and predicts a fall in the level existence of positive factors
of investment in 2008, due which have contributed
above all to the recent tur- to increased FDI flows.
bulence in the internation- Among these are the
al financial markets imme- good macroeconomic
20 PIB1 – Global Flow of Direct Investment
Estimate, in US$ billions
1,650
1,604
1,575 1,536
1,500 1,474 1,470
1,406
1,425
1,350
2007 2008 2009 2010 2011
situation and the growth of Bra-
zil’s own multinational companies.
This increase of FDI, nevertheless, 2 – Principal destinations for global investments
is limited by the lack of structural
Value Percentage of
reforms (see charts 1 and 2). Rank Country
(in US$ billions) global total
The study shows that in the me-
1 USA 251 16.7%
dium term, however, protectionist
measures, cases of political violence, 2 United Kingdom 113 7.5%
geopolitical tensions and govern- 3 China 87 5.8%
mental instabilities can compromise 4 France 78 5.2%
the global flow of FDI, and the sec- 5 Belgium 72 4.8%
tor most at risk is energy. With the
6 Germany 66 4.4%
barrel of petroleum now at sky-high
7 Canada 63 4.2%
prices, some countries are insisting
in renegotiating contracts and rena- 8 Hong Kong 48 3.2%
tionalizing their natural resources. 9 Spain 45 3.0%
The flow of investments to some 10 Italy 42 2.8%
of these – for example Bolivia and 14 Brazil 27 1.8%
Venezuela – saw a marked decrease
in 2006. This situation will tend to
worsen in coming years. 3 – Investment in new projects in 2006
In number of projects
Asian dragons
While developed nations are still 1,500
the principal recipients of FDI, the 1,378
Asian countries stand out as having 1,200
the greatest number of new invest-
ment projects. As a story in the last 900 979
edition of PIB showed, seven of the
10 cities that received most new FDI 600
725
668
are in Asia,. The rule holds good for 582
countries as well. China and India 300
hold top spots in the ranking for
new investment projects, while 145
0
Brazil lies in just 21st place, with 145 china India USA united France brazil
kingdom
projects (see chart 3).
PIB 21Trends
China looks set to lead the tables
4 – Flow of investments to Latin America in 2006 for several years to come. The coun-
In US$ billions try is the preferred destination for
most companies and is committed
to achieving the commercial stan-
dards laid down by the World Trade
mExico 18.8% Organization. What’s more, the
argentina 4.8% price of Chinese products should re-
colOmbia 6.3% main very competitive. India on the
other hand faces difficulties. While
chile 8.1% it has great potential to attract FDI,
there are problems with the busi-
brazil 19%
The search
for cheaper
labor in
emerging
5 – Foreign investment in Brazil nations is driving
In US$ billions company
internationalization
40
34
ness environment, for example the
political resistance to privatization
30 27
25 25 26 programs, inflexible labor laws and
obsolete infrastructure. This means
18 18 that the government goal of reach-
20 16 ing US$25 billion in FDI in 2008
15
looks hard to achieve.
10
10 Latin engines
Latin America is set to notch up a
20% increase in FDI this year, led
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 of course by Brazil and Mexico. In
fact, the study shows strong accel-
eration of investment destined for
Brazil, spurred by the country’s
6 – Countries with the best business environment strong macroeconomic perfor-
mance, the growing capital market
rank country mark
and the significant investments in
1 Denmark 8.76
sectors such as mining. In addition,
2 Finland 8.75 various important deals have been
3 Singapore 8.72 concluded, such as the purchase of
4 Switzerland 8.71 Arcelor Brasil by Arcelor Mittal of
5 Canada 8.70 Holland for US$4.5 billion, and of
Serasa by Experian of Great Britain,
46 Brazil 6.69
for US$1.2 billion (see chart 4).
22 PIBEven better than knowing we’re on top is being certain that we have not passed over our values to get there. PricewaterhouseCoopers, for the 6th consecutive time elected The Most Admired Auditing Company in Brazil. pwc.com/br © “PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
Trends
As for Brazil, the study shows
that the reforms of the last decade 7 – Business environment in Brazil
have placed the country on the
Sector mark (0 to 10) Position in world ranking
path to sustained albeit moderate
growth. The forecast is that the Political environment 6.2 40
second mandate of President Luiz
Macroeconomic environment 8.0 25
Inácio Lula da Silva will not succeed
in overcoming the limitations of the Market opportunities 7.1 18
country’s infrastructure or be able
Pro-market policies 6.5 41
to resolve the problems of the ex-
cessive tax burden. These deficien- Policy towards FDI 7.3 39
cies mean that the flow of FDI will
Foreign trade 7.8 51
not expand further, in addition to
hampering the government’s goal Taxation 4.7 78
of having GDP grow by 5% a year
Financing 7.0 43
(see chart 5).
The study shines a light on Labor market 6.5 48
some well-known problems, ones Infrastructure 5.8 52
that certainly reduce Brazil’s at-
tractiveness for foreign investors. OVERALL AVERAGE 6.69 46
Among them: anachronistic labor
legislation, the changeable political mergers and acquisitions, and the
environment and the lack of clarity volume of their operations is still
in tax rules. For this reason, Brazil Study shows that small when compared to the giants
appears in just 46th position in the
global rank of attractive business
reforms of the last of the Northern Hemisphere. But
the number has been growing sig-
environments, behind countries decade have led nificantly in recent years, especially
such as Cyprus, Estonia and Costa to moderate but amongst Brazilian and Mexican
Rica (see charts 6 and 7).
The net result is that Brazil’s
sustained growth companies. The purchase of the Ca-
nadian mining firm Inco by Brazil’s
strongest point is the international of the Brazilian Vale (formerly CVRD), for example,
operation of its companies. In fact, economy was the fourth largest operation of
the study identifies the growth its type registered in 2006. More
of multinational companies from are still relatively few of these than ever, Brazil’s companies are its
Southern Hemisphere countries as companies on the lists of biggest spearhead in the globalized world
an important phenomenon. There business deals, particularly global (see chart 8). z
8 – Largest M&A deals in 2007*
Company Value of deal
Buyer Country Country Sector
acquired (in US$ billions)
Iberdrola Spain Scottish Power United Kingdom 28,9 Energy
KKR USA Alliance Boots United Kingdom 24,2 Consumer goods
Japan Tobacco Japan Gallaher Group United Kingdom 19,5 Consumer goods
* through June
Vale Brazil Inço Canada 16,7 Mining
Astrazeneca United Kingdom Medimmune USA 14,7 Pharmaceuticals
24 PIBThis is how the Federal Government offers Investing in people’s needs
more of Brazil to more brazilians. is to invest in a more
He can now build
new for families equitable and developed
such as Daiane’s country for its people.
in Santa Catarina,
Since more people who will get cheaper
are purchasing building financing.
4 1) Lower taxes on over
materials, sector
retailers such as Luiz 50 items of construction
Antônio of Brasília materials.
are increasing
2 their sales. 2) Retail sales
were up by 9,7% from
January to July
3) Accumulated growth
of 9.6% in the sales
construction materials
PDE
through August 2007. ENEM
4) R$ 853 billion
worth of credit
available in Brazil.
1 The lower
taxation is also
More Brazil
Denise and Gustavo 3 for more
from Bahia will be helping small
brazilians
spending less on their builders, like Pedro
new home thanks in São Paulo.
to reduced taxes on
building materials.
www.maisbrasil.gov.br
*Real people and real storiesSpecial
Challenges Ahead
for the
The merger between Brazil’s Santista Têxtil and Spain’s Tavex has created
one of the world’s largest producers of denim, the cloth used to make jeans.
Controlled by the Brazilian company, the new venture is firming up its
management systems and fine-tuning its strategy to launch a major attack
on markets in Asia and the United States A d r iana S e tti , in C asablanca
uring the month of Ramadan, at it amidst a frenetic confusion of threads in the
which this year ran from mid looms and gigantic machines that carry out the
October through mid November, finishing of the denim, the cloth that is the prin-
the Muslim world fasts through cipal input used for making the most important
the day and spends the night in piece of clothing in the modern world – jeans.
reflection and improving family And all the hurry was for a reason. “November
relationships. But this period did 15th was the date set for starting our new opera-
not prevent employees at the Tavex factory in the tions,” said Said Messal, the Moroccan technical
Moroccan city of Settat continuing to work flat director at the factory. “By January 1st we must
out, apparently immune to the pangs of hunger be running at 100% of capacity.”
and thirst. At the Settat factory, which belongs Messal was describing a considerable chal-
to Santista Têxtil, part of the São Paulo-based lenge. After expansion, the factory will produce
Camargo Corrêa group, the workers were hard 20 million meters per year of
26 PIBWithout stopping:
Moroccan factory
works flat out even
during the month
of Ramadan
denim, an increase of no less than 54% over the cur- 14 production units of the world’s largest producer of
rent level of 13 million. This huge amount of cloth will denim – the company currently holds 3.5% of the global
help meet burgeoning demand in a global market that market, measured by billings, and plans to raise that
currently consumes 4.5 billion meters a year, enough to 10% or 15% by 2011. Such numbers are the result of
to make 1.7 million pairs of jeans. Once the work is the merger between Spain’s Tavex and Brazil’s Santista
concluded, the dimensions of the baroque golden Têxtil, controlled by Camargo Corrêa. The marriage
frame that surrounds the figure of King Mohammed between the two giants was one of the fastest and most
VI, hanging in the factory reception area and measur- conclusive yet announced. Initial overtures came from
ing some 2 meters by 1.5 meters, will at last find more the Brazilian side, driven by the prospect of expand-
fitting new surroundings. ing their presence in the textile markets of Europe and
The ambitious undertaking is just a foretaste of the United States where the Spanish have concentrated
what is to come, but it clearly shows the current situ- sales from their factories in Spain, Morocco and Mexi-
ation of the company. The Moroccan factory is one of co. Following an initiative by Camargo Corrêa, the first
Growing: Denim
production at the
Tavex factory in
Settat should expand
by 54% in 2008
PHotos: Mario Pomárico
PIB 27Special
Two worlds: the
Moroccan factory is
just a “short step”
160
from Europe
talks took place in the Spanish capital of time in Brazil as president of
in November of 2005. Just a month Santista, and who now presides
later a team from Tavex was packing the new Tavex. “But the process
its bags to visit São Paulo to get better 160 million meters of adaptation will take three years
acquainted with its suitor. of denim per year: to conclude.”
Tavex production In the first semester of this year,
Marriage of heavyweights capacity the company generated net profit of
In March of 2006, the two companies R$600,000, compared with losses of
signed a merger protocol, which was R$1.7 million in the same period 2006.
then ratified by Tavex shareholders in In practice, the integration is being car-
Madrid on June 20th. Immediately after this process, ried out on various fronts. The most symbolic of these
Camargo Corrêa become the owner of 59% of the capi- was the creation of five committees, each composed of
tal of the new company. This share has now dropped to five fixed members, coming from both sides, in addi-
about 54.5% and, according to the initial agreements, it tion to some special invited members. These commit-
will fall to 50% in the coming months. tees represent the five pillars of the company structure:
Headquartered in Madrid and trading as Tavex, us- human resources and management; marketing, sales
ing Spanish (and “Portunhol”) as the official language and development; supplies; industrial; and finance and
for internal communication, this textile powerhouse information technology. Since August of last year each
has the capacity to produce 160 million meters a year of committee has met monthly by videoconference with a
denim, in addition to 40 million meters of other cloth face-to-face meeting every six months. “These groups
for sports and work apparel. The company has almost seek to identify and capture synergies, as well as ex-
6,000 employees and an enviable client list, including changing experience and knowledge,” said Brazilian
international fashion giants like Levi’s, Diesel, Miss executive Nelson Tambelini Junior, human resources
Sixty, Blue Cult and Zara, plus major Brazilian names director at Tavex. “They also discuss ways of unifying
such as Forum and Zoomp. the performance indicators.”
“The first results are starting to be seen, but the With complementary areas of activity and similar
greatest impact will be felt as of 2008,” said Herbert business cultures, Santista and Tavex are now seeking
Schmid, the Swiss businessman who has spend a lot to blend the better aspects of their respective man-
28 PIBFleeing from the Old World
It’s possible to cover the 57 kilometers of
highway between Casablanca, the largest city in
Morocco with a population of 3.2 million, and the
Tavex factory in Settat, in around 40 minutes. Add
on the two-hour flight from Madrid to Casablanca
and it becomes clear that the Moroccan factory is
really just a short step from Europe. This reflects in
practice the strategy of the company in transferring
operations to low-cost production regions that
are nevertheless close to its clients. “One of the
initial impacts will be to shift production from Spain
Fotos: Mario Pomárico
to Morocco,” said CEO Herbert Schmid. “We are
investing €17 million in this operation, and we hope
Quality: Santista
to reduce costs by 30%.”
processes will be
introduced into Tavex With the Brazilian real currency gaining in
value and the 2004 end of the WTO Agreement
on Textiles and Clothing (ATC), which eliminated
import quotas on products coming from rich nations,
Santista Têxtil saw its profitability gradually erode.
agement styles in a single melting pot. “There is no The entry of foreign products forced down the price
doubt that Santista has a lot to contribute in terms of of denim by 15%, reducing Santista’s gross margin
its working practices, processes and quality control,” from 28% in 2002 to 17% in 2005. Meanwhile,
Tambelini said. “This refers not just to obtaining cer- Tavex also faced problems because of competition
tifications, like the ISO system, but also adopting labor in Europe from Asian producers. The merger was a
policies and ways of evaluating performance, which question of survival for both. According to statistics
have also been very well defined characteristics of from the International Textile Manufacturers
our company.” Federation (ITMF), 89% of all weaving equipment
For its part, Tavex contributes a strong position sold in 2006 went to Asian manufacturers. China
in the market for premium denim, alone produced 43% of total
where the company is strong in pro- world fiber output. The roughly
duction know-how and has a portfo- Our goal is 300 Chinese denim factories are
lio packed with clients from the world
of high fashion. This luxury segment
to be present responsible for one third of world
production. However, 90% of their
has the highest added value and thus in the Asian output is of basic products, leaving
generates more profit. It is also the market as well space for makers of premium
side of production that gives more cloths. “We are already close to
scope to designers and allows the Herbert Schmid, three major commercial blocs and
jeans industry to undergo constant Tavex CEO our goal is to be present in the
renewal. A pair of jeans made from Asian market as well,” Schmid said.
premium denim can cost US$300, while a basic pair China is close to Japan, where the consumption
costs anything from US$10 to US$25. Tavex currently of luxury models represents 25% of total jeans
holds 15% and 3% respectively of the premium markets sales, the same percentage as in Europe and the
in Europe and the United States. With the recent acqui- United States. Additionally, China is the world’s
sition of two factories in Mexico – whose prospects are fastest growing domestic market, both in relation to
enhanced by opportunities under the Central America basic products and for premium items. This is more
Free Trade Agreement (CAFTA) – the goal is to reach than enough reason to pluck up courage and face up
15% in two years. z to the fury of the Chinese dragon.
PIB 29Cover Story
Fuel to Chan
Sugarcane has always held great importance for the Brazilian
economy. Now the whole world is looking for sources of clean
energy, and the raw material for ethanol is the basis of a supply
chain in which Brazil masters all the technology. And it’s about
to become a global industry. By J oão Pau l o N u cci
P
ay attention. What you just read position throughout the fuel industry of the future.
in the title, and what you’ll read in It has the most advanced plantations and the great-
the following pages, isn’t jingoism. est abundance of land for new sugarcane crops.
Brazil really does have a concrete It has the world’s most modern and produc-
chance of participating in and tive distilleries. Brazilian industry exports
even leading an important revo- equipment to build ethanol plants in
lution in the world economy. The dozens of countries. And there’s
realization that global warming is more – the flex-fuel automo-
not just some boring spiel of ecologists but a con- bile engine that can run on
crete threat to life on our planet finds Brazil ready any mixture of ethanol
and prepared with the most favorable conditions and gasoline was de-
in the world to produce clean, renewable energy.
What’s even better, the country has technology that,
if replicated in other countries, has the capacity to
significantly reduce the emission of the greenhouse
gases that cause the problem.
Brazil is the world’s largest producer of sugar-
cane. Of every three sugarcane plants in the world,
one grows in a Brazilian plantation. Ethanol-pow-
ered cars have been a regular sight on Brazilian
streets for almost 30 years. What’s more, because
it adds ethanol to regular gasoline – the current
mix has between 20% - 25% ethanol, depending on
availability – Brazil has the world’s least polluting
fuel. Brazilian ethanol production is 16 billion liters,
which last year earned the country’s distillers more
than US$6 billion.
“The opportunity for the sector is not limited
just to ethanol,” said Marcos Sawaya Jank, presi-
Illustration: Marcelo Calenda
dent of the São Paulo Sugar Cane Agroindustry
Union (Unica). “Our technologies also allow for
converting sugarcane biomass into electric
power, for example.”
As we can see, the possibilities are
immense, and Brazil has a prominent
32 PIBge the World petroleum. There’s still a lot of talking to be done
before ethanol becomes a commodity with globally-
recognized prices. And for this to happen, Brazilian
producers will have to adopt a negotiating posture dif-
ferent from that which they have traditionally used in
the domestic market. “It’s one thing being a wise guy
in Piracicaba,” said Rubens Ricupero, a former ambas-
sador and finance minister, referring to the city in São
Paulo state which sits in the center of a major ethanol
veloped in the engineering departments of the major producing region. “It’s quite a different matter being
automobile makers located in Brazil (see story on respected as a partner at the negotiating table by major
page 40). Engines of this type are now standard on international organizations.”
virtually all new cars sold in Brazil. And there’s more.
Start paying attention to another clean fuel, biodiesel. World star
Following a decision by the federal government, as of Be that as it may, ethanol is a world star among the
2008 all the diesel sold in Brazil must contain 2% of renewable fuels and all the sectors that comprise the
biodiesel. And as this proportion increases, there will ethanol production chain are having their best moment
be a noticeable and positive impact on the quality of ever. “Brazil today produces what are by far the most
air in the major cities. modern and best equipped sugar mills and ethanol dis-
In the long run, and with other countries progres- tilleries, way ahead of any other country,” said Plínio
sively adopting a similar posture, this could add up to Nastari, an agribusiness consultant for Datagro. “The
an effective contribution to reducing global warming world’s sugar and ethanol companies come to Brazil
– in the same way that another Brazilian creation, the looking for technology.” The country may be leader, but
market for carbon credits (see story on page 40) could it is not alone. According to Nastari, Brazilian manufac-
also have an effective participation in this question. turers have significant competitors for specific pieces
The truth is that in this area, the world wants what of equipment, for example the United States in the pro-
Brazil has to offer. What does this mean? Apparently, duction of boilers and Turkey in diffusers. “But nobody
there’s a clear path ahead and the consolidation of Bra- dominates the whole productive chain from start to
zil as a major energy power in the 21st century would finish, like Brazil does.”
seem to be just a matter of time. This is even more It’s estimated that there are around 100 ethanol dis-
true after the recent confirmation of the potential of tilleries on order, which creates a kind of waiting line in
the Tupi deep water oil field in the Santos Basin, that the sector. Today it’s impossible to acquire a complete
will propel Brazil into the club of petroleum export- plant in under two years, while historically the average
ing countries. All this makes the future for delivery used to be 10 months. Ex-
look even more propitious – Brazil could ports represent around 10% of the sector,
simultaneously lead the production of but this will tend to increase a lot in the
clean fuels and be a major producer of
the most traditional source of energy. Is
Brazil has a coming years. “The great breakthrough
will come in 2015, when the United States
this what’s really going to happen? Will it unique chance could become ethanol purchasers,” Nas-
really be so simple? It’s as well to exercise to lead a tari said. The world’s largest consumer
a little caution.
In the first place, the world still lacks
world-wide market looks set to become an importer
when it exhausts its domestic capacity for
a formal market for major transactions energy producing ethanol from corn, possibly in
in the new fuels, similar to the one for revolution the middle of the next decade.
PIB 33Cover Story
In the meantime, Bra-
zilian companies are gear-
ing up to meet the growing
demand. Dedini Indústrias
de Base, the country’s lead-
ing maker of sugar mills and
controlled by the Ometto
family, grew from billings
of R$450 million in 2003 to
R$1.8 billion in 2007. Around
70% of this comes from the
sugar and ethanol sector.
PAULO LIEBERT/AE
And growth for 2008 is pre- São Paulo distillery:
dicted at no less than 60%. the world wants
“We are participating in var- Brazilian technology
ious infrastructure projects
in segments such as petroleum, gas, mining, paper and world’s leading center for sugarcane technology and
pulp,” said Sérgio Leme dos Santos, vice-president for equipment manufacture. Dedini still has five factories
corporate affairs of the company which is located in in Piracicaba, but its main factory for heavy equipment
Piracicaba and was founded 86 years ago. “But the ma- is in Sertãozinho. Its major competitor Caldema, spe-
jor impulse will come in the sectors of energy, sugar cialized in boilers, is also going through a great time.
and ethanol.” “We have grown 100% in the last three years,” said Alex-
Investments of over R$100 million since 2003 have andre Martinelli, commercial and marketing manager
allowed the company to double capacity from 12 to 24 for the company, but choosing not to reveal his sales
mills per year. Through 2010, that should reach 33 com- by value. The company has 500 employees and great
plete mills per year. In August, Brazilian President Luiz tradition in the sector. It was founded 1972 by the same
Inácio Lula da Silva participated in the inauguration in Ettore Zanini who founded Zanini along with the Biagi
Jamaica of one of the innumerable mills that Dedini has family in the Fifties.
built around the world. Spurred by heavy industry and ethanol, the lo-
cal economy is booming as never before. From 2001
Dramatic recovery through 2004, the economy of Sertãozinho expanded
Dedini’s current situation is the complete opposite of by 38.7%, according to the IBGE. Between 2005 and
what it looked to be at the end of the Eighties. At its 2006, some 5,000 jobs were created in the formal econ-
peak the company had 11,000 employees, but it entered omy. And in the first eight months of 2007, industry
the Nineties swamped in debt. Its principal competitor alone added a further 5,000 new jobs. Local manufac-
of the time, Zanini, belonging to the Biagi family, was turers have full order books through 2010.
also in difficulty. Zanini temporarily joined its opera- Things are so good that the historic name of Za-
tions with Dedini but ended up driven under by the nini is being reactivated by the Biagi family, owner
reduction in the demand for ethanol powered cars, and of Crystalsev e and Santelisa Vale, two of the leading
went bankrupt. Former Zanini employees created more Brazilian producers of sugar and ethanol. In Septem-
than 500 companies from the spoils and are now active ber, a holding company was created to handle the
in the sector, almost all of them in the São Paulo city capital goods interests of the group. So far, it encom-
of Sertãozinho, which is near Ribeirão Preto and also passes just two companies, Sermatec and Renk Zanini,
an important center for sugar cane production. “It’s but the group is eager to invest in heavy industry, and
possible to order up a complete mill here in Sertãoz- has the funds. From the original Zanini group there
inho, without having to buy anything from outside of remains an show pavilion in Sertãozinho which hous-
the town,” said businessman Mário Garrefa, president es the principal trade fairs of the sector, Fenasucro
of the Sertãozinho Industry Center. and Agrocana, which take place simultaneously. Last
The city of just over 100,000 residents is completely September, over R$1.8 billion of business was done
surrounded by plantations, and describes itself as the in four days. z
34 PIBYou can also read
