Brazil’s increasingly tech-savvy population and wealth of natural resources are generating plenty of business opportunities for U.S. companies. Consumers in Brazil are flying more and embracing mobile devices, trends driving growth in the telecom and air transportation markets. Meanwhile, Brazil’s booming mining and gas industries are driving up demand for equipment components, technology and logistics services.
The good news for U.S. companies is that many Brazilian businesses are looking abroad for vendors and partners, said Jeff Jorge, executive partner at Global Development Partners, a Michigan-based consulting firm that helps U.S. companies enter the Brazilian market.
“U.S. companies still carry a significant amount of cachet,” he said. “They’re held in high regard for innovation and execution.”
“U.S. companies still carry a significant amount of cachet,” he said. “They’re held in high regard for innovation and execution.
”Here’s an overview of Brazil’s four hottest industries and the opportunities they create for U.S. businesses.
There are two big reasons why Brazil’s air transportation market is hot, Jorge said. The country is home to the world’s third-largest plane manufacturer, Embraer, and Brazilians are becoming more frequent fliers. Embraer, which generates about $6 billion in revenue, makes regional jets and is a good target for U.S. businesses selling aircraft parts and technology. You don’t have to be a high-tech company to get in on the action, either. One of Jorge’s clients makes the food trays that go into plane seatbacks.
Overall, air traffic also is picking up in Brazil. In 2012, the number of plane passengers carried in and out of the country totaled 95 billion, up from 68 billion in 2009, according to World Bank statistics. And about 3 million Brazilians are expected to travel within the country during the World Cup next summer.
The surge in traffic requires infrastructure investments that will benefit U.S. technology companies and manufacturers.
About 70 percent of Brazilians over the age of 10 own cell phones, and the country is the fourth-largest mobile and data market in the world. Brazilian telecom companies are investing in the technology, infrastructure and services needed to keep up with the rise in demand. This creates opportunities for businesses that make telecom equipment, real-time support systems and software, Jorge said. Mobile apps also are popular in Brazil, and consumers there are particularly likely to embrace social apps with sharing and “like” features, Jorge said.
“It’s very important to have personal connections in Brazil – it’s part of the DNA,” he said.
In 2011, the Brazilian government announced a plan to more than triple iron, copper and gold output by 2030. And that means a lot of opportunities for companies that make or service anything that goes in and around mines, Jorge said. The market for parts and mining equipment components is particularly strong, and the U.S. is already one of Brazil’s largest mining industry trading partners. Technology and logistics services also are in demand, Jorge said.
Oil and Gas
In 2007, Brazil discovered massive oil reserves that could produce as much as 50 billion barrels. That makes for a lucrative oil market that could benefit energy, technology and logistics firms. However, it won’t be easy for U.S. companies to get a piece of the action due to regulations and other issues. The International Trade Administration recommends U.S. companies partner with Brazilian firms, as the government wants foreign businesses that benefit from the boom to have operations in Brazil.
But there’s more to the Brazilian energy market than oil and gas, Jorge notes. Brazil also is interested in alternative energy, and there are opportunities for U.S. companies in that sector as well.