ANNEX F
SECTOR PRIORITIES HIGHLIGHTED IN THE TRADE
AND INDUSTRY SELECT COMMITTEE'S CALL FOR EVIDENCE
UKTI SECTOR SUMMARIES
F1. Aerospace
F1.1 Brazil has the fourth largest Aerospace
Manufacturer in the world—Embraer—which is the main
player within the Brazilian Aerospace Industry. Embraer is responsible
for the employment of 17,000 people worldwide and is indirectly
responsible for supporting employment for 150,000 Brazilians.
Some 200 Brazilian SMEs have more than 80% of their turnover with
Embraer. Embraer's order books are healthy with nearly US$11 billion
of orders in September 2005, thanks to the successful range of
regional jets, the 170/195 series. 148 jets were delivered in
2004 when turnover was RS10.2 billion (US$4.6 billion at exchange
rate of August 2006, R$2.2 to US$1) with 101 jets delivered to
September 2005 for turnover of R$6.4 billion (US$2.9 billion).
The new range of small business jets for up to nine passengers,
the Phenom, is also selling well.
F1.2 Brazil also has a healthy small aircraft
sector covering agriculture. It has the second largest fleet of
Air Taxis in the world and ranks seventh in terms of helicopters
flying in market.
F1.3 The Brazilian market forms a small
part of Embraer's turnover, some US$300 million. Brazilian operators
have not invested in Embraer products because they do not receive
the same benefits of import tax exemption as for exported aeroplanes.
F1.4 Embraer has strategic alliances with
a European group made up of Dassault, EADS, SNECMA and Thales
this group owning 20% of ordinary shares of Embraer.
F1.5 Risk share partners for Embraer are
Kawasaki, Sonaca, Latecoere, Gamesa, Honeywell, Hamilton Sundstrand,
C&D, Liebherr and Parker. There are no UK companies involved
as risk sharing partners with Embraer, although GKN has a small
factory in Brazil supplying aeroplane windows.
F1.6 The Brazilian Government are pursuing
an agenda of increasing the local content of Embraer's future
aircraft. However the industry in Brazil is not yet in a position
to support Embraer at the volume, technological or quality level's
necessary. However, two new investments have been made in 2006
with Liebherr and Firstwave opening new factories.
F1.7 There are significant barriers to trade
and investment in Brazil (see Annex E) which adds significant
costs to selling into and to setting up in business in Brazil
for Aerospace companies. Only companies long embedded into the
Embraer supply chain (such as Sonaca of Belgium or Gamesa of Spain)
seem inclined to respond to the localisation agenda and then at
minimum levels possible. Kawasaki recently withdrew from wing
manufacture in Brazil, handing this back to Embraer themselves.
RECENT UKTI ACTIVITY
F1.8 UKTI organised a series of Seminars
in the UK in February 2005 to make UK companies aware of the changes
to the policies of the Brazilian government and how this might
impact on Embraer. Embraer, the Brazilian Government and BNDES
took part in seminars held in London and in Warrington. Over 50
UK companies attended. UKTI followed up this with a mission into
Brazil—only four companies engaged in a programme which
gave access to Embraer, BNDES and introduced UK companies to indigenous
companies already in the Brazilian supply chain and European companies
who had invested in Brazil as a result of the localisation agenda
of the Brazilian government. The mission took place in October
2005. As a result of the low take up to a very structured mission,
the UKTI Aerospace Sector Advisory Group demoted Brazil from being
a priority sector for Aerospace in November 2005.
FUTURE UKTI STRATEGY
FOR THE
SECTOR
F1.9 The UKTI Aerospace Sector Team hold
a watching brief on developments in market and support initiatives
by the overseas team to introduce UK and Brazilian companies one
to another were reasonable opportunities arise. four Brazilian
companies had UKTI sponsored visits to the UK in July 2006 for
the Farnborough Airshow. A programme of one to one meetings with
UK companies was arranged. The Aerospace Sector Team will, with
support from Post, monitor the level of business generated from
these meetings and will review the priority given to Brazil at
the next Sector Advisory Group Meeting.
F1.10 The Aerospace Sector should benefit
from exposure given and initiatives developed through the JETCO
process. The Aerospace Sector Team will support JETCO as required.
F2. Financial services
F2.1 Brazil has a large and, in many respects,
sophisticated financial services sector. Structure, patterns of
ownership and the degree of foreign penetration vary from industry
to industry. The country operates a relatively open market for
Financial Services, although with restrictions in areas such as
legal services and insurance. There is also great potential for
UK businesses in light of expansion and liberalisation processes
taking place.
F2.2 Most multinational players already
have a presence in the market. But there is room for new entrants,
particularly those offering new or innovative products.
F2.3 The UK presence in financial services
is strong but generally confined to the big players in industries
such as banking, accountancy, consultancy and legal services.
However, there is an increased demand for specialised service
providers in various areas of the Financial Services industry,
which UK companies are well placed to benefit from.
F2.4 The main barrier and difficulties for
UK companies entering this market is the legislation and international
competition. Legislation is sometimes restrictive (although changing)
and the main international players are already present in the
market.
OPPORTUNITIES
F2.5 Financial Services has been identified
as a UKTI priority sector in Brazil and we have good contacts
with UK stakeholders.
F2.6 In addition, the expertise available
in the UK financial services industry is highly valued in Brazil
and there has been a significant increase of interest in British
companies from Brazilian private and public contacts. Main areas
of interest are: PPP; Legal Services; Reinsurance and Carbon Trading,
although we receive a good number of enquiries in other niche
or specific expertise areas.
PPP
F2.7 The Brazilian government is committed
to using Public Private Partnerships to address State under-investment
in essential infrastructure. There is strong interest in PPP/PFI
techniques and expertise, and the UK is seen as the key point
of reference and a potential co-operation partner.
F2.8 The UK has played an important role
in guiding the Federal Government's thinking on PPPs- with PPP
seminars, and a series of visits to and from the UK. We are working
now on a PPP mission of state delegates in October 2006.
F2.9 Brazil's Ministry of Planning has appointed
IFC and CAF to help BNDES through this process and the UK law
firm, Linklaters, was awarded a legal advisory contract to help
the first pilot projects off the ground.
LEGAL SERVICES
F2.10 The market is regulated by the Brazilian
Bar Association (OAB) and is still restricts foreign practitioners.
Barriers include restrictions on foreign firms entering into multi-jurisdictional
partnerships with Brazilian qualified lawyers. Under Brazilian
immigration rules, foreign firms also have to employ two Brazilian
citizens for each foreign employee, and maintain fixed minimum
salary ratios between Brazilian and foreign employees.
F2.11 A number of law firms, however, have
set up in London and vice-versa. As Brazil expands its trade with
the EU and the rest of the world there will be greater work involving
legal services. British law firms established in Brazil are confident
about future opportunities.
F2.12 Four English firms have offices in
Brazil (Clifford Chance, Linklaters, Richards Butler and Beaumont
& Son) and others are looking closely at the business case
for breaking into what is a large market in the oil, energy, banking,
reinsurance, carbon trading and PPP sectors.
F2.13 Recently the Law Society and the Brazilian
Bar Association (OAB) signed a friendship agreement and initiated
a promising relationship with a number of joint seminars and an
exchange programme benefiting young lawyers interested in studying
and working in both countries.
REINSURANCE
F2.14 The reinsurance is a US$1 billion/year
business and is still a government monopoly.
F2.15 The much anticipated de-regulation
of the industry through the break of the reinsurance monopoly
of the Instituto de Resseguros do Brasil (IRB) is progressing
and the bill opening the reinsurance market for other national
and international re-insurers is currently under consideration
by Congress.
F2.16 The proposed legislation to open the
reinsurance market in Brazil recognises the unique status of Lloyd's
and its syndicates.
CARBON TRADING
F2.17 Brazil is a world leader in terms
of carbon credits with positive prospects of growth. It lacks,
however, internationally experienced companies to take projects
forward. Brazilian authorities still need to define some issues
that cause uncertainties about this market (including the taxes
that must be imposed on Certified Emission Reductions and its
accounting in the companies' balance sheets). But we are working
now to promote the UK's strong network of organisations with the
relevant expertise.
LONDON LISTING
F2.18 Promotion of the London Stock Exchange
and particularly the AIM could encourage local businesses to view
London as a viable alternative to New York. Three years after
their last visit to the market, LSE is again looking at opportunities
in Brazil and will visit the country in September 2006.
CONCLUSIONS
F2.19 Winning business in the Financial
Services sector in Brazil is a long term project.
F2.20 Brazilian contacts from both private
and public sectors are aware of the UK's strengths in areas of
synergy (Brazilian demand and UK expertise) where there is growing
interest and great potential for business. The experience available
in the UK is acknowledge as top class and much valued, however
UK companies have to overcome obstacles, mainly legislation and
bureaucracy in order to take full advantage of the opportunities
available.
OUTCOMES OF
UKTI WORK IN
THE MARKET
F2.21 We have been active in promoting seminars,
events, round tables and a number of other activities focusing
in assisting UK companies in establishing good contacts with Brazilian
counterparts envisaging concrete business opportunities. Activities
generated by the UKTI team have contributed to positive outcomes
in different areas.
F2.22 Law Society and OAB signed a friendship
agreement and launched a two way young lawyers exchange programme
(six month duration each round). The first round of the programme
with Brazilian lawyers in the UK has ended this year with a very
successful outcome.
F2.23 KPMG was contracted by the Minas Gerais
government to assist on the modelling of the first PPP project.
F2.24 Linklaters was chosen by the Brazilian
government (BNDES + Planning Ministry) to provide legal assistance
on the first federal PPP pilot projects.
F2.25 BNDES and the Planning Ministry have
expressed formal interest to have PUK on board as PPP consultant
for the federal pilot projects, after the end of a successful
three month "help desk" service sponsored by Embassy
and GOF. Brazilian government considers the UK as the single most
important source of information in PPP.
F2.26 Three Brazilian delegates attended
the two week PPP masterclass promoted by PUK in London, leading
to a full PPP mission with states officials that have expressed
interest to learn from the UK experience. The five day mission,
to take place in October, is comprised of five delegates from
leading states in PPP in Brazil with particular interest to create
links with UK companies to provide them the necessary assistance
during the process of implementing the projects.
F2.27 For the first time a Brazilian official
from the Treasury went on an six month attachment scheme to PUK
in London to have a practical experience with PPP. She is back
in Brazil where her experience is very valued and will generate
further benefits to UK companies in terms of providing specific
services as needed.
F3. ICT
F3.1 Total revenue of the IT, telecoms and
electronics industries in Brazil in 2005 was R$93.95 billion (US$23
billion), growth of 8% adjusted for inflation. IT manufacturing
represented 25% of the total. Brazil manufactures a large number
of PCs, printers, telephones and other hardware, mainly on assembly
lines, especially in the Free Trade Zone of Manaus and Sao Paulo
State.
F3.2 Brazil's components industry was hit
in the early 1990s by the end of protectionism but Brazil has
technology in modems, optoelectronics, banking and industrial
automation, software, and technology linked to sectors such as
aerospace, oil and gas, agriculture, mining and automotive.
F3.3 The sector is held back by heavy taxation,
high interest rates, high distribution costs, illegal trading
and software piracy.
F3.4 Brazil is dependent on imported IT
and electronics technology, particularly in leading-edge technology,
software and components. 2005 imports from South-East Asia were
up 34% on 2004, representing over 60% of imports in the sector.
Imports of electronic components are the main burden on the trade
balance.
F3.5 Technology sectors are dominated by
the multinational giants such as Dell, Microsoft, IBM, Motorola
and Ericsson. These five have also set up research and development
bases in Brazil.
F3.6 Production is driven partly by the
expansion of the telecommunications sector. There were 91 million
mobile phones in use by June 2006 and growth has been rapid. Brazilian
operators have installed Edge and are looking at 3G for the near
future.
F3.7 The IT Law introduced in 1999, to reduce
dependency on imports, provides tax and financing incentives for
investments in electronics manufacturing. A government priority
is to bring in semiconductor and other components manufacturers.
The government has announced plans to provide special tax and
financing incentives to the semiconductor sector, in an effort
to boost the rest of the components and equipment manufacturing
industries.
F3.8 With the choice of the Japanese system
for Digital TV, the government hopes that hardware, such as TVs
and set-top boxes, will be made in Brazil. The government estimates
that Digital TV will generate revenue of R$100 billion (US$45.5
billion) in 10 years.
F3.9 Software is included in the IT Law
and development is boosted by government incentives in many States.
Brazil has a double taxation agreement with the US but not with
the UK.
F3.10 Industry is increasing investment
in IT. The growth sectors of the Brazilian SCS market match areas
where UK companies have traditionally been strong: banking and
finance; telecoms; oil and gas; education; training; e-government.
F3.11 The successful Science Parks and business-based
R&D foundations such as Cesar and CPQD represent opportunities
for partnership in technology and new product development.
F3.12 Few UK companies are present in ICT
but they include National Grid (Intelig telecoms operator), BT,
Logica CMG and telecoms software suppliers such as One World Interactive
and Intec.
RECENT UKTI ACTIVITY
F3.13 Brazilian delegates participated in
the UKTI Inward mission and Business to Business event to Technology
World in May 2006.
F3.14 Participation in the UKTI programme
supporting UK companies at Cebit, Germany in March 2006.
F3.15 A relationship has been developed
between UKTI, the Science and Innovation section and Brazilian
business-based research and development foundation (CESAR) to
explore areas for co-operation, involving visits to the UK to
meet both R&D and business contacts.
F3.16 Co-operation with Global Watch on
research into the games software market in Brazil.
FUTURE UKTI STRATEGY
FOR THE
SECTOR
F3.17 A telecoms mission is in preparation
for UK companies to visit the Futurecom telecoms exhibition in
October 2006 as well as meeting operators in Sao Paulo and Rio
de Janeiro.
F3.18 Inward games software mission to visit
the UK late 2006.
F3.19 Inward mission of Brazilian software
companies to UK early 2007.
F3.20 Participation in UKTI programme of
support to UK companies at 3GSM 2007 in Barcelona.
F3.21 Ongoing co-operation with S&I
on CESAR initiative.
F4. Life Sciences
F4.1 The biotechnology sector in Brazil
currently brings together over 300 companies. The industry has
an estimated annual turnover of US$4 billion—or 1.5% of
country's GDP. It is a young industry: 50% are start-ups or have
been in business for less than seven years. It employs almost
30,000 people.
F4.2 Within the past two decades, Brazil
has built on its very strong academic base and made significant
advances across the various biotech sub-sectors, and has clearly
established a world presence.
F4.3 Brazil has an active science park/incubator
movement, similar to that in place in the UK. 80% of companies
and universities are based in the Southeast region, mainly São
Paulo, Minas Gerais and Rio de Janeiro. Brazil hosts three world-class
Biotech research centres:
— Fiocruz, leading pharmaceuticals,
vaccines and diagnostic research and manufacturing complex—also
WHO accredited yellow fever vaccine supplier.
— Instituto Butantan, producer
of serums and vaccines.
— Embrapa, Brazilian agricultural
research company.
F4.4 Brazil is promoting the Biotechnology
sector to stimulate industrial development. The Federal Government
has increased the biotechnology sector budget by 180%, it is continuously
improving its policy concerning foreign capital investment, simplifying
its regulations for goods and services, and facilitating imports
of equipment.
F4.5 The USA, France, Germany, and UK account
for 60% of all international co-operation biotechnology projects.
There is little regional (Latin American) co-operation in biotechnology,
except for a long-standing agreement with Argentina. However,
Brazil is the region's main education and training supplier. Most
international co-operation projects aim at basic research, mainly
those with the USA, but an increasing number of Technology Development
projects have been agreed, notably with countries like Japan,
Canada and recently with India, Israel and Cuba.
F4.6 Brazil has a large pharmaceutical market
(the 11th largest in the world—2005 IMS Health data), attracting
multinational pharmaceutical companies, such as GlaxoSmithKline
(London, UK), Roche (Basel, Switzerland) and Sanofi-Aventis (Strasbourg,
France). The industry brings together more than 300 companies,
including subsidiaries of most major multinational pharmaceutical
laboratories and a large local industry. Of their combined products,
26% are for the health care market and the rest are for agricultural,
environmental and industrial fields.
F4.7 Generic drugs account for more than
13% of the volume of medicines sold and 10% of the industry's
turnover, approximately US$600 million. The best sellers are antibiotics,
anti-inflammatory, and pain relievers. IMS Health reported that
in the 12-month period leading up to February 2005, sales through
retail pharmacies in Brazil rose by 19%, surpassing the 9% increase
seen in Mexico and 13% rise in Argentina.
F4.8 Approximately 80% of the units commercialised
in Brazil are manufactured in the country. Brazilian companies
account for 74.6% of the sales in this market. Indian companies
come second, with 10.3% share, followed by the Germans (4.7%),
Swiss (4.6%), American (3.8%) and Canadian (2%). (2005 Pro Genericos)
F4.9 Brazil is signatory to Trade Related
Aspects of Intellectual Property Rights (TRIPS) and in 1996 enacted
a new Trademark and Patent law, which follows international standards
and general guidelines established by TRIPS. This has encouraged
substantial investment in the country, both in the construction
of new manufacturing facilities and in Research & Development
in the Pharmaceutical and Biotechnology industries. However, there
are still pending concerns regarding Brazil's Intellectual Property
law, such as compulsory licensing in cases of national emergency
and the requirement of prior approval from sanitary authorities
for pharmaceutical patent applications, that particularly concern
the research-based companies.
F4.10 The genetics segment, worth US$717
billion in 2005, is much more consolidated, with only five local
companies accounting for 75% of the market, and numerous foreign
players trying to get their share.
F4.11 The regulatory framework has considerably
improved and makes Brazil a preferred gateway to other Latin American
markets.
— The 1996 Intellectual Property
Law now Recognises the Patentability of Pharmaceutical Products.
— The 2005 Innovation law supports
public-private partnerships in research.
— The 2005 Tax law will give more
dynamism to private investments.
— The 2005 Biosafety law regulates
biotech activities.
— Drug approval requirements are
of the highest standard.
F4.12 These new laws will support local
and foreign investments and enhance Brazil's business environment.
F4.13 The best opportunities for partnerships
are:
— In Vaccines: R&D collaborations
in new vaccines formulation, and building on the Brazilian expertise
for expansion of manufacturing capabilities for lower margin vaccines
for exportation, supported by UK Private investments.
— In Genetics: bringing primary
manufacturing and APIs capabilities to Brazil to tackle a huge
and growing market. Increase of manufacturing capabilities for
exportation.
F4.14 Additionally, collaborations for clinical
trials and new drug discovery for high quality products, based
on biodiversity, are of great interest. Investing in R&D and
not only production can achieve products with higher value.
F4.15 To make these collaborations happen,
on the Brazilian side, there is a call for:
— Increased communication about
Brazilian research.
— Programs to identify the best
university research programs and to organize technology visits
in the UK, to make contacts with local firms.
— Communicating about the local
market requirements and its potential.
— Developing private research.
— Identifying win-win mechanisms
for partnerships between public and private companies in higher
margin products that do not fit the Ministry of Health requirements.
F4.16 On the UK side, there is a need to:
— Communicate to UK industrial
players the changes in Brazil.
— Raise awareness about opportunities,
collaborations and partnerships in Brazil.
— Send representatives of some
UK SMEs to Brazil to realize the potentialities of the country
to improve their perception. Forging contacts in Brazil is of
prime importance, as a local partner is required to give transparency
to the collaborative process.
— Engage as much as possible with
the Brazilian government to help market requirements and regulations
move in the right direction, as well as suggest the most necessary
improvements.
— The UK can bring its culture
of business and risk capital.
UKTI ACTIVITY
F4.17 UKTI is undertaking a number of trade
and investment activities. In 2005 we sponsored a Biotechnology
Scoping Mission to Brazil. After spending almost three weeks and
visiting five cities, the researchers produced a very favourable
report that was the basis for our proposed activities in 2006-07.
F4.18 Brazilian companies are participating
in UKTI Biotechnology Business Exchange which will take place
in London in October. We expect to have a group of at least three
companies that will attend the partnering meeting and a Brazil
Seminar sponsored by IATC in Cambridge before Bio Brasil.
F4.19 Brazil Seminar—International
Agriculture Technology Cemtre (IATC) is organising a "Doing
Business with Brazil" seminar in Cambridge which will have
a biotech element to it. This seminar will inform UK companies
about the many opportunities in Brazil. We hope that this will
raise UK companies awareness about Brazil.
F4.20 Bio Brasil—We are sponsoring
a Trade Mission to Brazil in October. Companies will attend Bio
Brasil, the largest biotechnology conference/trade show in Latin
America and will continue their programme in Sao Paulo, with a
series of visits to companies in the region. Bio Products Laboratory
will be among the guest speakers at the Bio Brazil Conference
and at the IV Healthcare Seminar organised by the British Chamber
of Industry, in Sao Paulo.
F5. Oil and Gas
F5.1 The monopoly of the state-controlled
oil company, Petrobras, was ended in 1997 but it remains dominant
in the market (Shell became the first foreign company to produce
oil in 2003, in partnership with Petrobras). The government retains
40% of Petrobras stock, including a controlling share. Although
the company is run mainly along commercial lines, the active influence
of the government is clear; for instance, retail prices of fuel
and other oil products are held below world market prices and
Petrobras is directly involved in some social assistance programmes.
The company plans to invest US$ 87.1 billion under its 2007-11
business plan, creating important opportunities for providers
of services and supplies.
F5.2 Despite a steady growth in demand,
natural gas still accounts for only 7% of national energy use;
the government wants to increase this to 12% by 2010. Brazil remains
heavily dependent on gas imported from Bolivia which accounts
for 60% of the gas sold by the distribution companies. The largest
distribution company in Brazil, Comgas in São Paulo (owned
by BG Group and Shell) came close to seeing supplies interrupted
in June 2005 at the height of the Bolivian political crisis, when
protesters in favour of nationalisation of the gas industry blocked
access to production facilities in Bolivia. The Bolivian government
resisted the calls for nationalisation but imposed an increase
in production tax, from 18% to 50%, in contravention of existing
contracts. With support from our Embassies in Brasilia and La
Paz, BG Group have worked closely with Petrobras and the Brazilian
government to deal with the crisis. Rapid development of new offshore
gas fields to increase domestic production and reduce dependency
on Bolivia is a top priority for the Brazilian government. BG
Group are drilling in four fields, in partnership with Petrobras
and other international operators.
F5.3 The government is drawing up proposals
for a new gas regulatory framework, which is expected to increase
transparency and define the limits for Petrobras' dominant role.
The absence of a clear framework has been a barrier to competition
and is of concern to foreign players, including BG Group, as Petrobras
is the main producer in Brazil and owns the distribution pipelines
for domestic and imported gas supplies.
F5.4 Around 50 British SMEs providing services
and supplies to the Oil and Gas industry are present in Brazil,
either directly or through agents. Majors such as Shell, BP and
BG Group are involved in the E&P and distribution markets.
Rolls Royce has a large maritime and energy operation headquartered
in Rio and is the leading provider of design and equipment for
large offshore supply vessels, with 80% of the market in Brazil.
Wellstream is investing US$ 60 million to build the first phase
of a flexible pipeline manufacturing plant (their second plant
outside the UK).
F5.5 The Brazilian oil and gas sector, with
the majority of the large E&P projects offshore, offers significant
opportunities for UK products and expertise through the massive
Petrobras investment plan reinforced by a growing number of foreign
players. In particular, UK capability, matched to current/potential
demand in the market, suggests opportunities in:
— Upstream: Offshore Support Services,
Drilling and Completion Services, Well and Reservoir Operations,
Subsea Equipment and Services, Asset Management, Pipeline Integrity,
HSE, Shipbuilding (offshore platforms), Education and Training.
— Downstream: Refinery Construction
and Upgrading, Pipeline Construction and Maintenance, Regional
Gas Distribution Companies, Education and Training.
F5.6 Although many items will continue to
be imported, companies should also consider local production through
direct investment, joint ventures/technology transfers.
F5.7 Although UK oil and gas companies continue
to do well in the market, a number of factors both specific to
Brazil and related to broader industry conditions have been noted
to act as a disincentive to new investment. These include:
— Complex taxation and legal requirements.
— Increasing focus in local content
requirements within the sector.
— Significant competition from
well established indigenous and regional supply chains.
— Geographic distance from the
UK, immigration and language issues.
— Negative perceptions of corrupt
business practices and difficulty of doing business.
— Significant global demand for
products/services resulting in full order books and industry seeking
to service existing/known markets rather than explore new opportunities
in markets such as Brazil.
— Length of time taken to gain
business success in Brazil versus other "easier" markets.
UKTI ACTIVITY
F5.8 In order to assist UK companies access
opportunities and to counteract perceived weaknesses/barriers,
UKTI have developed a four pillar strategy for UKTI-led oil and
gas activity in Brazil:
(i) Engage Brazilian government/industry
on barriers to trade.
(ii) Build awareness of UK capability among
Brazilian decision-makers/procuring organisations.
(iii) Understand opportunities and communicate
them to UK supply chain.
(iv) Deliver interventions to bring UK supply
chain and potential Brazilians buyers/partners together.
|
| Date | Activity
| Outcome |
Objective
|
|
| Ongoing | Distribution of Portuguese version of UK Capability brochure detailing UK expertise across broad range of sector needs.
| Over 5,000 brochures distributed to decision makers in government/industry.
| 1 |
| Ongoing | UKTI support for projects delivered at UK-Brazil Centre of Ocean Engineering in COPPE (subsea engineering department of key Brazilian University).
| UK-Brazil centre provides a focal point for joint co-operation on R&D + B2B exchange in subsea sector and in marketing UK capability.
| 2/3/4 |
| Ongoing | At least 50 initiative or reactive visits by UKTI staff in Brazil and the UK, giving emphasis to information gathering, promotion of UK capability, identification and communication of opportunities and providing regular contact with commercial companies and Government agencies.
| Over 150 direct contacts with UK companies made so far in 2006.
| 1/2/3/4 |
| Ongoing | Energy Specialist co-funded by UKTI and Scottish Development International based in Brazil's Offshore Centre (Macae).
| Specialist provides on-the-ground support in Macae to UKTI and UK industry; successful in mapping key procurers decision chain; in establishing relationships; increasing awareness of UK capability; and assisting UK companies with advice and in gaining access.
| 2/3/4 |
| February 2006 | UK-Brazil Energy Memorandum of Understanding (MOU) signed providing Government-to-Government instrument to help address barriers to further development of businesses in Brazil. Range of activity delivered linked to MOU including seminars and workshops eg in September UK experts will participate in post-Gleneagles G8 follow-up meeting in Brazil on sustainable development/energy efficiency. A detailed action plan under the MOU is currently being developed for discussion with senior Brazilian interlocutors in October.
| Objectives of the MOU include: Facilitate commercial exchanges and technology transfer; regular discussions on a broad range of energy-related issues (trade, regulation, energy security etc); enables both sides to address issues of mutual importance, including any possible barriers to trade and investment; provides government with a framework for tackling company concerns; encourages greater collaboration on both traditional and alternative energy programmes, thus helping to address issues related to sustainability and climate change.
| 1/2/3 |
| May 2006 | UK-Brazil Briefing and Networking Breakfast at Offshore Technology Conference, Houston.
| Over 100 UK and Brazilian participants present for briefing by senior Petrobras personnel and following networking event.
| 2/3/4 |
| May 2006 | Americas Oil and Gas Opportunities Roadshow: UKTI staff from Brazil (and other Americas markets) deliver seminars to UK supply chain audiences in Aberdeen, NE England, East England and London on opportunities and UKTI services to support market entry.
| Over 140 UK participants attended the series of seminars. Many have followed up with specific enquiries about opportunities and UKTI services/missions etc.
| 3 |
| 14-18 August 2006 | Inward Mission by Brazilian Education & Training organisations (including Petrobras, Transpetro and FIRJAN/SENAI + Mexican and Venezuelan organisations) to meet key UK education and training providers + SMEs.
| Inward mission will meet over 40 UK Education & Training providers in programme spanning Aberdeen, NE England, Midlands and London. Objective: 5-10 companies explore opportunities in Brazil/Venezuela/Mexico.
| 2/3/4 |
| 11-15 September 2006 | Approximately 35 UK participants will attend Rio Oil and Gas Exhibition with support from UKTI in partnership with Energy Industries Council, Northern Offshore Federation and Scottish Development International. Participants will gain access to expert briefing, networking events with Brazilian industry and opportunities to profile capability.
| Objective: 5+ new to market companies report business won/follow-up.
| 2/3/4 |
| 22 September 2006 (tbc) | Support for British Chamber Energy Seminar in Brazil on Sustainable Business.
| An opportunity to set out UK approach to sustainable business/market friendly policies + UK capability to senior Brazilian government and business audience.
| 1/2/3/4 |
| September 2006 | Publication of detailed oil and gas market opportunities analysis and oil and gas education and training report to UK supply chain.
| UK companies significantly better informed about opportunities in Brazil. Greater awareness of UKTI support/services and planned interventions (seminars, missions etc).
| 3 |
| October 2006 | Brazilian roll-out of North Sea Story DVD (in Portuguese): The DVD was developed in cooperation with Shell, Wood Group, Robert Gordon University and a range of other industry partners. It provides an overview of the UK's experience in developing its oil and gas sector with key messages on community, supply chain development, alliancing, industry-government partnership and benefits of non-protectionism in developing international capability. The content has been designed to appeal throughout the value chain—from government and industry though to grassroots organisations and students.
| Key messages on sustainable business development and UK capability delivered to broadest range of existing and future decision makers.
| 1/2 |
| October 2006 | R&D-focussed decommissioning related event in Rio de Janeiro, with participation of Petrobras and other national operators.
| Brazilian government/industry exposed to UK capability/R&D in this field; UK industry brought into contact with key decision makers.
| 2/3/4 |
| November 2006 | Outward mission of UK Drilling companies to Brazil.
| 5+ UK drilling services companies meet key decision makers in this growth sub-sector. At least two report business won/follow-up.
| 2/4 |
| November 2006 | Planned inward mission from Transpetro (Petrobras' transmission/distribution company) to identify UK technology in LNG receiving terminals.
| Transpetro visit UK facilities in Southeast and Wales and meet UK technology providers.
| 2/3/4 |
| November 2006 | Support for downstream gas outward mission by Society of British Gas Industries to Brazil to promote UK capability/ research sector opportunities.
| Range of UK companies from transmission, distribution and utilisation sectors exposed to decision makers/aware of opportunities. Two or more UK companies report business won/potential for follow-up.
| 1/2/3/4 |
|
F5.9 Subject to resources within UKTI's Oil and Gas sector
team and within the Brazil network, a similar, or enhanced, programme
of activity is envisaged for 2007.
F6. Environmental technology
F6.1 Brazil has a comprehensive programme of environmental
legislation. However, the number of existing laws and the sluggishness
of the legislative process have hindered progress in this sector.
Enforcement is inadequate, in large part due to a lack of adequately
trained (and generally poorly paid) staff. Where legislation is
enforced, penalties are usually of insufficient scale to deter
repeat offenders.
F6.2 Various new environmental regulations are expected.
Environmental licensing for industry has been decentralised, which
will speed up the process and increase demand for services and
technologies.
F6.3 Many of the problems facing Brazil are to be found
in São Paulo state and other major cities because of their
population and industrial concentrations.
F6.4 UKTI has based its strategy for the Brazilian market
on:
— Contaminated land remediation: recent official
estimates put the number of contaminated sites in Brazil at 15,000.
Various heavy industries—mining, paper production, etc—have
created serious challenges. Opportunities exist in site investigation,
risk assessment, remediation.
— Air pollution control: opportunities exist
in control, monitoring and analysis equipment. Consultancy companies
with a wide range of experience in emissions from industrial and
agricultural activities are also sought after.
— Waste water treatment: sanitation projects
(sewage treatment), many attracting World Bank funding, and treatment
of industrial effluent.
— Waste management: treatment and disposal
of municipal solid waste for major cities such as São Paulo.
— Climate change: can provide essential funding
to help realise some major projects, eg landfill gas, waste-to-energy,
energy efficiency.
F6.5 UKTI Objectives for Brazil in the sector are as
follows:
— To identify and assess major business opportunities
(including potential risks and rewards).
— To identify and develop specific business
opportunities arising from major projects and government initiatives,
and to disseminate this analysis.
— To promote UK strengths and capabilities
in environmental technology and solutions, together with HMG's
experience of applying effective policy and regulations, to influence
and generate a favourable atmosphere for firms pursuing new business
opportunities.
F6.6 UKTI aims to facilitate partnerships between UK
and Brazilian companies, mainly by means of its Technology Partnership
Initiative (TPI). TPI aims to facilitate the transfer of UK environmental
technology and expertise to developing and rapidly industrialising
countries on a commercial basis. The Prime Minister launched it
in 1993, as a follow-up to the Rio Earth Summit in 1992, following
calls from developing countries for improved access to information
on environmental technology and solutions. TPI is a practical
means of responding to the UK's commitments to sustainable development
in developing and rapidly industrialising countries, whilst also
providing an introduction to UK companies seeking to secure contracts
in what are generally difficult, but growing, markets in which
to do business.
F6.7 TPI's principal aims are:
— To promote the transfer of environmental
technologies and services from the UK to developing and rapidly
industrialising countries in order to contribute to the achievement
of sustainable development.
— To do this in such a way as to maximise the
opportunities for UK suppliers of environmental technologies and
expertise. In particular to aim for an increase in commercial
linkages/partnerships in TPI priority markets.
F6.8 UKTI's work in Brazil is funded, in the main, by
the TPI programme.
F6.9 UKTI works in partnership with key stakeholders
and multipliers such as Trade Associations, Professional Institutions,
the Environmental Sector Advisory Group, the Environment Agency,
in addition to the UKTI overseas and regional network on:
— Producing and effectively disseminating market
research, analysing opportunities, including the political, regulatory
and economic environment.
— Supporting inward missions of buyers from
Brazil to participate in Meet the Buyer events at major UK exhibitions.
— Sponsoring in-market seminar events to represent
UK capabilities in those sub-sectors mentioned earlier.
— Developing political and business networks
(leading UK delegations into meetings with governments and regulatory
bodies) in market.
— Developing a Memorandum of Understanding
between CETESB and UKTI for exchange of information about the
UK's development of environmental policy and regulation.
— Sponsoring Environment Agency officials to
participate in international conferences in—Brazil, to advise
on UK and EU approach to development of environmental policy,
regulation and enforcement.
UKTI ACTIVITY
F6.10 Protection Offshore. UK Trade and Investment information
and catalogue stand promoting UK capabilities in Marine Pollution
Control (June 2006).
F6.11 Recycling and Waste Management exhibition (RWM
2006). UKTI is sponsoring four buyers from Brazil to participate
in a three-day programme, including a Meet the Buyer day, at this
exhibition and conference in the UK (September 2006).
F6.12 UKTI sponsored seminar mission to São Paulo
and Belo Horizonte. Six to eight companies will represent UK capabilities
in contaminated land remediation and air pollution control (October
2006).
F7. Healthcare
UKTI ACTIVITY
F7.1 UKTI helped a consortium of UK companies win a contract
for the first Medical Training Centre for the oil and gas industry
in Macae, Brazil. The project was launched by Ian Pearson, then
Minister for Trade in January 2006. The project involves the City
of Macae, Berkeley Training Centre in Brazil and a consortium
of UK companies led by Lancashire Ambulance Service. The training
unit is located at Macae's state of the art city hospital, meeting
the needs of the 35,000 people working in the offshore industry.
F7.2 This project is a good example of collaboration
between UKTI overseas and the UKTI sector team in London. Initial
contacts were made during an outward healthcare mission to Rio
in June 2005 and this was followed up by a sponsored inward mission
of officials to the UK from the state of Macae, Brazil to meet
relevant UK companies. Three weeks after this visit the contract
award was announced. Total value was $450k.
F7.3 The healthcare sector team are now involved in assisting
the UK consortium to win Phase 2 of the project for the purchase
of telemedicine systems for 40 platforms operated by Petrobras
offshore Brazil. Phase 2 will also cover the transfer of UK expertise
to Brazil on emergency response to major disasters. The team recently
sponsored a visit by the Secretary of Health for Macae together
with officials from Petrobras, the Brazilian state oil company
to observe the systems and development of telemedicine in Aberdeen.
Technical negotiations are currently ongoing and it is hoped that
the contract award will be announced in late 2006. Total value
of the contract is estimated at $1.5 million.
F7.4 Patricia Hewitt signed a Memorandum of Understanding
on Healthcare with the Brazilian Foreign Secretary, Celso Amorim
during President Lula's visit to the UK in March. This MOU was
prepared at the request of the Brazilian Government to facilitate
the collaboration of Bio Products Laboratory (BPL), UK's national
plasma fractionation unit within the UK's Department of Health
with Brazil's Ministry of Health.
F7.5 The main objective of the MOU is to increase co-operation
in the areas of blood plasma products. BPL prepared detailed proposals
for presentation to Brazil's Ministry of Health on the basis of
which they were ready to enter into discussions leading to detailed
negotiations. Despite the best efforts of BPL no discussions have
yet taken place.
F7.6 Also, BPL's French competitor, LFB, have been seeking
to forge a similar alliance on this project and have recently
hosted a visit by the Brazilian Ministry of Health to their facility
in France.
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