Select Committee on Trade and Industry Written Evidence


APPENDIX 27 (continued)

H—UKTI BRAZIL STUDY

REPORT FROM FIFERCONSULTANTS ON RECENT DEVELOPMENTS IN THE BRAZILIAN AEROSPACE MARKET

INTRODUCTION

  As a result of recent discussions between the UK and Brazilian Governments, consideration is being given to the formation of a Joint Economic and Trade Committee (JETCO) Aerospace Working Group.

  The UK Trade & Investment Aerospace Sector Team has commissioned Fifer Consultants to undertake a short study to assist in assessing the potential value of such a working group.

  The study provides a review of changes in the Brazilian aerospace market which have taken place since the UKTI seminars and mission to Brazil in 2005, together with an assessment of UK industry's current views on the market and resulting conclusions and recommendations.

CONTENTS

  1.  Development of Brazilian Government Initiatives for the Aerospace Industry

  2.  Industry Developments in Brazil

  3.  Brazil Missioners Progress

  4.  Views of Key UK Companies

  5.  UK Industry Developments—Views on the Brazilian Market and Proposed Working Group

  6.  Conclusions and Recommendations

1.  DEVELOPMENT OF BRAZILIAN GOVERNMENT INITIATIVES FOR THE AEROSPACE INDUSTRY

  Since the UKTI/SBAC mission to Brazil in October 2005, there has been significant progress in the development of Brazilian Government initiatives for the aerospace industry.

  A memorandum of understanding was signed on 20 June 2006 between the newly created Brazilian Civil Aviation Authority (ANAC), the National Economic and Social Development Bank (BNDES), the Brazilian Aerospace Industries Association (AIAB) and Embraer, instigating activity in two phases to develop measures assist and improve the aerospace supply chain.

Phase 1

    (a)  Mapping of the Brazilian industry, its current capabilities and deficiencies and identification of capabilities and investment required to meet Embraer's future supply chain needs.

    (b)  Identification of Embraer risk sharing partners and suppliers who are intending to establish facilities in Brazil to supply Embraer and the wider Brazilian and global markets.

    (c)  Achievement of a deeper understanding of the issues of technical development and taxes and tariffs facing the industry, particularly in relation to import and export tariffs, together with policies on offset arrangements for government purchases. Formulation of alternatives to overcome tax and tariff barriers.

Phase 2

    (a)  Study of commercial relationships in the supply chain to structure possible new BNDES support mechanisms, with the possible involvement of the capital markets and Embraer.

    (b)  Proposal of minimum standards of management and organisational structure for companies to qualify for any eventual support programme.

  Four working groups have been formed from representatives of the signatories to address the issues.

    GT-1: Programme Coordination

    GT-2: Aircraft Industry Supply Chain

    GT-3: Taxation Issues

    GT-4: Financial Solutions

  The working groups are meeting regularly with a view to submitting their findings to government early next year.

  In essence it would appear that the initiatives instigated by BNDES and described at the UK seminars in 2005 are now taking shape under a more formalised structure which includes the newly formed independent Civil Aviation Authority (formerly part of the Ministry of Defence).

  Whilst the primary aim of the initiative is to improve the supply chain in Brazil, the work to identify capability gaps will assist in identifying areas of opportunity for UK companies, albeit that the drive is to develop technically capable and financially viable organisations based in Brazil. The support mechanisms being developed will be open to both Brazilian and foreign owned enterprises.

  It is encouraging to note that taxes and tariffs as they relate to the aerospace industry are to be addressed, as this issue is one of the major perceived barriers quoted by the UK industry as a reason for not entering the Brazilian market.

2.  INDUSTRY DEVELOPMENTS IN BRAZIL

  Embraer reports increased demand for its products, and growth in the backlog of orders. This relates particularly to the 70-115 seat E170, E175, E190 and E195 family of aircraft. Embraer's order backlog for these aircraft stands at 414 aircraft compared with Bombardier's backlog of 81 CRJ regional jets. In the words of one industry commentator "Embraer controls the market". The UK low cost carrier Flybe is launch customer for the E195.

  Market economics have drastically reduced orders for 40-50 seat regional jets and a resurgence of turboprop aircraft in this sector. As a consequence, Embraer has virtually ceased production of the ERJ135/145 family in Brazil, with the exception of airframes for the successful Legacy executive aircraft. The ERJ145 continues to be assembled from imported components by Embraer's Chinese JV for the local market. Existing ERJ135/145s appear to be enjoying good utilisation with only 8 idle aircraft in storage compared to 100 Bombardier CRJ 100/200s.

  Embraer has continued to develop its product base to reduce dependency on its traditional regional aircraft market. The decision to move into business jets with the new Phenom 100, Phenom 300 and Linneage aircraft appears to have been successful with healthy demand for these types. This demonstrates again Embraer's knack of getting the right product to market at the right time. It remains Embraer's aim to be the leading business jet manufacturer by 2015, with a spectrum of products ranging from VLJs (very light jets) to large intercontinental executive aircraft.

  Unconfirmed industry reports suggest that Embraer is also studying the development of a turbofan powered C-130 sized tactical transport aircraft, together with other military/utility studies, to further diversify its portfolio.

  Embraer has confirmed the need to strengthen its supply chain to meet the demands of current and new programmes and that this process always results in opportunities for new suppliers and subcontractors. It currently has demands for technologies including; composites, 5 axis machining of large parts (17 metres and over), replacement processes for chemical milling and sheet metal structures. From Embraer's perspective the BNDES/ANAC/AIAB/Embraer initiatives have yet to define which supply chain links will have to be strengthened, but the list will include all of those mentioned plus others.

3.  BRAZIL MISSIONERS PROGRESS

  Four UK companies participated in the UKTI/SBAC mission to Brazil in October 2005; Aeromet International plc, Attewell Ltd., Delcam plc and TWI Ltd. All of the companies who participated have since developed or are developing business, demonstrating that opportunity exists in Brazil.

    Aeromet report that they are confident of securing an order from Embraer for castings valued at approximately £250K. Aeromet's Sales Director has recently visited Brazil and has launched some research through the British Consulate's aerospace team on further business opportunities.

    Attewell received an enquiry from Embraer for 620 different components and responded with a bid. They received very positive feedback indicating that they were the most competitive bidder. Embraer also wished them to quote for further parts for new models. Attewell report some frustration in dealing with Embraer, due possibly to high workload in the customers purchasing team, and contemplated appointing a Brazilian agent. Embraer has expressed a preference for dealing directly with the company, and Attewell continue to work hard to push the project to a final conclusion.

    Attewell have a positive view on the outcomes of the mission and have indicated that they would not have had the opportunity to bid had they not participated. Embraer's perceived policy of not offering long term supply contracts has led them to conclude that it would not make commercial sense to set up in Brazil at this time to support the level of business currently on offer.

    Delcam have not yet secured contracts in Brazil but they report positively on the outcomes of the mission.

    They have signed up a distributor who is planning to set up an office in Sao Jose dos Campos, close to Embraer, and are visiting the market again in November 2006. They will meet with Paul Smith to discuss ideas on improving market penetration.

    Delcam also put forward the view that 2006 was a relatively quiet year in Brazil as many people were awaiting the outcome of the Presidential elections, postponing investment decisions until 2007.

    TWI report that they have finished a contract for Embraer in September, worth approximately £30K, won as a result of the mission. A further proposal worth £17K was declined at the last moment due to budget reallocation. Embraer visited TWI twice in 2006 and are in discussion on three proposals for work in 2007 worth approximately £70K.

    TWI has established a presence in Brazil and is discussing work with BNDES on the supply chain improvement programme. They are also pursuing work in Brazil in other sectors including oil and gas.

    TWI also reports delays in Brazilian customs, and import tariff problems when shipping goods to Embraer. They are raising this with Brazilian Government contacts met during the mission.

  Those contacted would welcome the creation of a JETCO Aerospace Working Group if it were able to address issues which impede the progress of their business in Brazil including import and export tariffs and customs delays. It was also seen as valuable to bring to the Brazilian Government's attention issues having a negative effect on supply chain development including, for example, Embraer's apparent unwillingness to enter into long term supply contracts.

4.  VIEWS OF KEY UK COMPANIES

  Views on the Brazilian market and on the possible establishment of a JETCO Aerospace Working Group were sought from four key UK companies; Airbus UK, BAE Systems, GKN and Rolls Royce.

    Airbus UK has no significant links to Brazil from an industrial perspective, although there is a shareholder link to Embraer through EADS. Airbus is in the process of shrinking the number of its direct suppliers, although this does not preclude more industrial links to countries like Brazil if it facilitates market access.

    Brazil's second airline TAM is a significant target and key customer (largest in South America) and announced another major Airbus order last week. As TAM is also a potential customer for the new A350, Airbus is keen to maintain close relations.

    Airbus UK would view the formation of a JETCO Aerospace Working Group positively and would consider participation. If it builds relations for them and increases market access for Airbus and particularly for their UK supply base, thereby strengthening their suppliers, this would be seen as of added value.

    Airbus UK would also be interested in becoming involved in any joint research programmes which might result from the activities of an aerospace working group.

    BAE Systems' principal aerospace interest in Brazil is on hold due to the suspension of the FX new fighter aircraft programme. The company's main efforts are currently concentrated on land systems opportunities. A BAE Systems marketing subsidiary is retained in Brazil and the company maintains a watching brief on developments in the aerospace sector.

    BAE Systems sees the formation of an aerospace working group as potentially beneficial, particularly if it also considers issues outside of the main industrial manufacturing framework. Such issues could include; joint research and development, new technologies and emerging sectors including, for example, UAVs.

    GKN holds a positive view of Brazil through its ownership of a subsidiary company manufacturing transparencies for the aerospace sector and its involvement in the Brazilian automotive sector, where it is a major employer.

    The company reports a good relationship with Embraer and an interest in greater involvement with Embraer programmes. Further expansion for GKN in the Brazilian aerospace sector would depend on the development of new programme based business.

    GKN also see value in the creation of a JETCO working group to address aerospace sector issues at a government level and would consider participation.

    Rolls Royce. At the time of writing no feedback had been received from the company. Rolls Royce has, however, been present in Brazil since the late 1950s with a local subsidiary. It is also the engine supplier for the Embraer ERJ135/145 family of aircraft through its US subsidiary and has significant Brazilian market penetration in the power generation and marine propulsion sectors.

5.  UK INDUSTRY DEVELOPMENTS—VIEWS ON THE BRAZILIAN MARKET AND PROPOSED WORKING GROUP

  Views were sought from trade associations, including the SBAC, the DMA and the regional aerospace alliances as representatives of industry. The devolved administrations in Scotland, Wales and Northern Ireland and the UKTI international trade advisers with aerospace responsibility based in the regions were also consulted.

  The SBAC has consulted its Market Development Board, but at the time of writing a consolidated view was not available. There are no current plans for SBAC activity in the Brazilian market and no SBAC presence is planned for the 2007 LAAD exhibition in Rio de Janiero.

  As regards the proposed JETCO working group, the SBAC believes forming such a body would be valuable if brings benefit to UK industry, particularly in terms of trade development. The SBAC would be interested in participating on behalf of industry and believes this would fit in with its strategic role with UKTI.

  The Defence Manufacturers Association (DMA) signed an MOU with its Brazilian counterpart ABIMDE in June 2006 to promote cooperation in support of mutual objectives. These include; collaboration on regulatory issues, reciprocal free local advice and assistance to their respective memberships and the organisation of industry conferences and other events. The proposal for a JETCO working group is supported by the DMA as a means to generate UK interest and confidence in the Brazilian market.

  A broad spectrum of inputs and views were obtained from the regional interlocutors consulted which compliment the views discussed in earlier sections of the report. These are summarised below.

Brazilian Market

    —  None of the regions have any planned activity for the aerospace sector in Brazil—only some generic trade missions are planned.

    —  There has been little activity at SME level in the market.

    —  Some larger companies have had success including Dunlop with the braking systems for the Embraer business jets.

    —  Whilst Brazil is recognised as an important developing market, companies are tending to prefer traditional European and North American markets and to consider other new markets including Japan, India and China.

    —  Embraer is seen as a major player with supply opportunities for new programmes, but UK companies do not see a clear route to engaging with its Tier 1 supply chain.

    —  Some companies believe that the only route into Embraer is through establishing in Brazil, presenting a perceived barrier to entry.

    —  Some of those consulted believe that market initiatives have concentrated on manufacturing and that other areas including MRO, equipment and system supply and higher value added aspects of the market could present more potential.

JETCO Aerospace Working Group

    —  There was qualified support from virtually all those consulted for the UK Government to engage in an aerospace working group with the Brazilian Government.

    —  It was generally seen as a national activity rather than one in which the regions would participate directly.

    —  Setting up the working would provide a catalyst for change and give more impetus to developing activity between the two industries.

    —  It would provide a forum to improve conditions for market access for UK companies, including tariff issues.

    —  The working group would be of most value if it considered not only manufacturing, but other higher value and growth areas including; research and development, academic links, joint space activity, UAV research, sustainability, home land security applications for aerospace and MRO.

6.  CONCLUSIONS AND RECOMMENDATIONS

Conclusions

    —  The recent re-election of the Brazilian President should result in continued stability and growth, confirming Brazil's status as a major developing world economy. The aerospace industry in Brazil continues to grow with Embraer's success and expansion of its product portfolio offering greater opportunity for UK companies.

    —  The supply chain to Embraer and its Tier1 suppliers continues to be weak. Brazilian Government initiatives for the aerospace industry have become more formalised and are addressing issues which could be of potential benefit to UK companies accessing the market. The coalescing of these initiatives in Brazil should facilitate engagement with the Brazilian Government.

    —  The UK industry's perception of and interest in the Brazilian market has changed little since the UKTI initiatives of 2005. There are no planned trade association initiatives for Brazil.

    —  Companies who have been exposed to the market have generally been successful in securing business, confirming that opportunity exists in Brazil. Potential higher value and growth areas of the Brazilian market have been largely unaddressed.

Recommendations

    —  The UK Government should engage in a JETCO Aerospace Working Group with the Brazilian Government subject to agreeing a scope of work which will facilitate the generation of business with Brazil for UK industry and institutions.

    —  The Working Group should focus on reducing barriers to trade between the UK and Brazilian markets, including tariff and other non-tariff barriers, and on initiatives to promote trade, interchange and cooperation in aerospace between the two industries.

    —  The Working Group should consider not only manufacturing and supply, but wider issues including; MRO, research and development, academic links, training, joint space activity, sustainability, and growth areas including UAVs and homeland security applications of aerospace technology. Inclusion of these and other activities will provide the broadest scope of opportunity for UK companies and institutions.

I—UKTI SECTOR PRIORITIES

    —  Sectoral market priorities are assessed by UKTI on an annual basis. The process is coordinated by each sector team with input from relevant Posts and other stakeholders.

    —  Several factors are taken into account including: size of opportunity; need for government support; match between current and anticipated needs in the market against UK capability strengths; and demand from industry.

    —  UKTI's Sector Advisory Groups, made up of business representatives with particular relevant areas of expertise, play a key role in advising where resources might be best targeted.

    —  Against a background of reducing resource, sector teams have been tasked to be more stringent with priorities for their 2007-08 business plans. A maximum of five priority markets will be selected to receive the majority of activity in each sector, with a maximum of a further seven which will have one key activity during the financial year. The markets in this second tier are being called "Opportunity Markets".

    —  Following these principles, the priority sectors in Brazil for the financial year 2007-08 are:

    —  Agriculture.

    —  Engineering.

    —  Environment.

    —  Healthcare and life sciences.

    —  Oil and gas.

    —  Sports and leisure infrastructure.

    —  Chemicals.

    —  The opportunity sectors in Brazil for the financial year 2007-08 are:

    —  Aerospace.

    —  Construction.

    —  Creative and media.

    —  Education and skills.

    —  Financial services.

    —  Ports.

    —  The only priority sector in the other Mercosur markets is Oil and Gas in Venezuela. This is the same as for the current year.

    —  Priority sectors for current financial year (2006-07):

    —  Agriculture.

    —  Education skills and leisure.

    —  Engineering.

    —  Environment.

    —  Healthcare.

    —  Oil and Gas.

    —  Chemicals.

    —  Sports and leisure infrastructure.

    —  Textiles and carpets.

J—UKTI ACTIVITY IN THE PRIORITY SECTORS IN BRAZIL

AEROSPACE

  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 re-prioritized Brazil from high to low priority sector in Nov 2005.

  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 to one another where 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.

  As a direct result of JETCO, the UKTI Aerospace Sector team commissioned an independent report on the Brazil Aerospace sector. The study provided a review of changes in the Brazilian aerospace market which have taken place since the UKTI seminars and mission to Brazil in 2005, together with an assessment of UK industry's current views on the market and resulting conclusions and recommendations.

  Consideration is now being given to the formation of a JETCO Aerospace Working Group. The Working Group would focus on reducing barriers to trade between the UK and Brazilian markets, including tariff and other non-tariff barriers, and on initiatives to promote trade, interchange and cooperation in aerospace between the two countries.

AGRICULTURE

  Some 70% of Brazil's landmass is suitable for cultivation. Areas already in production account for 19% of the world's arable land. An appropriate climate, plentiful water and a largely flat topography give first class yield conditions, with multiple harvests each year. The agricultural sector has for many decades been the backbone of Brazil's economy. According to Brazil's National Agriculture Confederation (CNA), agribusiness accounts directly and indirectly for one third of Brazil's GDP and employs 37% of the Brazilian labour force. Brazil's agricultural production is expected to continue to grow strongly over the next decade. It is estimated that a further 124 million hectares could be developed for agricultural use within the next 10 to 15 years.

  Main opportunities are in the following sub-sectors:

    —  biotechnology, food safety, traceability, animal genetics, organic and GM production;

    —  technology and market trends, precision agriculture, remote sensing and precision machinery, post-harvest technology;

    —  bio-ethanol (mainly produced from sugar-cane);

    —  prawn and fish farming, aquaculture, deep sea fishing and fishing vessels; and.

    —  there is also demand for high-value-added machinery to boost productivity and reduce wastage.

  Latest activities in this sector include:

    —  Inward Mission—Foodex/Meatex 2006—19-22 March 2006—Birmingham.

    —  Outward Mission/Market Visit Support—International Conference on Agriculture Products Traceability—10-12 April 2006—Brasilia. Support two British speakers at the event and with commercial-oriented meetings in Brasilia.

    —  Visit Agrishow 2006—19 May 2006—Ribeirao Preto, Brazil.

    —  Outward Mission/Market Visit Support—19-23 June 2006—São Paulo and Brasilia.

    —  To assist one IATC staff member attending Feicorte event in São Paulo (19-20 June 2006) and business meetings in Brasilia (20-23 June 2006).

    —  1 to 5 July 2006 Inward Mission—Royal Show 2006, Coventry.

    —  13-18 August 2006—8th World Congress on Genetics Applied to Livestock Production (support to British Breeders attending the event)/Visit to the State Federation of Industries/ Attendance to the innauguration of the headquarters of the State Swine Association—State of Minas Gerais.

    —  26 August to 3 September 2006—Outward Mission/Market Visit Support Expointer August 2006, Esteio/RS.

    —  18-21 September 2006—Attend FENASUCRO 2006—14th International Trade Fair on the Sugar and Ethanol sector.

    —  8-12 October 2006 Inward Mission Biotechnology Business Exchange + Seminar.

    —  28-30 November 2006—Outward Mission—IATC sponsored Seminar on Food Processing (UK Experience) followed by visits to the Agronomic Centre of Campinas and to the Ministry of Agriculture in Brasilia.

    —  8 January 2007—Visit to FINEP Research and Project Financing—negotiations for a joint workshop in Technology Transfer, Rio de Janeiro.

    —  16 February 2007—Visit to Curitiba, capital of the State of Parana. Calls on IAPAR (Agronomic Institute of the State of Parana), State Secretariat of Trade and Industry, State Federation of Industries (FIEP).

    —  3-10 March 2007—Inward Mission—3 Delegates from Brazil's Ministry of Agriculture, Livestock and Food Supply plus 1 delegate from the Brazilian Agricultural Research Corporation (Embrapa). Visits to DTI, Defra, UK Research Centres and companies.

  Aquaculture is the fastest growing form of intensive agriculture worldwide. UK companies and Higher Education Institutions (HEIs) continue to develop cutting-edge technologies and to be at the forefront of R&D. Many are seeking export and outward investment opportunities. Brazil has a young, high growth, aquaculture industry but needs new technology and investment to sustain this—such as animal genetics, sustainable feeds and systems, fish-farm equipment/boats, direct investments, R&D with HEIs.

Activity includes:

    Attendance at Aquaciencia Congress, Brazil.

    Inward Mission Oct-06 Aquaculture/Biotech to main UK centres of excellence.

    Participate in Biotech Seminars 11-13 October in Cambridge.

    Participation of two Brazilian companies Value Added Seafood Seminar, London 4-5 October 2006.

    Outward Mission—Sustainable Aquaculture Seminar by March 2007.

AUTOMOTIVE

  Brazil is the 10th largest producer of vehicles in the world. There are 26 automotive manufacturers and with 471 autoparts manufacturers, 564 plants and 4,000 dealerships. The whole chain employs 460,000 people. The Brazilian automotive industry has 80% of market share in South America and represents 11% of the Brazilian GDP. Production is currently around 22.5 million units per year.

  The Motorsport industry in Brazil has about 8,000 drivers in total from various categories (Rally, F-3, F-Renault, StockCar, etc). This is a growing industry and therefore there are potential opportunities to be developed with British companies. We can highlight Rally and Stock Car categories as the most promising ones in terms of potential business opportunities.

NICHE AREAS

    —  Automotive: High tech equipment and special components and raw material for OEMs and autoparts manufacturers.

    —  Motorsport: Components and accessories (seat belts, seats, fire extinguisher, electronic instrumentation, telemetry), Joint Ventures with British racing teams (drivers' enhancement, technology transfer, etc) as well as special components and performance kits for the tuning sector, which is growing rapidly in Brazil.

    —  Construction: Construction equipment used in the Heavy Construction, Oil & Gas and Mining industries.

  Activities:

    —  AUTOSPORT INTERNATIONAL 2006 Inward Mission at the NEC, Birmingham, UK.

    —  September 2006 Commercial Officer Business Development Visit.

    —  AUTOSPORT INTERNATIONAL 2007 Inward Mission at the NEC, Birmingham, UK.

    —  May 2007 Commercial Officer Business Development Visit.

    —  Scoping mission to be confirmed for later 2007.

CONSTRUCTION

  The civil construction chain accounts for more than 15% of GDP in Brazil (US$ 600 billion approx. in 2004). Almost 4 million people are employed directly within the sector, and it consumes raw materials worth more than £13 billion each year. The forecast of investment for the construction equipment segment is of approximately £45 billion from 2004 to 2007. This amount represents 3.5% of the Brazilian GDP. The scenario is very positive for the heavy construction segment since it is closely linked to infrastructure. São Paulo and Minas Gerais states have plans to contract their first projects under the new PPP (Public-Private Partnerships) regulations in 2006 targeted at transportation, energy and sanitation sectors.

  Particular opportunities:

    —  Industrial floorings (eg high chemical resistance flooring used in food industry).

    —  Waterproofing membranes (eg specially used in tunnels and underground spaces).

    —  Water-based varnishes and resins for restoration projects.

    —  New technologies such as plastics and steel frame systems for low-cost housing.

  Activities:

    —  April 06 INTERBUILD inward mission at the NEC, Birmingham, UK.

    —  April 2006 Journalist to take part at the Inward Mission to INTERBUILD.

    —  October 2006 Outward mission to coincide with NUTAU in São Paulo.

    —  October 2006 UK speaker to NUTAU in São Paulo.

CHEMICALS

  The Brazilian Chemicals industry ranks 1st in Latin America and 9th in the world, just behind the UK, and is present in almost all the industrial chains and processes. The chemical sector is responsible for 3.7% of the Brazilian GDP. Imports of chemical products account for 20.8% of the country's total imports.

  There are business opportunities for UK companies across the diverse Chemicals sector, but mainly in speciality products, organic and inorganic chemicals, resins, paints, coatings & inks and dyes & pigments.

  Activities include:

    —  16 May 2006 Chemicals Meet the Buyers in Manchester.

    —  25-29 September 2006 Chemicals Industry Briefing Course.

    —  15-18 May 2007 Interplas 07 Inward Mission to NEC Birmingham.

EDUCATION AND SKILLS

  UK Trade & Investment sees substantial opportunities in Brazil and Brazilian delegates are regularly brought to the UK to attend major trade shows looking at ICT and other educational products such as distance learning & postgraduate courses, EFL (English as Foreign Language), vocational & training courses.

  UK Trade & Investment is exploring links between sports, education and social inclusion in Brazil and has recently supported a UK presence at a Special Educational Needs event in Brazil.

ENGINEERING

  Brazil is the biggest machinery and equipment manufacturing country in Latin America and the 10th largest in the world. Brazilian industry is modernising itself constantly and the engineering sector is a good example of such modernisation. Brazil exports 40% of its production. The main buyers are currently the United States, Argentina, Mexico, Germany and the UK. It includes the whole range of production, from the simplest machines to complete lines of production. Proof that the quality of Brazilian machines is of world-class.

  Activity:

    —  There was one inward mission to the PPMA Show (processing and packaging sector) in 2004. An inward mission on manufacturing visited the UK between 5-9 March 2007.

    —  UK Trade & Investment is supporting an inward mission to the Total Processing & Packaging Show on 15-16 May 2007.

  A report on Brazil's Packaging Industry was produced in 2005.

ENVIRONMENT

  UKTI has for many years promoted Brazil as a priority market for environmental goods and services. Investment in the environment sector in Brazil is expected to grow at a faster rate than previous years. This is, at least in part, due to an increase in private sector investment, with companies moving to new, more efficient and environmentally benign, technologies especially in land remediation, water reuse, industrial effluent treatment, air pollution control, solid waste management, energy from waste and other sub sectors.

  Over this time UKTI has pursued a programme of inward and outward visits focusing on aspects of Waste Management, Contaminated Land Remediation and other key areas of concern in Brazil. UK companies have been involved in successful collaboration in landfill gas and, associated with this, the Clean Development Mechanism process.

FINANCIAL SERVICES

  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.

    —  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.

    —  KPMG was contracted by the Minas Gerais government to assist on the modelling of the first PPP project.

    —  Linklaters was chosen by the Brazilian government (BNDES + Planning Ministry) to provide legal assistance on the first federal PPP pilot projects.

    —  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 FCO Global Opportunities Fund (GOF). Brazilian government considers the UK as the single most important source of information in PPP.

    —  Three Brazilian delegates attended the two week PPP masterclass promoted by Partnerships UK (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.

    —  For the first time a Brazilian official from the Treasury undertook a six month attachment scheme to PUK in London to have a practical experience with PPP. Now back in Brazil where her experience is highly valued and will generate further benefits to UK companies in terms of providing specific services as needed.

  The Lord Mayor of the City of London will be visiting Brazil in August 2007. The visit should serve to provide useful leverage to meet long-term goals of further opening Brazilian financial and services markets to UK companies, reinforcing on-going lobbying by UK Ministers. In the short-term we would hope to develop more strategic partnerships between Brazilian and British companies and greater awareness in the UK of the opportunities on offer.

ICT

  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.

  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. Other activities include:

    —  Brazilian delegates participated in the UKTI Inward mission and Business to Business event to Technology World in May 2006.

    —  Participation in the UKTI programme supporting UK companies at Cebit, Germany in March 2006.

    —  Co-operation with Global Watch on research into the games software market in Brazil.

    —  A telecoms mission for UK companies visited the Futurecom telecoms exhibition in October 2006 as well as meeting operators in São Paulo and Rio de Janeiro.

    —  Inward games software mission visited the UK in late 2006.

    —  Inward mission of Brazilian software companies visited the UK in early 2007.

    —  Participation in a UKTI programme of support to UK companies at 3GSM 2007 in Barcelona.

    —  Ongoing co-operation with S&I on CESAR initiative.

LIFESCIENCES

  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.

  Based on advice from our Ambassador in Brasilia, a Memorandum of Understanding (MOU) in healthcare was signed on 8 March 2006. Despite this MOU, support from the Ambassador and the Department of Health, negotiations on the project/tender between The Bio Products Laboratory, which is an operating division of the NHS Blood & Transport Authority, and the Ministry of Health are going very slowly.

  Brazilian companies participated in UKTI's Biotechnology Business Exchange which took place in London in October. Companies attended the partnering meeting and a Brazil Seminar in Cambridge, sponsored by IATC.

  Brazil Seminar—International Agriculture Technology Centre (IATC) organised a "Doing Business with Brazil" seminar in Cambridge that had a biotech element to it. The seminar informed UK companies about the many opportunities in Brazil. We hope that this will raise UK companies' awareness about Brazil.

  Bio Brasil—We sponsored a Trade Mission to Brazil in October. Companies attended Bio Brasil, the largest biotechnology conference/trade show in Latin America and continued their programme in São Paulo, with a series of visits to companies in the region. Bio Products Laboratory was among the guest speakers at the Bio Brazil Conference and at the IV Healthcare Seminar organised by the British Chamber of Industry, in São Paulo.

Brazil Telemedicine Project

  A Medical Training Centre was launched in Macae in January 2006, the first such training centre in Latin America. The project was a good example of collaboration between the British Consulate in Rio and the sector team in London. Contacts were made during a healthcare mission to Rio and invitations were issued to officials from Macae to visit the UK and meet relevant companies. A programme of meetings and company visits in the UK was arranged and very soon after the contract award was announced.

UK SME Success Story

  In June 2005, a UK SME, Owen Mumford, participated in a UKTI sponsored mission to Hospitilar, the largest healthcare tradeshow in Latin America. As a result of this they partnered with a Brazilian medical company and won their first order to supply 90 million lancets to São Paulo state. This first order was five times the volume they supply annually to the NHS in the UK!

OIL AND GAS

  In order to assist UK companies access opportunities and to counteract perceived weaknesses/barriers, UKT&I have developed a four pillar strategy for UKT&I-led oil and gas activity in Brazil:

    1.  Engage Brazilian government/industry on barriers to trade.

    2.  Build awareness of UK capability among Brazilian decision-makers/procuring organisations.

    3.  Understand opportunities and communicate them to UK supply chain.

    4.  Deliver interventions to bring UK supply chain and potential Brazilians buyers/partners together.

  UKTI led activity in related to Brazil's Oil and Gas sector and targeted on the four pillars of the strategy are set out below. These activities have agreed with the UKT&I International Oil & Gas Business Advisory Board and the Americas Board mentor, and key partners in industry associations and government (eg Scottish Development International, FCO):



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
UKT&I 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 cooperation 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 UKT&I 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 UKT&I and Scottish Development International based in Brazil's Offshore Centre (Macae).
Specialist provides on-the-ground support in Macae to UKT&I 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 e.g. 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 & Gas Opportunities Roadshow: UKT&I 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 UKT&I services to support market entry.
Over 140 UK participants attended the series of seminars. Many have followed up with specific enquiries about opportunities and UKT&I 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 & Gas Exhibition with support from UKT&I 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 UKT&I support/services and planned interventions (seminars, missions etc).
3
October2006
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-focused 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
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
December 2006
Inward mission from Transpetro (Petrobras' transmission/distribution company) to identify UK technology in LNG receiving terminals.
Transpetro visit UK facilities in Southeast and Wales (Isle of Grain, Milford Haven, Avonmouth) and meet UK technology providers (BG, FMC etc).
2/3/4
March 2007
Planned meeting between UKTI and Brazilian Energy Ministry to identify key joint-cooperation areas under UK-Brazil Energy MOU.
Focus on key areas of mutual interest with UK focus on issues which address identified barriers/promote UK capability.
1/2
March 2007
Support (briefing, lines to take etc) for visit of Sir David King (Chief Scientific Adviser) to Brazil.
Promote UK capability in key technology areas such as subsea engineering; raise issues of concern with Brazilian government/industry.
1/2


  Subject to resources within UKTI's Oil & Gas sector team and within the Brazil network, a similar, or enhanced, programme of activity is envisaged for 2007-08.

SECURITY

  Investment in electronic security equipment increases at an annual rate of over 15%. With good niche products, prices and distributor, UK suppliers can be successful. The federal government has pledged funds for the re-equipping of the police forces and the prison system.

  In the fire sector there are opportunities in niche areas and in new products. Barriers include poor regulation, standardisation and certification.

  Opportunities exist in niche products with new technology mainly in the private sector for large corporations, airports and ports, banks but also in the prison and some police forces.

  Activities:

    —  Visit to Interseg exhibition 18-20 June, Fortaleza.

    —  Ifsec Inward Mission.

    —  Commercial Officer BDV 24-26 July.

    —  Exposec information stand.

    —  Fire Show information stand.

    —  Security Table-top event in São Paulo.

SPORTS AND LEISURE INFRASTRUCTURE (PART OF CONSTRUCTION SECTOR)

  UK Trade & Investment facilitated a full day of meetings with commercial staff from Rio de Janeiro and UK companies interested in supplying goods and services to the Pan American Games in 2007, and with wider interest in Brazil's 2014 FIFA World Cup bid, and 2016 Summer Olympic bid.

  A presentation on what UK Trade & Investment can do to assist companies in the Brazil market was given to the 17 individual companies who also enjoyed one to one meetings.

TEXTILES

  British industry is highly regarded in Brazil. Main competitors in the market: Italy, Germany, Spain and France, USA. Recently discussions at UNCTAD proved that the Creative Industries are one of the most promising sectors for Brazil. UK fashion industry is hugely popular in the country. UK textiles and fashion have always enjoyed a world wide reputation and this is something UK manufactures, designers and retailers are all determined to continue to build upon into the 21st Century. Brazil's textile, clothing and fashion industry comprises over 30,000 companies ranging from fibre and filament yarn manufacturers to finished clothing makers and it employs 1.4 million people. In 2005 the industry's total sales reached £18.5 billion and production reached 1.8 million

  Activities:

    —  Inward Mission of Brazilian buyers to London Fashion Week, September 2006

K—EXPENDITURE OF SECTOR FOCUSED ACTIVITY IN BRAZIL

  The figure which was given in the written evidence remains the same (ie total spent throughout the financial year 2006-07 is £288,000). This is because when this figure was quoted previously it included monies already committed (and spent to date) for the rest of the financial year.

L—IPPAS AND DOUBLE TAXATION AGREEMENTS

INVESTMENT PROTECTION PROMOTION AGREEMENTS

    —  The UK's Investment Protection Promotion Agreement (IPPA) was one of 14 un-ratified IPPAs that were withdrawn from the Brazilian Congress in 2003. The Foreign Ministry feared that economic nationalist backbenchers were about to vote through amendments that would bar them from negotiating further IPPAs that met international standards and also jeopardize the few agreements that Brazil already has.

    —  The situation remains so and is not unique to the UK. Brazil does not have an IPPA with any other country. However, a Brazilian Working group has been established to look at all of Brazil's pending IPPAs.

    —  The IPPA was included in the JETCO at UK insistence in an effort to expedite the issues, but it is likely to remain unresolved for the foreseeable future.

    —  The Brazilian government is very much aware of this issue and is working towards having a mechanism in place that will be attractive to investors, but will fall short of a full IPPA.

    —  The UK government continues to work with the Brazilians on this, both through the JETCO process and with the private sector.

DOUBLE TAXATION AGREEMENTS

    —  Double Taxation Agreements are a critical part of developing trade and it is important that we try to ensure that there are double taxation agreements with all of our major trading partners, including Brazil. It is an issue that UK business raises consistently.

    —  Given Brazil's substantial and rapidly developing economy, a comprehensive double taxation agreement with Brazil would be welcome. It would help further business and investment links between two countries.

    —  The UK's double taxation policy is very close to the OECD Model Treaty, and we would want this to be the starting-point for any discussion, with features that business would welcome. Brazil's policy varies significantly from that of the OECD. A key issue is that Brazil is unwilling to give up its taxing rights.

    —  The USA also does not have a double taxation agreement with Brazil.

    —  It is not true to say that any treaty would be better than none. This would prejudice the terms of other treaties that are being negotiated within the region e.g. with Chile.

    —  OECD member states with double taxation agreements with Brazil frequently report problems with how Brazil applies those treaties. These treaties are mostly old and confer limited benefits. In 2005, Germany unilaterally terminated its DTA with Brazil following arguments over differences of interpretation.

    —  It follows that, while the UK would not want to rule out negotiation of a potential double taxation agreement, the basis for a negotiation would have to be the prospect of a treaty close to that of the OECD Model.

    —  HM Revenue and Customs (HMRC) maintains good informal links with Brazilian counterparts with a view to encouraging Brazil to adopt a treaty policy closer to that of the UK and the OECD. A senior policy adviser from HMRC will be visiting Brazil this spring to discuss technical details of a possible Double Taxation Agreement.

  It is unlikely that double taxation agreements with other EU countries are distorting trade and investment statistics.

M—NETHERLANDS

  There are a number of reasons why UK multi-nationals will sometimes route investment through certain countries. These are not always tax related. HMRC is not aware that investment in Brazil is being channelled through any one EU state (such as the Netherlands) as a result of a particular tax treaty. It is worth noting that Shell (for example) is registered as a Dutch company as well as in the UK. This is similarly the case with Unilever. Both companies have significant investment in Brazil.

N—NOTE ON LATIN AMERICA FOR THE FSSAB MEETING

Working Document Number (05) FSSAB II/3

Overview of Latin America

  For discussion by FSSAB members.

INTRODUCTION

  A number of comments on draft priorities were made by FSSAB members at the last meeting and subsequently in writing, in relation to South America, or specifically some countries -Brazil, Mexico and Argentina.

GENERAL MERCOSUR BACKGROUND:

    —  Historically, the Latin American market has been a good place for UK Financial Services business. This historical lead had been eroded notably by the US in recent decades, but the potential for this region is again growing, fuelled by the wealth in resource commodities such as oil and minerals. Furthermore, some of the Mercosur countries have undertaken significant reform and are now becoming more competitive.

    —  There are a number of large infrastructure projects related to oil and minerals currently underway and planned for the future in the region, where UK financing could be sought. A number of local Mercosur companies are now becoming multinationals appearing in the Fortune 500 that could potentially be looking for listing on the London Stock Exchange, or for further finance capital to become true multi national players.

    —  The Mercosur markets could possibly present significant opportunities for the UK financial services industry, but also significant risks such as political instability.

    —  On the other hand there may be some "quick wins" in the Mercosur markets that are of interest to the UK financial services industry, and this is something that we intend to explore further with our stakeholders.

CURRENT ACTIVITIES PLANNED IN LATIN AMERICA FOR 2007-08

  As such, there is currently no specific financial services strategy towards Mercosur markets, however:

    —  Brazil is provisionally an opportunity market for financial and related business services in 2007-08, ie in UKTI's Top 20 markets for financial and related services.

    —  Argentina and Mexico are two countries that have been mentioned by several stakeholders.

    —  The Lord Mayor of the City of London will be visiting Brazil from the 23 August to1 September. Detailed planning has not yet started for this visit.

    —  Provisionally UKTI's FS team has allocated to Brazil one of the largest budget allocations to a so-called "opportunity market". This allocation is to provide some seed corn funding to the following activities (to be refined):

    —  Legal services—joint seminar with Brazilian Advocates Organisation (OAB) on IPR/patent protection.

    —  Activity linked to the Lord Mayor of the City of London's visit.

    —  Support for the London Stock Exchange's possible follow up to their September 2006 visit.

    —  We are not planning to provide funding for the following activity:

    —  PPP—feedback from the sector indicates that the private sector should self fund PPP activity.

    —  Insurance/reinsurance seminar—despite the recent liberalisation moves, it is felt that the private sector should coordinate this activity if this is seen as a priority.

    —  Full Industry Briefing Course training has been provided to Marcelo Tavares, the lead FS officer in Brazil. HMG's Director-General for Trade and Investment in Brazil Martin Raven also received training before he arrived at Post.

    —  Financial Services is also a regular part of the JETCO Officials' discussions with Brazil.

    —  The Brazilian Ambassador has offered to host a business lunch for the Lord Mayor on Wednesday 14 March.

    —  The Brazilian Finance Minister called on the Lord Mayor at the end of January.

    —  A number of potential activities are being considered for Mexico and Argentina, including arbitration and AIM aspects.

O—RESOURCE CHANGES IN BRAZIL AND THE REST OF MERCOSUR

AS A RESULT OF SPENDING REVIEW (SR) 2004 AND UKTI

STRATEGY: PROSPERITY IN A CHANGING WORLD

BACKGROUND

  1.  Resource levels across UKTI's overseas network, including in Brazil, have in the recent past been affected by the requirement to:

    (a)  secure savings of £20 million in UKTI's overseas network under Spending Review 2004; and

    (b)  reinforce resources in the emerging markets under the new UKTI strategy by reductions in other parts of the network.

RESOURCE CHANGES IN BRAZIL AND THE REST OF MERCOSUR FROM 2005

  2.  Following a review of our commercial resources in Brazil in response to SR04 it was decided to close in the autumn of 2005 UKTI's operations in the regional offices of Belo Horizonte and Curitiba as there was little demonstrable evidence that they were contributing significantly to UKTI's Brazil network's business objectives and targets in support of UK customers. This resulted in the loss of four local jobs and contributed to network savings required under SR 2004.

  3.  Subsequently and following the launch of the UKTI strategy in 2006 it was agreed, in recognition of the high growth nature of the Brazil market, to increase resource as follows:

    —  2 local inward investment posts in São Paulo;

    —  1 UK based trade post in Brasilia to work primarily on JETCO;

    —  1 UK based trade post in Rio focusing on the oil and gas sector;

    —  1 UK based trade post in Sao Paulo to lead on the development of business opportunities across the priority sectors of agriculture, aerospace, biotechnology, engineering and healthcare; and

    —  1 local trade post in Rio.

  4.  In summary there was a reduction of four posts as a result of the closure of the regional offices and an increase of six to take effect over the period 2006-07 and 2007-08 as a result of the new strategy. Hence the figures that appeared in the answer of the 6 February to Mr Peter Luff's PQ are correct.

  5.  As far as reductions in other UKTI teams in Mercosur countries are concerned, day to day commercial assistance in Paraguay was discontinued when the British Embassy in Asuncion closed as part of the Spending Review in 2004. However lobbying on behalf of UK companies is carried out on a case by case basis from the British Embassy in Buenos Aires. As part of the resource redeployments in UKTI's overseas network under the 2006 strategy, the UKTI section of the Embassy in Montevideo (1.9 staff) is to be closed at the end of March 2008. Lobbying for commercial purposes will still however be carried out by the Ambassador on a case by case basis. All other resources are as shown in the answer to Peter Luff's PQ.

P—UKTI RESOURCES 2005-06


Market Desks
Sectors Group
Overseas
UK
LE

UKTI (Global)
105
142
239.3
1,338.2
Brazil
3
2.8
36
Rest of Mercosur
1
2.9
11.8


  We cannot provide the level of resource for Sector Group split by market as this not accessible.

  The level of UKTI resources for 2006-07 is currently being compiled and therefore unavailable at this time.

Q—ENQUIRIES RECEIVED ACROSS SOUTH AMERICA


Market
Substantive Enquiries
Overseas Market   Introduction Service (OMIS)
2005-06
2006-07
(Apr-Dec)
2005-062006-07
(Apr-Feb)

Argentina
36
152
4 11
Bolivia
10
80
0 0
Brazil
471
392
24 33
Chile
144
32
2 5
Colombia
9
97
1 0
Ecuador
5
35
0 0
Panama
15
12
0 1
Peru
10
47
10
Uruguay
252
135
0 1
Venezuela
79
30
1 3

SUBSTANTIVE ENQUIRIES

  These are general enquiries (whether by email, letter, fax or telephone) from UK and/or local companies that are not of a chargeable nature but that require a significant amount of time—i.e. at least 30 minutes work.

OVERSEAS MARKET INTRODUCTION SERVICE (OMIS)

  OMIS is a system to manage and deliver chargeable services to customers and supports the customer in an effective first entry into a new market. It provides an extensive range of research and support activities and, together with a simple price structure, provides a highly flexible and personal customer journey.

R—INFORMATION ABOUT MISSIONS ETC

    —  Government is now doing more to raise awareness and disseminate information about Brazil since identifying it as an emerging market in the new UKTI strategy.

    —  Some of the preconceptions disappear when companies visit the market and UKTI trade missions help companies to overcome this. In the last year nine trade missions have visited Brazil.

    —  Examples of what UK Government is doing:

    —  UKTI offers Market Visit Support in the form of financial assistance to SMEs who want to visit overseas markets as part of their trade development process. This is available to SMEs who are either new to export or new to certain markets. The list of eligible markets was extended last year to include Brazil along with UKTI's other emerging markets.

    —  UK-Brazil Year of Science is taking place this year and is designed to maximise impact and formulate a comprehensive approach to UK-Brazil research engagements. It will play an important role in raising awareness about Brazil with a number of high profile events throughout the year.

    —  UKTI is recruiting 15 Business Advisors to focus on medium-sized companies with potential to succeed in emerging markets, including Brazil.

    —  UKTI in the North West has contracted a Latin America specialist to run a programme of support and awareness raising throughout the region.

    —  UKTI in Yorkshire and Humber has taken on a regional champion for Brazil.

    —  Scottish Enterprise has been very active, running missions and providing trade development support to a couple of dozen energy companies with an interest in Brazil and Venezuela. This has led to some early successes such as Wood Group which has its HQ in Aberdeen. The company trades with Brazil and has invested heavily there and now employs over 400 Brazilian staff.

    —  International Business Wales has visited Brazil on four occasions since the establishment of the Welsh Assembly Government. In that time, 38 Wales based companies have visited the market winning more than £2.5 million of business and identifying a further £3.5 million of opportunities.

    —  UKTI in the South East held a Brazil-specific event in November which was well attended by companies.

    —  UKTI in the South West held a Brazilian event in late 2006 to educate businesses about the opportunities in the market. Following interest at this event a trade mission to Brazil is now being considered to coincide with the top Brazilian mobile content trade fair in May. [Mobile content includes games, finance, banking, mobile TV etc].

    —  UKTI in the South West is also running a series of events focussing on six emerging markets, including Brazil, during international trade week in March.

    —  UKTI's Engineering Sector Group is running a series of nine roadshows on doing Business in Brazil, China, India & South East Asia. These are in an innovative gameshow format and have already generated interest in Brazil from companies.





 
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