HC 82 Trade and Investment Brazil

BRAZIL 05

Written evidence submitted by AECOM Ltd

1. Experience of business development between UK and Brazil and role of UKTI

1.1 UKTI has provided assistance to AECOM Ltd in building its presence in the Brazilian marketplace. To date, this support has broadly taken two forms. Firstly, organising our involvement in both inward and outward trade missions; and secondly, facilitating networking, personal connections and introductions.

1.2 AECOM has participated in two outward missions and one inward Brazilian trade mission. These missions have proved an effective vehicle for showcasing AECOM’s work and demonstrating what British skills, innovation and talent can bring to the Brazilian market in terms of urban development, regeneration, infrastructure, global sports design, planning and delivery. This exposure has given our firm, which employs c.3,400 people in the UK, an enhanced profile within this important and expanding market. UKTI’s role was at its most effective when working with consular and political support in the run up to the Deputy Prime Minister’s visit to Brazil in June 2011. This concerted effort, which brought together business, sport and political capital, was a powerful statement of Britain’s commitment to Brazil and the role that a variety of leading edge British firms could play in shaping the country’s growth and development.

1.3 UKTI proved helpful in providing AECOM with on-the-ground intelligence and in particular, facilitating introductions to appropriate personal contacts within both public and private sector. This has provided access to people at an influential decision-making level, which may have been more difficult to obtain without UKTI support.

Recommendations

1.4 UKTI is particularly effective in using its knowledge of the local political and business landscape to facilitate personal contacts and introductions, in particular providing access to an appropriate decision-making level. There could, however, be more support after this introductory stage. Many of the challenges associated with doing business in Brazil relate to tax, contractual matters, language and business culture. UKTI could provide greater assistance in understanding and resolving some of these challenges once initial contact has been made which would be particularly helpful for SMEs without a supporting corporate infrastructure.

1.5 More could be done to provide longer lead-in times to ensure partnering with UKTI is strategic rather than reactive. On several occasions AECOM has been required to make rapid decisions around attendance at events, with limited time to prepare presentations and other material. Where firms wish to partner with UKTI, there should be an opportunity to discuss a programme of opportunities over a one-year horizon so investments can be planned accordingly in our investment planning cycle. Longer lead-in times and more transparent UKTI policy would enable better investment decisions to be made.

2. Maximising opportunities afforded by the Olympic handover

2.1 London 2012 and its success to date has put UK companies in the enviable position of being able to promote and export its significant capabilities to a global audience, whose eyes will be, and are already, on the UK in the hope of learning from our approach to design, regeneration, legacy and delivery. This profile would be enhanced if the current restrictions on marketing and promotion of work related to London 2012 were to be relaxed.

2.2 The value to the UK economy of London 2012 is undoubted. Indeed Davos has said that 2% of global GDP is generated by mega sporting events and given the current global trading environment, it would seem that this the ideal platform to promote British skills and products to a receptive market.

2.3 There has been a degree of host-to-host work between London and Rio, which has been valuably used to harness the experiences of London 2012. In particular, the skills of public sector bodies and delivery agencies such as the ODA have been utilised by Rio in structuring its approach to Olympic collaboration. However, less has been done with private sector partners who worked closely with the ODA in delivering London 2012.

2.4 The current restrictions on marketing have constrained opportunities for the private sector arising from the Olympic handover. They have also created confusion between those firms which claim to have Olympic experience and companies such as AECOM that have been involved in delivery at a deep level since 2003. Failure to release companies and individuals from the current brand and marketing restrictions is already resulting in the loss of a massive opportunity, not just for this industry but for promotion of the business and design talents in the UK as a whole.

Recommendations

2.5 The Olympic handover provides the platform for UK plc to showcase its skills and innovation in delivering global sporting events, not just to Rio, but also to other future host cities. The current restrictions mean that the handover could become a missed opportunity. UKTI should work with London 2012 / LOCOG to broker a framework which is more strongly supportive of UK business and also boosts the reputation of LOCOG in this role.

2.6 There should be a more defined approach to how we can work with UKTI in looking at opportunities associated with the wider calendar of sporting events, particularly as aspiring host cities for Olympic Games or other world sporting events look to the London-Rio handover this summer as an opportunity to identify consultant partners for bid preparation, design and delivery.

3. Barriers to trade

3.1 Taxation represents the most significant barrier to trade. It is currently difficult for UK firms to achieve competitiveness in the Brazilian market due to existing tax burdens. By comparison, serving the Brazilian market out of the USA or Spain can offer a less onerous tax profile than the UK (in the region of 2-3 times less) due to favourable taxation arrangements these countries have negotiated with Brazil.

3.2 Physically accessing Brazil is expensive and transport costs are prohibitive, impacting particularly on small firms. Limited routes and limited competition mean that it is more expensive to access Brazil compared to other markets a similar distance from the UK.

Recommendations

3.3 Negotiate tax arrangements which are less prohibitive for UK-based firms.

Dr Andrew Jones

Managing Director of Planning, Design and Development

Aecom Europe

23 April 2012

Prepared 23rd May 2012