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Bar International do Brasil Getting started: distribution & partnerships Manu Melotte Ponteaz Mechelen , May 7th 2

Bar International do Brasil Getting started: distribution & partnerships Manu Melotte Ponteaz Mechelen , May 7th 2014. Who is who. Ponteaz, ‘ ponte de A a Z’… Kurt Hameeuw : Ponteaz Sao Paulo AGC: establishment, start - up, supply c hain d irector in Brazil.

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Bar International do Brasil Getting started: distribution & partnerships Manu Melotte Ponteaz Mechelen , May 7th 2

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  1. Bar International do Brasil Getting started: distribution & partnerships Manu Melotte Ponteaz Mechelen, May 7th 2014
  2. Who is who Ponteaz, ‘ponte de A a Z’… Kurt Hameeuw: Ponteaz Sao Paulo AGC: establishment, start-up, supply chain director in Brazil. General Manager Guardian Industries Corporation (Glass division) for Brazil and Argentina. Start-up solar power. Manu Melotte: Ponteaz Brussels Sales & Marketing Director Sara Lee Brazil General Management and Mergers & Acquisition Roel Collier: Advisor Ponteaz Sao Paulo Joint-Ventures, Mergers & Acquisition (private equity) Clean Technology Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  3. What we will NOT talk about today Brazil is complex… TAXES are endless… Bureaucracy will be a major time-spent… Operational costs are surprising… infrastructure is not what you would expect. Brazil is not a low-cost country… Brazil is not only fun. Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  4. Take-out Why should you go?(And why not) Where is “your Brazil”?The size of a continent. Prepare.Market analysis will be more than just about customers, dealers and prices. Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  5. 1. Why should you go? The internal market is driven by growing middle classes. Consumption of goods and services is booming. Europe = quality & culture (brands) The need for technological know-howis high (b-t-b). Technology (what) and processes (how). In industry (production), construction, pharma. Agriculture. Investment in infrastructure is gigantic. Energy (sourcing, transport, storage). Agro-infrastructure. Ports, roads, railroads, airports. Hospitals. Telecom. Consumption Production of goods & services Infrastructure enabling economic growth Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  6. 1. Why should you go? (and why not) Brazil is not a “banana republic”… Added-value is key. “The right price for the right value.” Brazil is not a low-cost country. Producing in Brazil for export rarely will be the right option. Brazil is not your ready-to-use medicine against crisis. No immediate return. Investment (cash-out) will be significant. Expansion to Brazil will demand investment with time-perspective of 3 to 5 years. Brazil will help you counter your next crisis. World cup and Olympics… Big events can be a strong trigger to enter the country, but see it as part of the investment. Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  7. Take-out Why should you go?(And why not) Where is “your Brazil”?The size of a continent. Prepare.Market analysis will be more than just about customers, dealers and prices. Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  8. 2. Where is “your Brazil” North (-East) versus South (-East). Inland versus dense populated areas. Metropolitan and major city approach. Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  9. 2. Where is “your Brazil” – North vs. South Higher growth rate. Governmental stimuli. Culture gap. 70% of GDP More mature markets. Higher competition. Business culture. Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  10. 2. Where is “your Brazil” – North vs. South Mother and child in Imbassaï, Bahia. View on traffic jams on Marginal Pinheiros, Sao Paulo.
  11. 2. Where is “your Brazil” – Metropolitan area approach Brazil metropoles: Great Sao Paulo: 20 M Great Rio: 17 M Brasilia: 2 M Belo Horizonte: 5 M Curitiba: 2 M Manaus: 2 M Manaus Belo Horizonte Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  12. Take-out Why should you go?(And why not) Where is “your Brazil”?The size of a continent. Prepare.Market analysis will be more than just about customers, dealers and prices. Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  13. How. Me in Brazil. Me. Prepare: 3-steps approach 2 3 2 2 2 1 Structure the entry to feasibility. Can I play “my game” in Brazil. Readiness of my company. What makes me unique vs. competition. Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  14. Supply Chain Operations Mkt & Sales Post-sales R&D Me. What makes my company unique? 2 3 1 The value chain: which activities make me unique Crucial for defining your positioning in Brazil. Do not go for the obvious (e.g. “I have better quality…”). Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  15. Me in Brazil: market analysis 2 3 2 2 2 1 What do we want to know. How. Understand how the industry works. (value chain & industry analysis) - Who are the players and how do they work. - How is the sourcing. - Technology / Quality levels. - Geographical differences. - Market segments. - Price levels. - Sales & distribution channels. FIT / AWEX, Brascam, Belgalux: - 'Landendossier' - Ask for main suppliers / competitors / customers. - Associations / federations - Available market info (size, etc.). Google... Brazilian business is very 'digital'. External help (e.g. consultants) - Language, time. - Extended market structuring (in depth). - Objective contacting of competitors / potential partners. Field visit ('get a taste yourself') - Trade fairs. - Visit competitors, customers, suppliers. - Visit different regions. Positioning “Can I play my game” Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  16. Can I play “my game”: market analysis 2 3 2 2 2 1 Tip for market research: start at the client of your client and move backwards. YOU Your customer End-client Your customer End-client Your customer End-client Your customer End-client How relevant / important is your product for him? What does “better quality” mean to him. What is lacking (market gap). How could you help him? (delivery time, packaging, order quantity, …) How much does he pay? How much does your product way in his cost. Alternatives / competitors. Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  17. How. Me in Brazil. Me. Prepare: 3-steps approach 2 3 2 2 2 1 Feasibility. Logistics Fiscal Dealership set-up Can I play “my game” in Brazil. Readiness of my company. What makes me unique vs. competition. Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  18. Dealership model A: direct import Dealer x Dealer y Dealer z YOUR COMPANY In order to import, the dealer will need to obtain an import license (bureaucratic). The importing dealer will need to pre-finance all taxes at customs clearance: Import tax (between 0% and 35%). IPI (generally between 10% and 15%). PIS/COFINS (between 9% to 10%). ICMS (in SP 18%). (remark: taxes are from within and cumulative…) You sell at full cost, so taxes are on your cost price + margins + insur./freight. Remark: some of the above taxes are recuperated by the dealer. Important for NET-PRICE calculation!
  19. Dealership model B: master dealership(s) Dealer x Dealer y Dealer z YOUR COMPANY Potential royalty agreement The master dealer will be taking over the import bureaucracy and will assure market coverage. The issue of the taxes remains: the product is imported at full price. In the case of technology transfer or patented technology, a fiscal advantageous royalty agreement is to be evaluated. Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  20. Dealership Model C: via your own subsidiary YOUR COMPANY Do Brasil Export to YOUR CY do Brasilat low prices. Dealer x Dealer x Dealer y Dealer y Dealer z Dealer z YOUR COMPANY Recuperation of profit: Via dividends. Via royalties. Your company will own the dealership network in Brazil. Your subsidiary in Brazil imports at low prices (minimizing the import cost). Profit is realized in Brazil and recuperated via dividends and royalties. This set-up is advantageous especially in the case of high margin products. The recurrent costs and set-up costs of the operation in Brazil in most cases are low and should be evaluated even in the case of lower business volumes.
  21. Summary Know yourself before you go. Define a regional approach. Include in your market analysis the “full picture”. The impact of the business scenario on your logistics, market potential and local prices (taxes) is enormous. Market analysis and business scenario’s should be in parallel. Get a detailed view on your tax scenario. If not your local partner will take advantage… Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  22. Tchintchin! Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
  23. Ponteaz contact details Ponteaz Brussels: Manu Melotte manu.melotte@ponteaz.com M. +32 498 10 98 85 Skype manu.melotte Ponteaz Sao Paulo: Kurt Hameeuw info@ponteaz.com M. +55 11 97272 7195 T. +55 11 3042 8020 Skype kaahameeuw Ponteaz 2014 'Bar International do Brasil' - VOKA Mechelen
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