Construcon and Engineering Opportunies in Brazil for SMEs · E-mail: britcham@britcham.com.br...

TheBri(shChamberofCommerceandIndustryinBrazilRiodeJaneiroSãoPauloPhone:+551138190265E-mail:britcham@britcham.com.brwww.britcham.com.br

Construc(onandEngineeringOpportuni(esinBrazilforSMEs

18Feb2016

BritchamBrasil 1

BillBallantyneRichardTaylor

•  Brazil: big, diverse and complicated •  Short term: uncertainties: politics, corruption, recession and more •  Long term: good fundamentals: huge demand for infrastructure

•  Plans

•  Conclusions & Questions

Construc(onandEngineeringOpportuniBesinBrazilforSMEs

Brazil:big,diverseandcomplicated

•  Politics

•  Corruption Investigations

•  Recession: exchange rate – interest rates – unemployment - inflation

•  Commodity prices

•  Water shortage - energy uncertainty

•  Zika

Short term: uncertainties

•  Relatively stable politics + international relationships

•  Foreign currency reserves >US$ 300 billion + 65% Debt to GDP ratio

•  Spare production capacity available to ramp up industrial growth

•  Weak Real means Brazilian assets are 50% cheaper than a year ago

•  Growing urban population – huge demand for infrastructure Government strategy to recover from recession?

1. Fiscal adjustment - Cuts in most of social programs, subsidized loans, costs 2. Major reforms - Tax system, pensions, unemployment, insurance, public prices 3. Microeconomic reforms to spur productivity 4. Exports expansion - Resumed trade negotiations, BRL devaluation 5. Investments in infrastructure

Long term: good fundamentals

Plans: Investment in Infrastructure

Source: Brazilian Ministry of Planning US$39bi projected third party capital

Plans: Concessions process

Plans: Highways

16 new projects 7,081km in 14 states 2015: 5 auctions US$4.9bi 2016: 6 auctions US$7.9bi Existing concessions US$3.8bi

Plans: Railways

5 new projects 7,537km new railways US$17.5bi new investment Existing concessions US$4.0bi

Plans: Ports

50 new leases US$ 3.0bi 63 new TUPs US$ 3.6bi 24 lease renewals US$ 2.7bi

Plans: Airports

4 airport concessions US$ 2.1bi 7 regional airports US$0.1bi (6 in Sao Paulo) Expanding infrastructure Creating regional hubs

•  Brazil: big, diverse and complicated •  Short term uncertainties: politics, corruption, recession and more •  Long term good fundamentals: huge demand for infrastructure

•  Plans

•  Conclusions & Questions

Construc(onandEngineeringOpportuniBesinBrazilforUKSMEs

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