PROMOTION

When the name of the host city for the 2016 Summer OlympicGames is announced in Copenhagen on October 2, there

is a good chance it will be Rio de Janeiro.In its fifth bid to stage the world’s greatest sporting event, Brazil’s

cultural and commercial capital has made the final short list, alongwith Chicago, Tokyo and Madrid.

If the Olympics do come to Rio in 2016, it will provide an enor-mous boost for Brazil’s international prestige, and it will be thefirst time that the Games have been held in South America.

There are good reasons to believe this may happen. Rio’s stag-ing of the XV Pan American Games in 2007 was highly success-ful and proved that the city has the facilities and know-how tohandle such a major international event.

Furthermore, Brazil is scheduled to host the FIFA World Cupsoccer competition in 2014, and in several previous instances hostcountries have staged the two events consecutively.

Mexico staged the Olympics in 1968 and the World Cup in1970; Germany followed suit in 1972 and 1974 and the U.S. stagedthe World Cup in 1994 and the Olympics in 1996.

Carlos Nuzman, the president of the Brazilian OlympicCommittee, provides an even more persuasive reason for Rio’sselection: “Our budget is bigger than the others’, because we havemade clear what we need to do and we have the money,” he says.

All three levels of government – federal, state and city – havegiven guarantees that if Rio is declared the winner, work will begin

the next day with $700 million in immediate funding. They havealready provided $42 million to fund the bid to host the Games.

Much of the required infrastructure is already in place, and thegovernments are spending $4 billion to build more. The Olympicmovement is presenting Rio – and Brazil – with a historic oppor-tunity, says Nuzman.

“It can have a new city, a new country and a new continent,where the Olympic Games have never been staged before. It willalso be ideal for reaching young people. Brazil has 65 million underthe age of 18, and the continent has 180 million. These young peo-ple will be getting a very strong perspective for the future fromthe Olympic Games.”

Winning the bid to host the Olympics would further underlineand strengthen Brazil’s increasing international stature. Nothingillustrates Brazil’s progress better than the fact that the SouthAmerican nation is to become a contributor rather than areceiver of IMF handouts.

Just five years ago, Brazil owed the IMF $33.9 billion. Yet todaythe Brasilia government is lining up as a potential purchaser ofa bond designed to increase funds available to economically strug-gling nations.

“Isn’t it chic that Brazil is lending money to the IMF?” com-mented Brazilian president Luiz Inácio Lula da Silva with delightwhen he heard the announcement. �

By Michael Knipe

Already set to host the FIFA WorldCup soccer contest in 2014, thisbooming South American giant isa favorite to stage a futureOlympic Games.

writing the next chapter

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Reprinted from the August 3, 2009issue of Forbes magazine

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Amazonas, located in northern Brazil,is named after the world’s largest

river (by volume). It is the largest statein Brazil, and forest covers 98% of itsarea.

For many years, the state’s economydepended primarily upon rubber. Nowit has diversified, with an economybased on industry, natural gas and oil,mining, fishing and some agriculture.Ecotourism, with an average growth of6% a year, is the fastest-growing segmentof all, according to Getulio VargasFoundation, the world-renownedBrazilian think tank.

Much of the economic growth ofAmazonas falls under the auspices ofSUFRAMA, the Manaus Free TradeZone Superintendency, a federal agencylinked to the Brazilian Ministry ofDevelopment, Industry and ForeignTrade. SUFRAMA is responsible forconstructing a model of regional devel-opment using sustainability as a guide,while ensuring economic viability andimproving the quality of life for localpopulations.

Governor Eduardo Braga is a devoteeof Amazonas’ natural environment. Hekeenly believes that its preservation is thekey to the state’s economic development.Amazonas has the largest percentage oftropical forest in Brazil, but recent stud-ies indicate that unless action is takennow, the area could be endangered.

According to Braga, “The Amazonasis the most preserved state in terms ofenvironment, but the forest will remainonly if it gains economic value for thepopulation. Otherwise, soybeans, live-stock farming and mining will takeplace in the forest as an economic occu-pation.

“People now recognize that the worldreally depends on the maintenance offorests,” he continues. “The reduction of

deforestation is a highly effective meas-ure in reducing the greenhouse effect. Thewhole world recognizes this, yet the mar-ket does not pay for it. The forest musthave an economic value.”

Braga fervently believes that the stand-ing forest is worth more than the fallenforest: “We have developed a strategy tocut 70% of deforestation. People livingin units of protection must have the com-mitment not to deforest.” To guaranteethis, Amazonas instituted the BolsaFloresta, a system of tax support andfinancing designed to encourage theproduction of sustainable products. Thispolicy has contributed to an increase ofabout 12% for gross domestic productannually.

Also helping the economic picture isthe fact that Amazonas comprises thethird-largest state investment in scienceand technology in Brazil. The region isalso educating more of its citizens. To doso, the government is bringing top class-room resources into the state’s vast inte-rior through the use of computers,satellites and other technology.

Another boon for the region is theFIFA World Cup. The soccer champi-onship tournament will take place in thecapital city of Manaus in 2014.Amazonas is hoping to attract invest-ments totaling $6 billion. “The point isto mix the World Cup with investmentsfor environmentally correct tourism,”says Braga. “We are creating infrastruc-ture in a sustainable way. We are build-ing a stadium fueled by solar energy. Wehave proposed to FIFA [the World Cuporganizing body] to go carbon neutralduring the event.”

If major change doesn’t occur in theinterim, the biggest soccer tournament inthe world may kick off a new era of sus-tainability for Amazonas. �

By Laura Powell

The NameGameFrom fashion tofurniture, themagic formulafor successfulmerchandisingat two enduringBraziliancompanies isbranding.

Entrepreneurial flair in branding and mar-keting are among the key elements in the

success of two of Brazil’s longest-establishedfamily businesses.

Cia Hering, an apparel, manufacturingand retail company, and Insinuante, a retailnetwork selling furniture and household elec-trical appliances, have created brand namesfamous throughout the country.

Two brothers, Bruno and HermannHering, founded Cia Hering in 1880, whileLuiz Carlos Batista, the president ofInsinuante, began acquiring his business acu-men from his father and grandfather.

Cia Hering is now a public company withonly two members of the Hering family onits board, while Insinuante remains a privateconcern.

What the two companies have in com-mon, however, is the inspired creation oftheir brands and the astute manner inwhich they have updated their productsthrough the years.

“InGerman,Heringmeans fish, so our sym-bol of two crossed fish has a very stronglegacy,” says Ivo Hering, president of CiaHering. “But today, we are catering to ayounger group of people, and we are moredynamic in terms of purchasing, so we had toconsider how tomake the brandmore visible.

“The way to achieve this was to controlour distribution channel through our ownshops and franchised stores, and we nowhave the largest network of apparel storescovering the whole of Brazil.”

Today, Insinuante’s brand name and logois simply IN. “The name Insinuante was toolong, so we reduced it,” says Batista.

His greatest achievement, he says, has beenintroducing a new concept for the brand: giv-ing each of the stores large, modern prem-ises with 10,000 square meters of sales spaceand 5,000 square meters of parking.

Both Cia Hering and Insinuante placegreat emphasis on their marketing strategy.

“Advertising becomes more effective onceyou have your own shops and can build a

Staying GreenThe preservation of the natural environment iskey to economic development.

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collection with stylistic ideas,” says Hering.“We give consumers a good relationshipbetween price and quality.”

Cia Hering made improvements in prod-uct development and pricing, and is con-stantly reinventing itself to stay ahead offashion trends. “Brazilians see Hering as aquality product within a certain pricerange,” Ivo Hering adds.

The company launches six collections ayear and turns over a large part of its prod-ucts every twomonths. Hering says the com-pany has the potential to maintain a growthrate of 30% to 40% per year, as it has donefor the past two years. “We want to openmore shops rather than growing throughmergers or acquisitions,” he says.

One of the company’s altruistic activitiesis its involvement in the Fashion TargetsBreast Cancer campaign, which raisesmoney for research, detection and treatment.“We made a T-shirt to give visibility to thiscampaign and won honors in the U.S. forachieving the world’s largest sales by vol-ume,” says Hering.

Insinuante’s commitment to advertisingand marketing is even more adventurous. At

one point it wasspending half ofits profits on itsadvertising cam-paign, paying for20 television com-mercials a day.“To spend 3% or4% of annual sales

on advertising is crazy,” says Batista.“Imagine paying 50%!” However, the strat-egy has paid off, and the company is nowthe fourth-largest player in its sector.

Having started out in the family shoe andfurniture business in Vitoria da Conquista,Batista opened another store in Salvador,where he was attending university.

“That’s how I came up with the strategyto keep opening new stores,” he says. “I wasopening stores in neighborhoods wheremoney was short, because I understood theculture of those people. Then I moved to cityshopping centers tomeet middle-class needs.”

Insinuante soon had 100 stores. Today, thecompany has its own advertising agency andoperates in 12 Brazilian states.

“Consumers have grown up watching orlistening to our commercials,” says Batista.“In the past four years we have had growthof 200%.” �

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Luiz Carlos Batista,President, Insinuante

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Purpose Built

The second-greenest city in theworld is commited to private-sectordevelopment.

Goiânia, the capital of the centralBrazilian state of Goiás, has plans in

the works to construct a new recreationpark, a zoo, a livestock reserve and a pub-lic showground, all aiming to cater to theincreasing number of business touristsvisiting the city.

Modernization of the airport is alreadyunder way, and Mayor Iris Rezende is

confident that the city can attract sufficientprivate-sector investment to fund many ofits other projects. “I never saw an investordisappointed after investing in Goiânia,”he says.

The city is only a two-hour drive fromBrasilia, and this proximity makes it a prac-tical and affordable destination for tourists,particularly the crowds expected to pourinto the country during the 2014 FIFAWorld Cup soccer tournament.

Goiânia was founded in 1933 and is theonly city in Brazil other than Brasilia thatwas completely planned from scratch.Today, it is home to 1.25 million people andis a bustling center of cattle raising, agri-cultural industry, pharmaceutical clustersand, increasingly, information and commu-nications technology. It is also said to be thegreenest city in the country, and worldwideis second only to Canada’s Edmonton.

Rezende, age 75, is a veteran politicalactivist. A former member of Parliamentand two-term state governor, he is nowserving his third term as mayor. “I tookoffice when the city was in chaos,” he says.“Goiânia had 130 districts without asphalt.In four years, I paved 1,560 kilometers [970miles] of streets.” �

Small Region,Big PotentialA best-kept secret, this unspoiledBrazilian state is investing in itsimage and economy.

From the untouched glory of its coast-line to the colonial architecture of its

towns and the fossilized footprints ofdinosaurs, Paraíba is still waiting for dis-covery by tourists and investors.

Located in the northeast of the coun-try at the easternmost point on theSouth American continent, Paraíba is oneof the smaller Brazilian states, with a pop-ulation of 4 million and a largely agricul-tural economy.

Situated between Rio Grande doNorteand Pernambuco, two states that arealready popular tourist destinations,Paraíba has yet to benefit fully from itsown attractions. “We have beautifulbeaches, but we must offer quality infra-structure,” says Governor JoséMaranhão.

With this target in mind, the state gov-ernment is investing $51million in a con-vention center for business tourism and isbuilding highways linking the cities of thesouth coast to the towns of the interior.

It has already made other infrastruc-ture investments. Six months out of theyear, no rain falls in Paraíba, so the gov-ernment has constructed dams and waterducts to bring water to 102 cities and hasirrigated almost 5,000 acres of agricul-tural land. A project is also under way tobring electricity to 90% of the state’s ruralcommunities.

The presence of large oil shale depositsin its territory and the prospect of the fed-eral government’s investment in a biodieselproduction plant are expected to furtherboost the economy, as will tourism.

The state’s potential as a tourismresort and its wealth of high-quality oiland minerals are attracting internationalinvestors, says the governor. “We haveeven received a group from China inter-ested in investment,” he says. “Our slo-gan is, ‘Those who are not the largestmust be the best.’”�

“We have beautiful beaches,but we must offer qualityinfrastructure.”

Governor José Maranhão

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One-on-OneApproachEmphasis on personalized assistancemakes life easier for investors.

The tiny northeastern state of Alagoas isthe second smallest in Brazil, but it’s big

on natural beauty. Alagoas is known for itsmany lagoons and its coastline. From thecapital city of Maceió to the northern bor-der, the coast of Alagoas is marked by afringe of reef and pristine beaches. In recentyears, visitors from Europe and other partsof South America have been discoveringthese shores.

In addition to its natural advantages, thestate’s way of doing business also gives it aleg up on the competition. According toGovernor Teotônio Brandão Vilela Filho,creating transparency in public administra-tion has pointed the way forward. “Weneeded to rescue the credibility of the stateto attract investors,” says the former econ-

omist. So, Alagoas streamlined its govern-ment, reorganized the treasury office andmade information about government fundspublic. “We are Brazil’s first state to use thismeasure so that society can trust in thechange that is happening.”

Transparency makes life easier forinvestors, as does the Alagoan govern-ment’s commitment to personalized assis-tance. In fact, the state has a secretary ofdevelopment who deals with entrepreneursand investors one-on-one. “The governmenthere is not impersonal, bureaucratic,” saysVilela Filho. “We deal with each entrepre-neur as a partner, a friend and a person thatwe respect. As the state is small, we can fol-low each project with great attention.”

Despite the world’s current economicsituation, Banco do Nordeste has givenAlagoas a favorable projection in terms ofattracting new business. Vilela Filho saysthat since Alagoas has always been carefulabout planning for the future, it’s nowprimed to grow. Still, the state needs to over-come poverty by generating new jobs andimproving the quality of life for its citizens.Tourism development can do that, whileproviding substantial returns to investors atthe same time. �

“We deal with each entrepreneuras a partner, a friend and a personthat we respect.”

Governor Teotônio Brandão Vilela Filho

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GET TO KNOW BRASILIA,THE CAPITAL OF BRAZIL.CULTURAL PATRIMONY OF HUMANITY. MUCH MORE THAN YOU CAN IMAGINE.

[1] Francisco Rubio [2] Jerry [3] Claudia Victor [4] Patricia Brum [5] Walter Guimaraes [6] Helio Luiz [All Others] Trazzi

[1]

[4] [5]

[2] [3]

The Government of Federal DistrictTourism company of Brasilia

[4] [5]

Brazil’s second smalleststate is attracting the

world’s biggest investors

www.governo.al.gov.br

ALAGOAS STATE

No Cloudson the HorizonCeará offers tourists compensation ifit rains and gives a warm welcometo investors.

So certain is Ceará of its tourist-friendlyweather that the state offers visitors

refunds of their holiday costs if it rains dur-ing their stay.

“We have a climate that allows us to havetourists all year round,” explains Cid Gomes,the governor. “There is even a period herewhere we offer a safe-sun insurance. We areso sure about the weather that if visitors comehere and experience rain, they will have arefund to compensate for it.”

Ceará is on the northeastern coast ofBrazil, and its dry season extends from Julyto December. In addition, the temperatureis warm all year.

At present, the state’s tourism is predom-inantly domestic. Brazilians account for85% of visitors, but with more than 350miles of sandy beaches, together withmountains, spectacular waterfalls and rainforests, the governor is keen to utilize thetourism sector to its full potential to attractmore foreign visitors.

“We are only six and a half hours from

At the time of press, the currency conversion ratewas Brazilian reals to U.S. dollars (R$1 to US$0.499).All monetary figures stated are U.S. dollars unless

otherwise indicated.Director: Lucas Montes de Oca; Managing Editor:

Beverley Blythe; Editor: Michael KnipeArt Director: Lisa Pampillonia

Project Managers: Florence Lilti, Mathew Harris,Lauren Denny and Jorge Maraima

Commercial Director: Carolina MateoThis special advertising feature was produced by

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Europe, six hours from the U.S. and fourhours from the farthest places in Brazil,” hesays. “We have flights to Lisbon andAtlanta, but it is essential for us to havemore flight connections.”

With the prospect of increasing numbersof visitors, particularly in 2014 whenBrazil hosts the FIFA World Cup, Ceará isimproving and expanding its tourism infra-structure. “We have three major projects inprogress, representing values exceeding$1 billion,” says Gomes.

The state is building a golf resort and anaquarium, predicted to be the best in LatinAmerica, at an investment cost of $102mil-lion.

Tourism, however, is only one of three sec-tors fueling Ceará’s economic growth. Theother two are agriculture – particularlyfruit production – and the port of Fortaleza,which acts as an import-export shipping hub.

“Our irrigated fruit crop has tremendouspotential,” says Governor Gomes. “In thelast three years we have almost doubled ourexports annually, and we envisage this hap-pening for many years. People worldwidewill not stop drinking coffee or eating mel-ons. These are basic products that wegrow, and we can enlarge our market. Weneed only to improve some of our infra-structure to facilitate this process and tolower the costs.”

The state administration in Ceará hasestablished an agency in partnership withthe private sector to identify and developniche sectors of the economy and facilitateinvestment. “We are the closest state toEurope, and we can be a major hub forexports and processing,” says Gomes.

The port of Fortaleza is located at an inletof the Mucuripe coastline and contains6,000 square meters of warehouses andmore than 100,000 square meters of docksfor container shipping.

“Our port has a deep draft, which is rarein Brazil, and we already have all the

structures to transform it into an export-processing zone,” says the governor.

Ceará is investing about $174.5 millionin the port to double its size and build rail-road links.

Ceará has a population of 8 million, anddespite development along the coast, muchof the interior is undeveloped, with half thepopulation living in poverty.

In addition to supporting the develop-ment under way in the tourism sector andthe seaport, the state is seeking investmentto establish a refinery, as well as steel andpetrochemical plants.

“Basic industries are essential here,”says Gomes. “There will not be a wholecycle of industrialization until we have theseindustries. We have a substantial footwearsector, our textile business is second to none,and the people of Ceará have a naturalvocation for trade.”

The finances of the state are also sound.Gomes, who served two terms as mayorand has completed his first two years asgovernor, says his first priority was toimprove taxation efficiency and create apublic surplus. Ceará, he says, now has thelargest budget surplus in its history.

His next priority is to attract investmentfrom private-sector industry. “If any man-ufacturer wants to explore the alternativeworld of Ceará, we are available to enteras a partner and by buying shares and pro-viding incentives.

“Our economy and the income of thepopulation will not improve without a mas-sive investment.” �

“In the last three years wehave almost doubled ourexports annually, and weenvisage this happening formany years.”

Cid Gomes, Governor of Ceará

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