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Quarterly Business Newsletter | Issue No. 22 | 1st Quarter 2020
Quarterly Business Newsletter | Issue No. 22 | 1st Quarter 2020TRADE PROMOTION SECTION
This is a quarterly publication by the Embassy of Brazil in Nairobi which aims to create awareness of existing trade and investment opportunities between Brazil and Kenya,
Uganda, Rwanda, Somalia and Burundi.
BRAZIL’S DEMOGRAPHIC AND ECONOMIC DATA
Surface area (Sq. Km) 8,510,820,623 km2
DEMOGRAPHIC DATA (WORLD BANK/IBGE)Total Population (Oct 2019- estimate) 210,981,325
Population growth rate (2018) 0.78% per annum
Population density (2018) 24 inhabitants/km2
Urban population growth rate (2018) 1.09% per annum
ECONOMIC DATA (IBGE DATA)GDP (2018 in US$) 1.885 Trillion
Inflation target 2019 4.25% ± 1.5%
Inflation (IPCA) December 2019 1.15%
12-month cumulative inflation (Dec 2019) 4.31%
Trade Balance (BCB Data)Exports (Jan-Dec 2019) USD 224.0 billion
Imports (Jan-Dec 2019) USD 177.3 billion
Trade surplus (Jan-Dec 2019) USD 46.7 billion
Total trade flow between Brazil and Kenya (2019)
USD 58.25 million
Financial and Capital Markets – (BCB Data)Base Lending Rate (Selic Rate – (Dec 2019) 4.59 %p.a
Long-term lending rate (TJLP – (Dec 2019) 5.57 %p.a
Stock Market Value (IBOVESPA) (DEC 2019) USD 1.256 trillion
Number of companies listed in BOVESPA 325
CONFECTIONERY SECTOR IN BRAZIL 3
Chocolate Confectionery 3
Chocolate Consumption 4
Sugar Confectionery 4
TRADE FAIRS 5
THE STATE OF ESPÍRITO SANTO 6
Economy of Espírito Santo 8
Tourist attractions in Espírito Santo 10
RECENT HIGHLIGHTS 11
Embassy of Brazil in Nairobi
3Quarterly Business Newsletter | Issue No. 22 | 1st Quarter 2020
CONFECTIONERY SECTOR IN BRAZILIt is typical to see a chocolate store in almost every neighborhood in Brazil. The only other place in the world where there is this much chocolate is Brussels. Brazil has an incredibly deep and intense relationship with cacao and chocolate. Brazil is the world’s fifth-largest producer of cocoa and has long been a fundamental part of the worldwide chocolate supply chain. Brazil’s production was at 195 thousand tons in 2019 generating revenues of US$ 811.2m domestically and US$ 290.4m internationally. Main producing areas of chocolate in Brazil are from Bahia, Espirito Santo, the upper Amazon and lower Amazon, near the border of Bolivia, Peru, Ecuador, Colombia or Venezuela.
There are about 50 thousand cocoa farmers in Brazil and 50% of them are located in the state of Bahia, which produces about 95% of Brazilian cocoa. The state of Espírito Santo produces 3.5% and the Amazon produces 1.5%. The sector represents more than 4,000 direct and indirect jobs, and is one of the links of a chain of more than 120 thousand people, including farmers and chocolate industries. Brazilian confectionary revenues amounted to US $ 429.6 million from January to October 2019, according to data available on the Federal Government Statistics Portal, ComexStat.
Chocolate Confectionary
Brazil is among the six countries that lead the volume of chocolate retail sales. The others include the United States, Germany, Switzerland, Belgium, United Kingdom and France. Brazil chocolate market recorded revenues worth US$ 3.2billion in 2018. The industry is concentrated especially in São Paulo, but there are also important producers in Bahia, Espírito Santo, Paraná and Rio Grande do Sul.
Embassy of Brazil in Nairobi
4 Quarterly Business Newsletter | Issue No. 22 | 1st Quarter 2020
Gourmet chocolate recently emerged in Brazil, but still only represents 3% of the domestic production. This segment is expanding in the Brazilian chocolate market to meet export demands. Gourmet chocolate uses more cocoa than normal chocolate making it taste bitter. The production of fine cocoa, which is used in gourmet chocolate production, is concentrated in the state of Bahia.
Brazil can supply the right chocolate for all kinds of audiences, from the luxury market to the more popular kinds. Nevertheless, what sets Brazil apart is the fact that Brazilian producers have state-of-the-art technology. Increasingly, specialist and artisanal chocolate has been Brazil’s chosen target, allowing for high-quality production from cocoa farming to squares, slabs and bars of finished chocolate. This niche slice of the market also allows producers to experiment, making use of other ingredients only found in Brazil.
Chocolate ConsumptionBrazilians are chocolate lovers. According to ABICAB, (Brazilian Association of the Chocolate Peanut and Sweets Industry), 75% of the population consume chocolate and 35% would choose chocolate over any other food or drink.
The consumption of chocolate per inhabitant in Brazil has grown a lot since the 1970s. At that time, the consumption was around 300g per year. Nowadays the annual average is 2.5 kilograms per person annually. One of the reason for this increase is that Brazilian is increasingly identifying chocolate as a food type. The highest consumption of chocolate is in the southern states. Surveys indicate that the volume of chocolate consumption is strongly related to the income per capita of the population.
The purchase of chocolate is more concentrated in supermarkets, where people can find many flavors and brands with lower prices. A box of bonbons are the most popular option for the lower income earners while middle and high income earners consume the most chocolate and prefer buying it in specialized stores.
The consumption of chocolate has increased more than the production; therefore, the country has reduced exports and increased imports in order to supply domestic demands. The main sources for Brazil are Peru, Chile, Argentina, South Korea and Japan.
Main Players
The major brands like Mondélez, Garoto and Nestlé have greater prominence in the market, but specialized stores such as Cacau Show and Kopenhagen also have a considerable market share, mainly in the Southeast and in the capitals. The three largest companies that are responsible for 76% of all sales in Brazil are:
• Mondélez: this company has 32% market share and produces some of the most traditional chocolates brands in Brazil such as Bis and Sonho de Valsa, under the brand Lacta. In addition to leading the market, it is also the number one in the sale of chocolate Easter eggs, which are the favorite for children
• Garoto: has 22% market share and produces popular chocolates such as Batom and Serenata de Amor
• Nestlé: used to lead the market, but slipped to third place with results compared to Garoto. Currently has 21% market share.
The other main players in the market are Amma Chocolate, Mendoá, Chor and Nugali, which are all Brazilian chocolate producers that have seen significant growth over the last few years. Nugali’s chocolates won the Silver Medal in the prestigious International Chocolate Awards, which recognizes excellence in the business. The company in Santa Catarina state began introducing acai, Brazil nuts and other unique ingredients, which has increasingly piqued foreign interest in its products.
Other players include Hershey’s, Arcor, Mars and Ferrero.
Sugar ConfectioneryAbicab represents 93% of the candy market in Brazil. Brazil is the sixth country with the largest retail sales of sugar confectionery and chewing gum, reaching a production volume of 278000 tons, in 2018. The volume exported was 88 thousand tons, an increase of 13% compared to the previous year while imports reached 13,000 tons in 2018. Top destinations include the United States, Paraguay, Argentina, Mexico, Uruguay, and Canada.
Embassy of Brazil in Nairobi
5Quarterly Business Newsletter | Issue No. 22 | 1st Quarter 2020
The national average consumption is 1.4 kg per inhabitant / year. According to a research commissioned by Abicab, 55% of Brazilians consume candy & gums at least 3 to 5 times a week, mainly motivated by the taste and pleasure they offer. Mint and fruit flavors, caramels and toffees are more appreciated. Gum pellets and candies are also very popular.
Today, Brazilian companies are working on developing products that meet these new markets. To this end, they are modernizing and improving production lines to achieve the minimum quality required especially for healthiness. In this sense,
natural colors and flavors are already being developed and used by the sector.
Associação Brasileira da Indústria de Chocolates, Amendoim e Balas (ABICAB)
The Brazilian Cocoa, Chocolates, Peanuts, Candies and Byproducts Industry Association (ABICAB), represents the Brazilian confectionery and chocolates industry and works to support both innovation and sustainable practices within the sector. ABICAB manages the ‘Brasil Sweets and Snacks’ exportation program, in partnership with The Brazilian Trade and Investment Promotion Agency (Apex-Brasil)
TRADE FAIRS
Candy ShowDate: 16 - 19 Apr 2020 Venue: Expo Center Norte, São Paulo, Brazil
Candy Show brings together hall and candy shops, confectionery & snacks born from the need of Brazilian industry and provides them with the opportunity to display their range of products, releases and mainly expand their business.
FipanDate: 21 - 24 Jul 2020 Venue: Expo Center Norte, São Paulo, Brazil
“International Bakery, Confectionery and Independent Food Retail Trade Fair” Fipan is Latin America’s largest Bakery & Confectionery trade fair and one of the key ones to be intended for food service operators. It focuses on Bakery, confectionery and other establishment operating in the food service, its outstanding characteristic is the significant business making during its production, being a leader in the visitation of owners, directors, and managers.
ANUFOOD BrazilDate: 09 – 11 March 2020Venue: São Paulo – SP, Brasil
ANUFOOD Brazil – Exclusive Trade Show for the Food and Beverage Sector – Powered by Anuga – is the only event in Latin America totally dedicated to the companies of various segments of the food and beverage sector, as well as pioneering in enhancing the agribusiness sector and its natural products.
Embassy of Brazil in Nairobi
6 Quarterly Business Newsletter | Issue No. 22 | 1st Quarter 2020
Brazil
AtlanticOcean
Espírito Santo
Vitória
THE STATE OF ESPÍRITO SANTO
Espírito Santo, directly translated to “Holy Spirit” in English, is a Brazilian state situated in the southeast of Brazil. It was given this name in reference to the Holy Ghost, believed by some Christian religions to be the third part of a trinity God (along with God himself and His son Jesus Christ). This is in response to the Catholic religion, introduced by the Europeans during the 16th century, which taught the locals Christian doctrines and methods of worship.
Espírito Santo covers a total area of 46,180 square kilometers which is slightly large than Garissa County. It has a population of 4.02 million inhabitants. The capital of Espírito Santo is Vitória, which is located on an island. The state is well known for its sand dunes, ports and beaches due to an extensive coastline. Because of its positioning, this state enjoys many different types of vegetation and habitats, which are home to an array of wildlife. These habitats range from lakes and forests to coastal stretches and mangroves. It is also acclaimed for the forró, a unique style of dance. Espírito Santo enjoys a tropical climate along the coast, with dry winters and wet summers.
Economy of Espirito Santo
Espirito Santo is one of the fastest growing states in Brazil. The state plays a significant role in contributing towards the National economy. Espirito Santo accounts for about 2.5% of the total National GDP. The GDP was US$308.8 million in 2016 according to reports by the Government of the State of Espirito Santo. Some of the reasons that make the state an ideal investment destination include strategic location in the Southern parts of Brazil with access to extensive coastlines and one of Brazil’s largest ports, a well-developed infrastructure system, qualified professionals as well as investment incentives provided by the Government of the State of Espirito Santo.
Pulp and Paper Products The state has several reserves of eucalyptus plantations, which is the principal resource for the production of pulp. The pulp production industry is very well established thus having a robust skilled labour. In addition, the region’s ports are well adapted for the export to the world’s largest consumers’ market such as China.
Equipment for power generation The local government has a clear strategy to diversify the energy matrix of the state. The state currently imports 2/3 of the energy consumed. Therefore, incentives are given for installation of renewable sources of energy such as wind farms
7
and solar energy especially for the poor communities. The production and distribution of natural gas is constantly evolving, requiring large investments. The development of this sector is considered crucial for industrial development of the state.
Metal mechanics This sector has evolved to supply not only the construction sector but also in the production of parts for the energy industry. With the clear expansion policy on the energy matrix of in the state, the sector holds potential growth.
Iron Ore Espírito Santo plays a key role in the production chain of iron ore in Brazil. In addition to being very close to the largest producing region, Minas Gerais, it has ports connected by rail network. Among them, the Port of Tubarão near Victoria, which is considered the most efficient in the world for shipping commodities.
Oil refining and coke The Espírito Santo’s Basin already appears as the second most productive in Brazil, and has reserves estimated at over 50 million cubic meters of oil. Currently, there is a gap in oil refinement with minimal investments in this. Most of the oil produced is for the export market.
Food and Beverages This sector offers a lot of potential both in the domestic and foreign market. Most of the tea and coffee production is done for the export market, especially to Asian markets. Chocolate production is high and its quality recognized internationally because of a very skilled labour and technology available for this sector.
Clothing and AccessoriesArticles of clothing and accessories is one of the sectors that provides the most employment in the state. Two specialized industry centers were created between Colatina and São Miguel da Palha and in Vila Velha to encourage the growth of this sector. However, the market is highly fragmented and provides opportunities in the manufacturing value chain.
Resin and elastomers manufacturingIn tandem with the national plan to reduce the importation of chemical resources, Linhares Gas-Chemical Complex was created. Espírito Santo is specialized in the production of the fertilizer sector. There are also aims to explore the potential of expansion of the natural gas chain in the state.
Wind farm
Gas Chemical Complex
Coffee beans
Eucalyptus trees
Embassy of Brazil in Nairobi
8 Quarterly Business Newsletter | Issue No. 22 | 1st Quarter 2020
Tourist attractions in Espirito Santos
Metropolitan Cathedral
Metropolitan Cathedral: The Cathedral was built in the twentieth century in a neo-Gothic style, with valuable stained glass. In its basement, there is a chapel where the bishops of the Holy Spirit are buried.
Santo Antonio Sanctuary
Santo Antonio Sanctuary: Built in the 1960s, the sanctuary has three domes. The architecture is in Baroque style, being a replica of a 16th century Italian temple dedicated to Mary in the city of Todi.
Palacio Anchieta
Palacio Anchieta: Jesuit building of the 16th century, houses since the 18th century the seat of the State Government. Facing the sea, overlooking Victoria Harbor, the building houses the tomb of Father José de Anchieta and is one of the oldest government headquarters in Brazil.
Carlos Gomes Theater
Carlos Gomes Theater: Built in 1927 and designed by Italian architect André Carloni, who was inspired by the Scala theater in Milan, Italy. Capixaba artist Homero Massena made the Italian neo-Renaissance style dome.
Embassy of Brazil in Nairobi
9Quarterly Business Newsletter | Issue No. 22 | 1st Quarter 2020
Camburi Beach
Camburi Beach: Best known in the city, with about 5km, is ideal for sports such as sailing, kite surfing and ocean fishing.
Curve da Jurema
Curve da Jurema: Along the 800m of its sandy strip, visitors can admire the landscape, comfortably installed in one of the many kiosks with covered areas, serving delicious appetizers of capixaba cuisine.
Pedra da Cebola Municipal Park
Pedra da Cebola Municipal Park: Great for walks and contact with nature. At the site was a quarry, turned into a park thanks to a community action. The park also has a cultural space, meditation house, oriental garden and gazebo on a rocky wall, used for climbing.
Panela de Barro
Best representation of indigenous handicraft from Espírito Santo. A tradition that is passed from mother to daughter for at least 400 years. The pans makes typical seafood dishes more delicious, such as moqueca and capixaba pie. The Associação das Paneleiras (Cookware Association) works in the neighborhood of Goiabeiras and sells the pans.
Embassy of Brazil in Nairobi
10 Quarterly Business Newsletter | Issue No. 22 | 1st Quarter 2020
Caieiras Island
Caieiras Island: Surrounded by mangroves, the town is home to fishermen, crab pickers, shellfish gatherers and crab shredders. In its border, besides the beautiful landscape of the bay of Vitória, there are restaurants where you can try traditional dishes of the gastronomy of Espírito Santo, such as moqueca and the capixaba pie.
Panela de Barro: Best representation of indigenous handicraft from Espírito Santo. A tradition that is passed from mother to daughter for at least 400 years. The pans makes typical seafood dishes more delicious, such as moqueca and capixaba pie. The Associação das Paneleiras (Cookware Association) works in the neighborhood of Goiabeiras and sells the pans.
Old VillageThe history of Espírito Santo began in Vila Velha, the oldest city in the state, which stands out for the beauty of its 32 km of beach. Founded in 1535 by Vasco Fernandes Coutinho, when it was still a captaincy, today the municipality has its main economic base in port activities. On the beautiful beaches of the city, you can stroll the boardwalk and taste delicious dishes in the kiosks. Famous for the song Madalena, written by singer and songwriter Martinho da Vila, Barra do Jucu is a place full of attractions, such as cuisine, which reveal the strong folk traditions.
Embassy of Brazil in Nairobi
11Quarterly Business Newsletter | Issue No. 22 | 1st Quarter 2020
RECENT HIGHLIGHTSBrazilian Agribusiness Export Revenue Reached US$96.8 Billion in 2019Agribusiness exports totaled US$96.8 (R$388) billion last year. That amount represents 43.2 percent of Brazil’s total exports, according to the Secretariat of Trade and International Relations of the Ministry of Agriculture, Livestock, and Supply.
Full story here
Brazilian confectionery exports rise ahead of ISM 2020A new report has highlighted 32% growth in Brazilian confectionery exports since 2015, as the country prepares its delegation for ISM 2020.
Full story here
Brazilian Shares worth Buying in 2020, Says US Banking Giant JP MorganJP Morgan reiterated its recommendation of overweight (above market average performance) for Brazil and signaled that the country is among the best countries to invest in Latin America in 2020.
Full story here
São Paulo Is World’s Second-Most Desired Travel Destination in 2020São Paulo is the second most desired city, sought by tourists from around the world to travel in 2020, beating destinations such as Tokyo, Tel Aviv, Vienna, and Dubai.
Full story here
Embassy of Brazil in Nairobi
12 Quarterly Business Newsletter | Issue No. 22 | 1st Quarter 2020
BRAZIL’S TRADE PORTAL: INVEST EXPORT BRAZIL The Invest & Export Brazil website is a unique initiative of the Federal Government of Brazil, which brings together, on a single platform, information from various Brazilian agencies dedicated to trade promotion and investment attraction.
Invest & Export Brazil is an efficient, coordinated government website highlighting Brazil’s business and investment opportunities, promoting foreign trade and attracting international investors to the country’s dynamic domestic economy. This informative website is a joint effort of Brazil’s Ministries of External Relations (MRE), Development, Industry and Foreign Trade (MDIC), Agriculture, Livestock and Food Supply (MAPA) and the Brazilian Trade and Investment Promotion Agency (APEX-Brasil).
The platform brings together information on investment and business opportunities, presenting, in a structured and thematic manner, Brazil’s major industries and the institutions supporting them. The Trade and Investment Guide follows the international trend towards cooperating organizations sharing products and services in a single, standardized electronic environment. The innovative web interface enhances the user experience, optimizing access to information, quickly answering key questions and offering services that simplify import, export and investment activities.
INVEST &
Trade and Investment Guide
EXPORT
A publication by the Trade Promotion and Commercial Section,
Embassy of Brazil in Nairobi.United Nations Crescent,
No. 121, Gigiri.
P.O. Box 30754-00100 Nairobi, Kenya.Tel: +254 (0) 20 712 5765/6 Fax: +254 (0) 20 7125767
Cellphone: +254 733 606460
www.apexbrasil.com
www.nairobi.itamaraty.gov.br
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