São Paulo – The delegation to the Arab world, to be organized by the Brazilian Export and Investment Promotion Agency (Apex) in February next year, should focus on expanding the market for Brazilian companies in areas in which the country is strong: food, beverages and building material. According to figures presented by the Apex on Wednesday (19), during the event for release of the delegation, at the Arab Brazilian Chamber of Commerce offices, in São Paulo, Brazil may expand sales of products like grain, soluble coffee, fruit, milk, pasta, glass and stone, among others, to the region.
In the case of grain, for example, the Arab market imports US$ 4.5 billion a year and Brazil supplies just 9%. In coffee, purchases are US$ 81 million, of which 22% is sold by Brazil, in fruit and juices, purchases total US$ 107.3 million and Brazil’s share is 12%, whereas in milk and dairy, purchases reach US$ 405.1 million, 8% of which is supplied by Brazil. In the building area, Brazilian companies participate with 1.7% of the glass and its works imported by the Arabs, whereas in metallurgy products, the share is 2% of the US$ 331 million bought by those nations. In the case of ornamental stone, Brazil is responsible for 2% of their US$ 354 million in imports.
These products, in a list of around 20 items, were identified by the Apex as those with the greatest opportunity in the region. The study was presented by the Business Management and Commercial Intelligence analyst at the agency, Ulisses Pimenta, to businessmen interested in participating in the delegation. The delegation will be led by the minister of Development, Industry and Foreign Trade, Fernando Pimentel, whose ministry supports the delegation, alongside the Arab Brazilian Chamber.
The trip is scheduled to take place from February 12th to 16th and should cross the United Arab Emirates and Saudi Arabia. In the United States, however, businessmen will also have roundtables with importers form other Arab countries, like Kuwait, Jordan, Lebanon and Qatar. Pimenta recalled that the Emirates is a gateway into the region and for this reason the reach of the delegation should not be restricted to the country.
“You may reach them through the Emirates,” he said, regarding the remaining Arab nations. According to him, total exports and imports of the Emirates represent 160% of the country’s Gross Domestic Product (GDP), proving the point.
Pimenta recalled that perspectives in the region are good. In Saudi Arabia, for example, the forecast is for GDP growth of 4.21% in 2012, 4.23% in 2013 and 4.28% in 2014. The rate of investment should be around 23% in 2014. “It will continue being an attractive region for trade and investment in coming years,” said Pimenta. For the Emirates the forecasted growth is 4.64% in 2012, 4.98% in 2013 and 5.65% in 2014. The rate of investment should be 19.5% in 2014, according to the Apex study.
“You have to know the market, the competition and to prepare an adequate strategy for success. The market has the income,” said the Apex analyst. The CEO at the Arab Brazilian Chamber, Michel Alaby, who also spoke at the release, pointed out to the businessmen that travelling on a mission with the government opens doors. “Apex and the Arab Brazilian Chamber have developed excellent work, with business roundtables and visits to the region,” said Alaby, while providing negotiation tips to those participating, including the need to forecast a 20% discount to Arab importers, who normally negotiate much.
Negotiator
The director of exporter Braseco, Damaris Eugênia Ávila da Costa, also provided clues as to what is necessary to consider for success on the Arab market. The executive started relating with the Arab market around six years ago, when she was seeking suppliers of glass on the international market for sales in Brazil. She ended up, however, finding demand for Brazilian glass in Egypt. Damaris told two of her experiences while negotiating and said that the price is the most important fact during an initial negotiation with the Arabs. “Ecological products, with greater quality, that may come later, in the first purchase, what matters is the price. They may later start paying more.”
Alongside Damaris, the event for release included another 80 people. One was Ricardo Figliolini, a trader at Cotia, one of the main importers and exporters in Brazil, headquartered in the city of São Paulo. The company exports to the Arab market and is evaluating participation in the delegation. Iolanda Monteiro, the account manager, and Adriano Campestrini, the marketing manager at FiberWork, in the area of equipment for optic fibre networks, participated in the event. The company, headquartered in Campinas, in the interior of São Paulo state, offers products and services for telecommunications operators and should enrol for participation in the delegation. The company exports to the United States, Latin America and Europe and aims to enter the Arab world.
General Products, a trading company from São Paulo, sent Fabio Toledo, who is responsible for international sales, to the release. The company exports mostly auto parts for heavy vehicles, as well as other items like furniture, decoration and equipment for oil and gas. The Arab market, according to Toledo, answers to around 30% of sales by the company, which aims to increase its presence in the region. He stated that a previous General Products participation in a government trade delegation, some 10 years ago, resulted in good contacts.
Enrolment
Despite the delegation being focussed on food, beverages and building material, companies in other sectors may also participate. According to Apex, companies may enrol, whatever their sector, and participation will be evaluated according to the demand in the region. Enrolment will open on Thursday (20) and may be done on the Apex site up to November 18th. The trip will be on commercial aircraft. Apex will organize roundtables with importers in both countries, according to the profile of each participant.
*Translated by Mark Ament
