The Brazilian trade mission to North Africa, which ended, Tuesday, June 5, should yield US$ 35.7 million in deals to the participating companies over the next 12 months, as well as at least US$ 3 million in deals closed during the trip. The figures were taken from a survey conducted by the Brazilian Export and Investment Promotion Agency (Apex) among the delegation members. The Apex organized the trip along with the Arab Brazilian Chamber of Commerce.
In 10 days, the Brazilians made 528 business contacts in Morocco, Tunisia, and Egypt, during conferences, business roundtables, and technical visits. More than just exports, the mission brought true opportunities for partnerships between companies from Brazil and the Arab world.
"The mission left a very strong trail of enthusiasm behind. The data show that it surpassed its goal, which was primarily one of market prospecting," said the marketing vice president at the Arab Brazilian Chamber, Rubens Hannun, who led the delegation.
In his assessment, the Brazilian companies approached the three markets in a comprehensive fashion, considering not just sales possibilities, but also those of partnerships and investment in those nations.
"On the Brazilian side, there was a wide-ranging view of foreign relations, and on the Arab side, the Brazilians left a good image and respect," said Hannun.
One example is that of Usmatic, a maker of hydrometers and irrigation equipment, which left Egypt with a near-signed industrial agreement. The owner of the company, Edmilson Marcondes dos Santos, left a technology transfer contract to be closed with a local industry in the same field.
"All that is left are the figures to be defined, but the idea is to manufacture mini-pivots here under the Usmatic brand," he stated.
According to him, the Egyptian partner already makes central irrigation pivots, but it does not possess the necessary know-how for making mini-pivots, destined to areas of up to 33 hectares. The aim is to pass on to the company in the Arab country the equipment projects, to oversee the implementing of operations, and to offer training to local workers, in exchange for payment of royalties.
Other participants also showed interest in industrial projects in North Africa, as was the case with the Brazilian Fruit Institute (Ibraf), the Association of the Manufacturers of Medical and Dental Products (Abimo) and the Movexport consortium, which brings together furniture manufacturers from the city of Ubá, in the southeastern Brazilian state of Minas Gerais. These organizations will forward to its associates the existing possibilities in this realm, and the benefits that may be obtained.
Possibilities range from the installation of storage infrastructure to the establishment of joint ventures, to direct investment in construction of factories.
"There was a fundamental improvement in the quality of relations, with business opportunities in the medium and long terms," said Hannun. "And the presence of companies in various sectors that were truly interested in the region goes to show that Brazil, being respected and known, has a lot more to offer than just commodities," he stated.
The mission counted on the participation of companies and organizations in the fields of foodstuffs, inputs for the food industry, beverages, agricultural products, fruit, construction material, medical and dental equipment, tools, irrigation equipment, rubber and synthetic resins, furniture, and shoe components and accessories.
Markets
In Morocco, the first leg of the trip, 207 commercial contacts were established, with US$ 6.2 million in business opportunities for the next 12 months. In Tunisia, the second leg, 147 meetings occurred, resulting in possible contracts worth US$ 19.2 million. In Egypt, the last stop, there were 174 contacts, with an estimated US$ 10.5 million in deals.
"This proves that there are no bad markets in the region, because there is not a single Arab country that does not maintain good relations with Brazil. This reaction, in terms of business opportunities, is a reaction to Brazil in itself," Hannun said.
According to him, the trip was also important in order to gain a better understanding of the differences between countries regarding market behavior, the taxes charged, the incentives granted to investment, the level of industrialization, among other information. "This will enable us to make a more precise diagnosis as to how to proceed with our work," he claimed.
One of the companies that created strong business opportunities was Singular Trading, which prepared sales of 12,500 tons of crystal sugar, which may yield almost US$ 6.9 million in exports. According to the company representative, Cristiano Vivaldi, also lined up were sales of chocolate, biscuits, hard sweets, powdered juice, and there was also a demand for orange juice.
Most companies left North Africa with business underway, or at the least with good contacts to be developed. Also participating were the Brazilian Association of Shoe and Leather Components Industries (Assintecal), Link Worldwide, which represents eight companies in the same sector, Braseco, which sells construction material, agricultural machinery, and other products, Latinex, which sells foodstuffs and beverages, Mabel, a maker of biscuits, Nitriflex, a manufacturer of synthetic rubbers, PMAN, which produces inputs for the bakery industry, Predilecta Alimentos, for candy, spices, and pulps, Starret, for tools, and WK, for construction material.
In Tunisia, meetings were held with the minister of Trade and Handicraft, Mondher Zenaí¯di, with the secretary of state for the Americas, Saí¯da Chtiouiu, at the Tunisian Department of Privatizations, at the Chamber of Commerce and Industry of the Center, in Sousse, at the Sahlou Hospital, also in Sousse, at the Barto Museum, in Tunis, and with representatives of the Tunisian Union of the Industry, Trade and Craft (Utica).
In Egypt, meetings were held at the Egyptian Businessmen's Association, at the MENA news agency, where another cooperation agreement was signed with Brazil's ANBA news agency, at the Sixth of October City Investors Association, and at a local company that organizes business fairs. "Important gateways were opened up," Hannun stated.
1,500 Industries
As a last activity, mission members visited factories located in Sixth of October City, 50 kilometers south of Cairo, the capital of Egypt. The municipality, which is entirely industry-oriented, hosts 1,500 plants in various sectors, spread throughout six industrial zones.
"The city accounts for 10% to 15% of the Egyptian industry," said Mohamed Khamis, secretary general at the Sixth of October City Investors Association, an organization that brings together approximately 600 local companies.
One of the companies visited was Juhayna, a maker of dairy products and juice that has three factories in the city. The production line is fully automated, and the company processes 500 tons of milk and 500 tons of juice per day, around 20% of which are exported to countries such as Libya, Jordan, the United States, and European nations.
Working three shifts six days a week, and sometimes seven, production capacity is already at its maximum. And the company is investing in expansion. "We must expand, we should have two new factories within a year," said the director general at the company, Nelson Thomsen, from Denmark. According to him, the new operations should generate 300 to 400 new jobs, which will add to the approximately 2,000 existing ones.
The majority of milk and fruit supplies comes from producers in Egypt itself, but the company also imports some fruit, powdered milk, stabilizers, and packaging. The Brazilian mission includes representatives of the food and juice inputs sector. The company produces a large line of yoghurts and juices, as well as long life milk and other dairy products.
According to Thomsen, the company has existed for 28 years, and introduced the long life milk production process in Egypt. The company has its own distribution network. The vast majority of employees work in the managerial and sales fields. One of the company's customers is the McDonald's chain, to which it supplies ice cream mixes. Its annual revenue is around 1 billion Egyptian pounds (US$ 175.4 million).
Shoes
Another factory visited was Short, which makes shoes and buys some components from Brazil, such as recycled leather. The company is widely known in the local market, but it also exports to Italy, France, Saudi Arabia, and Dubai, in the United Arab Emirates. The factory has a production capacity of up to 2,000 pairs a day, but is currently making approximately 500. According to the company owner, Ahmed Short, this is due to the fact that Egypt is now in the low season.
According to Short, his company has 150 employees. In addition to the factory, he owns four stores, and 10 other outsourced points of sale commercialize his products almost exclusively. As in Brazil, competition of Chinese products is strong. "We manage to keep going because our brand is strong in Egypt, so people look for it," said the businessman, who established the company 15 years ago.
Besides food and shoes, Sixth of October City hosts the sectors of automobiles, textile plants, chemicals, construction material, medical equipment, cosmetics, carpets, cigarettes, and others. The industrial units occupy an area of 400,000 square meters.
According to Mohamed Khamis, the cost for establishing a factory in the city is low, at US$ 20 per square meter of land area, and US$ 100 per square meter of built area. Furthermore, the water supply rate price is US$ 0.20 per cubic meter, and the cost of electricity is US$ 0.04 per kilowatt/hour. The Egyptian government charges a 20% tax on profit and 10% on sales, as in the Brazilian value added state tax (ICMS). Tax rates on imports range from 2% to 20%.
With approximately one million inhabitants, Sixth of October City is home to four universities. "There are 26 cities like this one in Egypt, but Sixth of October is the largest," Khamis said.
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