Four Major International Corporations Decided to Invest in Brazil – Here’s why
As corporations expand and the world business continues its path of globalization, many companies are looking to invest in Brazil. What’s enticing about Brazil is its strong economy with a GDP that’s expanding. Fueled by 200 million people with a strong middle class, Brazil has a lot to offer. We talked more about it in this article: “6 Reasons to Invest in Brazil and drive your ecommerce sales“.
Many corporations have been put off by Brazil, however, because of its reputation as a corrupt and difficult place to do business. But, with a new president committed to renew the political scenario and players in congress, and a thriving e-commerce sector, technological advancement, agriculture, auto, oil, and healthcare, not to mention its solid status as a prime exporter in the world, Brazil is in the spotlight. Some of the largest companies around the globe are aiming to expand their work in the country in 2019. In fact, four major world-wide players have already announced and begun their investment plans this year in Brazil.
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Top 4 major internacional corporations decided to invest in brazil:
Following the rumors circulating since 2017 that Amazon will increase the investments in Brazil, the ecommerce giant finally began selling on a full-scale level in February 2019. The move comes after building a warehouse in São Paulo in 2018, that measures about 50,000 square meters. The center is not just a direct job creator, but also taps into the high trucking and aviation sectors in Brazil. Previously, Amazon sold only books and third-party merchandise, but now it serves more than 120,000 products in 15 categories other than books.
So why now? Brazil thrives on its own ecommerce giant, MercadoLivre, unlike in Amazon’s native United States. Still, the American monster corporation has been expanding worldwide for some time. If Amazon wants to compete on a global level, it has to find success in Brazil.
Over the next five years, it’s forecast that the Brazilian market will nearly double to $35 million. In order to get in on the growth, Amazon needs to find its presence in Brazil and conform to its ways while it can still wiggle into the thriving ecommerce economy. And so far it has, adjusting its payment systems to the common Brazilian method of payment plans as it uses Boleto for customer invoicing and physical payment. The slow migration was necessary for Amazon, but the full move was just a matter of time.
You might also like: “What Makes Amazon.. Amazon? Unraveling the Secret of the Ecommerce Giant“
According to the Brazilian newspaper Valor Econômico, Satya Nadella, CEO of Microsoft, defined during his participation in an event in São Paulo the four main areas of investment in the company for 2019: infrastructure, large amounts of data treatment, artificial intelligence and cloud computing.
Investing in Brazil is a major move for Microsoft – it’s particularly interested in the cloud computing platform, Azure. The country already represents a market with easy adoption to the product, one that it has shown a big growth from use of the platform.
Microsoft’s main investment is to democratize artificial intelligence in Brazil in order to use tools for opening even more doors for products like Azure. One of the reasons that makes Nadella believe in the development of this technology to work in favor of business growth is that, according to him, Brazil’s taking the lead in control of privacy matters, as he considers the status of another emerging countries in this aspect.
$175 million. This is the what the world’s top aluminum rolling and recycling corporation is investing in Brazil to grow its production facility. The company, based in Atlanta in the United States, has continually improved their Pindamonhangaba plant over the years, but this expansion is more significant. Starting in February 2019, and through 2021, the expansion will create over 50 domestic jobs in Brazil, and include recycling and production improvements that align with the company’s reliance to sustainability.
The draw to Brazil for Novelis is its availability of aluminum, as one of the world’s largest suppliers. Land is also a draw, as this expansion will acquire 90 acres for what could be future growth. Novelis is able to accomplish its good working relationship with Brazil due to the São Paulo Agency for the Promotion of Investments and Competitiveness. The role of the agency is to guide foreign companies like Novelis with the ins and outs of working in Brazil. This indicates a desire to entice foreign companies to come to the region. In kind, the landscape of Brazil is intriguing to a country like America where land and water might not be as available in a financial or sustainable way. Not only that, Brazil has a solid reputation for retaining a good working relationships with foreign countries. In their press release, Steve Fisher, President and Chief Executive Office of Novelis said, “This investment in additional rolling and recycling capacity further strengthens our commitment to the South American region and better positions us to meet our customers’ needs… our focus on establishing another reliable water source also helps us further deliver on our purpose of shaping a sustainable world together.”
Fortune 500 company FIS, a financial service technology company with approximately 52,000 employees worldwide, is based in Jacksonville, Florida in the U.S., though it has had a Joint Venture agreement with Banco Bradesco in Brazil, that is now coming to an end. This partnership is intended not to discontinue a working relationship with Brazil, however, but allow more flexibility on FIS’s part.
The end of the tie means that FIS can enjoy relationships with other banks in Brazil, and create a better planned strategy in the Brazilian market. Currently, in the Joint Venture, payment sales are handled by Banco Bradesco. Brazilian credit cards under FIS are now serviced via Banco Bradesco for more than 40 million customers. With this new development, FIS can take advantage of more customers. For Banco Bradesco’s part, they will be in a position to save money without another entity in play for their transactions.
What’s the draw for credit cards? The country is emerging from a recession, which means people are spending again – and spending is a hot item in Brazil. Credit cards make up more than 50% of transactions. But the landscape of payment systems is changing. A Central Bank initiative is going into effect, with real-time payments and a potential to alter the way people pay with cards. Open banking and crypto currency are also on the docket for some potential changes, and fintech, like FIS, is the future of Brazilian banking. It stands to reason, they’d want flexibility during a time when they could really prosper in this evolving environment.
It’s clear that companies and tycoons are keen on investing in Brazil. The cross section of a strong ecommerce market, agricultural goods, a friendly business environment, and an evolving banking system that’s looking at technological solutions makes Brazil a healthy, solid place for business. It’s no wonder everyone is looking to invest in Brazil in 2019.
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