Brazilian Agribusiness: Great investment opportunities Curitiba, August 2017
A strong market share Brazil World ranking, 2017 Main products Production Exports Number of destinations Sugar 1 st 1 st 108 Coffee 1 st 1 st 115 Orange Juice 1 st 1 st 56 Soybean 2 nd 1 st 81 Beef 2 nd 2 nd 127 Chicken meat 2 nd 1 st 132 Corn 3 rd 2 nd 50 Pork 4 th 4 th 98 The number of destinations shows that Brazilian products have quality Source: USDA, 2017/18; AgroStat, 2017(until august/2017);
Importance of domestic market Brazil: domestic consumption and exports Orange Juice 2% 98% Soybean Coffee Sugar Corn Chicken meat Beef 27% 40% 39% 74% 68% 85% 73% 60% 61% 26% 32% 15% In addition to meeting domestic demand, Brazilian agriculture has the capacity to supply customers abroad Pork 80% 20% Ethanol 93% 7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Source: USDA. 2016/17; AgroStat, 2016. Made by: SRI/MAPA. Data extracted in August, 2017. Domestic Consuption Exports Imports not included
Technology saves land Grain production, land use and yield (1976/2017) Increment 40 years +33% +340% +386% +266% More than 15 million ha planted with more than one harvest in the same year: - Reduced fixed costs (same land, same labor, same equipment) - Very competitive grain production - High grain availability of animal feed
Production will continue to grow Brazil forecast for the next 10 years Base 100 140 135 130 125 120 115 110 105 100 95 26.05% (2015/16 2025/26) Brazil will play an increasing role as a global supplier of agricultural products Source: MAPA (august 2017) Grains Beef Pork Broiler Meat Milk
Most of the territory is preserved Land use The The carbon total area area stock of of native in the preserved vegetation native preserved inside vegetation farms of in Brazil in Brazil would is is extend equivalent over to a to 16 huge the years total of carbon portion area emissions of Europe France by and the US. Norway combined. Source: Embrapa, IBGE, CNA, MMA, FUNAI, DNIT, ANA, MPOG. Preparation: Embrapa Monitoring
Brazilian Finance Engineering to finance agribusiness LCA US$ 64,15 Rural Producers CPR CDA NPR CCR Other receivables CDCA CRA Other Bonds Banks Agroindustries Traders Others Investment Funds Investment Banks Individual Investors Others Billion Current stock of LCA, CDCA and CRA (held by the public) It s a big market! Source: BM&FBovespa/Cetip
Direct investments flow average 2013-2015 - Selected countries - Brazil is 500 450 471 already one of the 400 350 300 288 270 US$ billion greatests 250 200 destinations for FDI 150 100 50 129 80 67 64 46 36 36 0 Source: IMF
Investment in Brazilian Agribusiness INVESTMENTS There are several areas for foreign investors: - Production - Inputs supply - Infrastructure - Logistics - Processing - Distribution Portfolio with 30 projects and more than US$ 1,3 billion in investments opportunities in SMEs
INVESTMENTS Strong partnership with agribusiness stakeholders MAPA Outros Others State Govs Estados Action to identify opportunities for foreign investment Industrias de Máquinas e Equipamentos Machinery Industries Indústrias Supply de Insumos Industries Investment Oportunidades de Opportunities Investimento Agro Industries Agroindústria s Produtores Farmers Rurais City Govs Municípios Local governance and stakeholders will play a fundamental role
Brazil There are opportunities for investment in infrastructure and logistics
Brazilian Export Corridors Highways Railways Waterways Source: MT
Logistics corridors Modal Split of Transport South Corridor Southeast Corridor Northeast Corridor North Corridor Source: MT
Brazilian Port Distribution North Central Region There is great potential to expand!! Parallel 16 Agricultural production Port Capacity 58% 17% 42% 83% Source: Agroconsult e BRZ Investimentos
Investment Partnerships Program Ports Railways Highways Great investment opportunities! Source: PPI
Great potential for warehouse expansion! Brazilian Storage Infrastructure Regional Storage Capacity Source: MAPA e Conab Region Production (M. of tons) Storage capacity (M. of tons) Deficit (%) Midwest 77,88 51,38-34% South 69,52 60,32-13% Southeast 18,44 22,07 20% Northeast 16,68 8,93-46% North 6,15 3,3-46% Total 188,67 146,00-23%
PCA Warehouse Construction Program - R$ 1.6 billion in 2017/18 crop - 15 years to pay - No loan limit - Interest of 6.5% per annum - For producers and cooperatives
- Respect for contracts and private property - Foreign capital may freely enter Brazil Brazil is a safe and friendly investment choice! - Treated on an equal footing with domestic capital - Foreign Direct Investment is not subject to any taxation - Besides start-ups and joint ventures, Brazilian law allows for mergers and acquisitions - There is an important financial market in Brazil, where indirect investments can also be made Source: ApexBrasil
Thank you! Jonathas de Alencar Moreira jonathas.alencar@agricultura.gov.br 61 3218-2817