São Paulo – Possessing good financial control that are conducive to managerial reports makes it easier, and even cheaper, for enterprises to raise funds on the market. The tip was given lsat Tuesday (20th) by the PhD at the Getúlio Vargas Foundation School of Economics (FGV) in São Paulo, Claudio Jorge Monteiro, during a lecture to business executives at the offices of the Arab Brazilian Chamber of Commerce, in São Paulo.

“Whatever the market does not know is made up for in pricing, the price of credit goes up, it becomes more expensive and difficult to obtain,” said the specialist on the importance of having information on one’s business organized and available. Monteiro discussed two types of fundraising by businesses, one being banks, and the other, the equity market, either via becoming listed, selling stakes, taking in new partners, letting go of existing ones, etc.

For the two fundraising varieties, Monteiro said having managerial reports is crucial, since they are, in practical terms, the language the market speaks. “It is critical so the market may communicate with the enterprise and ascertain whether it is doing well or not,” he said. The professor listed important aspects of financial control, such as cash flow, treasury, accounts payable and accounts receivable, all of which combined provide a measure of the business’s performance, and may be used on obtaining lower interest rates.

These managerial reports, however, must not contain errors or inconsistencies. “This may cause the bank to overestimate the risk,” said Monteiro. In the case of the equity market, the company sell for a lower-than-actual price. Potential report errors cited by the professor include mixing natural and legal persons’ data. Including partners’ personal expenditures into the company’s statements may cause results to take a turn for the worse. Technical errors may also take place, such as not including certain revenues, among others.

In order to achieve a good financial control, according to Monteiro, a business must have clearly defined job assignments. The person who does the planning cannot be the same one in charge of implementation or control. But according to the FGV professor, 95% of Brazilian businesses have no accounting department, let alone an audited one.

In Brazil, businessmen are often people who are good sellers or manufacturers who lack management skills, unlike modern businessmen who have studied Economics, attended specialization courses abroad, outlined a business plan, and then set up their business, following opportunity studies, among other measures. “The vast majority of these businesses are one-man businesses,” says Monteiro, concerning professionals who plan, implement and control their enterprises.

The lecturer explained to attendees the process a request for credit undergoes in a bank. He discussed the 4Cs (character, capability of management, conditions and capital) which are taken into consideration on assessing a client’s risk profile. Character is assessed by looking into aspects such as timeliness and payment history, management capability entails the strategic decisions made, conditions involve how the industry the company is a part of is behaving, and capital means a company’s figures.
As regards figures, at this time the market’s “totem pole” is the ratio of net debt-to-Ebitda (earnings before interest, taxes, depreciation and amortization). In other words, by what proportion the debt exceeds a business’ cash flow generation capacity. The best-case scenario, according to Monteiro, is for the debt to be payable with three years’ worth of cash flow generation. “Whenever the debt requires over three years to be paid, the bank is going to require further guarantees,” says the professor.

Apart from the client’s risk, banks assess other hazards, also called Cs, such as Collateral, i.e. securities offered, Covenant, i.e. the company’s commitment to a successful operation, Conglomerate, I.e. whether the company is part of a group whose business and finances are in good shape, Cross Selling, i.e. whether the loan can be used as leverage in negotiation so that, for instance, the bank can take charge of the company’s payroll, among other aspects.

According to Monteiro, fundraising via the equity market is usually more expensive. “The process takes longer, is more sophisticated, more detail-rich, and requires specialized consulting,” he said. There are several methods on the market for assessing a company’s value when it comes to raising funds this way, but he told the audience which is best: according to Monteiro, third-party capital (banks) is always cheaper than proprietary capital (equity).

The Arab Chamber president Marcelo Sallum opened the lecture, which was organized and mediated by former director Mário Rizkallah. The meeting was part of a lecture cycle hosted by the Chamber, covering topics ranging from economics and business to law, history, and culture. Registration was free of charge. 

*Translated by Gabriel Pomerancblum

São Paulo – Fertilizer purchases increased, as did agricultural machinery. Rural property infrastructure was expanded, the quality of seeds used in crops improved. These are some of the consequences that the rise in price of the main agricultural commodities produced in Brazil, which started in the middle of the past decade, brought to the Brazilian countryside.  Soy and maize prices started to rise in that time and currently are still at least 100% higher.

“Last year sales of harvesters and tractors grew a lot, as well as pesticides, fertilizers. The technological level grew a lot”, says the head of the Brazilian Agribusiness Association (Abag), Luiz Antonio Pinazza. According to him, Brazilian farmers still own resources, due to the rise of agricultural commodity prices, and the countryside is going through a very favorable moment.

The head of the Economy Department of  the Brazilian Ministry of Agriculture, Livestock and Supply (MAPA, in the Portuguese acronym), Wilson Vaz de Araújo, cites, besides the use of technology and fertilizers, the investments in storage systems and field management capacity as consequences of the rise in agricultural product prices. More modern processes, according to him, allowed the increase of productivity, and thus, the increase of production.

Larger investment in fertilizers can be seen in the sector statistics. The delivery of fertilizers on the Brazilian market, which were 20.1 million tonnes in 2005, increased to 31 million last year, according to the Brazilian National Fertilizer Association (Anda).The Brazilian industry of agricultural machinery and implements profited US$ 5.9 billion in 2008 and US$ 13.1 billion in 2013, according to the Brazilian Machinery Manufacturers Association (Abimaq).

Life in the countryside

According to Araujo, from Mapa, in regions where agriculture is strong the new level of prices for agricultural commodities influenced the quality of life, the financial sector,  commerce, input suppliers and even education. In this regard, Afrânio Cesar Migliari, secretary of Agriculture and Environment of the municipality in Mato Grosso, which is considered the national capital of agribusiness, said “quality of life in the countryside improved, in cities devoted to agribusiness”.

According to the secretary, Sorriso and the remaining soy and maize producing municipalities in the region, such as Lucas do Rio Verde, Nova Mutum and Princesa do Leste, have better living conditions today. “There are new vehicles, new trucks, imported vehicles”, says Migliari. Civil construction is thriving in Sorriso, according to him, and there are several new housing complexes, high-value condominiums. “The state changed a lot in the past ten years”, he said about Mato Grosso.

The higher income has consequences not only on the personal life of farmers in Mato Grosso, according to Migliari, but also on agricultural activity itself, on farms’ structures, investment in higher quality seeds and fertilizers, more modern machinery, acquisition of new airplanes, tractors, automatic planters and harvesters. And the acquisition of newer technology helped the state to address one of its main bottlenecks, which is agricultural labour. Sorriso plants 660,000 hectares of soy per year and 440,000 hectares of maize, which was considered secondary in the municipality until it started to profit better and to receive investments.

Rise in soy and maize prices

Asian demand for grains and the decision of the US to produce ethanol from maize are among the factors leading to maize and soy’s new prices. “China imported two million tonnes of grain in 2000, and today it imports between 65 and 70 million tonnes. And Brazil occupies a big part of this market”, says Pinazza. Speculation in the commodity market as a whole, which also includes non-agricultural products such as oil, has also favored the price rise, according to the director.

The head of the Economy Department of the Brazilian Ministry points out the variation of stock prices, especially after 2009. “In general, the prices were quite generous”, he says, citing income increase and urbanization in developing countries, mainly from Asia as possible reasons. Araújo believes the grain market will keep the upward trend. “The level of agricultural commodity prices has changed. There may be some fluctuation, but they will stay in this new level”, he says.

*Translated by Rodrigo Mendonça

São Paulo – Kuwait’s The Sultan Center supermarket chain is promoting Brazilian products during the Brazilian Week, due from June 3rd through 16th at the store in Al-Salmiya. The action is sponsored by the Arab Brazilian Chamber of Commerce and the Brazilian Export and Investment Promotion Agency (Apex-Brasil).

Most of the products featured will be foodstuffs. Approximately 150 items will be highlighted on the supermarket’s shelves, and consumers will be able to sample a few Brazilian flavours.

“This is an innovation action in the region. Kuwait is a high-end market mostly comprised of Arabs. We will be able to gauge the acceptance of Brazilian products among this specific audience,” says Karina Cassapula, the Arab Chamber Marketing coordinator.

The Brazilian Week is the outcome of a Sultan Center director’s attending the matchmaking held by the Arab Chamber in 2012 and 2013. “Matchmaking ranks among our best services, since it is conducive to actual deals,” says Cassapula.

“This is why we are hosting matchmaking rounds for the construction and food industries during the FIFA World Cup, since these are some of our top exporting industries to Arab countries,” she explains, referring to the World Cup Project, which will bring importers to Brazil during the football tournament.

According to the executive, a broad variety of items are involved in the promotional action, so as to showcase the different foods Brazil has to offer. “We have typical products such as assai, guaraná, Brazil nut and coconut water, but also mass consumption products such as chocolate powder, candy, coffee etc.,” she says.

At the opening, ten official Brazilian national team jerseys will be raffled. On the 3rd and 4th of June, the Brazilian singer Aline Lazzari will perform. The artist, a singer and acoustic guitar player, plays Brazilian popular music and lives in Dubai. The inaugural event will be attended by Michel Alaby, the Arab Chamber CEO.

The Sultan Center has units in Oman, Jordan, Bahrain and Lebanon. In Kuwait alone, the chain boasts 14 supermarkets and over 7,000 employees. It is the largest retailer in the Gulf country, and one of the leading suppliers of supermarket items, perishables, and general goods in the Middle East.

According to Cassapula, the Brazilian Week in Kuwait should be the first of several similar actions. “The plan is to repeat the action in other countries and with other supermarket chains, including more products,” she says.

*Translated by Gabriel Pomerancblum

São Paulo – Brazilian exports to the Arab countries were down 10% year-to-date through April this year from the same period last year, as per figures from the Brazilian Ministry of Development, Industry and Foreign Trade compiled by the Arab Brazilian Chamber of Commerce. The 10% decline took place in both revenues and shipped volume. In April, export revenues were down 9.57%, but shipped volume was up 11.5%.

However, figures are expected to improve from May onwards, since this year the Ramadan will happen earlier, in June, says the Arab Chamber CEO Michel Alaby. “They are building stockpiles,” says the executive. Ramadan is the holy month, when Muslims fast during the day, but can eat once the sun sets, and they usually do so in collective meals and family meetings.

Year-to-date through April, Brazil grossed US$ 4 billion in export revenues to Arab countries, as against US$ 4.5 billion in the same period of 2013. Shipped volume dropped from 12.4 million tonnes to 11.2 million tonnes. In April alone, revenues from export to the Middle East and North Africa stood at US$ 1 billion, as against US$ 1.1 billion in April 2013. Shipped volume was up from 2.4 million tonnes to 2.7 million tonnes.

The good news regarding the trade balance during the period include higher shipments of iron ore, in April, and of meats, year-to-date. In both cases, however, revenues declined, a sign that prices have dropped. “The prices of some of the top commodities are on the way down, and domestic demand for protein is strong,” says Alaby.

Brazil is facing a few difficulties when it comes to exporting beef to some of the Arab countries, which have embargoed imports of the product due to the announcement, made in 2012, that one animal bearing the mad cow disease causative agent had died in the state of Paraná. THe animal, however, did not die as a result of the condition, which it did not develop. This year, another atypical case of the disease was reported in Mato Grosso, and two Arab countries, Egypt and Algeria, banned imports from the state for 180 years.

Nonetheless, the CEO claims there is room for Brazilian new protein suppliers in the Arab market, such as poultry companies. He also notes that the FIFA World Cup, which Brazil is hosting from June 12th onwards, may open up new vistas for exports. During the tournament, Arab importers will travel to Brazil to look into business opportunities and watch the matches, via a joint action from the Brazilian Export and Investment Promotion Agency (Apex) and the Arab Chamber.

Year-to-date through April, among the four leading Arab importers of Brazilian products, two increased their purchases in 2014 from 2013: Egypt, up 18%, And Algeria, up 43%. Egypt ranks third among the leading Brazilian export targets in the Arab world; Algeria ranks fourth. Saudi Arabia, which tops the ranking, imported 24% less product, and the United Arab Emirates, which ranks second, stepped down its purchases by 13.5%.

Revenues from exports of processed goods, including sugar, were down 24.5% year-to-date through April, and revenues from animals and products, including meats, were down 6.9%. These were the main categories of products shipped from Brazil to the Arab countries. Sales also dropped for mineral products, including ores, and plants and products, including cereals.

Imports

Brazilian imports of Arab products also dropped year-to-date through April this year from the same period in 2013, from US$ 3.4 billion to US$ 3.3 billion. In April, however, imports increased from US$ 960 million in 2013 to US$ 1.03 billion this year. Brazil imports mostly oil and its products and fertilizers from the Arab countries.

*Translated by Gabriel Pomerancblum

Algiers – The 47th edition of the International Fair of Algiers (IFA) will have the participation of 1,045 local and foreign companies. The exhibit will be held from May 28 to June 2nd at the Algiers Exhibition Centre in Algeria’s capital.

 The event will have 453 national and 592 foreign companies from 37 countries, according to Rachid Khiar, representative of the Algerian Company of Fairs and Exports (Safex, in the French acronym), the fair organizers. The theme of this edition is “Strong and serene Algeria”.

The United States are this year’s guest of honour and around 80 North-American exhibitors operating in the transport, technology, agriculture and pharmaceutical industry are expected.

Among the countries which will have representatives in the fair are also Argentina, Cuba, Venezuela, Turkey, Germany, France, Portugal, Great Britain, Russia, Poland, the Czech Republic, Egypt, Tunisia, Palestine, Libya, Kuwait, Jordan, Sudan, China, Vietnam, Malaysia, Indonesia, Senegal, Cameroon, Spain, Italy, India, Iran, South Africa, Belgium, Ukraine, Burkina Faso, Yemen and Mali.

“The International Fair of Algiers is a regional and national showcase to present the national production and discover foreign products with a view to using them in the achievement of the different economic and social development programmes of Algeria,” said the secretary general of the Trade Ministry, Aïssa Zelmati.

In his opinion, the choice of the US as guest of honour in the fair is the result of solid economic and trade relations between the two countries and the undeniable presence of North-American stands in the IFA even during hard times.

“We hope that the participating American companies will forge partnerships with their Algerian counterparts to develop economic and trading cooperation between the two countries,” said Zelmati.

The US ambassador to Algiers, Henry Ensher, said, for his part, there is a real potential in developing bilateral relations and the strengthening of cooperation beyond the oil industry.

“We will participate in the trade event to intensify and strengthen trading cooperation between Algeria and the US,” said the diplomat, adding that the forthcoming visit of the US Secretary of State of Energy “shows the importance of relations between the two countries.”

During the fair, a memorandum of understanding in pharmaceutical industry and other agreement between Algerian and American companies will be signed. Conferences, trade meetings and cultural events will be organized on the sidelines of the trade event.

For further information, access: http://fia.safex.dz/en.html (in French and English)

*With information from the ANBA Newsroom. Translated by Rodrigo Mendonça

São Paulo – Apart from the tourists who are travelling to Brazil to watch the World Cup matches, the tournament will bring to the country 2,300 foreign importers, investors and opinion-makers who are interested in buying local products. They are participants in the World Cup Project, organized by the Brazilian Export and Investment Promotion Agency (Apex-Brazil) in partnership with 708 companies and organizations from various sectors.

“The project allows international buyers a unique experience in Brazil, enabling them to come into contact with various enterprises. This makes for a unique relationship platform. It is a means to improving the image of Brazilian products and companies,” explains Jacy Braga, the Relationship Marketing manager at Apex.

The World Cup Project comprises buyers from 76 different sectors, including housing and construction, foodstuffs, beverages and agribusiness. According to Braga, visitors hail from over 100 countries, and in higher numbers from the United States and Argentina.

The importers’ schedule includes actions such as matchmaking rounds, visits to manufacturing plants, fairs, farms, and laboratories, in addition to meetings, lectures and seminars. The Apex partner companies and organizations are organizing 837 separate business schedules, i.e. sets of appointments to be kept by the international visitors for the duration of the tournament.

The business environment will be extended into the World Cup matches the foreigners will attend. The Apex will set up an exclusive facility for promoting relationships between Brazilian executives and the importers. “There will be an emphasis on Brazilian technology, with tablets featuring the Brazilian matches, a pinball arcade and Brazilian interactive games,” says Braga.

Exports and investment attraction during the World Cup are expected to exceed R$ 3 billion (US$ 1.3 billion), a sum similar to the turnover during the Confederations Cup, held in 2013. Braga notes that aside from the sales volume elicited by this type of action, the relationship and the awareness of Brazilian products and companies also improve greatly as a result of the promotional actions linked to the tournament.

“During the Confederations Cup, we questioned foreign buyers as to their perception of Brazil as a business partner. Prior to the event, 58% gave either good or very good grades; following the trip, the rate of good or very good grades climbed to 84%,” says the Apex manager.

The image of Brazil has improved in other aspects during the contest last year. When questioned about the perception of quality of Brazilian products and services, good and very good grades amounted to 56% before the tournament, and soared to 87% after the foreigners travelled to Brazil. Regarding the perceived professionalism of Brazilian business executives, good and very good grades stood at 40% before and 87% after the event.

Large and small businesses are taking part in the World Cup Project. The best-known brands are Bauducco, Garoto, Piccadilly, Marcopolo, Randon, Portobello and Cecrisa.

Arabs on the field

Buyers from countries in the Middle East and North Africa will be among the participants in the World Cup Project. Nine Arab companies, for instance, will engage in matchmaking rounds at the offices of the Arab Brazilian Chamber of Commerce, one of Apex’s partner organizations.

“The project will also allow Arabs to visit companies and suppliers to see their facilities on the spot and assess the business outlook with these companies,” says Michel Alaby, the Arab Chamber CEO.

The executive stresses that this is a chance to truly showcase the country to the Arabs, instead of simply speaking about Brazil, and an opportunity for buyers to enjoy Brazilian football. “The Arabs are aficionados when it comes to football and the Brazilian national team,” he says.

The matchmaking rounds at the Arab Chamber will have three different phases. On June 8th and 9th, negotiations will involve food companies from the Gulf; on June 25th and 26th, construction industry companies will participate; and on July 2nd and 3rd, food companies from North Africa will attend.

“It is also an opportunity for Arabs to learn about the Arab Chamber’s role and activities as a supporter of this project, and as a serious organization that may follow up with the contacts between Arabs and Brazilians,” says Alaby.

The Arabs attending the matchmaking at the Arab Chamber are a part of a larger group of Middle Eastern buyers who are coming to the country during the Cup. According to Braga, the Apex is bringing 68 importers from the region, from Arab countries such as United Arab Emirates, Saudi Arabia, Bahrain, Qatar, Kuwait, Oman, Iraq, Lebanon, Palestine, Jordan and Libya, and non-Arab countries such as Iran and Turkey. Importers from Sudan, in North Africa, are also involved in the project.

These buyers will keep appointments set by various Apex partners. They are coming to Brazil to do business in 18 different sectors, like foodstuffs, construction, footwear, pharma chemicals, toiletries and perfumery, agricultural machinery and implements, medical products, and textiles, among others.

“The Arab countries are very important to Brazil’s exports. They are crucial to our project, and we are counting on them to do business at the events we will carry out with the Arab Chamber and other partners,” says the Apex manager.

*Translated by Gabriel Pomerancblum

Brasília – The number of asylum applicants in Brazil in 2013 more than doubled from 2012. Last year, 5,256 people applied. In 2012, slightly over 2,000 people applied, as per figures released this Wednesday (14th) in the report Asylum in Brazil: a Statistical Review (2010-2013), issued by the National Committee for Refugees (Conare) and the United Nations High Commissioner for Refugees (Unhcr). Over the last four years, the number of applications increased by 800%.

Year-to-date through May, 1938 applications were made and 684 were accepted. The Unhcr estimates that applications may amount to 12,000 by the end of 2014.

The Conare chairman Paulo Abrão said the increase is mostly due to the worsening of international conflicts and to migratory flows toward countries regarded as “lands of opportunity” – especially on the South-South axis, which currently accounts for 40% of global migratory flows.

“Brazil boasts outstanding humanitarian practices, a tradition of observance of human right, and the Unhcr has acknowledged this widely,” said the UN agency’s representative in Brazil, Andrés Ramirez.

According to him, asylum applications are on an upward trend. “The trend has been clear since 2010, it did not begin last year. It is an exponential increase.”

There are 5,208 refugees in Brazil today. They are from 80 different nationalities, 90% are aged 18 to 30 and 66% are men.

Most refugees in the country are from Syria, the Democratic Republic of the Congo, Colombia and Pakistan. The Brazilian states that received the most applications are São Paulo (23%), Paraná (20.7%) and the Federal District (14%).

Most of the asylum applicants last year were from Bangladesh, Senegal, Lebanon, Syria and the Democratic Republic of the Congo, according to the Unhcr. The rate of applications accepted was 45%, the highest of the last few years. All applications from Syrians were accepted, according to the Unhcr.

According to the report, there is a tendency for change in the next few years – towards increased diversity of nationalities, due to Brazil’s growing openness and to global humanitarian crises.
Brazilian law provides that asylum may be granted to people experiencing persecution due to political reasons, race, religion, or for being a part certain social groups (like countries with homophobic policies, for instance) or else due to serious, widespread human rights violations.

According to the report, the number of asylum requests approved in Brazil increased from 2010 to 2013 as a consequence of specific laws, and of Brazil’s becoming established as the leading donor of funds to the Unhcr among emerging countries: over R$ 11 million (US$ 4.9 million) were donation in these four years.

A resolution from the Conare, issued last Tuesday (13th) on the Federal Official Gazette, sets forth new rules for reducing asylum-related paperwork. The new measures enter into effect this Wednesday. The new rules are expected to enable swifter, more efficient proceedings.

Thus far, asylum applicants were required to undergo four stages, including interviews and filling in Federal Police forms, plus interviews with social and human rights organizations such as Cáritas. This process has been made simpler, a single form has been created, and the proof of asylum application is now issued upon the first contact with the applicant, following which the foreigner attains legal status in the country.

Formerly, the application form had to be renewed after 180 days; from now on, it will remain valid for a year.

*With information from the ANBA Newsroom. Translated by Gabriel Pomerancblum

São Paulo – The Omani delegation that held the Brazil-Oman Economic Forum last Monday (12th) in São Paulo paid a visit to the offices of the Arab Brazilian Chamber of Commerce late this Tuesday afternoon (13th), and was welcomed by the organization’s president Marcelo Sallum and CEO Michel Alaby.

“The Sultanate of Oman is very well represented in Brazil, first by the ambassador [Khalid Al Jaradi], who is doing a magnificent job, and second by the Arab Chamber, which has carried out a strong commercial promotion work [for the country],” said Sallum.

The delegation comprises representatives from government agencies and state-owned companies and has travelled to Brazil looking to promote business opportunities in the sultanate. In addition to the forum, the Omanis attended separate meetings with Brazilian executives, paid a visit to the São Paulo Investment and Competitiveness Promotion Agency (Investe São Paulo) and will go the Port of Santos on Wednesday (14th).

“Our visit has been a huge success,” said the head of the delegation, Yahya Said Abdullah Al Jabri, chairman of the Duqm Special Economic Zone Authority. He highlighted the participation of the Brazilian vice president Michel Temer in the forum, the meetings with Brazilian executives and the visit to Investe São Paulo, where they learned about investment opportunities in the state.

Alaby gave a presentation on economic relations between Brazil and Oman, and delegation members inquired which sectors the Arab Chamber believes hold the most promise for bilateral business.

Sallum cited infrastructure. “We took delegates from Brazilian infrastructure companies along with us, and they told me they were interested in following up with the visit,” he said, referring to the trip Michel Temer took to the sultanate in 2013, alongside businessmen. He also envisions partnership possibilities in ports. The Omani delegation includes executives from the Duqm, Sohar and Salalah ports.

Alaby added that infrastructure in Brazil yields “good profitability,” as do retail and the hotel industry. In his opinion, however, the best opportunities for Arabs, especially those from the Gulf, lie in agribusiness. “And that is also due to [the issue of] food security,” he asserted.

Delegation members also requested information about heavy industry companies that may be interested in doing business with Oman, and about fish farming experiences in Brazil. Fishing is an important activity in the sultanate, due to the length of its coastline and its maritime tradition.

Jabri said a Brazil-Oman Business Council should be established swiftly to conduct an in-depth evaluation of the outlook for mutual investment, and to foster bilateral trade. The council’s establishment has been entrusted to the Arab Chamber and the Oman Chamber of Commerce and Industry. He also suggested that more trade missions be carried out.

Ambassador Jaradi stated that the Arab Chamber is the embassy’s “number one” partner in Brazil, and thanked Sallum, Alaby and the employees who gave assistance through the forum and during the delegation’s visit. “I am certain that we will see the concrete results of this forum,” he said.

*Translated by Gabriel Pomerancblum