Bilateral Trade
Introduction
Brazil and Switzerland enjoy a harmonious and long during trade relationship. The volume of Swiss trade negotiations in Brazil account for 40% of all Swiss transactions in Latin America; thus, Brazil is Switzerland's major trading partner in the region. Likewise, Switzerland is Brazil's 20th major trade partner.Bilateral trade between both countries has increased by 300% in the last 10 years. Brazil is attracting an increasing number of small and medium-sized Swiss companies because of its growing consumer market, while more and more Brazilian companies are interested in exporting to Switzerland or acquiring new Swiss technologies and services.
Switzerland is Brazil's 42nd country with higher volume of products imported from Brazil thanks to the quality of Brazilian goods and the ability of Brazilian negotiators.
Brazilian exports to Switzerland have increased ten times in the last ten years. Brazil exports mainly iron ore, gold bars, aluminum, orange juice, meat, ethanol and cotton. Switzerland's main exports to Brazil include pharmaceutical products, machines and chemical products.
In addition to the good economic relationship, both countries enjoy a solid diplomatic, cultural and political relationship, and have signed a number of treaties in areas as diverse as civil aviation, technical-scientific cooperation and education.
According to the Swiss consulates in Brazil, there are living 14,653 Swiss citizens in Brazil while the Brazilian community in Switzerland counts officially 16,503 people (2009), based on numbers of the Swiss Immigration Office.
Trade Balance
In 2009, Brazil exported products worth US$ 153,0 billion and imported goods amounting to US$ 127,6 billion, resulting in a trade balance surplus of US$ 25.3 billion. In 2008 Brazil rank 22nd among major exporters, and 24th among importers.Switzerland exported products worth US$ 249,7 billion, and its imports totaled US$ 221,3 billion in the same year, and rank 20th among major exporters and 23rd among importers for the year of 2008.
In terms of bilateral trade, according to SECEX (Brazilian Foreign Trade Agency), Brazilian exports to Switzerland reached US$ 1,920 million last year, while its imports from that country amounted to US$ 2,050 million in the same period.
The major Brazilian exporters to Switzerland in 2009 were: Vale, Rio Paracatu Mineração, Anglogold Ashanti, Alcoa, Fischer, Marsam Metais Mineração, Albras Alumínio Brasileiro, BHP Billiton, John Deere, Brasil Foods, Solabia Biotecnológica, Seara, Ascot, Novartis, Caterpillar, Bertin, Embraer, Doux, Frangosul, Cutrale etc.
The major Brazilian importers of Swiss products are: Novartis, Roche, Syngenta, Carterpillar, Bayer, Ministério da Saúde, Petrobras, Cosipa, Firmenich, Synthes, Rolex, DSM, Medtronic, Cisa, Duty Free, Alunorte, Biotronik, Thomson, Robert Bosch, CNH, Huntsman, ABB, Brasil Foods, Videolar, Meizler, Bobst, Clariant, Agie Charmilles etc.
Business Highlights
In the year of 2009 the Swiss company Leica Geosystems, manufacturer and distributor of software and systems designed to capture aerospacial data, established a subsidiary in the city of São Carlos, in the State of São Paulo. The Brazilian subsidiary is responsible for the market development in Latin America and Caribe regions.
In february 2010, the Swiss company Stadler Rail Group, signed an agreement to supply 7 locomotives for the Brazilian company MRS Logística S.A. The rack-and-pinion locomotives will operate in the freight line from São Paulo to Santos seaport. The amount estimated for this transaction surpasses CHF 60 million, which strengthens the potential for Swiss equipment, with its state of art technology, in the Brazilian market.
Also in 2010, the Swiss company Baumer, one of the major manufacturers of industrial automation sensors, opened its subsidiary in Baumer. This company estimates to achieve a US$ 1 million in sales in its first year of operations.
Eftec, company of the Swiss group EMS, which manufactures chemical products for the automotive sector, opened in April 2010 its first plant in South America. The investments in the plant of Santana do Parnaíba - State of São Paulo -, were around R$ 20 milhões, and group estimates show that this plant will represent 8% of EMS-Eftec volume of business.
The Swiss company Barry Callebaut, major chocolate producer in the world, opened in May 2010, a gourmet chocolates production plant in the city of Extrema, State of Minas Gerais. The investments surpass R$ 28 million for this site, which will have 20,000 ton capacity of production per year.
Business Opportunities
The city of Rio de Janeiro will host the first-ever Olympic Games in South America August-September 2016, as well as some of the games for the 2014 World Cup. These two events will generate numerous trade and investment opportunities in several areas, for both games and the city.
The state government of Rio de Janeiro estimates that investments from 2010-2016 will reach US$50 billion in infrastructure, construction, transportation, public security, education and training, among others. Most of those investments will occur through Public-Private Partnerships (PPPs) under Brazil's Growth Acceleration Program (PAC).
Investments
According to the Brazilian Central Bank, Switzerland is among the 16 major investors in Brazil, with direct investments in the region of US$ 2 billion for the period of 2007 up to 2009. Only in 2009, direct investments from Switzerland in Brazil totaled US$ 376.7 million.In 2008, Switzerland had CHF 5.5 billion (US$ 6 billion) in direct investments mainly from the USA. In comparison to 2007, the foreign direct investments shrunk 92% due to the global financial crisis. Some Swiss market segments that are granted investment incentives are: biotechnology, nanotechnology, medical equipment, and communication technology.
Brazil is the world's largest exporter of orange juice, coffee, sugar, soybean, tobacco, meat and iron ore. It also detains virtually half of the global regional jet market, and ranks among the leading countries in several segments, such as shoes and soft drinks (3rd), stones, motorcycles and rubber (5th), cosmetics (6th), pulp and paper (7th), steel (8th), textiles (8th) and others. It is the world's third largest consumer of agricultural defensives, and the fourth largest consumer of fertilizers. The country is home to the second largest natural forest reserve, has the third largest bauxite reserve, and is the fifth largest consumer of mobile phones. It ranks first in aluminum can recycling. It is also the world's largest producer of precious stones, although it is not among the world's major jewel manufacturers.
Despite all these, Brazil needs to invest more in energy, water/sewage treatment, roads, railroads and waterways, airports and housing. Some markets with expansion potential are: telecommunications, IT, financial, semiconductors, infrastructure, bioenergetics, education, tourism and leisure.
The country offers many opportunities for companies interested in exploring alternative energy sources, capable of generating carbon credits, including biofuels (ethanol and biodiesel), and wind and solar energy.
The table below shows the announced investments per sector, which had a strong increase between 2002 and 2005, and estimates for 2007 to 2010:
| Investments growth per Sector - 2007-2010/2002-2005 | |||
| Sectors | Investment (R$ billion) | Estimated Growth (% per year) | |
| Made 2002-2005 | Estimate 2007-2010 | ||
| Industry | 207.0 | 380.2 | 12.9 |
| Oil & Gas | 99.2 | 183.6 | 13.1 |
| Ethanol / Sugar | 12.5 | 20.5 | 10.3 |
| Mining | 29.8 | 52.7 | 12.1 |
| Siderurgy | 14.4 | 37.1 | 20.8 |
| Petrochemical | 8.8 | 17.6 | 14.8 |
| Pharmaceutical | 3.9 | 4.6 | 3.4 |
| Pulp and Paper | 9.2 | 20.0 | 16.9 |
| Electronics | 8.2 | 15.6 | 13.9 |
| Automotive | 20.9 | 28.5 | 6.4 |
| Infrastructure | 124.8 | 197.9 | 9.7 |
| Electric Power | 40.8 | 88.2 | 16.6 |
| Communication | 58.7 | 58.8 | 0.0 |
| Sewage | 16.3 | 38.1 | 18.5 |
| Railways | 7.7 | 11.0 | 7.4 |
| Seaports | 1.3 | 1.9 | 7.4 |
| Services | 1.6 | 2.6 | 10.0 |
| Software | 1.6 | 2.6 | 10.0 |
| Civil Construction | 316.7 | 470.0 | 8.2 |
| Residential construction | 316.7 | 470.0 | 8.2 |
| Total | 650.1 | 1,050.6 | 10.1 |
Source: Anfavea, IBGE, IBS, Petrobrás, ONIP, Teleco, Telebrasil, ONS, EPE, ANTT, Almeida e Negrão (2005) e BNDES.
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