A Mutual Attraction … by Michelle Tirado
There is no question about it, Brazilians love Central Florida – and we are not just talking about the vacationers. From the Space Coast to Tampa Bay, Brazilian-owned businesses in a wide range of industries are establishing a presence throughout the region. And the feelings are undoubtedly mutual.
Why the attraction between the two? Earl Crittenden, co-chair and chief protocol officer of Orlando Mayor Buddy Dyer’s International Advisory Board, said for Brazilian companies, Central Florida is home to one of the busiest convention centers in the world, Orange County Convention Center, and the third largest destination airport in the United States, Orlando International Airport. TAM Airlines, Brazil’s most used airline, now offers daily, non-stop service to Rio de Janeiro and São Paulo. On top of that, it boasts two ports and four major highways – I-95, I-75, I-4 and the Florida Turnpike. Just as important as the logistical advantages, the area has a vast pool of skilled workers from which to draw.
Exports and Imports
Enterprise Florida, Inc. (EFI), a partnership between Florida’s business and government leaders and the principal economic development organization for the state, has seen an increase of Brazilian companies with an interest in doing business in Central Florida – across the state there are already about 3,500 in Florida.
EFI believes Orlando is second only to South Florida as the first choice in location for Brazilian companies looking to do business in the state. Why? Central Florida is a large, dynamic and diversified market that offers economic opportunities to foreign business. Also, the I-4 corridor is rich in technology companies and the region offers the opportunity to do business with not only Florida companies and residents, but also millions of international visitors.
Gray Swoope, Florida’s Secretary of Commerce and president and CEO of EFI, emphasized that Brazil has a connection with the entire state – it is Florida’s no. 1 trade partner. According to the 2012 Florida International Business Highlights: Florida-Origin Exports Merchandise Trade & Foreign Direct Investment, a report by EFI, the state’s leading merchandise export market is Brazil, with $15.8 billion in exports. It ranks number five in imports, with $3.8 billion in merchandise coming into the state. “From a standpoint of Brazil companies doing business with the United States, Florida is a great entry point,” Swoope said.
Come to Play, Come to Stay
Tourism is such a big economic force in Central Florida, and Brazilians are helping to power it. “Brazil is a huge market for Florida,” Crittenden said. “We had in Orlando 55 million visitors last year, and a large part of them are Brazilians – they either come here as visitors or as business owners.” Not surprisingly, many Brazilian companies, including a slew of restaurants, have opened locations in the region’s tourist zones, particularly in Tampa and Orlando. For example, Fogo de Chao, a Churrascaria-style steakhouse located on International Drive, opened last year, and Giraffas, a fast-casual, Brazil-based chain, opened its doors on International Drive in May.
Outside of Orlando, Brazil-owned businesses in an array of industries are setting up shop. Swoope listed three examples: Gerdau Long Steel North America in Tampa; TAM Airlines, which added Orlando International Airport to its destination roster in 2008; and Embraer in Melbourne.
Embraer, the São José dos Campos, Brazil-headquartered company that designs, develops, manufactures and markets aircraft and aviation systems, opened an assembly facility on the Space Coast in 2011 for its Phenom business jets. Last year, the company announced the launch of an engineering and technology center in Melbourne. “I think that is a game changer,” Swoope said. “Not only are you making the planes there now, but you just brought the component of design for future aircraft. Now you have a complete cluster of Embraer there.”
The Southern Giant
Brazil is the fifth-largest country in the world in area and population, with 192 million people, according to the U.S. Commercial Service. Its gross domestic product was about $2.2 trillion in 2012, reports IBGE, the nation’s census bureau. Its GDP grew 2.7 percent in 2011, 7.5 percent in 2010 and 0.9 percent in 2012. An economic giant in all respects, it is no wonder that Central Florida businesses want a footing in this market.
“Our companies see this growing, dynamic economy – this stable economy, this growing middle class,” Swoope said. “If you look at the state of Florida as a whole, we have 58,000 businesses in export, and it is only second to California. Most of those are small and medium-size enterprises. I suspect a large number are Central Florida businesses.”
Swoope listed some of the types of companies/industries that match up well with Brazil. Among them: infrastructure and infrastructure support; logistics and distribution; technology, such as IT and digital media; and health care.
Entering the Brazil market is not easy, however. EFI recommends that companies interested in doing business there make an effort to understand the culture, markets and regulations and that they work with Brazilian distributors or strategic alliance partners. Further, it suggests that companies take advantage of the services offered by EFI and the U.S. Department of Commerce. In addition to organizing trade missions to Brazil, EFI has an office in São Paulo to assist new-to-market Florida producers with penetrating the Brazilian market through the Florida Platinum Key Program, in partnership with the U.S. Commercial Service.
Finding the Business Niche
Maitland-based Genesis Water Technologies (GWT), a water treatment, purification and filtration products provider, is one company that used EFI’s services to enter the Brazil market. Nick Nicholas, sales manager/business development, said, “We took advantage of the EFI rep in Brazil. That was our initial contact [with the country].” Last year, GWT secured partnerships with two companies, one in São Paulo and the other in Mato Grosso, located in western Brazil, to distribute its products. Nicholas said it is taking a little time to grow its client base, but it has received its first orders.
Noting that Brazil has water challenges and a need for technology to overcome them, Nicholas anticipates big returns with these relationships. “Each rep has focused not only on the different regions of the country but in different industries.”
Hernon Manufacturing, a Sanford-based manufacturer of adhesives, sealants and dispensing equipment, jumped into the Brazil market about five years ago. Edgardo Rodriguez, director of sales and marketing, said initially it opened an office there, yet he admitted the move did not deliver the expected results. They also tried working with an independent representative, an arrangement that did not work out very well either. “The biggest problem is the red tape and duties of the country. They make it hard.”
A couple of years ago, after the company participated in a trade mission to Brazil organized by EFI, the company decided to take a partnership-licensing approach, inking a joint venture agreement in 2012 with Redelease, a distributor of specialty chemicals in Brazil. The new company resulting from the joint venture, based in São Paulo and called Hernon-Redelease, is majority owned by Redelease. Rodriguez said the partnership has been very successful thus far mainly because both owners have a vested interest. When asked why the company went into Brazil, Rodriguez said, “It is an emerging market. You have to go, but you have to go very carefully.”