mato_grosso_land_of_opportunities
TRANSCRIPT
MATO GROSSO “Land of Opportuni5es”
Gabriel Prado de Barros March, 2015
Gabriel Prado de Barros • Master in Interna5onal Business
• Experience: Aponia Data Solu-on (Big Data);
Teor Marke-ng Consul-ng Group;
• Family business: CaLle
• Born & raised in Cuiabá, Mato Grosso
Objec5ve
The purpose of this presenta5on is to create a series of business opportuni5es for investors and to build a bridge
between Mato Grosso and foreign capital.
Execu5ve Summary
Overview of Brazil’s Economy
Commodi5es & Export Economy
Mato Grosso
Business Opportuni5es
Overview of Brazil’s Economy
Brazil’s Economy
Source: USDA, FAO, IBGE, Datafolha hEp://www.tradingeconomics.com/brazil/gdp-‐growth .
• The seventh largest economy in the world.
• Brazil has an export-‐oriented economy.
• The country’s trade is driven by its extensive natural resources, agricultural diversity and manufacturing produc5on.
• Bureaucracy, corrup5on and weak infrastructure remain the biggest obstacles to
economic development.
Commodi5es & Export Economy
Fonte: USDA (jan/2012) Nota: 2011 (carnes) e safra 2010/11 (demais produtos), Elab por DEAGRO/FIESP
Brazil is Driven by Commodi5es
• Iron Ore: 13.25%
• Crude Petroleum: 8.37%
• Soybeans: 7.04%
• Raw Sugar: 5.33%
• Poultry Meat: 2.84%
• Soybeans Meal: 2.71%
hEp://atlas.media.mit.edu/explore/tree_map/hs/export/bra/all/show/2012/
# Name Value (USD) Percent 1 Iron Ore $32,738,933,263.29 13.25% 2 Crude Petroleum $20,694,869,420.72 8.37% 3 Soybeans $17,404,229,338.85 7.04% 4 Raw Sugar $13,176,481,805.36 5.33% 5 Poultry Meat $7,031,095,420.08 2.84% 6 Soybean Meal $6,707,239,692.56 2.71% 7 Coffee $6,221,145,399.20 2.52% 8 Corn $5,357,176,321.51 2.17% 9 Planes, Helicopters, and/or Spacecrai $5,126,418,316.41 2.07% 10 Refined Petroleum $5,025,095,500.99 2.03%
Products Exported by Brazil
Total Country Trade: $ 247 B
hEp://atlas.media.mit.edu/explore/tree_map/hs/export/bra/all/show/2012/
Products and Market Size of Brazil’s Exports
*Export RCA: Revealed compara-ve advantage
hEp://atlas.media.mit.edu/explore/tree_map/hs/export/bra/show/all/2012/
• China: 16.71%
• United States: 11.09%
• Argen5na: 7.20%
• Netherlands: 5.41%
• Germany: 3.86%
Export Des5na5ons of Brazil
hEp://atlas.media.mit.edu/explore/tree_map/hs/export/bra/show/all/2012/
Export Des5na5ons of Brazil
hEp://atlas.media.mit.edu/explore/tree_map/hs/export/bra/chn/show/2012/
Brazil’s Main Trade Partner: China
Mato Grosso
Source: CONAB, IBGE e Imea
Brazil’s Commodi5es Leader
• Mato Grosso accounts for 9% of total soybean produc5on in the world.
• Mato Grosso accounts for 3.9% of the world’s coLon
produc5on (9th biggest worldwide).
• The state of Mato Grosso produced over 45 million tons of total commodi5es in 2014.
• The State of Mato Grosso is the largest overall exporter in Brazil’s Midwest and one of the largest in Brazil.
2013
Millions
1st
.
. .
rd
Source: hEp://www.unitedworld-‐usa.com/usatoday/brazil/20mato_grosso.htm And Source: CONAB, IBGE e Imea
• Agricultural sector represents over 50% of the state’s GDP
• Economic growth rate of 124% between 2002 and 2008
• The state boasts the unique characteris5c of being home to three of
Brazil’s six biomes. (Amazon rainforest, tropical wetland, tropical savanna
known as the Cerrado)
• Cuiabá, the capital of Mato Grosso was one of the host ci5es for the World Cup
A Unique State
Source: Imea
Development of Agricultural Produc5on in Mato Grosso
Source: IMEA Report – Dec -‐ 19 -‐ 2014 #07
The Economic Condi5ons
• 2014 -‐ The total revenue of all commodi5es was US $ 14.50 billion, US $ 1.3 billion increase over 2013.
• 2014 -‐ Soybeans had the highest produc5on and revenue in history. Genera5ng a total of US $ 7.3 billion, US $ 800 million more than in 2013.
• 2014 -‐ beef caLle gross value produc5on increased 16%, genera5ng a revenue of US $
3 billion. • Soybeans are expected to yield a record produc5on for the 2014/15 crop year along
with a higher revenue.
Source: Imea
Total Agro Produc5on for the Next 10 Years (tons)
Corn Projec5ons Soybeans Projec5ons
• Mato Grosso has a maximum poten5al of 13.4 million hectares in open areas. • Increase in the grain produc5on area, poten5al of 5 million hectares (52%) in the
coming years.
• Poten5al to implement new technologies will increase produc5on.
A Tropical Texas, with Room to Grow.
Source: AgroMT_outlook_2022
Business Opportuni5es
Produc5on & Real Estate
Financial Opera5ons: Credit & Trading
Grains Storage
Infrastructure
Produc5on & Real Estate
Avarege Yield: Source: Kleffmann Group / Standard Devia-on: Source: Burgo, Marcelo Nery , ESALQ/USP Piracicaba, 2005
Mato Grosso: Land & Opportuni5es
Source: Imea, hEp://whotv.com/2014/08/04/agribusiness-‐lack-‐of-‐infrastructure-‐hurts-‐brazil-‐bean-‐exports/
Land Uses & Occupa5on
Conserva-on Uni-es – 6% Preserva-on areas by producers -‐ 41% Agricultural – 9% Pasture – 27% Others uses – 2% Ci-es of Mato Grosso
Indigenous Lands – 15%
Other States
"In the state of Iowa, the average farm is about 333 acres, or about 250 football fields. In the state of Mato Grosso the average farm size is about 2,100 acres". (whotv.com)
Financial Opera5ons: Credit & Trading
Trade Balance of Mato Grosso (Millions US$)
Source: AliceWeb, MAPA.
In 2013, 47% of grain produc-on was exported.
Millions US$
• High US Dollar
• High Brazilian interest rate
• Farmers need credit
• High interna-onal demand for grains
• Bureaucracy
• Lack of infrastructure
• Price of commodi-es
• The state accounts for over 30% of the Brazil’s Midwest exports
• Soybeans, Corn, CoEon and Meat products are the most commercialized
• The state’s largest trading partners in terms of exports, con-nue to be China, the Netherlands , Thailand, Spain, Venezuela, Iran and the United Kingdom.
Opportuni5es & Risks
Foreign Trade
Source: SICME – Secretaria de Indústria, Comércio, Minas e Energia do Estado de Mato Grosso *FOB: Free On Board: Responsibility for freight costs
Grain Storage
Storage Capacity
Source: CONAB, Elab: Agroconsult
Soybeans and corn produc5on MMT % capacity /produc5on Sta5c capacity of bulk
Grain Storage
• There is an under capacity of 34% compared to produc5on.
• The state has 2,143 registered warehouses. • The most affected is Sorriso with a maximum deficit of 7 million tons of
storage.
Source: Mapping private, commercial, and coopera-ve storage in Mato Grosso. 2013. By: João Antonio Vilela Medeiros1 Peter D. Goldsmith
95% of the grain storage in Brazil is own by private sector
Coopera-ves Govern Private Sector • There is clear evidence of a shortage of storage,
par5cularly private and coopera5ve, as grain produc5on rises in the state.
Infrastructure
Transporta5on Infrastructure – Main Problems
• High Cost of Construc-on of New Roads
• High Rail Costs • Deficient Port System
• Inefficient Transporta-on Mix
Source: Anuário Exame, 2008
Transporta5on Infrastructure
Inefficient Transporta5on Mix
Source: IMEA
Source: ANTF / COPPE
Comparison Between Brazil and USA
Poten5al Waterways in Brazil
Source: ANTAQ.
• Over 27,000 miles of Poten-al Waterways
• Only 8,000 miles of effec-ve
Waterways
• According to the federal government, railroads and waterways will represent 35% and 29% of the Brazilian general cargo transporta-on by 2025.
Source: Centrogrãos, Caramuru and Soy Transport Coali-on, BCR Rosário
Transporta5on Cost
Truck/Road
Waterways
Truck/Road
Next Steps
• Going to Mato Grosso April 24th • Gathering all possible informa-on on site • Find/ tes-fy the right opportuni-es in the State • Create strategic roadmap for inves-ng in Mato
Grosso
QUESTIONS ?
Sources
LINKS
hEp://whotv.com/2014/08/04/agribusiness-‐lack-‐of-‐infrastructure-‐hurts-‐brazil-‐bean-‐exports/
www.tradingeconomics.com/brazil/gdp-‐growth
hEp://atlas.media.mit.edu/explore/tree_map/hs/export/bra/chn/show/2012/
hEp://www.unitedworld-‐usa.com/usatoday/brazil/20mato_grosso.htm
hEp://www.aprosoja.com.br/sobre-‐a-‐soja/Os-‐usos-‐da-‐Soja
www.tradingeconomics.com/brazil/gdp-‐growth
hEp://whotv.com/2014/08/04/agribusiness-‐lack-‐of-‐infrastructure-‐hurts-‐brazil-‐bean-‐exports/
Bonus Videos
hEp://www.ny-mes.com/video/sports/100000002969642/women-‐as-‐sumo-‐warriors.html?playlistId=1194811622289
hEps://www.youtube.com/watch?v=v_oMn1kXVVk
The Smallest World Cup Host City – Video by NY Times
World Cup Host City: Cuiaba – Video by FIFA
hEps://www.youtube.com/watch?v=JN0thEOL99M
Harvest od Soybeans in Mato Grosso
• 44% Export of grain in natura (raw)
• 7% Other uses (stock)
• 49% Processing
(1) 79% Soybeans meal (bran)
• 52% Export
• 48% Domes-c consump-on (animal
feed)
(2) 21% Soybeans Oil
• 23% Export
• 77& Domes-c Consump-on (Food
and biodiesel)
Des5na5on and use of Brazilian Soybeans
Example: Soybeans Bonus
Source: hEp://www.aprosoja.com.br/sobre-‐a-‐soja/Os-‐usos-‐da-‐Soja