brazil

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A
GLOBAL/COUNTRY STUDY AND REPORT
ON
“In Depth Study of BRAZIL Country”
SUBMITTED TO
GUJARAT TECHNOLOGICAL UNIVERSITY
IN PARTIAL FULFILLMENT OF THE
REQUIRQMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
UNDER THE GUIDENCE OF
Miss. Chhaya Patel (Asst. Professor)
SUBMITTED BY
Smt. K.K.PATEL MBA/MCA COLLEGE (PALASAR)
MBA PROGRAMME
AFFILIATED TO GUJARAT TECHNOLOGICAL UNIVERSITY
AHMADABAD
March,2013

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CONTENT:
SR. NO.
PARTICULAR
PAGE NO.
1
ECONOMIC OVERVIEW OF THE BRAZIL COUNTRY
1.1
GEOGRAPHY
3
1.2
DEMOGRAPHIC
4
1.3
TRADE POLICY
9
1.4
MACROECONOMIC POLICY, MONETARY POLICY AND FISCAL POLICY
11
1.5
POLITICAL
13
1.6
ECONOMIC OVERVIEW
15
1.7
SOCIAL FACTORS
17
1.8
COMMUNICATION
19
1.9
EDUCATION SECTORS
20
2
PESTLE ANALYSIS
21
2.1
Political factor
21
2.2
Economic Factors
22
2.3
Socio cultural Factors
23
2.4
Technological Factors
24
2.5
Environmental Analysis
24
2.6
Legal Environment
25
2.7
Political Environment
26
3.
SWOT ANALYSIS
27
PART-2
28
1
Petrochemical Industry
28
2
Food And Beverage Industry
54
PART-3
1
Findings
75
2
Suggestion
76
3
Conclusion
77
4
Bibliography
78

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1.1. GEOGRAPHY
The country of Brazil occupies roughly half of South America, bordering the Atlantic Ocean. Brazil covers a total area of 8,514,215 km (3,287,357 sq mi) which includes 8,456,510 km (3,265,080 sq mi) of land and 55,455 km (21,411 sq mi) of water. The highest point in Brazil is Pico da Neblina at 2,994 m (9,823 ft). Brazil is bordered by the countries of Argentina, Bolivia, Colombia, French Guiana, Guyana, Paraguay, Peru, Suriname, Uruguay and Venezuela.
Much of the climate is tropical, with the south being relatively temperate. The largest river in Brazil, and one of the longest in the world, is the Amazon. The rainforest that covers the Amazon Basin constitutes almost half of the rainforests on Earth.

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1.2 DEMOGRAPHIC
1.2.1 PHYSICAL AND DEMOGRAPHIC SETTING
Brazil‟s territorial extent of 3.27 million square miles makes it the fifth largest country of the world, surpassed only by Russia, Canada, China,and the United States. It covers 47 percent of South America. The largest pro- portion of the territory is made up of geologically ancient highlands. About 57 percent of the land is on a plateau varying between 650 and 3,000 feet above sea level; 40 percent consists of lowlands with an elevation of less than 650 feet; and 3 percent exceeds 3,000 feet. North of the city of Salvador there is a gradual rise from the coast to the interior. However, when approaching Brazil from the Atlantic along the central and southern coasts, one has the impression of a mountainous country, because the high- land plateau of central and southern Brazil drops off sharply into the Atlantic. This wall-like slope is called the Great Escarpment.
This natural barrier has made access to the interior difficult and has often been cited as a major reason for the slow development of the interior of the south-central plateau prior to the twentieth century. With the exception of the Amazon, most of the principal Brazilian river systems have their sources in central and southeastern Brazil, many fairly close to the ocean. Because the rivers drain inward, there is no natural focus of routes in the most dynamic area of the country; therefore, river transportation has not played an important role in the development of Brazil. The Parana River system is fed by tributaries that flow westward into the interior until they reach the main river, which flows southward toward Argentina.
The Sao Francisco River has its source in the South. It flows northward, paralleling the coast for more than 1,000 miles before turning eastward. Most of the river systems descend rapidly as they pass through the Great Escarpment, making interior navigation for ocean vessels impossible. For instance, the Sao Francisco River is navigable for about 190 miles into the interior, until shortly before the Paulo Afonso Falls. Only the Amazon River is navigable far into the interior, and it unites a sparsely populated, underdeveloped, and unexploited region of Brazil. Brazil is mainly a tropical country, and its climates contain few extremes, but:
The average temperature on the Amazon at Santarem, a few degrees from the equator, is 78.1 degrees; in the dry Northeast, the highest temperature recorded is 106.7 degrees, but further southward, along the coast, the maximum temperatures are much lower. The average in Rio de Janeiro in the warmest month is 79 degrees. In the highlands of the interior, the temperatures are lower than at the same latitudes on the coast. Only the states south of Paulo ever experience frost. Rainfall is adequate in most of Brazil. Any deficiency is limited to part of the Northeast, where there are areas that receive less than 10 inches per year. Most of the Northeast receives between 20 and 25 inches of precipitation the principal problem of that region is rainfall irregularity: variations between excessive rains and droughts. Very moist areas, with more than 80 inches of rainfall a year, exist in four regions: the upper Amazon lowlands, the coast from Belem northward, scattered parts of the Great Escarpment, and a small section in the western part of the state of Paraná.

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1.2.2 NATURAL RESOURCES
Brazil has an abundance of many different types of mineral resources. It has an immense reserve of iron ore (the potential reserves in 2010 were thought to be about 48 billion tons), manganese (in 2010 estimated reserves were about 208 million tons), and other industrial metals. The country also possesses substantial quantities of bauxite, copper, lead, zinc, nickel, tungsten, tin, uranium, quartz crystals, industrial diamonds, and gemstones. Until the late 1960s, knowledge of Brazil‟s total mineral reserves was still limited. The use of modern surveying and prospecting techniques (e.g., the use of satellites) has resulted in substantial new discoveries. For example, until recently, most known mineral deposits were thought to be located in the mountain range running through central Brazil (especially in the state of Minas Geris). In 1967, however, huge deposits of iron ore (estimated at 18 billion tons) were discovered in the Serra dos Carajas, located in the Amazon region. Also in the late 1960s, the Amazon was found to contain large deposits of bauxite. Tin reserves near the Bolivian border have been estimated to be larger than those of Bolivia, and in the 1970s substantial copper deposits were found in the state of Bahia.
In the decades since World War II, there has been a dramatic reshaping of Brazil‟s sources of energy consumption. In 1946, 70 percent of the country‟s energy supply was drawn from firewood and charcoal. By 2003 however, 92 percent was drawn from oil and hydroelectric power. Unfortunately, the fuel resources of the country have not matched its mineral resources. Until recently, the only known coal deposits were in the southern state of Santa Catarina. This coal is of poor quality, containing a high proportion of ash and sulfur, and therefore cannot be fully used for production of coking coal by the steel industry. About 65 percent of metallurgical coal requirements are met by imports. In the 1970s, some new coal deposits were discovered deep in the Amazon region but have yet to be fully exploited.Brazil‟s known oil reserves were inadequate for its needs for a longtime. Until the early 1970s, most of the known reserves were located in thestates of Bahia and Sergipe, but domestic production from these sources furnished only 20 percent of the country‟s needs. Offshore exploration by PETROBRAS, a government-owned company, resulted in new discoveries near the town of Campos in the state of Rio de Janeiro, in the state of Sergipe, and near the mouth of the Amazon. The size of these discoveries was considerable. By 2009, Brazil‟s proven oil reserves were estimated at 1 billion barrels. By 2003, domestic production had reached 88 percent of domestic consumption, and in 2007, Brazil is self- sufficient for petroleum. The hydroelectric potential of Brazil is one of the largest in the world, at an estimated 150,000 megawatts. Until the post–World War II period, the best sites of potential hydroelectric power were considered to be too remote from the major population centers for development, but since the 1950s, the development of such sites has proceeded rapidly with the construction of the hydroelectric works at Paulo Afonso and Boa Esperança in the Northeast, Furras and Ilha Solteira in the Southeast, and Tres Marias in the state of Minas Gerais. In the mid-1970s, work began on what was then the world‟s largest hydroelectric project at Itaipu on the Paraguayan border, and in 1983 the project‟s first turbines were brought online. By 2003 about 55 percent of the country‟s hydroelectric potential was being utilized.

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1.2.3 POPULATION
In 2010 the population of Brazil was estimated at 188 million, making Brazil the fifth largest nation in terms of population size. Given the country‟s enormous territory, its population density is relatively low. Brazil had an average 21 persons per square kilometer in 2009 (compared with 14 in Argentina, 53 in Mexico, and 37 in Colombia). However, considerable variation can be found in population density within Brazil, ranging from 3.3 persons per square kilometer in the Amazon region, to 30.7 in the Northeast, and 149 in the state of Sao Paulo. In 2001, 7.6 percent of the population lived in the Amazon region, 28.1 percent in the Northeast, 42.6 percent in the Southeast, 14.9 percent in the South, and 6.8 percent in the Center-West. A distinctive feature of the regional distribution of Brazil‟s population is the degree of concentration within a few hundred miles of the seacoast. Population penetration into the interior has been notable only in the twentieth century, particularly in the South. The building of the interior capital city of Brasilia (which was inaugurated in 1960), the connecting roads to that city, and the high rate of road construction in the 1960s and 1970s have substantially increased the migration to the interior.
The growth rate of the population began at a high level in the middle of the twentieth century but gradually declined; from 3 percent per year in the 1950s, to 2.9 percent in the 1960s, then 2.5 percent in the 1970s, 2 percent in the 1980s, and finally, 1.2 percent in the period of 2000_). The high growth rates in the middle of the twentieth century resulted from a continuing high birthrate coupled with a rapidly declining mortality rate. This resulted in a high proportion of the population being represented by the demographic group aged 14 years and younger; 39.5 percent of the population was in this dependent group in 1995, although this number declined significantly to 37.7 percent by 2009 (compared with 21.6 percent in the United States and 15.2 percent in Brazil). The literacy rate for Brazilians 15 years and older increased from 49 percent in 1950, to 61 percent in 1970, and to 88 percent in 2004. However,when functional illiteracy is taken into account, the literacy rate decreases to 75 percent. The growth of literacy is closely connected with the recent high growth rates of educational enrollment. By 2004, primary school enrollment as a percentage of the 7_ year age group stood at 99.5 percent; secondary school enrollment for the 14 year age group was 74.9 percent, and higher education enrollment for the 20 year age group was 20.1 percent. The high proportion of the population in the younger age groups accounts, in part, for the low labor force participation ratio. This was 32.9 percent in 1950, shrank to 31.8 percent in 1970, and rose to 45.9 percent in 1995 and 49.1 percent in 2009. The racial composition of Brazil is quite varied. One expert on Brazil‟s population has stated: Until the latter part of the nineteenth century, the population was mainly made up of descendants of Portuguese, Africans, and Amerindians.
During colonial times, and into the nineteenth century, a considerable amount of miscegenation took place, resulting in a large proportion of today‟s population being of mixed ancestry. In the latter part of the nineteenth century and first decade of the twentieth century, heavy immigration from Italy, Portugal, Spain, Brazil, Poland, and the Middle East occurred. These immigrants settled mainly in southeastern and southern Brazil. In the second decade of the twentieth century, large numbers of Japanese immigrated, settling mainly in

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the states of São Paulo and Paraná. Today the estimated number of Brazilians of Japanese descent is over 800,000. This diversity in the background of the population has not prevented Brazil from achieving a high degree of cultural unity. With the exception of a small number of Indians deep in the Amazon region, all Brazilians speak Portuguese, with small regional variations in accents (possibly less than in the United States). According to one of the leading interpreters of Brazilian society.
1.2.4 ENVIRONMENT
Brazil's environment is one of the richest in the world. Brazil‟s natural wealth includes not only the dense tropical rainforests of the Amazon, but also the important biomes of the savannah-like Cerrado , the arid scrublands of the Caatinga, the Atlantic Forest, the grasslands of the Pampa and the wetlands of the Pantanal. Much of Brazil‟s fauna and flora is found nowhere else on earth, its ecosystems contains more than 15% of the plant and animal species known to science . Brazil also holds 12% of the worlds available freshwater. According to the Ministry of the Environment, the value of environmental services rendered by Brazil's ecosystems (in terms of mega-biodiversity conservation and carbon sequestration) is several trillion euro per year. Therefore Brazil has a key and strategic role to play on a global scale, a role which the country has assumed since it is party to a number of international conventions on environmental issues (biodiversity, climate change/Kyoto Protocol, desertification, endangered species, etc.) and participates actively in international conferences on the environment.
Following the Conference on Environment and Development held in Rio in 1992 and following broad internal consultations, the Brazilian Agenda 21 was drawn up to redefine the country's development model, introducing the concept of sustainability. The main priorities of this document were integrated in the 2004-2007 PPA. But although Brazil has an ambitious environmental agenda and a wide variety of environmental legislation, effective implementation is still lagging behind. Although the Ministry of the Environment endeavors to promote the environment as a horizontal issue that should be taken into account in all important public policies, other Ministries still consider the environment as an impediment to economic growth.
Brazil's Amazon basin deserves a special mention since it covers 6.5 million km², i.e. around 60% of the country's territory. It is also one of the world‟s most biodiversity-rich ecosystems and plays an important role in the global cycle. The FAO‟s Forest Resource Assessment indicates an average annual loss of 13,500 km² for the period 1990-2009 and 18,000 km² for 2000-2009 in Amazonia. Several schemes are being implemented to curb deforestation, such as the Programme for Protection of Amazon Areas, or the Sustainable Amazon Programme. Deforestation in the Amazon region and elsewhere in Brazil is mainly due to economic pressures (expansion of the surface dedicated to agriculture, infrastructure works like roads or dams to improve production movements, activity in the timber industry in the Amazon region, tourism in Pantanal or the Atlantic forest, etc.) and to urbanization. Deforestation and the vigorous expansion of large-scale agriculture (in particular of soy, maize and other grains) - where use of genetically modified seeds has grown very quickly in recent years - and of the

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cattle-breeding have led to a loss of biodiversity in vast areas. Deforestation is also providing around 60% of Brazil‟s greenhouse gas emissions and more than 3% of global greenhouse gas emissions. The impacts of climate change are likely to affect Brazil‟s natural ecosystems – increasing the risk of biodiversity loss and sectors related to primary production. Water resources are at risk in many areas. Human health and human settlements, especially in coastal lowlands and environmentally and socio-economically marginal areas, also are vulnerable. There are indications that global climate change and deforestation may lead to major shifts in the hydrological system of the Amazon, with potentially catastrophic consequences for the rainforest and the whole region.

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1.3 TRADE POLICY
Brazil faces several trade policy options. We evaluate those options from the perspective of the welfare of all potential partners. We also track impacts on the poor in Brazil, to determine which trade policy helps most in terms of poverty reduction in Brazil. Our primary policy focus is to see if there is a trade-off between aggregate welfare gains to Brazil from trade liberalization and the welfare gains to the poor. We conclude that there is no such trade-off, and explain why. As part of the MERCOSUR customs union along with Argentina, Uruguay and Paraguay, Brazil is engaged in negotiations to implement the Free Trade Agreement of the Americas (FTAA). In addition, MERCOSUR is negotiating a potential free trade agreement with the European Union (EU), along with less notable regional arrangements. Moreover, Brazil has supported further multilateral negotiations within the World Trade Organization (WTO).
However, Brazil is concerned that these regional integration initiatives will provide much less market access than agreements that do not constrain exports of partner countries. Notably, significantly improved agricultural access to EU markets will be very difficult to achieve for the usual internal EU political reasons. As a major agricultural exporter, Brazil therefore believes that the best negotiating forum for obtaining freer agricultural markets is the WTO. Moreover, antidumping and stringent rules of origin may limit access to the markets of the main Northern partners in these agreements. The analysis of Harrison, Rutherford and Tar [2002] for Chile, we assess the impact on Brazil of these key trade policy options.
We extend that analysis by evaluating the value of trade policy options to Brazil if the key Northern partner denies access to specific products. In the case of the EU, we focus on agriculture protection and evaluate the impact of exclusion of preferred access to MERCOSUR exporters in the most highly protected agricultural products in the EU. In the case of the FTAA, we determine the impact on Brazil of denial of access to the most highly protected products in the US due to antidumping or restrictive rules of origin. A major policy concern is the link between trade policy changes and poverty in Brazil.
Although interest in the impact of trade policy on poverty has dramatically increased in recent years, general equilibrium modeling with multiple households to examine equity issues dates back to Adelman and Robinson [1978] and Piggott and Whaley [1985]. These studies pioneered one approach, which is to include multiple households within the general equilibrium model. This is typically done by aggregating households from a household survey into 5-40 households. In recent years modelers have focused more attention on the impact of trade policy on poverty, and Harrison, Rutherford and Tarr [2003] showed that a concern about equity is not equivalent to a concern about poverty. A second approach is to take price changes from a representative consumer general equilibrium model and feed these into a micro-simulation model of household behavior, such as in Chen and Ravallion [2003] and Bussolo and Lay [2003]. This approach allows examination of the diversity of impacts across households: even if the aggregated poor households gain, many individual poor households could lose. But it comes at the expense of ignoring feedback effects of the quantity changes on the equilibrium outcome in the general equilibrium model, and does not

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reconcile inconsistent information on household income from the national accounts and the household surveys.
Our analysis is in the tradition of the first approach. We incorporate 20 different types of Brazilian households in our model: ten rural and ten urban, where rural and urban households are further classified according to income levels. We are able to identify clear and crucial links between trade policy changes, factor intensities at the industry level, economy-wide factor returns and poverty the links suggested by the Hekscher-Ohlin and Stolper-Samuelson models. But we show that it is only as a result of the attention to detail in the empirical estimation of factor shares that we are able to obtain results that can be sensibly used to analyze the poverty dimension of trade policy changes. We also show the importance of agricultural liberalization for the poor.
Our aggregate policy results are that both the FTAA and the EU-MERCOSUR arrangements are net trade-creating for the countries involved, but that excluded countries almost always lose from the agreements. We estimate that multilateral trade liberalization of 50% in tariffs and export subsidies results in gains to the world more than four times greater than either the FTAA or the EU-MERCOSUR agreement. This shows the continued, potential importance to the world trading community of multilateral negotiations.
A fully implemented agreement with the EU is almost twice as valuable as the FTAA to Brazil due to access to highly protected agricultural markets in the EU. But if agriculture is excluded from the MERCOSUR-EU agreement, the agreement is of very little value to Brazil. Application of antidumping and restrictive rules of origin by the US against Brazil under the FTAA on the most protected products in the US also reduces the value of the FTAA to Brazil. Nonetheless, the FTAA still has significant value to Brazil since we assume that other markets in the Americas and the less protected sectors in the US remain open to Brazilian exporters.
Most of the trade policy options we evaluate result in a distribution of the gains to the different households that is progressive, such that the poorest households experience the greatest percentage increase in their incomes. Although Brazil has undertaken substantial trade liberalization in the 1990s, there remain vestiges of its import-substitution industrialization strategy of the 1960s. Trade policy reforms in Brazil tend to shift resources from capital intensive manufacturing toward unskilled labor intensive agriculture and less capital intensive manufacturing, thereby inducing an increase in the wage of unskilled labor relative to capital and skilled labor. This results in an increase in the incomes of the poorest households in Brazil relative to the richest. The percentage increase in the incomes of the eight poorest households is several times greater than the percentage increase in the income of the average for the economy as a whole.

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1.4 MACROECONOMIC POLICY, MONETARY POLICY AND FISCAL POLICY
Macroeconomic policy comprises monetary and fiscal policies, exchange rate regulations, credit and financial markets regulations, balance of payments measures (including the deregulation of the capital account), and in some instances, policies that regulate wages (and the wage norm). Also, the development of interdependent financial markets has made capital mobility and the reversal of capital flows a crucial frame of reference of macroeconomic policy. Thus, through changes in the money supply, the prime or inter-bank interest rate, the wage norm, exchange rates, fiscal revenues and public expenditures, macroeconomic policies determine the dynamics of aggregate consumption and investment, economic activity, the general price level, employment, productivity, production strategies and choice of technology, and, of course, resource management practices of all economic agents.
Macroeconomic policy impacts on the environment take place through a complex but effective process. Consequences for logging, mining, oil and gas industries, as well as fisheries are particularly important because these activities are close to the natural resource base and their activities impinge directly on the integrity of ecosystems. In addition, when these sectors are dominated by State-owned firms, their role in providing non-tax fiscal revenues (as well as in bridging the currency gap) is a potent driving force behind changes in technology and usage rates that can make all the difference between adequate environmental stewardship and deterioration of resources. In the case of manufacturing industries and the transportation sector, macroeconomic policies also have serious implications for emissions‟ mitigation and abatement, thus bringing new implications for the debate on global climate change.
In addition, macroeconomic policies also have important repercussions on many sectors and dimensions of the environment that rely on public funding to fulfill their objectives. An important example is the case of natural protected areas, biosphere reserves and funds for environmental remediation, monitoring and conservation. In many countries, natural protected areas are a fundamental policy instrument for biodiversity conservation, but in times of fiscal constraints, typically they occupy a secondary role and the required funding is not available. In addition, agricultural policies are negatively affected by the same curtailment of fiscal expenditures. For example, income deficiency payments (accepted by the Uruguay Round Agreement on Agriculture and now by the World Trade Organization and critical components of trade liberalization) respond to the rationale of fiscal policy rather than to the objectives of free trade. Their evolution in real value terms depends on the priorities of fiscal policies; if fiscal revenues are insufficient to generate a primary surplus, fiscal authorities may allow these income deficiency payments to fall behind inflation and thus, drop in real terms. This will put extra pressure on natural protected areas surrounded by localities with high social marginalization.
In a sense, macroeconomic policies embody a sort of “implicit environmental policy” that frequently contradicts the objectives of explicit policies for the environment. This is why lack of attention to macroeconomic policies can and will undermine efforts at understanding the

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root causes of environmental degradation. It also weakens our ability to orient policy-making in directions more consistent with the World Conservation Union‟s mandate and more generally with the needs of sustainable development in general. This 3I-C proposal is designed to fill this gap and to launch a new set of initiatives that will advance healthy environmental stewardship through sound macroeconomic policie

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1.5 POLITICAL
Brazil is a Federal Republic made up of 26 States, one Federal District (Brasília), and 5,560 municipalities. Brazil is a representative democracy, with a President who acts simultaneously as Head of State and of the Federal Government. All legislative and executive bodies, at Federal, State and municipal levels, are elected with four-year mandates. The federal legislative body is the National Congress, consisting of the Federal Senate and of the House of Representatives (Chamber of Deputies). Each State has a State legislature and a directly elected Governor, who heads the State executive and appoints its members. The Constitution provides for an independent judiciary. Today Brazil is a stabilised democracy with a well developed political and institutional system. Still, some limitations persist that are likely to have a negative effect on governance, human rights and citizens‟ security. The most significant challenges include:
(a) The difficulty of putting together stable parliamentary majorities in the framework of the current political system, which creates a variety of problems with fully exercising legislative and executive powers;
(b) The relatively fragile links between the three levels of government (Federal, State and municipal), which make it difficult to define and implement policies and reforms nationwide, to promote national integration and to encourage balanced development of the various regions;
(c) The frequent cases of corruption and unlawful use of public resources;
(d) The legal and regulatory complexity and the need to improve the functioning of the judiciary system, to increase the efficiency of the public administration and to enable citizens and economic operators fully to exercise their rights;
(e) The need to improve effective implementation of the existing legislation in the field of human rights. Excessive use of force by law enforcement officials, limited access to justice for the poorest and most vulnerable sectors of society, and abuse against indigenous people are other major causes of concern;
(f) Violence, which is particularly serious in big cities and frequently associated with (illegal) drug trafficking and social exclusion, generating a strong feeling of insecurity amongst citizens.
In recent years, Brazil has been implementing an increasingly assertive foreign policy, playing an active role in multilateral fore and positioning itself as a representative of emerging countries and as a staunch defender of poorer countries, particularly in Africa. In the context of the UN reform, Brazil has been lobbying intensively for a permanent seat on the UN Security Council, together with Brazil, India and Japan, within the G4 Group. Brazil is also actively lobbying for the dismantling of agricultural subsidies, within the G20Group at the WTO. Brazil is leading the UN peacekeeping force in Haiti. It should be underlined that on many major world issues Brazil‟s views converge with the EU‟s. Both Brazil and the EU

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believe that sustainable development can be better achieved in a multi-polar world. They also share the view that regional integration is the best way forward to achieve prosperity and peace. Their views also coincide on other issues of multilateral interest, such as the fight against poverty, climate change, peace and security.

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1.6 ECONOMIC OVERVIEW
Throughout the 1990s, growth was erratic and the period was marked by instability, inflation and macroeconomic volatility. In 1994 Brazil adopted the Plano Real and succeeded in controlling inflation, aligning the real on the US$. This led to a strong valuation of the real and adversely affected Brazil‟s trade balance. Brazil‟s financing needs increased and so did Brazil‟s external debt.
In 1999 the Government negotiated a fiscal adjustment programme with the IMF and launched a package of structural reforms to restore macroeconomic balances. These included the adoption of a floating exchange system for the real, an inflation-targeting regime, and a tight fiscal policy.
The new administration that came to power in 2003 is maintaining the prudent macroeconomic strategy that Brazil has been implementing since 1999 and continuing to give priority to macroeconomic stability. The new Government thus committed itself to keep a firm grip on inflation, and managed to achieve high primary surpluses (more than 4% of GDP). This cautious economic policy prompted a steep fall in the public debt/GDP ratio (to 51.8%) - and put Brazil in a position not to renew its agreement with the IMF, and even to repay all of its liabilities to the IMF (US $ 15.5 billion) in 2009, two years ahead of schedule, and to achieve the lowest country risk rating in its history. The structure of the Brazilian debt has also been improved with a smaller share of total debt now being denominated in foreign currency. In spite of these positive signs, public debt remains a source of vulnerability for the Brazilian economy.
The Government‟s record in meeting the budget targets has been achieved mainly by raising revenue, i.e. increasing the tax burden, and compressing public investment. Private investment has also been hampered by high interest rates. As a result, after a high growth rate The South American Community of Nations was established at the 3 South American Nations Summit in Cuzco in December 2004. This new regional integration system brings together all the countries of the South American continent, i.e. all the Mercosur and CAN countries plus Chile, Suriname and Guyana. Brazil‟s fiscal revenue ratio is close to 35 % of GDP. in 2004 (5.2%), fuelled by exceptionally favorable global economic conditions, the economy slowed down in 2009.
In 2004 the Brazilian economy ranked 14 worldwide, though its share of world trade remained limited (0.9%). Services accounted for around 75% of Brazil‟s GDP, industry 19% and agriculture 6%. In recent years Brazil has recorded significant trade surpluses and exports have contributed positively to Brazil‟s GDP growth; exports have been led mainly by transport equipment (including automotive and aircraft), meat and iron and steel. Significant productivity gains have been made in the agricultural sector turning Brazil into a major agricultural power Brazil‟s main trading partners in 2004 were the EU (26.8%) to which around 50% of Brazil‟s agricultural exports were bound the USA (21.9%), Argentina (6.9%), China (6.9%) and Japan (3.7%). Over recent years, the EU has registered significant trade deficits in favor of Brazil. Brazil is a leading destination for European investments, whose

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total stock in the country is close to €80 billion (one third of the total). In 2002, 52% of the investment flows to Brazil came from the EU. From 1996 to 2002, investment flows concentrated mainly on the tertiary sector.
Brazil imports oil but could become self-sufficient by the end of 2009 given the scale of investment recently made in this sector. Brazil‟s oil production is equivalent to Kuwait‟s (1.8 million barrels a day). Over the past decade Brazil has been very active on the external trade front. At the WTO Brazil has endeavored to improve market access for its agricultural products. Through Mercosur, Brazil has recently tried to diversify its trade by concluding limited preferential trade agreements with countries like India and South Africa, added to the existing and new preferential trade agreements with many Latin American countries. Further agreements of this type are planned with countries such as Morocco and Egypt. Mercosur itself has been weakened by trade disputes between Brazil and Argentina related to Brazil's surging exports to Argentina.

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1.7 SOCIAL FACTORS
Key social indicators have improved over the last decade. The current Government has assigned high priority to social development programmes. “Fome Zero” is the Federal government strategy to eradicate extreme poverty notably by promoting food and nutrition security as well as the access of the most vulnerable population to citizens' rights. In this context, the government has streamlined the existing social transfer programmes into a unified conditioned social cash-transfer Programme “Bolsa Familia” for the most disadvantaged families, which offers financial subsidies as well as a combined access to basic social rights (e.g. health, food, education and social assistance). Efforts are being made to improve the efficiency of the programme though a better targeting. However much remains to be done to address rural, urban, gender and racial inequalities and to ensure that access to goods and services benefit all social groups.
In 2004 Brazil ranked 72nd out of 177 in the UN Human Development Index, a rather modest position compared with the country‟s levels of economic development and technological sophistication. According to the Brazilian MDG monitoring report (September 2004), in 2002 there were 52.3 million poor people in the country, or 30.6% of the population, while extreme poverty affected 11.6% of the population, i.e. 20 million people. Brazil is still one of the world's most unequal societies: the poorest 20% account for 4.2% of Brazil‟s national income or consumption. Since 1990 the Gini index has remained at 0.57 (1 being the maximum inequality), one of the highest in the world. In other words, wealth and income distribution remain very unbalanced.
The poorest of the poor in Brazil have traditionally been in the North-East region . In 2002, 25.2% of its inhabitants were in extreme poverty or indigence. However, some areas in other parts of the country, in particular close to or inside big cities, have reported increasing numbers of poor or indigents. For instance, 5.2% of the inhabitants of the south-east were also in extreme poverty or indigence in 2002. In fact, nowadays poverty exists in most of the country, although it is concentrated mainly in metropolitan and depressed agricultural areas. Inequality in Brazil is also related to race; 65% of the poorest 10% are blacks or mulattos, while 86% of the wealthiest 1% is whites. Access to education has improved over recent years but there are still regional imbalances between the North-East and the South and South- East regions, especially in higher
education. Literacy among young people in Brazil is officially high (96.3% amongst 15-24 year-olds in 2002) but illiteracy remains high among the population aged 15 or more (12% in 2002).
Health indicators have also improved. Public policies have had an impact on the drop in child mortality rates (36 per 1000 in 2003), but there is still room for reduction of post-neonatal mortality, mainly in the North and Northeast regions. In 2002, Brazil spent 7.9% of its GDP on health, an amount close to the OECD average (8.72%). According to UNAIDS, an estimated 650,000 Brazilians are living with HIV. Brazil's response to HIV has benefited from strong political support: access to care, including anti-retrovirals, is universal and

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guaranteed by national law. Combating HIV/AIDS has been mainstreamed as a cross-cutting issue in the programming process by analyzing the government's policy agenda on HIV/AIDS and sexual and reproductive health in particular, as well as the importance of the theme in Brazil.

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1.8 COMMUNICATION
Compared to their neighbors Brazilians communicate with a slightly more blunt cultural style. However, this is often determined by the level of a relationship, i.e. the warmer it is, the blunter it gets. They also place a lot of emphasis on non-verbal gestures to enhance their point. Communication is generally very polite however their conversations can be held at break-neck speed, with plenty of animations, frequent interruptions and lots of physical contact. Brazilians like depth, background and context so if you are more comfortable with direct, brief communication style, you would be well served to consider offering more information than you normally would.

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1.9 EDUCATION SECTORS
According to the Institute of International Education, Brazil is the fourteenth largest source of overseas students coming to the United States for education and training services. In 2011, there were 8,777 Brazilian students studying in the U.S. and the number of students has been gradually increasing since the 2005/2006 academic year. About 34.8% of Brazilian students participate in graduate programs and about 46.3% are enrolled in undergraduate programs.. school.
S

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2. PESTEL ANALYSIS
PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the environmental scanning Component of strategic management.
2.1 Political factor:
The Brazilian Federation is based on the indissoluble association of three autonomous political entities: the States, the Municipalities and the Federal District. A fourth entity originated in the aforementioned association: the Union. There is no hierarchy among the political entities. The Federation is set on six fundamental principles: sovereignty, citizenship, dignity of the people, social value of labor, freedom of enterprise, and political pluralism. During 2010 alone, 210,000 jobs were created in the tourism sector and in excess of $736 million was invested by the government in 2010 alone.
The political arena has a huge influence upon the regulation of businesses, and the spending
Power of consumers and other businesses. You must consider issues such as:
 Political stability
 Risk of military invasion
 Legal framework for contract enforcement
 Intellectual property protection
 Trade regulations & tariffs
 Favored trading partners
 Anti-trust laws
 Pricing regulations
 Taxation - tax rates and incentives
 Wage legislation - minimum wage and overtime
 Work week
 Mandatory employee benefits
 Industrial safety regulations

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2.1.1 Brazil’s political parties:
Brazil has a multi-party system with numerous political parties sharing the vote, in which no single party has a chance of gaining power alone, so that they must work with each other to form coalition governments. The ideologies of the different parties are not always universally adhered to, as many of them are in fact loose coalitions of local and individual leaderships.
Above the broad range of political parties in Brazilian Parliament since there is no election threshold, the Workers' Party (PT), the Brazilian Democratic Movement Party (PMDB), the Brazilian Social Democracy Party (PSDB) and the Democrats (DEM) together control the absolute majority of seats in the Senate and Chamber of Deputies, [1] and effectively have dominated Brazilian political landscape since the returning of democracy in 1985. Smaller parties often make alliances with at least one of these four major parties.
 Brazilian Democratic Movement Party
 Workers' Party
 Progressive Party
 Brazilian Social Democracy Party
 Democratic Labour Party
 Brazilian Labour Party
2.2 Economic Factors:
Brazil's GDP (PPP) is the highest of Latin America, boosted by large and developed agricultural, mining, manufacturing, and service sectors, as well as a large labour pool. The country has been expanding its presence in international financial and commodities markets, and is part of the group of four emerging economies named BRIC. According to the International Monetary Fund and the World Bank, Brazil has the ninth largest economy in the world by purchasing power parity (PPP) and tenth largest at market exchange rates.
Brazil has a diversified middle income economy with wide variations in development levels. Most large industry is agglomerated in the Southern and South-eastern states. The Northeast Region is the poorest region of Brazil, but it has attracted new investments in infrastructure for the tourism sector and intensive agricultural schemes.
Marketers need to consider the state of a trading economy in the short and long-terms. This are the factor affecting Brazil
 Capital growth

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 Low cost of living - experience a luxury lifestyle at little expense
 Booming property market
 Currency exchange
 Inflation
 Economic expansion
 Housing shortage
2.3 Socio cultural Factors:
Brazil also recognizes and has participated in international efforts to promote Sustainable development, including the adoption of Agenda 21, and a commitment to implementing it at the national, provincial and local levels.
The social and cultural influences on business vary from country to country. It is very important that such factors are considered. Factors include:
 Demographics
 Class structure
 Education
 Culture (gender roles, etc.)
 Entrepreneurial spirit
 Attitudes (health, environmental consciousness, etc.)
 Leisure interests
 Population growth rate and age profile.
 Population health, education and social mobility, and attitudes to these.
 Population employment patterns, job market freedom and attitudes to work.
 Press attitudes, public opinion, social attitudes and social taboos.
 Lifestyle choices and attitudes to these.
 Socio-cultural changes.
Various human factors drive, influence and affect environmental change at the global, regional, national and local levels. Drivers of environmental change vary in nature and scope but can be broadly grouped together as demographic; economic and social; science and technology; conflict; and governance. Critical social dimensions include poverty and health.

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2.4 Technological Factors:
1. Mine-safety research
The Safety in Mines Research Advisory Committee aims to advance mineworkers‟ safety. It has a permanent research- management office overseeing research in rock engineering, Engineering and occupational health.
2. Energy research
The Chief Directorate: Energy of the Department of Energy manages a policy-directed research programme. This includes transport energy, renewable energy and energy for Developing areas, coal, electricity, energy efficiency, energy economy and integrated energy policy formulation.
3. Agricultural research
Agricultural research is conducted by the Agricultural Research Council, several universities and the private sector.
4. Water research
Water research in Brazil is coordinated and funded by the Water Research Commission in Pretoria. The organization‟s most active partners in water research are:
 Universities and universities of technology
 Professional consultants
 Science councils
 Water and waste utilities
 Non-governmental organizations.
2.5 Environmental Analysis:
The vision of the Department of Environmental Affairs is to create a prosperous and equitable society living in harmony with the environment. Brazil is home to one-sixth of the world's marine species with the Indian Ocean on the east coast and the Atlantic on the west coast. The country has more species of wild animals than Europe and Asia put together and a vast variety of endemic and migratory birds.
Brazil is home to one-sixth of the world's marine species with the Indian Ocean on the east coast and the Atlantic on the west coast. The country has more species of wild animals Than Europe and Asia put together and a vast variety of endemic and migratory birds.
Three analyses are important:-

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Water analysis: Analysis of quality criteria and dissolved matter of process water such as appearance, pH value, conductivity, salt content, hardness, TOC, cations and anions.
Product analysis: Waste water toxicity in accordance with OECD 209 Aquatic toxicity in accordance with OECD 202
Metal analysis: Atom absorption spectrometry to determine metals is a prevalent procedure in Chemical analysis and we can quantitatively determine Ag, Al, Ca, Cd, Co, Cr, Cu, Fe, K, Mg, Mn, Na, Ni, Pb, Sb, Si, Sn, Ti and Zn.
2.6 Legal Environment:
Brazil has a 'hybrid' or 'mixed' legal system, made of the interweaving of a number of distinct legal traditions: a civil law system inherited from the Dutch, a common law system inherited from the British, and a customary law system inherited from indigenous South American.
Laws, rules, and standards:
 All agricultural exports operate within an institutional environment, which is made up of a set of political, social and legal ground rules.
 These ground rules for the laws of all production, exchange and distribution and give rise to certain expectations and assurances about the actions of others, and give order and stability to the means of doing business.
Objectives:
 To give an understanding of the major factors which must be considered in the
Legal/political environment when planning to market globally.
 To give, in detail, a description of the main elements of the latest GATT Round.
 To show the importance of legal/political aspects in global marketing.
Types of law:
 Courts & Judgments
 Constitutional Law

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 Human Rights
 Litigation and Court Procedure
 Electoral Law
2.7 Political Environment:
Brazilian politics since the end of the military regime in 1985 have been characterized by a multiplicity of political parties. Many do not have a strong ideological foundation or detailed policy platforms, and are built around shifting small groups of high-profile politicians. In recent years, four main parties have come to dominate the political landscape: the PSDB (Brazilian Social –Democratic Party); the PT (Worker‟s Party); the PMDB (Brazilian Democratic Movement Party); and the DEM (Democrats).
The PSDB's candidate, Fernando Henrique Cardoso, won the presidential elections in 1994, and was re-elected in 1998. The centre-left PSDB (Brazilian Social-Democratic Party) remains important across the country and governs the state of Sao Paulo – the most populous and wealthy state in the country. Their Presidential candidate, José Serra (a former Governor of Sao Paulo), was the main rival to incumbent Dilma Rouseff in the 2010 elections.
The then President Lula, one of the founders and the most charismatic leader of the PT party, won the 2006 Presidential elections and managed to transfer his electoral capital to Dilma Rouseff. Since reinstatement of democracy in Brazil this was the first time Lula had not run for the presidential election. Dilma‟s election represented a vote for continuity – particularly in taking forward Brazil‟s social agenda. PT put pro-poor policies at the top of their agenda, whist also continuing its predecessor‟s commitment to IMF targets and fiscal discipline.
The 2010 Presidential elections were taken to a second round. However, Dimla beat José Serra with over 60% of the vote. Dilma‟s campaign motto was to finish poverty in Brazil with a more equal wealth distribution.
Serious corruption accusations involving Dilma‟s predecessor in the Household Ministry played a big part to take the elections to a second round. The next Presidential elections are due to be held in October 2014.

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3. SWOT ANALYSIS
Strength
 A small number of excellent private sector educational institutions, with a view to increase their role in the economy and with the ability to attract the support of industry.
 Tenacity mixed with strong sense of initiative and self-reliance as well as capacity for risk taking among entrepreneurs.
 Commitment and social solidarity from key sectors such as banking sector.
 Good contact with outside world with links to many developed countries.
 The strong support of the retail infrastructure that will benefit Indian Food and Beverages market.
 When Indian Food and Beverages business, the business started going to Brazil because of its power over the forces of production flexibility is helpful for the Food and Beverages industry.
 Brazil is a result of cheaper labor rates, the competitive price.

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Weakness
 An inability of public sector organizations to move into high gear of development.
 Poor links in general between the education and industry.
 A low level of support for research and poor alignment of existing activities with the needs of industry and the economy.
 A lack of manager familiar with modern management concepts and techniques as well as a limited range of management training opportunities.
 Lake of skilled Labors.
 Some age groups are less interested in Food and beverages industry.
 Lack of Co-ordination between government bodies and private players.
 Sometimes weakness of insufficient information happens.

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Opportunities
 Strong role of post formation training can result in skilled workforce.
 There should be many opportunities for adding value in basic activities in areas such as tourism, agriculture and food processing.
 There is a need to look in detail at how to develop the agro food sector.
 E-commerce and the Internet as promissory distribution channels are emerging.
 Except Brazil, the countries like USA, UK, and CANADA. Need food and beverages. Because they are interested in it.

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Threats
Threats to do something that the unfavorable conditions that affect the Indian markets on the Brazilian food and beverages.
 A failure to grasp the nettle of reform especially in the area of business and innovation related legislation, higher education and research.
 Pace of reform is too slow vis-a-vis competitors.
 The banking and finance sector also need to innovate and this issue can easily be overlooked when the focus is on technology or specific sector of economic activity.
 Competition in the domestic market.
 Balance between demand and supply of high.
 Interested in competing countries, and good technical support & R & D facility.

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PART-2

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2.1 PETROCHEMICALS INDUSTRY
1. INTRODUCTION OF PETROCHEMICAL INDUSTRY
The world petrochemical industry has changed drastically in the last twenty to thirty years. The United States, Western Europe and Japan previously dominated production of primary petrochemicals, not only to supply their own domestic demand but also to export to other world markets.
There is some industry like Packaging industry, Brazil IT sector, Tourism sector, Agriculture sector, Petrochemical sector.
1.1 HISTORY OF PETROCHEMICAL IN BRAZIL
The petrochemical industries in the United States, Western Europe and Japan have experienced lower growth rates. In 2010, these three regions accounted for only 37% of world primary petrochemicals production.
The start-up of these plants has effectively washed the number of export markets available to the United States, Western Europe and Japan as the volume of imports from developing regions increased. As a consequence, the petrochemical industries in the United States, Western Europe and Japan have experienced lower growth rates.
1.2 SECTOR OVERVIEW:
 Petroleum and Petrochemicals
 Brazil-Bolivia Gas Pipeline
 Ethanol Industry
1.3 BRAZILIAN PETROCHEMICAL PRODUCTS:
Basic Petrochemicals
Capacities Ethylene 3.752
Green Ethylene
200 Other Products 6.220

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1.4 CONTRIBUTION IN GDP AND ECONOMIC SECTOR
1.4.1. Oil & Gas Complex GDP
The analysis connected to the Gross Domestic Production (GDP) can be developed in various levels of desegregation due to the fact that the Oil & Gas Complex can be divided into four principal aggregates: a) inputs (inputs that are supplied to the extraction sector); b) the sector itself (the oil and gas extraction sector); c) based industry (industry of oil and gas transformation); and d) final distribution (including the commerce, transport and services).
1.4.2 Petrochemicals industry Complex GDP participation in Brazil
The Oil & Gas Complex GDP corresponds to approximately 10.4% of the total GDP of Brazil, for the year 2011.
1.4.3 Brazil Petrochemicals Industry Outlook to 2015 - Market Size, Company Share, Price Trends and Capacity Forecasts
1.5 GOVERNMENT POLICY
Brazil is the reduced taxes to help the ethanol and petrochemical industries as the government tries to tamp down inflation at the same time that it seeks to rev up weak economic growth.

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2. STRUCTURE OF PETROCHEMICAL INDUSTRY
The different regions and districts of the country produce a large array of Petrochemical, depending on the type of available raw material and the indigenous skills of the producers.
 Ethylene product
 Propylene product
 Butanes & butadiene product
 Benzene product
 Diesel fuel product
 Liquefied petroleum gas product
 Gasoline
2.1 ROLE OF PETROCHEMICAL IN THE ECONOMY
Employment Generation: Manpower is the primary in-put in the process of production of Goods and rendering of services.
Linkage with other sectors: The petrochemical sector has very important linkage among economic sectors (Agriculture, industry and Tourism).
2.2 PORTER’S FIVE FORCE MODEL ANALYSIS
Brazil inclusive Porter‟s model but grouped the five forces into three categories, namely: Suppliers, customers and competitors.
2.3. FACTOR AFFECTING PETROCHEMICAL SECTOR
 Ethane feedstock shortage
 New rafts of anti-dumping tariffs
2.4 PETROCHEMICAL OF VALUE CHAIN ANALYSIS
Petrochemical industry as a consumer of the oil products represents a significant part of the oil product portfolio. The reader can get a more exact picture about strict integration of Downstream and Petrochemicals Division of MOL Group and dependence on each other by the analyzing of co-products‟ significance.
2.5 FUNCTION OF PETROCHEMICAL INDUSTRY
 Financial Function
 Human Resource Development

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3. COMPARATIVE POSITION OF PETROCHEMICAL INDUSTRY BRAZIL V/S INDIA
The petrochemical industry is flourishing in many Arabian country and rural areas both in the business. Brazil's geological formation is very old.
 Financial Performance
3.1. MAJOR PLAYERS OF PETROCHEMICAL INDUSTRY
 Petrobras ltd.
 Petrolia Piranha ltd
 Ultra par ltd
 Braskem
3.2. PRIORITY PRODUCT ANALYSIS
 Gasoline
 Ethylene
 Propylene
 Butanes & butadiene
 Benzene
 Diesel fuel
 Liquefied petroleum gas
3.3 EVALUATION OF TOP PLAYER
3.3.1. Boston Consulting Group (BCG Model)
The analysis of the profit potential of Its business with the senior management provides a tool for classification.
3.3.2 General Electric Multifactor (GE) Portfolio Model
According to Kotler, organizations are able to go to the extent that they may be in attractive markets and the competitive strengths of the business will succeed in the markets.
1. Invest/grow
2. Selective investment
3. Harvest/divest
3.3.3. 7p of marketing in petrochemical industry
 Petrochemical products
 Price of petrochemical products
 Promotion
 Place
 Packaging
 Positioning
 People

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3.4 STRUCTURE OF THE BRAZILIAN PETROCHEMICAL INDUSTRY
 Naphtha Condensate Natural Gas
 Basic Petrochemicals
 Thermoplastic Resins
 Plastic Parts& Intermediate Chemicals
 Non Financial Performance
3.6 ECONOMIC ANALYSIS OF PETROCHEMICAL
It is used by oil and gas companies, government agencies, consultants and legal professionals to secure timely and accurate information on:
 Ratings and rankings
 Legal, Fiscal and Contractual Terms
 Environmental Terms
 E&P Statistics
 Business Environments
 Biodiversity
 Company Rankings
 Fiscal Overviews
3.7. MARKET POSITION OF PETROCHEMICAL INDUSTRY
 Brazil contribution in world market is 3.2%
 The Petrochemical Industry is a $100 billion industry worldwide.
 The total exports of petrochemical items: - Rs. 13412.92 Crore.
 Industry‟s share in Brazil exports:- 1.51 %
3.8. MARKET SIZE ANALYSIS
Brazil is the fifth largest producer of wine in the Southern Hemisphere. At the end of the 2008 financial year, the Brazilian wine industry generated revenues of USD2.4bn.
3.9. SWOT ANALYSIS OF THE PETROCHEMICAL INDUSTRY
Strengths
 High quality of domestic products (e.g. ethanol, gasoline)
 Ideal climate and soil: high quality and quantity of raw material of petrochemical
 High levels of gas production
 Technological development of chemical industry
 Huge trained talent pool
 Competitive labor cost
Weaknesses

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 Small size of individual farms and of most chemical processing companies
 Low farmers knowledge about new technologies
 Difficulty in penetrating foreign markets outside EU
 Creation of trade barriers by third countries
 Frequently changing legislation (e.g. tax legislation)
 Low standardization ability in products like ethanol & chemical
Opportunities
 Huge market value of different types of chemicals.
Threats
 Stiff rational pricing pressures
 Environmental hazards concerns
 Low market recognition

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4. PRESENT POSITION AND TREND OF CHEMICAL BUSINESS IN INDIA
4.1 OVERVIEW Petrochemicals are derived from various chemical compounds, mainly hydrocarbons obtained from oil and natural gas. Growth potential of the chemicals sector was immense, considering the current low per-capita consumption in the country. These include synthetic fibers, polymers, synthetic detergents, plastics, olefins and aromatics, and find use in daily need items ranging from clothing, furniture, construction, agriculture to medical appliances.
4.2 IMPORT REQUIREMENTS AND DOCUMENTATION
The following documentation is required when exporting to Brazil:
 Bill of lading
 Cargo release order
 Certificate of origin
 Commercial invoice
 Customs export declaration
 Foreign exchange authorization
 Packing list
 Technical standard / health certification
4.5 EXPORT DATA FOR BRAZILIAN FOR PETROCHEMICAL PRODUCTS
Product name
Industry Total export value in
2008 (USD thousands)
Exports as a share of
total Brazilian exports
2008
(%)
Exports as a share of in world exports in 2008 (%)
Growth of exports in value(% per annum)
Ethylene
15,55,897
7.44
12.7
22
Propylene
5,82,598
5.2
18.1
19
Butanes & butadiene
11,095,854
6.5
17.4
19
Benzene
4,373,488
2.6
13.4
23
Diesel fuel
4,686,963
4.2
9.0
8
Liquefied petroleum gas
2,493,197
4.8
2.8
46
Gasoline
2,265,996
5.1
4.6
17

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5. POLICY RESOLUTIONS FOR PROMOTION OF PETROLEUM, CHEMICALS AND PETROCHEMICAL INVESTMENT REGIONS (PCPIRS)
The industry offers a wide scope for development that contributes positively to economic growth and regional development. The future outlook for the industry is bright with positive developments anticipated in various chemical sub sectors.
The PCPIRs would reap the benefits of co-sitting, networking and greater efficiency through the use of common infrastructure and support services. They would have high-class infrastructure, and provide a competitive environment conducive for setting up businesses. They would thus result in a boost to manufacturing, augmentation of exports and generation of employment.
POLICIES AND NORMS OF BRAZIL
5.1 REGULATORY
 Duties and tariffs
Import tariffs vary depending on the product, but in general are quite high.
 Basic Duty:
This tax is applicable to most imported goods and the rate is 30 percent for most products.
 Additional Duty (AD) or Countervailing Duty (CVD):
An additional duty to match the domestic Central Value Added Tax (CENVAT) for goods produced and manufactured in India.
 Special Additional Duty (SAD) or Special Countervailing Duty (SCVD):
A 4 percent duty on most imported products. This tax is designed to match domestic taxes such as Sales Tax and Value Added Tax.
5.2. ROLE OF THE CENTRAL GOVERNMENT
Government of India was ensure the availability of external physical infrastructure linkages to the PCPIR including Rail, Road (National Highways), Ports, Airports, and Telecom, in a time bound manner. This infrastructure will be created/upgraded through Public Private Partnerships to the extent possible. . Central Government will provide the necessary viability gap funding through existing schemes.

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5.3. ROLE OF THE STATE GOVERNMENT
The State Government would play the lead role in setting up of the PCPIR. It would identify a suitable site, prepare the proposal and seek approval as elaborated below. It will notify the PCPIR area under the relevant Act, and acquire/ assist in acquiring the land necessary for setting up of the infrastructure, processing and non-processing areas.
5.4. LICENCING
The government has reserved certain items for exclusive manufacturing in the small-scale sector. Non-small-scale units can undertake the manufacturing of items reserved for the small scale sector only after obtaining an industrial license.
5.5. DE-LICENSED INDUSTRIES
These are industries which do not require compulsory licensing, do not fall under vocational restrictions, and are not reserved for small-scale industries. There was no exhaustive last specified by the Department of Industrial Policy and Promotion.
5.6. IMPORT POLICIES
 Import Licensing/Customs Valuation
 All importers must register with the Secretariat of Foreign Trade (SECEX) to access the SISCOMEX computerized trade documentation system.
 U.S. companies continue to complain that Brazil employs a variety of customs-related non-tariff barriers including onerous and burdensome documentation requirements and inconsistent interpretations of the law.
5.7 GOVERNMENT PROCUREMENT
 Lack of transparency and preferences for Brazilian products.
 Domestically produced medical equipment.
 Domestically produced medical equipment, construction, Security and defense sectors.
5.7SERVICES BARRIERS
 Telecommunications
 Audio Visual Services
 Express Delivery Services
 Financial Services
5.8 INVESTMENT BARRIERS
 Energy

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6. IMPORT POLICY
Petrochemical imports are predictably estimated at $25.6 million.
6.1 IMPORT PROCEDURES
 How do I obtain duty information?
 What are Brazil‟s import tariffs?
 Are other taxes assessed on imports?
 Are other basic papers required?
 Where can I obtain more detailed monetary and commercial Information?
 Do I need a local agent in Brazil to import my product?
 Who is the Senior Commercial Officer (SCO) in Brazil?
 Who should I get in touch with if I want to import from Brazil?
6.2 GOVERNMENT ROLE IN IMPORT POLICY
(A) Mode of transport
Brazil imported goods by air, sea, road transport, rail transport and postal channels to import to Brazil.
(B) Approved importer
The goods arrived in Brazil can only be imported through the government authorization to enter Brazil.
(C) The means of conveyance
According to Brazilian law, ship owner or captain of the aircraft must arrive when the customs region or leaving Brazil, means of transport to the Customs entry or exit announcement, submitted with the journey, cargo, storage, crew / crew members, passengers on the detailed information and declare the truth.
(D) Declarations to declare
To ensure the state‟s tax due are collected, to comply with all applicable laws and regulations, importers must declare the amount of carry, transport imported goods, goods and means of transport. By law, the importer or his agent shall within 7 days after arrival of the goods (sea, air
Or rail transport of bulk cargo to declare a period of 14 days, the container cargo warehouse Reporting period of 28 days) for the import announcement.
6.4 LICENSING POLICY AND PROCEDURE
 An application for a license;
 An applications for an approved mark;
 The defects sheet; and
 The report of survey.
6.5 DIRECT OR INDIRECT TAX
Direct tax
Direct taxation consists of taxes levied directly on the income of individuals and on company profits.

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Indirect tax
Indirect taxation refers to taxes on utilization collected on behalf of a government.
Customs Duty
Customs duties are imposed by the Customs and Excise Act 91 of 1964.
Excise duty
A secondary purpose of these duties and levies is to pressure consumer behavior, meaning that Government may control Excise duties and levies to depress the consumption of certain Harmful products.
6.6. VALUE ADDED TAX (VAT)
A person is legally responsible to register for VAT if the income earned from supplying goods or services is more than R1 million in a 12 month period, or is logically expected to exceed this amount.

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7. POLICY AND NORMS OF INDIA FOR PETROCHEMICAL FOR EXPORT
7.1 PETROCHEMICAL SECTOR POLICY IN INDIA
There are small restrictions regarding location for establishing petrochemical units.
7.2 TRADE POLICY
 Original engravings declining under 9702
 Original sculptures categorized under 9703
 Products under the code 9704 are freely importable.
7.3 TARIFF AND NON TARIFF POLICY IN PETROCHEMICAL
Apart from for 9704 all the items under 97 attract to total import duty of 35.2 % is basic duty and
Especially duty only 7 % in India Petrochemical is distributed through following major sharing channels.
7.4 NORMS FOR THE FOREIGN ORGANIZATION IN INDIAN PETROCHEMICAL RULES FOR THE FOREIGN ORGANIZATION DEFINE BY THE GOVT, .OF INDIA
 Made up and chemical, Petroleum is also included.
 It must be produced in petrochemical industry.
 It should not have query.
7.5 LICENSING POLICY AND PROCEDURE FOR PETROCHEMICAL SECTOR
7.5.1 Petrochemical product export free unless regulated
7.5.2 Application for Petrochemical License
7.5.3 Ethanol product
7.5.4 Diesel fuel
7.6 GOVERNMENT ROLE IN PETROCHEMICAL SECTOR
Government of India has introduced policies in the Union Budget 2009-10 with the aim to sustain a growth rate of at least 9 percent per annum.
7.7 Taxation of Petrochemical sector in India
 Central Govt.,
Income tax
Custom duty
Central excise
 State Govt.,
Sales tax
Stamp duty
State excise

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 Territory tax under
Property
Conroy
Tax on Market
Balance of Payment
7.8 LOAN/CREDIT GRANTING INSTITUTIONS FORPETROCHEMICAL SECTOR
1. United Bank of India
2. UCO Bank
3. Bank of Baroda
4. Bank of Maharashtra
5. State Bank of India
7.9. EXPORT DOCUMENTATION
In export documentation it must be catalog with the department of labor for purposes of the Necessary for the production process. Insurance fund and also register under the representative for the reward for occupational injuries and disease. Export duty, Free of duty, prerogative of credit of duty, Re-export of imported goods.
7.10. SUBSIDY FOR EXPORT OF PETROCHEMICAL IN INDIA
Indian government declared 8% interest subsidy scheme for the exporter‟s of Petrochemical.

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8. PRESENT TRADE BARRIERS OF IMPORT EXPORT 8.1 TYPES OF TRADE BARRIERS 1-TARIFF BARRIERS 2-NON TARIFF BARRIERS TARIFF BARRIERS The CET for industrial goods will return to 14% on imports of capital goods produced in Argentina and originating from outside of MERCOSUR as of July 1, 2012.
Information and telecommunications-related (IT) products are regulated by a separate tariff schedule, which expires on December 31, 2015. NON-TARIFF BARRIERS
As of February 1, 2012, prior approval is required for all imports from the FEDERAL PUBLIC REVENUE ADMINISTRATION (AFIP).
Approval times and criteria applied to determine if permission is granted to import are unpredictable and exporters are advised to ensure that Argentine clients have an approved DJAI as well as permission from AFIP to purchase the foreign exchange necessary to pay for goods prior to shipping.

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9. FEASIBILITY REPORT OF PETROCHEMICAL EXPORT
The regulation of the import and export goods is controlled by the import and export act, 1947 the procedure of export must be guided with those rules and policies so framed by the central government.
Excise duty is the biggest source of revenue, profitability for the government of India. Excise duty is tax imposed by the central government on products manufactured in India.
9.1 LEGAL FORMALITIES & PROCEDURE:
9.1.1 EXPORT DOCUMENTATION:
The regulation of the import and export goods is control by the import & export act, some goods which are in short supply are restricted by the country certain specific goods.
There are mainly required four types of document like export duty, free of duty, entitlement of credit of duty under DEPB scheme, re export of imported goods.
9.1.2 SUBSIDY FOR EXPORT OF PETRO-CHEMICAL:
The Indian government has been declared two percentage interest subsidy schemes for the exporters of petrochemicals.
9.1.3LICENSE DECLARATION FOR EXPORT:
The document will be formulated by one of the departments that will point out that all members have participated in elaboration of the document. Registration number of all goods being shipped; each department of the exporting company and its participation in the shipping; edification of transporting vehicle; an EEI is filed online and the internal transaction number (sample: ITN X200911100001) is applied to key shipping documents, i.e., invoice, B/L, verifying the actual filing.
9.1.4 REGULATION OF IMPORTS IN BRAZIL:
1. The goods which are imported into Brazil must the import permit.
2. The list of goods requires the import permits is specified in each year in the annual import control program. The permits are valid for imports from any country.
3. Foreign trade zones: foreign trade zones or free ports are recognized in Brazil. Brazil uses the coordinated system of categorization.
4. Samples that have no commercial value are allowed duty free access.
5. The Brazil government has viewed countertrade as a second-best option to be occupied in only when standard trade cannot be conducted.
6. The warehouse is available at various points of entry.
7. Brazil bank can provide somewhere to stay all international transactions and that are situated throughout the country. Duties may be rebated on goods on re-export.

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9.1.5 PROCEDURES OF IMPORTED PETRO-CHEMICALS PRODUCT IN BRAZIL:
It means of transport to the customs entry or exit declaration
It submitted with the voyage, cargo, storage, crew/crew members, passengers on the detailed information and declare the truth.
To ensure the state‟s tax due are collected.
The importer or his agent shall within 7 days after arrival of the goods (sea, air or rail transport of bulk cargo to declare a period of 14 days, the container cargo warehouse reporting period of 28 days) for the import declaration.
Customs may also request additional information, and sampling the goods testing and inspection.
9.2 TECHNICAL ANALYSES
9.2.1 TRANSPORTATION SERVICE OF BRAZIL
1. Sea (name of company which transport product by sea)
Mediterranean shipping company
Bulk connection
Amazon
2. Air port (name of company which transport product by air)
BCSA
Sea Paula international airport
Rio de Janerio international airport
9.2.2 EXCISE DUTY
Excise duty is the biggest source of revenue; profitility for the government of India. Excise duty is imposed by the central government on product manufactured in India. It is collected before removal of products from the factory site.
9.2.5 SHIPPING EXPORT PROCEDURE
They have procedure have to be followed by (A) „` person-in-charge of conveyance” and (B) the exporter.
9.2.5.1 PROCEDURES BY PERSON IN CHARGE OF CONVEYANCE
Any new airline, shipping line, steamer agent should be registered in Customs Systems for electronic processing of shipping bills etc. The ship should be granted „Entry Outward‟. Steamer Agents can file “application for entry outwards‟ 14 days in advance so that intending exporters can start submitting “Shipping Bills‟.
9.2.5.2 PROCEDURES TO BE FOLLOWED BY EXPORTER

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Exporter has to submit “shipping bill” for export by sea or air and, bill of export for export by road. The shipping bill form requires details like name of exporter, consignee, Invoice Number, details of packing, description of goods, quantity, FOB Value etc. If the goods are cleared by manufacturer for export, the goods are accompanied by to export. This form should be submitted to customs authorities. If the exporter intends to claim duty drawback on his exports, he has to follow Set procedures and submit necessary papers.

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10. PRESENT INCENTIVE OF EXPORTING PETROCHEMICAL PRODUCTS OF INDIA
Brazil is one of the most important and largest markets in Latin America. Brazil has a great potential of attracting foreign investment in the petrochemical sector.
The Brazilian petrochemicals market will demonstrate a strong recovery in the year 2010, which will be led by an increase in domestic consumption that will translate into industry opening rates of 80% from 90% in 2009.
Brazil is a major producer of petrochemical products and accounts for approximate 46% of South America's total petrochemical capacity including methanol. Brazil accounts for 70% of total South American capacity in ethylene, which is bound to increase with the new discoveries.
Indian Export Import Trade Data covers Indian foreign trade with over 200 countries around the world and represents transactions of over 2,00,000 Indian Exporters Importers.
With Online data since January 1st, 2003, India Export Import Trade Data provides organizations complete access to current and historical trade data.
The number of Records collected from Indian Customs, Ports based on Bills of Entry and Invoices have now crossed over 8 Crores (80 Millions).
10.1.1 FOREIGN INVESTMENT OPPORTUNITIES IN CHEMICAL INDUSTRY:
Brazil's chemical industry ranks in the world's ten largest chemical industries, and is also the topmost industry for the Southern hemisphere. The Brazil economy has grown at a consistent growth rate, and there is serious need felt for new investments as there is fear that the country‟s economy may outpace industry's production.
Methanol:
Methanol is an organic chemical and forms an important part of the Indian petrochemical industry.
Acetyls:
Acetyls are organic compounds that are being produced by reacting acetic acid. The acetic acid used for the production of Acetyls is made by reacting carbon monoxide with methanol.
Propylene oxide:
Propylene oxide is an important intermediary product of the petrochemical industry. It is used for many of the end use products.
Naphtha and natural gas:
Naphtha and natural gas as feedstock are considered building blocks by the entire petrochemical industry.

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10.1.2 COUNTRY WISE EXPORTS OF PETROCHEMICAL:-
PRODUCT OF PETROCHEMICAL
COUNTRIES WISE EXPORTS
Aromatics
Germany, Saudi Arabia, USA, UK
Fiber Intermediates
Canada, Germany, UK, USA
Olefins
Germany, UK, Saudi Arabia, USA
Other Petro-Based Chemicals,
France, Germany, USA, UK
Performance Plastics,
Italy, USA, Germany, UK
Polymers
France, USA, UK, Germany
Synthetic Fibers
France, USA, UK, Germany
Synthetic Rubber (Elastomers)
Italy, USA, Germany, UK
10.1.3 MAJOR DISTRIBUTION CHANNELS: -
The wide distribution network and the various advancements of the major petrochemical companies like RIL, IPCL, and BPCL have been a key feature of growth this year.
10.2 PRESENT INCENTIVES OF IMPORTING PETROCHEMICAL PRODUCT OF BRAZIL
In a Brazil the number of percentage is continuously increasing for the global trade and that need the exploring the opportunities of employment, some special focus on initiatives which has been identified as market diversification, technology updating, status holder support ,Petrochemical, and the chemical industry growth.
10.3 GROWTH OF PETROCHEMICAL INDUSTRY IN INDIA AND BRAZIL
10.3.1. INDIA
 The petrochemical industry of India is US$700 million industry from world market.
 The production of 5.06 MMT polymers during FY09 accounted for around 62% of the total production of key petrochemicals. It also achieved 88.5% capacity utilization.
32%
11%
1%
2%
3%
4%
4%
4%
6%
3%
US
UK
SWITZERLAND
SAUDI ARABIA
NETHARLAND
JAPAN

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10.3.2. BRAZIL
 Brazil Petrochemical Pole is the largest integrated complex in the Southern Hemisphere, and is the result of R$10 billion in investments, accounting for a third of the state's exports and for nearly half of the industrial production value.
 The growth of Brazil petrochemical industry, it holds the share of around 24% of the total global producer of petrochemical related products.
10.4 GROWTH IN MARKET STRUCTURE OF PETROCHEMICAL INDUSTRY
 Sustainable growth
 Control and reform
 Consistent policies
10.5 PRESENT TRADE RELATION OF INDIA AND BRAZIL
Brazil and India are deeply committed to IBSA (South-South cooperation) initiatives and attach utmost importance to this trilateral cooperation between the three large, multi-ethnic, multi-racial and multi-religious developing countries, which are bound by the common principle of pluralism and democracy.

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11. PROJECT MANAGEMENT STRATEGIC FORMULATION OF PETROCHEMICAL BRAZIL
Project management:
Project management is the expert capability to deliver, with due diligence, a project product that fulfill a given mission, by organizing a dedicated project team, effectively combining the most suitable technical and managerial methods and techniques and devising the most competent and effective work stop working and completion routes.
11.1 SPECIFIC (PROJECT) MISSION
Project management starts with the explanation of this mission into a set of requirements and defines objectives, guidelines and policies, strategy, and essential achievement plans to gather these.
11.2 BASIC ATTRIBUTES OF PROJECTS
A project has three basic attributes, namely: individuality of a project‟s mission; impermanent nature characterized by defined starting and closing times; and uncertainty such as environmental changes and risks.
11.3 PROJECT MANAGEMENT ENTRY
Project professionals defeat unknown and compound issues such as challenging plans, development projects, and new events in order to achieve the missions of societies and organizations.
11.4 PROJECT MANAGEMENT HISTORY AND GLOBAL TREND
In 1994, the number of PMIÒ members was only 12,000 but membership reached 80,000 in 2001. PMIÒ started the certification of “Project Management Professionals (PMPÒ) in 1984. The PMPÒ certification system until early 1997 was rigorous, mainly targeting North American project managers, and evidence of academic qualifications, professional experience dedication to the project management profession mainly in terms of membership and professional activities with PMIÒ or PMIÒ designated project management associations, before PMPÒ candidates could sit for examinations on project management knowledge. In 1997, PMIÒ reengineered the certification system in line with requirements of brazil accreditation bodies, and a new certification system was put in place in 1998 which is providing a more ample opportunity for PMPÒ certification to not only North American but global project management practitioners by providing computerized knowledge examination in nine languages.
11.5 POLICY FRAMEWORK AND STRATEGY FOR DEVELOPMENT OF PETROCHEMICAL PRODUCTS
The objective of petrochemical products development is to increase a variety of new and interesting products in the country in order to develop and support the country‟s economy and society.

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11.5.1 New Foreign Trade Policy (2004-09)
This policy has announced various incentives for promoting the exports of petrochemicals. These includes establishment of new special economic zone for petrochemicals duty free import of trappings & embellishments increased to 5% of fob value of exports.
11.5.2 Export Promotion Scheme
Under this scheme, the expansion commissioner of petrochemicals provides economic support for the product development, publicity, and marketing and social and other interest‟s measures. The Brazilian government has been declared two percentage interest subsidy schemes for the exporters of petrochemicals.
11.5.3 Special Economic Zone
To increase the export of petrochemicals in Brazil, the ministry of commerce, government of Brazil has already agreed to set up three special economic zones ( SEZs) at Noida, jodhpur ( Rajasthan)and Moradabad in UP. The Noida SEZ is especially for petrochemicals product.
11.5.4 Import Regulation of Brazil
Brazil is a member of WTO and is having harmonized system for import. There is a free exchange of trade between Brazil and other countries except some goods. In that an import permit are required for some specific goods and is obtain from the import export director.

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2.2 FOOD & BEVERAGE INDUSTRY
1. INTRODUCTION OF FOOD AND BEVERAGE INDUSTRY
The industry that forms our target group is food and beverage industries. Food additives are an important part of food industry which play very important role in improving the color, scent and taste of food, readjusting the nutritive composition raising the quality and grades perfecting the processing conditions and prolonging the shelf-life of food. The majority of food industries do not produce on their own the additives they use, but they have suppliers who provide them with what they need.
1.2 FUTURE TENDENCIES
1.2.1 Tendencies in the ECONOMIC sphere
During the period 1995-2003, industrial production showed an average annual growth rate of 2.1% while in the period January- November 2004, it grew by 2.8%. The added value of the food and drink sector has drastically increased, during the period 1994- 2001, at an average rate of 7,9%. Employment in the sector is decreasing, in the period 1994-2001, at an average annual rate of 0.2%. From 1995 to 2005, the industrial production in the food and beverage subsector grew by 20.6% compared with growth of 11.7% of the total industrial production.
The largest companies of the food and drink industry are presented in the following table:
20 largest companies of Brazil food & drink industry, in terms of sale

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The 20 largest companies of Brazil food & drink industry, in terms of sales In 2010, Brazil was second in the European Union (out of 15 countries), in terms of growth, reaching a growth rate of 3.3% (Spain holds the first place). The food industry covers 21% of the total production of Brazil and in particular dairy products hold 5%, and meat products, fruits & vegetables and bread, sugar, chocolate, coffee, spices cover 3%.
Contribution of food industry and food sectors to total Brazil Economy
Contribution of each food sector in the Brazil food industry
Brazil imports and exports are presented in the following table and diagram. Meat and dairy are the main imported products with 29.4% and 17% respectively. The main importing countries are in the European Union. Meat imports are necessary because of the limited cattle in Brazil, especially beef. In the dairy sector, Brazil has high productivity, however there are many multinational companies (leaders in that sector), which import large quantities. Vegetable fats hold the lowest percentage (4.9%), considering the fact that Brazil has high olive oil production and consumption.

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1.2.2 Tendencies in the ORGANIZATION sphere
Given the new tendencies of demand in the food sector, new products continuously flood the market. In order for a product to be qualified as “new”, the innovation needed is a meaning very broadly defined. In case of food the innovation is usually limited to changes in design or packaging of the product and it is not related to technological changes in the production process or the composition of ingredients.
1.2.3 Tendencies in the LEGAL sphere
Aiming the free movement of foodstuff within the European Union on the one hand, and enhancing consumer protection and human health on the other hand, the Parliament adopted on 8-7-2008, on second reading, three reports of the Committee on Environment, Public Health and Food Safety concerning food additives, flavorings and enzymes.
1.2.4 Tendencies in the TECHNOLOGICAL sphere
Investments in technology
 Despite general problems in recent years, in the sector of food-drinks it is observed a strong mobility for investments to modernize. From 2000 until 2006 the percentage of investment costs is constantly increasing, for the food-beverage enterprises, in order to streamline their procedures.
 However, the Brazil companies, mostly small companies, are still immature in innovative behavior, which is mainly due to the small business market and in administrative and organizational shortcomings, which do not allow the necessary restructuring, in a general culture of risk avoidance and low level in business networking, which reduces the potential of entrepreneurship.

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2. MARKET STRUCTURE OF FOOD AND BEVERAGE INDUSTRY
2.1 Market Overview
India is one of the largest countries in the world, with a growing population of 1.2 billion people. India‟s GDP was US$1,843 billion in 2011 and is forecast to rise to US$2,013 billion in 2012. GDP is expected to continue growing at rates around 7–8 percent per annum for the next few years‟ there has been a discernible increase in purchasing power in many parts of the country and rising affluence in many urban pockets.
India is one of the world‟s largest food producers and has a large agriculture industry. This, combined with a cultural preference for fresh food, means that India supplies the majority of its own food for consumption. However, India is a growing market for processed food imports, which are becoming more popular with the younger population, especially in urban areas.i Consumption of food and beverages was estimated at US$366.8 billion in 2011.i
 Processed foods
The overall packaged food industry reached US$25.4 billion in 2011 and is forecast to grow to US$38.5 billion by 2016. The highest value segments of packaged foods in 2011 were to be „dairy‟ (at US$9.1 billion), followed by „bakery‟ (at US$4.9 billion), and „oils and fats‟ (at US$4.1 billion).
 Wine
India does not have a culture of wine drinking and many Indians do not consume alcoholic beverages for religious reasons, therefore there is a low wine drinking consumer base. Imported wines also face high tariffs. However, the Brazil – India Free Trade Agreement (FTA) under current discussion is likely to reduce tariffs and open opportunities for Brazil wine exporters.
 Fish and seafood
The fish and seafood market has continued to grow strongly as middle-class Indian consumers‟ purchasing power continues to grow. However, this is starting from a very low base. Fish and seafood are consumed in greatest proportion in coastal areas such as Kerala, Mangalore and Tamil Nadu, due to the lack of cool chain/storage infrastructure making it less practicable to transport to inland areas. However, inland fish is becoming more popular. Molluscs and cephalopods are the fastest-growing categories of fish and seafood.iv
 Meat
Imports into India of beef, or products that contain beef, are prohibited. This ban applies to beef imports from all countries and is in place for religious reasons. Brazil Lamb meat is unable to be imported into India due to India's sanitary regulations.

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2.2 Market Drivers
There are a number of trends driving growth in the food and beverage industry. These include:
 Rising incomes:
India‟s strong economic growth is increasing consumers‟ incomes. It is estimated that by 2025, India will have 583 million people living on incomes of above US$4,380 (around US$23,530 after accounting for the purchasing power parity).
 Urbanization:
The typical Indian lifestyle is becoming more urbanized and Western. This is leading to higher consumption of processed, packaged, branded and value- added food and beverage products. Urban consumers are increasingly willing to pay for premium products. However, the majority of the population is still located in rural areas and consumes only subsistence foods such as cereals and breads.
 Globalization:
Globalization is the localization of globalised products or services and has caused international food products to be adapted to suit Indian consumers. For example, McDonald‟s in India provide vegetarian rather than beef burgers and pizza chains serve pizzas with Indian toppings such as curry. This has resulted in greater acceptance and increased demand for international food and beverage products in India.
 Health consciousness:
Indian consumers are becoming more careful about their health. Heart disease and diabetes are major concerns in India. Nutrition is starting to become an important consideration when purchasing food. In general, older and female consumers tend to be the most health conscious when making purchase decisions.
 Women in the workforce:
As more women join the work force and households become smaller, packaged and processed products such as ready to eat meals, canned foods and snacks will be in higher demand.vii The most popular ready to eat products are those based on traditional Indian recipes.
 Special festivals:
Demand for specialty and high value foods such as chocolates, almonds and other dried nuts, cakes and pastries, imported fruits, fruit juices, and Indian sweets peaks during the festive season, especially at Deepawli (Diwali)- the festival of lights.

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2.3 Market Potential
Overall food and beverage consumption is expected to grow at rates between 6–11 percent for the next few years the products and sectors that are expected to have the highest potential for growth are:
 Processed food:
Ready to eat meals, canned foods and snacks are forecast to be in higher demand.
 Milk and dairy:
There is high growth for processed dairy and milk products. Additionally, the dairy processing industry in India is growing and demanding milk and dairy ingredients. Cheese, butter, whey, yoghurt and ice cream are some of the major dairy products that are imported with cheese being the most popular.
 Beverages, including wine:
In India, tea is one of the only beverage products that has a mature market. Other beverages such as coffee, carbonated drinks and functional drinks all are experiencing high growth. Coffee consumption is expected to grow 20–30 percent per year for the next few years.i Demand for wine is also growing, but the market is still captured mostly by domestic suppliers due to high tariffs on imported wines.
 Fish and seafood:
Fish consumption is currently low due to low incomes and generally poor cool chain infrastructure. However, as incomes rise, the consumption of fish is expected to increase 17 percent by 2015. The challenge for fish consumption growth is that it is not traditionally part of Indian cuisine and, similar to meat, Indians primarily prefer fresh fish so inland areas tend not to consume it.

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3. COMPARATIVE POSITION OF FOOD AND BEVERAGE INDUSTRY
3.1 INTRODUCTION
Globally, the food and beverages sector represents a cornerstone of economic opportunity in that it is universal to human life and health. However, issues relating to regulations and standards governing the production and distribution of food across the world have increased the complexity of operating within the sector in different markets. In Brazil, the food and beverages sector is one of the economy‟s most influential sectors and contributes significantly to sustaining Brazil‟s rapidly expanding economy.
3.2 MARKET SIZE
3.2.1 Global Trade and Relative Position Of Brazil
Brazil, Russia, India and China (collectively known as the BRIC countries) represent the fastest growing and largest economies in the developing world and are playing an increasingly important role in the global economy. Collectively the BRIC market amounts to almost three billion people, representing just under half of the total population of the world. Each of the BRIC countries contributes significantly to global growth, with Brazil making an expanding contribution.
Consequently, Brazil has been awarded investment grade status by a number of international investment agencies – thereby indicating that investing in the country can be done with relatively low risk. The promising investment outlook in Brazil is further enhanced by the prospect of strong economic growth. Currently, despite the debilitating effects of the worldwide economic recession, the Central Bank of Brazil expects economic growth in the country to increase by 5% in 2010.
3.2.2 Global Trade and Relative Position of the Brazil In Relation To the Food and Beverages
Brazil is one of the global leaders in the food and beverages sector. The country‟s prominent position in the sector predicated on the fact that 19% of the world‟s total arable land is in Brazil. In addition, 19% of the world‟s water comes from the region in and around Brazil. These factors, coupled with good rainfall patterns, have contributed towards Brazil‟s standing as one of the world‟s producers of products such as coffee and soybean, apples, pears, melons and grapes. Good prospects for entry into new areas of the food and beverages market, particularly in terms of the production of wines, fruit and vegetable products, together with significant technological advancement in Brazil, has placed the country in a unique position to maintain its leading position in the food and beverages sector. Brazil is a large agribusiness producer and major food supplier to international markets.

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3.3 COMPETITOR ANALYSIS
3.3.1 International competition
Natural resources and technological advances have increased Brazil‟s ability to compete globally with countries such as Germany that dominate the food and beverages sector in Europe. China represents another major competitor for Brazil in the food and beverages sector. Despite this, the Chinese market also represents a significant market for Brazilian food and beverage exports, with China set to become the world‟s largest importer of food and agricultural products by the period spanning 2015 to 2020.
3.3.2 Local competition
Domestically, competition within the food and beverages sector in Brazil is concentrated in specific regions. The food industry is mainly concentrated in the Southeast region which accounts for 4.4% of all food stuffs. Nearly one quarter (22.7%) of Brazil‟s food and beverage factories and plants are located in São Paulo.
Food and beverage products are sold primarily to consumers through retailers in Brazil. Retail and food sales dominate the retail market in Brazil, accounting for more than 50% of total retail sales. The table below outlines the top 10 Brazilian retailers in terms of market share and provides an indication of the extent of competition already prevalent in the Brazilian food and beverage sector.
Local competition of Retail Company
Company name
Retail Company Nationality of Ownership
Sales
(USDm)
Market Share %
Number of stores
in Brazil
Carrefour France
12
212.1
14.18
539
Wal-Mart USA
9
213.3
10.70
345
G. Barbaso Chile
1
279.9
1.48
50
Irmaos Bretas Brazil
4
988.3
1.15
54
Cia Zaffari Brazil
3
976.8
1.13
28
Prezunic Brazil
5
969.7
1.12
29

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DMA Distribuidora Brazil
6
929.4
1.08
89
Irmaos Muffato Brazil
8
776.6
0.90
26
A. Angeloni Brazil
1
753.8
0.87
20
3.3.3 Consumption/Demand
 Local consumption patterns of goods (locally produced and imported)
In terms of the beverage industry, consumption in the Brazilian soda market is dominated by globally renowned brands such as Coca-Cola, Sprite and Pepsi. National brands like Guarana Antartica and Dolly are also available in the market and compete with the international brands.
The most popular food products available in the Brazilian market can be grouped under the following categories:
• dried food
• Savory snacks
• Baby food
• Canned or preserved foods
• chilled processed foods
• dried processed foods
• Frozen processed foods
• Ice cream
• Meal replacement products
• Noodles
• Oils and fats
• Pasta
• Ready meals
• Sauces, dressing and condiments