question/answer forum doing business with brazil...est. 2015 freight forwarder / mexican customs. ....

QUESTION/ANSWER FORUM:DOING BUSINESS WITH BRAZIL

THE SCARBROUGH GROUP

Est. 1984 International Freight / U.S. Customs

Est. 1988 Own Trucking Fleet

Est. 2003 NVOCC Operations

Est. 2014 NAFTA Truck Brokerage

Est. 2015 Freight Forwarder / Mexican Customs

www.scarbrough-intl.com

Fabio Yukio YamadaManaging Director

TRADEBRZ [email protected]

ABOUT THE SPEAKERS

Chad Clooten, CESSupply Chain Specialist

Scarbrough International, [email protected]

T: 816-584-2425


Darcy BarnesSenior Export Operations Expert


T: 314-592-5325

mailto:[email protected]



ABOUT BRAZIL


• Population: 208 Million• GDP: USD1.8 Trillion• GDP per Capita: USD8,651• GDP Growth in 2018: 3%• Unemployment: 13%• Inflation: 3%• International Reserves: USD 356 Billion• Exports = USD191 Billion• Imports = USD171 Billion

RECESSION IS OVER


• GDP Growth: 1%• Expected inflation in 2017 < 4.5%• Peaceful transition• Brazilian officials are confident: the

worst is over• Exceptional gains in a few months –

stock market soared in Jan & Feb 2018

BRAZILIAN CULTURE

GREETINGS– Women: kiss both cheeks– Men: handshakes – Shake hands with everyone when arriving and exiting– Hugging and a nice pat on the back are also quite common

TIMING AND SCHEDULING– In metropolitan regions, meetings are scheduled from 9 AM to 5 PM.– Executives usually arrive at 9 AM and leave at 7 PM.– Meetings can be brief or last hours - one hour is a good average.– Delays can be expected on both sides – 15 minute is acceptable– Even though it is difficult to move in metropolitan areas, it is advisable to schedule

meetings at the prospects’ place– When our company is responsible in scheduling meetings, we allow extra time for

eventual delays between them and we limit to 4 meetings per day.


BRAZILIAN CULTURE

BODY LANGUAGE

• When conversing, good eye contact is important. To not do so is considered impolite.

• A good, warm handshake is the traditional greeting in Brazil. However, the Brazilians show affection easily.

• People in Brazil will also shake hands when arriving and departing. There may also be a touching of the forearm or elbow, and often a pat on the back.

• If you are conducting business, be certain to bring a plentiful supply of business cards because these are always exchanged.

• Also, during business meetings expect to be served (often) small cups of very strong coffee.

• Since this is more of a touching society, people stand close together when conversing or when standing in lines.


BRAZILIAN CULTURE

LANGUAGE AND COMMUNICATIONS• English is spoken by 20% of the Executives.• Spanish and Portuguese are close but not identical – Brazilians understand Spanish, but the

contrary is not a rule, once Brazilians tend to speak their own “Portunhol”• Good conversation topics are football (soccer), family and music. • Bad conversation topics are politics, poverty, religion. Also it is not common to ask personal

questions, such as age, salary, marital or job status.


CORPORATE AND CULTURE• During a conversation a lot of touching of the arms and back is

common. Brazilians tend to speak in very close proximity, with lots of physical contact.

BRAZILIAN CULTURE

MEALS & MEETINGS• Exchange business cards during introductions.• In Brazil, constant interruptions while someone is talking is often

considered acceptable.• Good eye contact is expected.• Negotiations are known to occur over meals, often lunch

WHAT TO WEAR• Although Brazilian culture tends to be relatively informal,

Brazilians are quite fashion conscious. It is important therefore to dress smartly and conservatively.

• Suits are often used by lawyers and government officials.• When attending a Brazilian’s home, it is customary to bring the

host flowers or a small gift


BRAZILIAN CULTURE

BUSINESS RELATIONSHIPS

• Brazilians negotiate with people not with companies, therefore, building a positive relationship (via small talk) is necessary while discussing business matters.

• It is believed the further north you go the more relaxed the attitude is in regards to business.

• Try not to show feelings of frustration or impatience as this will reflect poorly on you as an individual. Brazilians pride themselves on their ability to be in control, so acting in a similar fashion will improve your relationship and interactions with your Brazilian counterparts.

• Brazilian business is hierarchical. The final decisions are usually made by the highest ranking person; therefore, it takes some time to make a deal.


REQUISITES TO ENTER BRAZILIAN MARKET

MARKET ASSESSMENT:

• Demand• Customer needs / behavior

analysis• Competitor pricing• Channel analysis• Regulatory environment

mapping• Entry barrier analysis• Cost driver analysis


• Sales Agent

• Distributor

• JV with Exiting Company

• Acquisition

• Greenfield

Prioritization of potential market opportunities

Evaluation and prioritization of potential entry options

BUSINESS OPPORTUNITIES

Food Industry


Agricultural Equipment & services

Medical Equipment & Devices

Life Science, Bioscience

Aircraft & partsChemicals

IT and ICT

• 540 local and international pharmaceutical• USD 22 Billion• Growth 7% in volume• Industry imports, 18% are from USA

• Raw materials• Equipment

• Nutritional Supplements – growth of 25% per year

LIFE SCIENCE / BIOSCIENCE


MEDICAL EQUIPMENT & DEVICES

• Largest market in South America• Imports – 30% are from the US

(USD60 to USD100 Mil per year)• There are 6630 hospitals & 491,600 beds –

705 are private


FOOD INDUSTRY

• Healthy food – organic ingredients• Equipment for the food industry: meat processing, cold

cuts. • Brazil is one of the top three exporters of protein


AGRICULTURAL EQUIPMENT & SERVICES

• Niche for sophisticated agricultural equipment.• Market of USD5.5 billion in 2015 – USD100 Million from US


AIRCRAFTS & PARTS

• Brazil imported USD5.2 Billion of aerospace goods from US• Embraer imported USD2 Billion from US• Second largest fleet of Executive Jets (15,000)• Third largest of helicopters


CHEMICALS

• Potassium Chloride• Insecticides• Urea• Ammonium Dihydrogenorthophosphate• Drugs• Drugs with heterocyclic composts• Human antibodies• Fungicides• Fertilizers• Glyphosate


TECHNOLOGY

• IT• CAPEX USD42 Billion in 2016

• ICT• Capex USD 180 Billion in 2016• 257 Million cell phones & 120 Million internet

users• Internet of Things – USD 4.1 Billion in 2016• Business Analytics – USD 811 Million in 2016• Cloud Computing – Growth of 20%• Online Payment – 30% of all transactions in 2016


INDUSTRY SECTORS BY REGION


HOW TRADE BRZ CONSULTING CAN HELP

• Tradebrz’s Market Intelligence identifies business opportunities in all industries:

• Find the right product for the right channel at the right price• Estimate demand• Value chain analysis• Competition analysis and gaps• Overcome entry barriers• Market Entry Strategies & Action Plan• Implementation of Business Plan• Locate ideal partners and prospects• Follow up & follow up• Next steps planning


HOW TO FIND A BUYER OR SUPPLIER

• Tradebrz finds reliable buyers and suppliers• Sets up introductions & expectations on both

sides.• Intermediates calls and meetings• Checks performance in the local market and

background checks.• Recommends


SHIPPING TO BRAZIL

Importers & Exporters must Register with the Foreign Trade Secretariat (SECEX)

• All Brazilian importers and exporters must be registered with the Foreign Trade Secretariat (SECEX) of the Ministry of Industry, Commerce and Tourism (MICT). The inscription number in the General Taxpayer Register of the Revenue Ministry (CGC), of the consignee must appear on the commercial invoice or other documentation for clearance.

• This is referred to as the CNPJ number (short for CadastroNacional de Pessoas Juridicas).

All Brazilian Importers must have a Brazilian Broker

• They will be a critical partner in ensuring smooth clearance and delivery. Scarbrough International is affiliated with several networks of partners, allowing us to have a global reach with local contacts in Brazil that can deal with issues immediately.


Original Packing Lists

Requirements of Documents

• 3 colored copies of each• Signed in blue ink• Docs must show

• Freight• Insurance• Other charges (when applicable) as

separate line items

INVOICE AND PACKING LIST

Original Commercial Invoices

• INCOTERMS must be stated on the commercial invoice. DAP is allowed, but discouraged.

• DDP is strictly prohibited in Brazil due to tax reasons.

*All required Regardless of Incoterms


BILL OF LADING REQUIREMENTS

NCM NUMBER

This number is a local classification system in Brazil, and is consistent with the Harmonized Tariff System classifications

Brazil requires that the NCM number (Nomenclatura Comum do MERCOSUL) be stated on the bill of lading.

It is only mandatory that the first 4 digits of the NCM number be listed.


REQUIRED DOCUMENTS

Scarbrough International is proficient at assisting in the completion of various other documentation such as certificates of origin and insurance certificates. As long as we know the particular requirements of the customer, we can customize our documentation packet and process to meet those needs.Other documentation may be required


• Original, rated bills of lading are required for Brazil. • “As Agreed” or “Prepaid” will not be accepted• The rate must be shown.

As such, Scarbrough always utilizes our trusted partner in Brazil in order to protect your interests and keep your costs confidential, passing along only the necessary documentation required for clearance to the actual consignee.

ORIGINAL BILLS OF LADING


THE IMPORTANCE OF DETAILS

• We have an accuracy checklist specific to Brazil that is used for each file. Once the MBL is received from the carrier, the MBL, HBL, and commercial documents are checked against each other and this checklist immediately by another team member.

Ideally this is done with 24 hours of sailing.

• Once this internal check is completed, the documentation is then sent to our reliable partner in Brazil, to once again check over all the documentation for any discrepancies.

Having a representative in Brazil that deals with their Customs procedures as part of daily routine is a big advantage. After this second safeguard, the documents are then emailed to the final consignee for their approval before the originals are sent by courier to destination.

This includes, but it not limited to:

Piece count

Commodity description

Port of loading

Port of discharge

Weight

Container

Seal number

Specific Details between MBL, HBL and Commercial Docs must match exactly.

Scarbrough takes ACCURACY serious.


YET, MORE DOCUMENTATION RULES

All documentation needs to be presented timely

• Originals must be in-hand at destination absolutely no later than 5 days before cargo discharges at first port of call in Brazil.

Correct documentation is VITAL!

• There is a very limited window of opportunity to correct documentation, so ensuring accuracy from the beginning is crucial. Once cargo gets stuck in Brazilian customs, it can be a lengthy, expensive process to get it released.

Correction letters issued for

discrepancy are subject to penalties up to USD$50 per

occurrence.

Penalties for late documentation

presentation are up to $5000 (USD)

per HBL.


Sao Paulo / Santos

Paranagua

Rio Grande Itajai

Vitoria

Belem

MAIN OCEAN PORTSRio De Janeiro

Fortaleza Manaus


Sao Paulo / Guarulhos International Airport

(GRU)*Passenger

Rio de Janeiro (RIO)

MAIN AIRPORTS

Sao Paulo / ViracoposInternational Airport

(VCP)*Cargo Only

Porto Alegre (POA)


Fabio Yukio YamadaManaging Director

TRADEBRZ [email protected]

ABOUT THE SPEAKERS

Chad Clooten, CESSupply Chain Specialist


T: 816-584-2425


Darcy BarnesSenior Export Operations Expert


T: 314-592-5325


