Trading Companies Finally Get Some Respect in Brazil

Tradings of Brazil Trading companies from Brazil posted revenues of US$ 20.7 billion from exports last year. They answered to 10.5% of the country's total revenues from foreign sales, according to data disclosed this Wednesday, May 6, by the Brazilian Export and Investment Promotion Agency (Apex) during seminar "Trading companies in Brazil," held in the city of São Paulo, capital of the state of the same name.

The figures were surveyed by the Getúlio Vargas Foundation (FGV), at the request of the Apex, which began implementing a program for encouraging exports by means of trading companies last year.

Sales by trading companies grew last year, taking into consideration that in 2007, revenues from exports totaled to US$ 16.39 billion. The figures include sales by trading companies and also by those known as commercial exporter companies.

According to the president at the Apex, Alessandro Teixeira, there is potential for the US$ 20 billion to double within three or four years. The aim of the program is to enable exports by small and medium companies, given that these usually export only by means of trading companies.

"There is a potential to be developed in the foreign trade field, namely small and medium companies that could export, but are not allowed to," says the secretary of Foreign Trade at the Brazilian Ministry of Development, Industry and Foreign Trade, Welber Barral, who also participated in the seminar in São Paulo. The Apex programs, for instance, include 6,000 companies, 30% of which do not export yet. Until they start operating in foreign trade, it would take approximately three years. The idea is to shorten the path.

After the program started being implemented, a mission to Angola, Africa, has already taken place. In the second half of this year, a new trip will be made to representatives of trading companies, including business roundtables, in South Africa.

The idea, however, is to invite not only buyers from the country itself, but also from the other African nations, such as those in the North of the continent, where the Arabs are located. Depending on the results of the action, the Apex intends to carry out new roundtables, in 2009, in Asia, the Middle East and Eastern Europe.

The goal of the Apex program is also to value the role of trading companies, so that they are not regarded simply as sales intermediaries. Secretary Barral claims that they are going to play an important role in the diversification of Brazilian exporter companies. In trade missions, trading companies usually represent more than one company.

The same applies to the export products, as they usually promote more than one type of item. "Wherever there is lack of awareness of Brazilian products, as is the case with Arab countries such as Bahrain or Qatar, trading companies might arrive with, say, 30 different products," says Teixeira.

Wednesday's  seminar was the first large meeting of Brazilian trading companies. Besides the seminar, which gave an idea of the size and current status of the segment, the meeting included business roundtables involving approximately 200 businessmen from Brazil and another 40 from other countries in America.

The survey presented during the meeting pointed out that there are 5,773 trading companies and commercial exporter companies in Brazil. Most of their foreign sales, in 2008, consisted of machinery and equipment, with 37%, followed by foods, 13%, textiles, clothing and footwear, also 13%, and household and construction items, 12%.

The majority of trading companies in Brazil export through São Paulo. The state concentrates 48% of exports by those companies. Next come the states of Rio Grande do Sul, with 11%, Santa Catarina and Paraná, with 9% each, Paraná, Minas Gerais and Espí­rito Santo, with 7% each, and Rio de Janeiro, with 5%.

At the seminar, a proposal was made for the creation of a nationwide managerial group, which would congregate and represent the companies. Aside from promotion of trade, the Apex program also provides for the creation of said group, as well as changes in regulation for trading companies, and simplification and extension of financing.

Anba

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