Brazil’s Petrobras Spreads the Riches and Boosts Small Businesses

Small factory in Brazil For a little over three years now, more than 2,000 micro and small businesses from 11 Brazilian states, with support from the Sebrae (Brazilian Micro and Small Business Support Service) have been qualifying themselves as suppliers to the oil and gas (O&G) production chain.

The strategy contributes to leverage national development, and is one of the objectives of the Program for Mobilization of the National Oil Industry (Prominp) of the Brazilian federal government.

In October 2004, the Prominp, Sebrae and the Brazilian state-owned oil company Petrobras signed the agreement that currently stands out by helping small companies to enter the O&G production chain.

During that period, 8,544 companies have been identified as effective or potential suppliers to the O&G production chain. Out of that total, managers at 4,592 micro and small businesses (MSB) were recruited to engage in activities pertaining to one of the agreement's 14 projects, in 11 different states, where Petrobras owns units for exploration, production and refinement of oil and gas.

Most of these MSB became part of the RedesPetro (PetroNetworks) as suppliers of equipment, products and services to Petrobras and the entire O&G chain in Brazil. So far, they have counted on the support of 136 large- and medium-sized companies that are anchors for actions of the agreement's projects. Said actions include business roundtables, training for suppliers, and events concerning business opportunities and purchasing policies.

The Sebrae-Petrobras agreement is regarded as innovative and the first of its kind in the history of Petrobras and Brazil. It creates market opportunities and allows for the entry of small businesses into one of most prosperous sectors in the Brazilian economy. Besides increasing the businesses' efficiency and revenues, the agreement fosters technological innovation.

Products and solutions developed by executives at small-sized companies have earned important awards and international certifications. New equipments manufactured in Brazil are replacing and reducing imports by Petrobras and other large companies in the sector.

The Brazilian entrepreneurial and technological creativity surprises the O&G chain. In addition to technological items, Brazilian micro and small businesses also supply furniture, clothing, security, foodstuffs, medical appointments, and electrical services, among others.

This year, the partnership between Sebrae and Petrobras should be renewed for another three years. The results of the agreement's first phase show that large companies in powerful and established economic sectors, such as O&G, can serve as excellent anchors to the national and local development, especially when coupled with MSB networks.

"The Sebrae-Petrobras agreement provides a model that can be reproduced in other production chains," says the manager at the Collective Service Unit – Sebrae Industry ("Unidade de Atendimento Coletivo – Indústria do Sebrae"), Miriam Zitz.

This formula, which has been put to use for decades in other countries, points to a path to be travelled by other large companies in the remaining Brazilian production chains.

"Speaking directly to the market generates less echo. It is also a means of leveraging the companies that are located near the Petrobras units," says the manager of the agreement at Petrobras, José Luiz de Oliveira Reis. According to Reis, the result of this practice not only reflects in the business realm, but also in living conditions.

"All of the companies involved have learned how to cooperate. Being in a network is more productive than being alone," he says. In the process, Reis explains that Petrobras had to adapt to local realities in order to work with companies near its units. One example was the need to adapt the language contained in its manuals to the different local expressions.

The national project manager for the O&G chain at Sebrae, Eliane Borges, explains that in the next three years of the agreement, the two institutions will continue to develop their work, focussing on five strategic issues, as follows: diagnosis of the local production chain, training to MSBs, formation and consolidation of business cooperation networks, mobilization of large companies, and articulation of the many existing chains of action.

In the new phase, companies from the states of Pernambuco (Northeast) and Santa Catarina (South) will also take part in the agreement. In the state of São Paulo (Southeast), the project is already being structured.

Another focus will be on adapting small-sized businesses to regulations concerning health, environment, and safety in the workplace. "This is a common demand by large companies. Usually, small businesses do not control those features very much," says Eliane.

"We shall also support technological development and promotion of the capacity for innovation of micro and small businesses," states Eliane. She explains that a survey of the technological demands by large companies will be conducted.

The survey will provide the basis for the evaluation of the MSB's capacity of joining together to cater to the demand, in partnership with technological organizations.

Sebrae

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