CONFIDENTIAL

FOR INTERNAL USE WITHIN

CLIENT COMPANY ONLY

INTRODUCTION TO BRAZIL

BUSINESS OPPORTUNITIES IN LATIN AMERICA’S LARGEST ECONOMY

São Paulo, Brazil

September 2015

SÃO PAULO, 1 OF 26 BRAZILIAN STATES, HAS A LARGER ECONOMY THAN TURKEY

SEPTEMBER 2015

BRAZIL IS THE 7TH

LARGEST ECONOMY IN THE WORLD

SOURCE: IBGE, BRAZILIAN CENTRAL BANK, MINISTRY OF DEVELOPMENT, INDUSTRY AND FOREIGN TRADE

2,3 trillion USD GDP

Well-

developed

industrial

sector

Largest

market in

Latin

America

Growing

consumer

market

4x Sweden´s GDP

The world´s 7th largest economy

201 million people

21x Sweden’s population

15 cities with over 1 million inhabitants

8,5 million km²

19x Sweden’s land area

Land mass about the size of Europe

Diversified

and resource-

rich

economy

SEPTEMBER 2015

BRAZIL IS A DEMOCRACTIC REPUBLIC CONSISTING OF

26 STATES AND ONE FEDERAL DISTRICT

SOURCE: IBGE, MINISTRY OF FOREIGN TRADE

Political system: Federal presidential representative

democratic republic

Number of states: 26 states and the Federal district

President: Dilma Rousseff (PT – Worker’s Party)

Language: Brazilian Portuguese

Currency: Brazilian Real (BRL)

Main exports: Iron ore, petroleum, biofuels, soy,

aircrafts and vehicles

Main imports: Petroleum, electronic equipment and

auto parts

Top three trade partners: China, US, Argentina

São Paulo

Rio de Janeiro

Belo Horizonte

Brasília

Curitiba

ITS MAIN TRADING PARTNERS ARE CHINA, US AND ARGENTINA

TOP 6 MAJOR CITIES OF KEY IMPORTANCE FOR THE ECONOMY

Porto Alegre

LEADING EXPORTER OF IRON ORE AND AGRICULTURAL PRODUCTS

SEPTEMBER 2015

THE BRAZILIAN ECONOMY TOOK OFF IN 2003 BASED ON

MACRO-ECONOMIC REFORMS INTRODUCED IN 1994

1988

1992

1994

2003

THE LAST THREE DECADES BRAZIL HAS BUILT SOLID DEMOCRATIC INSTITUTIONS AND A FUNCTIONING MARKET ECONOMY

Currency reform and

controlled inflation

Economic growth is

stabilized Opening to

international trade

Creation of Mercosur

free trade agreement

Brazil “takes off”

5% annual GDP growth

Decreasing inequalities

Rise of middle class

Democratization after

20 year dictatorship

New Constitution

SEPTEMBER 2015

ECONOMY AND POPULATION CONCENTRATED TO THE

SOUTHEAST

SOURCE: IBGE, SWEDCHAM

Pará

Santa

Catarina

Tocantins

Bahia

Rio Grande

do Sul

Paraná

Mato

Grosso

do Sul São

Paulo

Espírito

Santo

Rio de

Janeiro

Minas

Gerais

Mato Grosso Rondônia

Acre

Amazonas

Roraima Amapá

Maranhão

Piauí

Sergipe

Ceará

Alagoas

Pernambuco

Goiás

Paraíba

Rio

Grande

do Norte

Brasilia

THE STATE OF SÃO PAULO STANDS FOR A THIRD OF BRAZIL’S GDP

GDP (%)

North

Population (%)

Land mass (%)

Northeast

Southeast

South

Central West 10%

16%

55%

14%

5%

8%

14%

42%

28%

8%

22%

7%

11%

18%

42%

Region

90% of Swedish

companies

established in

Brazil are located

in the São Paulo

metropolitan

region

SEPTEMBER 2015

BRAZIL IS PART OF THE REGIONAL TRADE AGREEMENT

MERCOSUR

SOURCE: MERCOSUL, SWEDCHAM *WITH SOME SPECIFIC RESTRICTIONS

FOR MANY SWEDISH COMPANIES BRAZIL IS AS AN ENTRY POINT AND BASE FOR EXPANSION IN SOUTH AMERICA

MERCOSUR is a free-trade bloc established in 1991 by

Argentina, Brazil, Venezuela, Paraguay, and Uruguay

MERCOSUR allows for the free trade of goods, services,

and production inputs between the member countries*

Bolivia, Chile, Colombia, Ecuador and Peru have in some

cases bilateral free-trade agreements with MERCOSUL

members but remain outside the bloc's customs union

Instead Chile, Colombia, Mexico, and Peru have formed

their own free-trade bloc – the Pacific Alliance

More than a half of Swedish companies in Brazil are not present

in any other Latin American country

48% of Swedish companies in Brazil are exporting to Latin

American countries. Chile, Argentina and Peru are the main destiny

Food industry; 9%

Automotive industry; 6%

Coke production, oil refining and biofuels;

5%

Chemical industry; 5%

Steel industry; 3%

Machines and equipment industry; 3%

Other transformation industries; 17%

Metalic mineral extraction; 12%

Oil and gas extraction; 2%

Other extractive activities; 4%

Construction; 27%

Utilities production and distribution; 9%

GDP DIVIDED BY ECONOMIC ACTIVITY (%)

SEPTEMBER 2015

BRAZIL HAS A DIVERSIFIED INDUSTRIAL SECTOR

SOURCE: BRAZILIAN STATISTICAL BUREAU

Services

60 %

INDUSTRIAL GDP DIVIDED BY ACTIVITY (%)

Agriculture 5%

Industry 21%

Public administration, health & education

14%

Retail 11%

Real state activities &

rents 8%

Financial services & insurance

8%

Transport, storage & mailing

4%

Information services

5%

Other services

14%

Net taxes over

products 15%

ALTHOUGH SERVICES REPRESENT 60% GDP

ECONOMIC RECOVERY IS EXPECTED FOR 2017

GDP GROWTH % 2000-2016

4,4%

1,3%

3,1%

1,2%

5,7%

3,1%

4,0%

6,0%

5,0%

-0,2%

7,6%

3,9%

1,8%

2,7%

0,1%

-2,0%

0,0%

-3,0%

-1,0%

1,0%

3,0%

5,0%

7,0%

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

*

20

16

*

SEPTEMBER 2015

THE ECONOMY HAS SLOWED DOWN DURING THE LAST 4

YEARS AND ENTERED INTO RECESSION IN Q2 2015

SOURCE: BRAZILIAN CENTRAL BANK *FORECAST

AS FROM 2017 THE ECONOMY IS EXPECTED TO START A SLOW RECOVERY

Brazilian economy entered a crisis due to a

series of challenges:

Political grid-lock obstructing economic

reforms and financial stability measures

Increase of debt and unbalanced public

finances

The economy still being highly commodity

export-driven

Long-term structural problems linked to the

“Brazil cost” (“Custo Brasil”)

END OF THE COMMODITY BOOM AND THE PERSISTENT “BRAZIL COST”

SEPTEMBER 2015

TWO KEY REASONS FOR CURRENT CHALLENGES

SOURCE: MGI

Lacking

infrastructure

High taxes

Regulatory

burden

Bureaucracy

Import tariffs

Corruption

Low

productivity

Lack of

qualified

labour

The Brazil

cost

CURRENT POLITICAL GRIDLOCK ON FEDERAL LEVEL IS FURTHER HURTING THE ECONOMY AND HINDERING ECONOMIC REFORMS

FALLING GLOBAL COMMODITY PRICES

THE COUNTRY IS THE 21ST LARGEST DESTINATION FOR SWEDISH EXPORTS

SEPTEMBER 2015

SWEDEN HAS A TRADE SURPLUS OF USD 1,5 BILLION

WITH BRAZIL

SOURCE: BRAZILIAN MINISTRY OF FOREIGN TRADE

BRAZIL IS A MAJOR IMPORTER OF SWEDISH INDUSTRIAL GOODS

THERE ARE MANY SMALLER COMPANIES GETTING

ESTABLISHED IN BRAZIL

SEPTEMBER 2015

SÃO PAULO IS SWEDEN'S SECOND LARGEST

INDUSTRIAL HUB

SOURCE: INTERVIEWS AND SWEDCHAM REPORT

SWEDISH MULTINATIONALS HAVE A LONG-TERM PRESENCE –

MANY WITH LOCAL PRODUCTION SINCE OVER 50 YEARS

MORE THAN 220 SWEDISH COMPANIES EMPLOY 70 000 PEOPLE

LARGER OR SMALLER, SWEDISH COMPANIES FROM VARIOUS INDUSTRIES ARE ENTERING THE BRAZILIAN MARKET

64%

36%

47% 53%

64% of Swedish

companies in Brazil have

1-50 employees

47% of Swedish

companies in Brazil have

a turnover of up to

10 million BRL

SEPTEMBER 2015

DESPITE CURRENT CHALLENGES VARIOUS SECTORS

OFFER SIGNIFICANT BUSINESS OPPORTUNITIES

BEYOND THE SHORT-TERM MACRO ECONOMIC OUTLOOK THERE ARE PLENTY OF OPPORTUNITIES FOR SWEDISH COMPANIES IN BRAZIL

Food

Industry &

Agribusiness

Mining

Oil

& Gas

Healthcare Defense &

Security

Automotive &

Transport

Public and private sector expanding

Public health system covering

200 million people

Aging population

World-leading mineral producer

High investments to increase

productivity and efficiency

Significant unexplored

mineral deposits

Presence of major global OEMs,

with large investments

Exports to Latin America

Government incentives

Acquisition of SAAB Gripen fighter

aircrafts

Extensive Swedish-Brazilian

cooperation within defense

Large domestic aerospace

industry

World-leading producer of

soybeans, coffee and sugar

Large beef and poultry production

The world's largest area of arable land

USD 130 billion to be

invested 2015-2019

Expected to become top ten

global oil producer by 2020

Lack of local competition

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BUSINESS SWEDEN OFFERS A FULL SERVICE

PORTFOLIO FOR EFFICIENT MARKET ENTRY

* BSO SERVICES INCLUDE: OFFICE PLACE & SERVICE, ADMINISTRATION, COMPANY ESTABLISHMENT (INCL

LEGAL ADRESS) , DELEGATE MANAGER AND FINANCIAL ANALYSIS

SEPTEMBER 2015

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OUR CUSTOMERS

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INTO BRAZIL

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SWEDISH COMPANIES

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NETWORKS IN BRAZIL

CONTACT US

BUSINESS SWEDEN IN BRAZIL

Rua Joaquim Floriano, 466 – cj 1908 – Ed. Office

BR 04534-002 – São Paulo - Brazil

Phone: +55 11 2137 4400

Fax: +55 11 2137 4425

brazil@business-sweden.se

SEPTEMBER 2015