Brazil, a Place in the Sun for Made-in-Italy

Throughout the entire last century, Brazil was referred to as the country of the future, as if it were some kind of eternal promise, destined to remain in the imaginary world of endless expectations without ever actually coming true.

But suddenly, everything changed, and for the last ten years, especially during the last five or six, Brazil has become one of the best examples of the miracle of the emerging countries; an example of economic growth that is on its way to reaching a European standard of living, with the kind of vitality that has been lacking in the Old Country for a long time.

The country is favored in this by its enormous potential, with a surface area nearly thirty times that of Italy, and a population of 190 million inhabitants (a little more than three times that of  Italy) , the absence of ethnic and religious tensions, massive natural resources, various climate zones perfect for the most diverse crop cultivations: a proper magnet for the world’s entrepreneurs, and duly recognized by the leading rating agencies.

The possibilities seem especially attractive for Made-in-Italy products, already much appreciated in the most diverse business sectors, from design to fashion, and from food to machine building. In this latter industry, the interest of Italian firms working in the glass industry is sure to become even more pronounced, considering that growth for 2012, too, is estimated at about 3.3% (but the government is talking about +5%), accompanied by a substantial drop in inflation and robust growth in the demand for homes, both for tourism and for residences. This demand is particularly driven by the middle class, which speaks to the significant increase in the capacity and the inclination to buy.

However, all this does not mean that it’s all plain sailing. On the contrary. There are already major obstacles ahead for the foreign companies planning to launch a business locally, particularly in light of Brazil’s extremely complex fiscal system and its burdensome red tape. First hand confirmation comes from Alessandro Schiatti, Director of Production and Development and Brazil Sales Manager for  Schiatti Angelo, manufacturer of glass processing machinery that is quite popular in South America: “We have been successfully exporting to Brazil for several years now,  in fact, orders for the first four months of this year are already on a par with the entire year of 2011. But we still are not convinced that it’s worth the effort to build a manufacturing facility locally. Initially, such an investment might seem easy and beneficial, but then the bureaucratic and fiscal issues begin to surface, and  often, legal questions, too.  Furthermore, the advantage linked to the cost of labor is very limited, because the sweeping economic changes over the last five or six years and the steep rise in the cost of living have significantly reduced the gap between local and European standards”. So, it’s better to focus on the prestige and the considerable technological advantages of Italian-made machines, which more than justify the differences in cost. Here, there are also very steep fiscal penalties, because the import taxes, intended to favor Brazil’s machine building industry (especially in some regions) up the cost of foreign products by as much as 50%, but the enormous potential for growth and easy access to credit help local manufacturers invest in quality.

Expectations for Glass South America, set to take place from May 16th to 19th in Sao Paulo, are imbued with an entirely justifiable sense of optimism: Gimav’s group stand will provide Italian firms with a platform to showcase their still unparalleled technological leadership, and ample opportunity for success in the future.

600450 Brazil, a Place in the Sun for Made-in-Italy

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