Right time to invest in Brazil
The investor who is not interested in Brazil right now is making a serious mistake. This is the opinion of Yvan Bernardin, founder of Bernardin Brazil Business Development.
Why do you think this is a great time to invest in Brazil?
Yvan Bernardin: as surprising as it may seem, several factors come together to make this terrible moment the most suitable time for investing in the country. First, the exchange rate: between May 16, 2015 and May 16, 2016, the Real depreciated 58% against the US Dollar. For a foreigner, Brazil now costs 58% less than two years ago, only by the exchange rate factor. Second, the crisis creates opportunities for good business. Many Brazilian companies are suffering from the economic recession, and need external financial resources for recapitalization. Companies need to sell whether products or services or shares or the whole company!
The third factor is the most important: foreign companies must take advantage of the recession time to position themselves in the market in order to be ready when the economy grows again. It is known that the return on investment in the domestic market takes three years on average, so it is no use waiting for the economic recovery to think about doing something.
Do you believe in the quick recovery of the country’s growth?
Yvan Bernardin: A quick look at the economic history of Brazil shows that the country has a cyclical economy, with ups and downs; only the duration and intensity of the recession vary slightly. Today, the economic situation may seem worse than in previous recessions because of the political crisis, but Brazil will grow back and the foreign investments will accelerate this process.
Let´s not forget that Brazil is the 7th or 8th largest economy in the world, with a 200 million people market, insufficient infrastructure, requiring private investment, with huge reserves of raw materials (agricultural, minerals, energy), setting up a strong growth potential in exploration and processing activities; furthermore, the industries are lacking in new technologies and the workforce in training.
What are the most promising sectors? Are there markets that continue to grow despite the crisis?
Yvan Bernardin: A strategic study of the Brazilian market cannot be only macro but requires a thorough analysis of the niche or segment in which the company will operate. Then there might be surprises, for example the IT sector continues to grow above 15% per year; the pharmaceutical industry rose 9% in 2015. The recession does not affect everyone, quite the contrary!
Source: Chamber of Commerce Brazil-Canada (CCBC)