Rockford courts Brazilian markets
By Ana Lucia Richa
By Ana Lucia Richa
Rockford College Internexus Student
and Brazilian Journalist
How far is Brazil from Rockford? If the subject is international business, Brazil is nearer to Rockford than people can imagine. Since the 1980s, business relations between Rockford industry and Brazil have been constant and increasing. At least 10 of the 36 Rockford companies which have more than 300 employees have stable trade with Brazil. These commercial relations are through sales representatives, their home offices and, for some of these companies, through regional branches.
Ingersoll and Eclipse are Rockfords strongest trading partners.
Ingersoll Milling Machine Company is one of the many U.S. factories that has bet on Brazils increasing potential, with its machine tools and machining systems. In addition to exports to Brazil, Ingersoll has one factory in the state of Sao Paulo.
Sergio Petti, sales engineering manager of Eclipse Incorporated, believes that Brazil stands out in South America in economic potential. Eclipse occupies about 5 percent of the Brazilian market for its product, exporting industrial blowers, burners and heating systems.
Also doing business with Brazil are the following local companies or their subsidiaries: Hamilton Sundstrand Corporation, Textron, Inc., Woodward Governor Company, Newell/Amerock Corporation, Invensys Environmental Systems, Taylor Company and Pacific Scientific Motor & Control Division.
The Country Commercial Guide of Brazil for 2001, a report of the U.S. Department of State and the U.S. Embassy in Brazil, pointed out Brazil as a substantial market opportunity for U.S. exports.
The report encourages the investors claim that Brazil is the 10th largest economy in the world and represents almost half of South America in population (170 million people) and in territory (3,286,500 square miles). Also, in 1999, Brazil was the 11th largest export market for the U.S. The main reason justifying this position in the U.S export ranking is that the Brazilian government emphasizes increased economic opportunities for the private sector through competition. Second, consider the big industrial and individual consumer markets.
In addition to this, the companies that open a branch in Brazil find an abundant and cheap workforce. The minimum wage for one month with 40 hours a week is 180.00 Brazilian Reals, which converts to $75.00.
Despite the many advantages, the Brazilian system of importation can be a negative one for international investors. The tariff barriers are high, and the bureaucracy makes the transactions difficult.
Far from the biggest market for Rockford companies, Brazils commercial worth is substantial. According to the Rockford Area Chamber of Commerce, total exports to Brazil in 1999 were valued at $5.5 million.
The expectation is that these exports will increase, following the positive Brazilian economic development. The growth estimate for the Brazilian economy in 2002 is 2.5 percent, according to a Brazilian Central Bank report released in March.