World Bank / IFCBRASSCOM SeminarAntonio Gil, PresidentMay 20th - Washington DC

BRASSCOM

BRASSCOM

THE NEW DISCOVERYTHE NEW DISCOVERYOF BRAZIL*OF BRAZIL*

* In pursuit of the way to India

BRASSCOM

Congress with Senate & House, 81 / 513 Elected Governors & HousesElected Mayors & Councils

3

4

Labor laws dating 1939Ministry of Labor / Special Labor Courts

Federative Republic with 26 states and Federal District

Independent Judiciary with three levelsSupreme Court appointed by President, need Senate approval

Tough legislation on Environment and sweat-labor

Political Organization

BRASSCOMBrazil Numbers in a nutshell

Currency reserves are over US$180 Billion, external debt 50% of reserves

GNP: US$ 1,5 Tri GNP Growth in 2007: 5,4 % - 2008 (est.): 5%

Population : 186 Mi (Urban: 80%)

Inflation under control – 2007: 4,8%

DFI 2006: US$ 16 Bi 2007: US$ 31 Bi

Exports 2007: US$ 160 Bi

3

Investment Grade

BRASSCOMInfrastructure

Efficient Post Office internal system, most major fast delivery operators present (UPS, Fedex, etc)

Comprehensive Telecom network offers country-wide access

125 million mobile phones in operation in the end of 2007

Brazil has world’s second largest private aviation fleet

Fast air access to Europe and North America (9-12 hours flights)

Federal & State highway system covers the whole country – growth assured through private concessions

3

4,6 million wideband access (2006)

BRASSCOMEducational System

There are 2,270 Universities among Federal, State and Private and 5,8 Mi students (Source: MEC, 2006)

Technical Schools and Universities turned out 246,000 IT-related professionals (Source: MEC, 2005)

9-year Elementary school today reaches 100% of population

High-school 3 yearsTechnical Schools with 1 more year, ready to enter in the IT job market

111 post-graduate IT-related courses

3

More than 250 new public technical schools will be created by the end of 2010

BRASSCOMPosicionamento

FOOD POWER

BRASSCOM

Agriculture GDP (2007): US$ 318,6 biTotal Exports in Agribusiness (2006): US$ 49,4 bi

Key facts about Agribusiness in Brazil

Total Cultivated Area:2007: 57,8 Mi ha2008: 59,7 Mi ha(Var.: 3,4%)

Source: Ministry of Agriculture / IPEA / WFP / US Grains Council

3

Brazil’s position in agricultural exports (2007 - % of the world exports)

The No. 1 exporter:• Coffee: 28,9%;• Beef: 30,0%;• Poultry: 37,8%;• Sugar: 41,5%;• Orange Juice: 83,5%;

The No. 2 exporter:• Soybean: 34,2%;

The No. 3 exporter:• Corn: 8,6%.

BRASSCOMPosicionamento

ENERGY POWER

BRASSCOM

Oil Production: 2,15 million barrels/day (AIEA 2008 est.)

Key facts about Energy in Brazil

Tupi oil discovery in Brazil:

33 billion barrels (Petrobras Apr. 2008 est.);

New discoveries can make Brazil a major oil exporter by 2012

Petrobras

• A Brazilian oil and gas company, dedicated to oil exploration and distribution, created in 1953;

• Active in 27 countries;

• 109 production platforms and 15 refineries (2007);

• Leading corporation in innovation and research in deep and ultra deep water exploration and production;

• 4th largest oil company in the world; • Market value: US$ 242,76 billion (2007).

BRASSCOM

Hydropower• Clean Hydroelectric Power continues to be main energy source;• World’s 3rd largest producer of hydroelectricity;• It corresponds to 83% of Brazilian electricity production.

Key facts about Energy in Brazil

BRASSCOM

Biofuels - Brazil is the world’s leader in renewable-energy sources

Biodiesel: • 2004: announced the “National Program for Production and Use of Biodiesel” – mandatory 2% of biodiesel (2008), and 5% (2013). Ethanol:• National Program of Alcohol (Pró-álcool)• Revenues from Ethanol Exports (2006): US$ 1,6 billion (UNICA)• 71,2% of Brazilian vehicles are flex fuel (2007)• Productivity (gallons of ethanol per acre): 727 in Brazil (321 in the USA) (WW Int. Center est. 2006/7 for Brazil and 2004/5 for the USA)

% of global production of ethanol in 2006. (World Bank)

Key facts about Energy in Brazil

BRASSCOMCase of Success

Embrapa

• Brazilian Agricultural Research Corporation; focused on solutions for

sustainable development in agriculture;

• Driving technological force for the progress of Brazilian Agribusiness;

• Budget in 2007: more than US$ 602 Mi;

• Coordinates the National System for Agricultural Research;

• Global laboratories for cutting-edge technology development;

• 68 bilateral agreements with 37 countries; 20 multilateral agreements;

• 38 research centers (biogas, biodiesel, ethanol, genetic engineering, nanotechnology, biologic security).

BRASSCOMCases of Success

Embraer

• 4th largest aircraft manufacturer in the world, active in 6 countries; • Privatized in 1994;• Produces commercial and executive Jets and also Defense systems; • Market Value: US$ 20,3 bi (April 2008).

Vale

• Second diversified-mining company in the world and biggest private company in Latin America;• Largest producer of iron ore, pellets and nickel; • Active in all continents and 33 countries;• Market value: US$ 150 bi (2007).

Steel

Paper

BRASSCOMPosicionamento

IT POWER

BRASSCOMIT Market

IT-GNP of over US$ 20,6 Bi (IDC, 2007)

US$ 9,0 Bi in services

15% growth in 2004-2005, 25% in 2006-2007 (IDC)

Competitive services market, ACCENTURE, BRQ, BT, CAST, CPM

BRAXIS, DATASUL, DTS, EDS, G&P, GFT, HSBC, HUGHES, IBM,

INTEL, ITAUTEC, MICROSOFT, POLITEC, PROMON, SATYAM,

SIEMENS, STEFANINI, SUN, TATA, TIVIT, TOTVS, UBIK, UNISYS

Local PC makers have outperformed traditional manufactures like

HP, Dell, Acer, with strong sales & support organization and

competitive prices

2

3

4

BRASSCOMIT Market

Highly experienced IT Professionals - Starting 45 years ago.

IT professionals now number more than 1,7 Million

Intensive use of diverse platforms, Mainframe, Unix, Linux, .Net,

Java, Oracle, SAP, Natural Adabas, …

Brazil ranks second (after USA) in world’s mainframe population,

with an experienced pool of COBOL professionals

Brazil is leader in Java programmers, with several JUGs and has the

largest JUG in the world (18,000 members, IDC)

Labor pool developed from a business-technology approach, with

deep industry knowledge

3

BRASSCOM

1.233

70

1.106 1.1421.081

1.186

755

607 636711671

5018 26 36

20082004 2005 2006

IT Services Expenses

(in-house and outsourced)

IT Services Expenses

(outsourced and off-shore)

IT Services Expenses

(outsourced)

IT off-shore demand will grow hardly in the services market share. IT off-shore demand will grow hardly in the services market share.

2007

Global IT Services Market Evolution(US$ Bi)

CAGR1

3%

6%

40%

1) Compounded annual growth rateSource: Gartner Group

Global Sourcing opportunity

BRASSCOMBrazil’s Advantages

Industry knowledge

Cultural compatibility

Strong and diversified internal IT market

Favorable time-zone

Absence of natural disasters

No ethnical or terrorism problems

Western and democratic legal system

Political and economical stability

45 years of IT investments

4

BRASSCOM

More than 85.000 professionals with 65% of Brazilian IT-GDP

Today 35 members

Founded in 2004 by major Brazilian IT companies

2

The Brazilian Association of Information Technology & Communication Companies

BRASSCOMBRASSCOM Goals

TECHNICAL AND LANGUAGE EDUCATION

EXPORTS PROMOTION & BRANDING

MARKET STRENGTHENING

INFORMATION & INTELLIGENCE

REGULATORY

DIGITAL CONVERGENCE

Work actively with Governments, Universities, other Public Institutions and Enterprises to provide world-class training and education programs

Position, promote and disseminate Brazilian IT capabilities internationally and domestically. Increase volume of Brazilian IT exports

Facilitate potential partnerships, joint-ventures, alliances and other joint-efforts among local and international companies

Guide IT industry to the Digital Convergence challenges.Foster innovation

Create, maintain and disseminate an information database for the Brazilian IT Industry

Take effective steps to generate a competitive, fair and ethical environment for the IT industry

BRASSCOM3-years national program in IT

US$ 5 billions in exports

100,000 new professionals

Federal Incentives

10% reduction on labor charges

3,5% reduction on “S System”

Income tax reduction for Education and Innovation in R&D

Local Incentives

Facilities and infrastructure

Local tax incentives

BRASSCOM

The 21st century is the century of knowledge. The 21st century

is the century of Brazil.

BrazilOne of the 3 key global players in

Information Technology

World Bank / IFCBRASSCOM SeminarAntonio Gil, PresidentMay 20th - Washington DC