Do you know the proper classifications of the products you export? David Noah, founder and president of Shipping Solutions, was featured on the August 13, 2008, daily news broadcast of Small Business Television (SBTV.com) and talked about the importance of proper product classifications.

SBTV.com is the only video news and information destination site for America's 25 million small businesses. The site is committed to providing small business owners the tools they need to manage, grow and protect their ventures.

Click here to watch the complete interview with Noah.

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By Prema Nakra, Ph.D. email | bio

As the fifth largest country in the world and the largest on the South American continent, Brazil has traditionally been an agricultural and commodity based economy. Brazil has consolidated its democracy, constructed a diversified and financially sound economy, solidified its manufacturing base and enhanced its participation in the globalized world. It’s little wonder that Brazil is now considered one of the top four emerging markets in the world.

With approximately 190 million people in an area only slightly smaller than the United States, this leading South American economic power is changing the world’s attitudes toward the country as well as the region. With Gross Domestic Product (GDP) growth averaging four percent and stable leadership emanating from Luiz Inácio Lula da Silva's Presidency, South America's largest economy represents increasing trade opportunities for enterprises large and small.

In this four-part series of articles I will discuss Brazil’s value proposition, how it has motivated multinationals to venture into this emerging market, and the challenges of successfully operating in Brazil.

INTRODUCING BRAZIL

The Country: Brazil, officially the Federative Republic of Brazil, is the largest, most populous and most dynamic economy in South America. Brazil occupies nearly half of the area of South America. Only Russia, China, Canada and the United States are larger. In population Brazil ranks fifth among the nations of the world, after China, India, the United States and Indonesia.

Fronting on the Atlantic Ocean it extends over almost half the continent and shares borders with 10 other countries. The world's largest rain forest spreads across most of northern Brazil; mighty rivers wind through this region including the Amazon. Majestic mountains rise north of the forests and border the Atlantic Ocean in the southeast.

Roughly 75% of the people live in urban areas, nearly all of which are in the highland and coastal areas south of the Amazon Basin. Many cities are growing rapidly, some almost explosively, mainly because of migrants from rural areas. In and near some cities, huge impoverished settlements, called "favelas" have grown up. One such shantytown, Nova Iguaçu, outside Rio de Janeiro, has rapidly become one of the largest cities in Brazil.

Brazil’s Place in the "BRIC" Economies: Brazil is one of the so-called "BRIC Countries" (Brazil, Russia, India, and China) that are now approaching about half the economic size of the G6 countries (U.S., Japan, U.K., Germany, France and Italy). According to a seminal report issued by Wall Street investment bank Goldman Sachs, when taken together the BRICs could be larger than the G6 by 2039 in GDP terms. Compared to some other BRIC nations, Brazil has respectable corporate governance, and the developing economy is supported by its convenient geographic location, making it better placed to service Europe and North America.

Manufacturing Sector in Brazil: The manufacturing sector, with periods of rapid growth, has been key to Brazil’s economic development. Among the major manufacturing industries are food processing; the production of textiles, iron and steel; transportation equipment and chemicals. Automobile assembly and shipbuilding are large and expanding industrial operations. Other important manufacturing activities include production of machinery, electrical and electronic equipment, aircraft, cement, wood and paper products, rubber goods, leather products, pharmaceuticals, plastic items, and transportation equipment.

Case in Point: Each of the major automobile firms has assembly plants in Brazil including Volkswagen, GM, Fiat, Daimler and Ford. Other industry sectors have also ventured into Brazil, for example: Cargill and Nestle in the food and drink sector, McDonalds in fast food franchising, Unilever and Bayer AG in pharmaceuticals, Nokia in Electronics, Motorola in semiconductors, Caterpillar in heavy machinery, and BASF in chemicals. Large fuel companies including Shell, Esso and Texaco have also ventured into the market. Global retailers in Brazil include Wal-Mart, French chain Carrefour and Companhia Brasileira de Distribuicão, the country's largest retailer.

Government has participated in the manufacturing sector by investing in areas such as steel, petrochemicals and aircraft. Foreign direct investment has flowed into the manufacture of automobiles, chemicals and electrical goods. Almost a third of Brazil's Gross Domestic Product (GDP) is accounted for with the manufacturing of automobiles, computers, aircraft and other durable goods.

The manufacturing industry in Brazil is highly concentrated geographically. The leading concentrations are in metropolitan Sao Paulo, Rio de Janeiro, Campinas, Porto Alegre and Belo Horizonte. The more dynamic and technologically advanced industries are also highly concentrated in these locations. São Paulo is the largest and most modern industrial complex in Latin America.

In part two of this series, I will examine Brazil’s value proposition.

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