brazil industrial, logistic and supply chain overview · northeast of brazil and 2nd tier regions...

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Brazil Industrial, Logistic and Supply Chain Overview GIB presentation Research and Market Intelligence

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Page 1: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

Brazil Industrial, Logistic and Supply Chain

Overview

GIB presentation Research and Market Intelligence

Page 2: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

Growing middle class forecast

1

49%

24%

9%

38%

54%

58%

13% 22%

33%

2003 2013 2023

High

Middle

Low

Classes according to per capita income, in Reais per month as of July 2013: low class (up to 320), middle class (320 to 1,120), high (more than 1,120)

Source: Serasa-Experian

+ 17 Million + 41 Million

176 Milllion 201 Milllion 216 Milllion Population

Classes as of percentage of total population

Page 3: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

Northeast of Brazil and 2nd tier regions are growing

2

Percentage of consumption by region and by capital versus countryside

59 55 49

14 16 20

1991 2002 2014

From southeast to northeast

South Southeast Central-west Northeast North

54

37 32

46

63 68

1991 2002 2014

From capital to countryside

Capital cities Countryside

Source: IPC Marketing

Page 4: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

12%

3%

9% 10%

9%

10%

15%

10%

12%

10%

12% 12%

11%

14%

11%

10% 10%

9%

6%

2%

0%

4%

1%

-2%

6%

2%

6%

7% 7% 6% 6%

7%

4% 4% 4%

2%

-0,50

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F

Ho

use

ho

ld c

on

sum

pti

on

(R

$ T

rilli

on

s)

Household consumption Nominal growth Real Growth

Internal Market is still main economic driver

3

Household consumption

Source: IBGE

2nd

half

* 3.3 Trillions estimated

Page 5: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

E-commerce shows more than 20% growth per year

4

E-commerce revenues

10,6

14,8

18,7

22,5

28,8

34,6

2009 2010 2011 2012 2013 2014*

e-Commerce revenue R$ billion

2009-2014

CAGR 26,7%

USA

~6% of retail revenue

CAGR: ~15%

US$ 202 billion

*estimate Source: e-bit, Census US Department of commerce

1.4%

2.2%

% of retail

revenue

1.8%

1.9%

2.0%

Page 6: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

34%

19%

19%

12%

16%

Asia* LATAM European Union - EU USA Other

64%

16%

9%

9% 2%

Raw materials and intermediates Consumer goodsFuels and lubricants Capital goodsother

Brazil exports commodities to Asia

5

Brazilian exports by destination and by product category

*China ~20%

Source: Ministry of Development, Industry and Foreign Trade, CEBC

US$ 238 Billion Total ~26% Soy beans and

iron ore

Page 7: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

Brazilian logistics performance score

6

Logistics Performance Index (LPI 2014) – Brazil in 65th

Brazil: 2.94

U.S.: 3,92

Germany: 4,12

Hong Kong SAR ,

China: 3,83

India: 3,08

Russia: 2,69

South Africa 3,43

Source: Logistics Performance Index, World Bank, 2014

Singapore: 4,00

Mexico: 3,13

Page 8: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

Logistics performance index

7

LPI Score 2014 - Brazil position

Source: Logistics Performance Index, World Bank, 2014

1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 28th 34th 42nd 50th 54th 60th 65th 90th

In 2012: Brazil was 45th in LPI rank. Dropped 20 positions due a reduction in all partial scores, with significant

decreases in International shipping, Timeliness and Infrastructure.

Page 9: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

Roads are the main mode, despite its costs

8

% TKM

Source: ILOS/CSCMP

67%

18%

11%

3% 1%

31%

37%

10%

21%

1%

Roads Rail Waterway Ducts Aerial

BR EUA

Page 10: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

So

uth

east

S

ou

th

Cen

tral

N

ort

hea

st

No

rth

São Paulo

Rio de Janeiro

Minas Gerais

Espírito Santo

Paraná

Santa Catarina

Rio Grande do Sul

Mato Grosso do Sul

Mato Grosso

Goiás

Distrito Federal

Maranhão

Piauí

Ceará

Rio Grande do Norte

Paraíba

Pernambuco

Alagoas

Sergipe

Bahia

Rondônia

Acre

Amazonas

Roraima

Pará

Amapá

Tocantins

Good Very Good Regular Bad Very Bad

Periferic regions in need of better road conditions

9

Main roads conditions per state

Source: CNT, 2012

10%

27%

34%

20%

9%

Brazil

Page 11: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

10

22,9

19,5

13,3

9,4 9 8,7

5,1 5 4,7

3,5

0

5

10

15

20

25

EUA Índia Argentina Chile China México Rússia Austrália Canadá Brasil

Source:: CNT, 2011

Freight railways transportation overview Density of railways (linear Km per 1,000 sq. km of land area)

Page 12: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

1,4% 1,8% 2,0% 2,1%

1,3%

2,1% 1,9% 1,9%

4,8%

4,4% 4,6% 4,7%

7,5%

8,3% 8,5% 8,7%

2005 2009 2011 2013

Warehousing Stock Transportation

19% 22% 24% 24%

Transportation costs are 54% of logistics costs

11

% net revenues

Total

Source: ILOS

54% 54% 53%

22%

17%

22% 25%

64%

Page 13: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

0

2

4

6

8

10

12

14

16

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Pu

blic

Inve

stm

ent

(R$

Bill

ion

s)

Roads Railways Waterways Aerial Total investment

Public Annual Investments has trippled...

12

Source: CNT, 2014

4 Billion

12 Billion

Annual public investment by transportation mode

Private investment tend to be ~60% of public investments

Page 14: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

But there is a long path to be run...

13

28 years in current investment levels and

annual GDP growth

Suggested investments in main axis of transportation

Source: CNT - 2014, USP

747 Billions of suggested investment

Page 15: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

More investments in Rail and Waterways proposed

14

% of total investment in transportation by mode

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Actual investment profile Proposed investment profile

Aerial

Waterways

Railways

Roads

Source: CNT, 2014

20% 56%

Page 16: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

Market Overview / High-end industrial 1H 2014 – Brazil

15

Total

Stock

24.1 MM sqm

+ 3.6%*

New Stock

Delivered

1.1 MM sqm

-1.7% yoy

New Stock

Forecast

14.8 MM sqm

2H2014 - 2017

Vacancy

Rate

10.9%

+ 0.8 p.p.*

Asking

Rents

20.86

R$/sqm/month

- 1.1%*

Source: JLL *over last semester

Page 17: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

High-end warehouse stock per state

No stock

0 ~ 26k sqm

26k ~ 58k sqm

58k ~ 129k sqm

129k ~ 325k sqm

325k ~ 489k sqm

489k ~ 1.3m sqm

> 1.3m sqm

Existing stock

Rental changes

Decreasing (-2 ~ 0 %)

Stable (0%)

Increasing (1 ~ 3 %)

Increasing (3 ~ 6 %)

Increasing (7 ~ 12 %)

Rent price

Rent average (R$/sqm) 18

SÃO PAULO

RIO DE JANEIRO

13% - 3.1 MM

55% - 13.4 MM

Page 18: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

17

Availability rate

No availability

3 ~ 6%

7 ~ 8%

9 ~ 11%

12 ~ 13%

> 14%

Available area (k sqm)

No availability

8 ~ 13

14 ~ 30

31 ~ 42

43 ~ 182

> 182

37 30

13 13

1,800 159

182

8

41

114

41

24

116

42

High-end warehouse availability per state

Page 19: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

Prime Industrial – Rental Clock, 1st half 2014 Mexico City

18

Sao Paulo / Rio de Janeiro

US positions relate to the overall market

Source: JLL, July 2014

Rental Value

growth slowing Rental Values

falling

Rental Values

bottoming

out

Warsaw

Americas EMEA Asia Pacific

Rental Value

growth

accelerating

Amsterdam, Paris, Madrid

Atlanta, Houston

Chicago, New York, San Francisco

Frankfurt

Tokyo, Philadelphia

London

Beijing, Hong Kong

Dallas, Shanghai

Singapore

Boston

Los Angeles

Sydney

Page 20: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

19

New Supply – Rio de Janeiro increases relevance

Source: JLL

2013 H1 2014

SP 43%

RJ 29%

PR 9%

RS 5%

MG 5%

GO 5%

ES 2%

MA 2%

SP 66%

PE 10%

RJ 8%

PR 6% MG

5%

GO 2% BA

2% RS 1%

TT: 2.7 MM sq.m TT: 1.1 MM sq.m

Page 21: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

Sao Paulo main industrial sectors (manufacturing + logistic)

20

21%

13%

10%

9% 7%

7%

6%

5%

5%

4%

3%

3% 3%

2%

1% 0,5%

0,2%

Tenant Occupation by Segment

Vehicles and parts Chemicals

Beverage & Food 3PL

Mining and Metalurgy Eletronics

Building Materials Pharma

Retail Textile

Hygine and Perfurms Package

Others Paper and pulp

Communication Oil & Gas

Internet

Note: segmentation has been calculated on number of companies, not on occupied area by tenant.

SOROCABA

JUNDIAÍ ITU

EMBU

CAJAMAR GUARULHOS

SÃO JOSÉ DOS CAMPOS

ABCDM

SÃO PAULO

SANTOS

ATIBAIA

CAMPINAS

ARAÇARIGUAMA

BARUERI

Top 3 segments by region

Ring road (Rodoanel) Planned 2nd Ring road

Page 22: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

0 10 20 30 40 50 60 70 80 90 100

Traffic

Hiring drivers

Moviment restrictions

Parking difficulties

Environmental requirements

Leadtime

Optimizing vehicle cubature

Routing

Delivery window

New vehicles supply

percentage of answers in survey

Now

Future

Faster and cleaner in a more crowded and restrained environment

21

Main challenges in transportation in big cities

Source: ILOS

Page 23: Brazil Industrial, Logistic and Supply Chain Overview · Northeast of Brazil and 2nd tier regions are growing 2 ... Brazilian logistics performance score 6 Logistics Performance Index

COPYRIGHT © JLL IP, INC. 2014

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