gcr of brazil

7/30/2019 Gcr of brazil

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1.1 Demographic Profile of the Country- BRAZIL

Total Population: 198,739,269 (July 2009 est.), ranked # 5 behind the United

States (307,212,123) and Indonesia (240,271,522).

Age Profile: 0-14 years: 26.7%, 15-64 years: 66.8%, 65 years and over: 6.4%

Median age is 28.6, Average life expectancy is 71.99 years, ranked #123 in

world 49% Male & 51 % Female.

Gross Domestic Product Contribution by Economic Sector

67.7% Services, 25.8% Industry, 6.5% Agriculture (2009 est.)

Industries: textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft,

motor vehicles and parts, other machinery and equipment

Languages: Portuguese (official and most widely spoken language); note less

common languages include Spanish (border areas and schools), German, Italian,

Japanese, English, and a large number of minor Amerindian languages

Religions: Roman Catholic (nominal) 73.6%, Protestant 15.4%, Spiritualist 1.3%,

Bantu/voodoo 0.3%, other 1.8%, unspecified 0.2%, none 7.4% (2000 census)

Ethnic groups: white 53.7%, mulatto (mixed white and black) 38.5%, black 6.2%,

other (includes Japanese, Arab, Amerindian) 0.9%, unspecified 0.7% (2000census)

School life expectancy (primary to tertiary education): 14 years

Total Land and Water Area:8,514,877 sq km, ranked #5 behind the United States

(9,826,675 sq km) and China(9,596,961 sq km)

Location - Eastern South America, bordering the Atlantic Ocean

Geographic coordinates - 10 00 S, 55 00 W

Map references - South America

Area - total: 8,514,877 sq km, land: 8,459,417 sq km, water: 55,460 sq km

Land boundaries total: 16,885 km

border countries: Argentina 1,261 km, Bolivia 3,423 km, Colombia 1,644 km,

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French Guiana 730 km, Guyana 1,606 km, Paraguay 1,365 km, Peru 2,995 km,

Suriname 593 km, Uruguay 1,068 km, Venezuela 2,200 km

Coastline 7,491 km

Maritime claims : territorial sea: 12 nm, contiguous zone: 24 nm, exclusive

economic zone: 200 nm, continental shelf: 200 nm or to edge of the

continental margin

Climate : mostly tropical, but temperate in south

Terrain : mostly flat to rolling lowlands in north; some plains, hills, mountains, and

narrow coastal belt

Elevation extremes : lowest point: Atlantic Ocean 0 m, highest point: Pico da

Neblina 2,994 m

Natural resources : bauxite, gold, iron ore, manganese, nickel, phosphates,

platinum, tin, rare earth elements, uranium, petroleum, hydropower, timber

Land use : arable land: 6.93% , permanent crops: 0.89% , other: 92.18% (2005)

Irrigated land 45,000 sq km (2008)

Total renewable water resources: 8,233 cu km (2000)

Freshwater withdrawal (domestic/industrial/agricultural) : total: 59.3 cu km/yr

(20%/18%/62%), per capita: 318 cu m/yr (2000)

Natural hazards : recurring droughts in northeast; floods and occasional frost in

south

Environment - current issues : deforestation in Amazon Basin destroys the

habitat and endangers a multitude of plant and animal species indigenous to the

area; there is a lucrative illegal wildlife trade; air and water pollution in Rio de

Janeiro, Sao Paulo, and several other large cities.

Nationality noun: Brazilian(s) , adjective: Brazilian

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Ethnic groups : white 53.7%, mulatto (mixed white and black) 38.5%, black 6.2%,

other (includes Japanese, Arab, Amerindi

Country name : conventional long form: Federative Republic of Brazilconventional short form: Brazil , local long form: Republica Federativa do Brasillocal short form: Brasil

Government type :federal republic

Capital : name: Brasilia , geographic coordinates: 15 47 S, 47 55 W

time difference: UTC-3 (2 hours ahead of Washington, DC during StandardTime) ,daylight saving time: +1hr, begins third Sunday in October; ends lastSunday in February

Administrative divisions : 26 states (estados, singular - estado) and 1 federaldistrict* (distrito federal)

National holiday : Independence Day, 7 September (1822)

Constitution : 5 October 1988

Legal system : civil law; note - a new Brazilian civil law code was enacted in 2002

replacing the 1916 code

International law organization participation : has not submitted an ICJ jurisdiction

declaration; accepts ICCt jurisdiction

Suffrage : voluntary between 16 and 18 years of age and over 70; compulsory

over 18 and under 70 years of age; note - military conscripts do not vote

Judicial branch : Supreme Federal Tribunal or STF (11 ministers are appointed

for life by the president and confirmed by the Senate); Higher Tribunal of Justice;Regional Federal Tribunals (judges are appointed for life); note - thoughappointed "for life," judges, like all federal employees, have a mandatoryretirement age of 70

Political pressure groups and leaders : Landless Workers' Movement or MST

other: labor unions and federations; large farmers' associations; religious groupsincluding evangelical Christian churches and the Catholic Church

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1.2Economy - overview

Brazils large and well-developed agricultural, mining, manufacturing, and service

sectors, outweighs that of all other South American countries, and Brazil is expanding

its presence in world markets.

Since 2003, Brazil has steadily improved its macroeconomic stability, building up foreign

reserves, and reducing its debt profile by shifting its debt burden toward real denominated and

domestically held instruments.

In 2008, Brazil became a net external creditor and two ratings agencies awarded

investment grade status to its debt. After record growth in 2007 and 2008, the onset of

the global financial crisis hit Brazil in September 2008. Brazil experienced two quarters

of recession, as global demand for Brazil's commodity-based exports dwindled and

external credit dried up. However, Brazil was one of the first emerging markets to begin

a recovery. Consumer and investor confidence revived and GDP growth returned to

positive in 2010, boosted by an export recovery. Brazil's strong growth and high interest

rates make it an attractive destination for foreign investors. Large capital inflows over

the past year have contributed to the rapid appreciation of its currency and led the

government to raise taxes on some foreign investments.

Brazil has a free market and export-oriented economy and is currently the ninth

largest economy in the world and the largest in Latin America. The city of So Paulo is

also the financial centre of South America.

The country's scientific and technological development is argued to be attractive

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to foreign direct investment, which has recently averaged S$ 20 billion per year,

compared to only US$ 2 billion/year over the last decade, thus showing a remarkable

growth.

TABLE TITLE: economic statistics

Table no: 1

Rank 6th(nominal) / 6th (PPP)

Currency Brazilian real(BRL, R$)

Fiscal year Calendar year

Trade

organizations

Unasul,WTO,Mercosul, G-20and others

GDP $2.517 trillion (nominal)[1]

$2.309 trillion (PPP)[1]

GDP growth 3% (2011)[2]

GDP per capita $11,845 (2011) (nominal; 54th)[1]

$12,916 (2011) (PPP; 76th)[1]

GDP by sector agriculture: 5.8% industry: 26.8% services: 67.4% (2010)[3]

Inflation(CPI) 6.50% (December 2011)[4]

Population

below poverty

line

8.5% (2011)[5]

Gini coefficient 49.3 (June 2009)[6]

Labour force 103.6 million (2010 est.)

Labour force

by occupation

agriculture: 20%, industry: 14% and services: 66% (2003 est.)

Unemployment 4.7% (December 2011)[7]

Main industriesaeroplanes,steel;iron ore,coal; machine

5
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/Brazilian_realhttp://en.wikipedia.org/wiki/Brazilian_realhttp://en.wikipedia.org/wiki/Fiscal_yearhttp://en.wikipedia.org/wiki/Union_of_South_American_Nationshttp://en.wikipedia.org/wiki/Union_of_South_American_Nationshttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/Mercosulhttp://en.wikipedia.org/wiki/G20_major_economieshttp://en.wikipedia.org/wiki/G20_major_economieshttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-imf-0http://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-imf-0http://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-1http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capitahttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-imf-0http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capitahttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-imf-0http://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-2http://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/Consumer_price_indexhttp://en.wikipedia.org/wiki/Consumer_price_indexhttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-waxyfx-3http://en.wikipedia.org/wiki/Poverty_linehttp://en.wikipedia.org/wiki/Poverty_linehttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-4http://en.wikipedia.org/wiki/Gini_coefficienthttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-5http://en.wikipedia.org/wiki/Unemploymenthttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-6http://en.wikipedia.org/wiki/Aeroplanehttp://en.wikipedia.org/wiki/Steelhttp://en.wikipedia.org/wiki/Steelhttp://en.wikipedia.org/wiki/Steelhttp://en.wikipedia.org/wiki/Iron_orehttp://en.wikipedia.org/wiki/Coalhttp://en.wikipedia.org/wiki/Coalhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)http://en.wikipedia.org/wiki/Brazilian_realhttp://en.wikipedia.org/wiki/Fiscal_yearhttp://en.wikipedia.org/wiki/Union_of_South_American_Nationshttp://en.wikipedia.org/wiki/World_Trade_Organizationhttp://en.wikipedia.org/wiki/Mercosulhttp://en.wikipedia.org/wiki/G20_major_economieshttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-imf-0http://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-imf-0http://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-1http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capitahttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-imf-0http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capitahttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-imf-0http://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-2http://en.wikipedia.org/wiki/Inflationhttp://en.wikipedia.org/wiki/Consumer_price_indexhttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-waxyfx-3http://en.wikipedia.org/wiki/Poverty_linehttp://en.wikipedia.org/wiki/Poverty_linehttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-4http://en.wikipedia.org/wiki/Gini_coefficienthttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-5http://en.wikipedia.org/wiki/Unemploymenthttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-6http://en.wikipedia.org/wiki/Aeroplanehttp://en.wikipedia.org/wiki/Steelhttp://en.wikipedia.org/wiki/Iron_orehttp://en.wikipedia.org/wiki/Coalhttp://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)


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building;armaments;textilesandapparel;petroleum;cement;chemicals; fertilizers;cons

umer products, including footwear,toys, andelectronics;food

processing;transportation equipment, includingautomobiles, rail cars

and locomotives,ships, and aircraft;

electronics;telecommunicationsequipment,satellites,real estate, brewing,tourism

Ease of Doing

Business Rank

126th[8]

External

Exports $201.9 billion (2010 est.)[9]

Export goods transport equipment, machinery, steel, airplanes, paper, electric machinery, iron ore,

soybeans, footwear, coffee, autos, automotive parts, machinery

Main export

partners

China15.3%, United States9.6%,Argentina9.2%,Netherlands5.1%,Germany 4.0%

(2010)Imports $181.6 billion (2010 est.)[9]

Import goods machinery, electrical and transport equipment, chemical products, oil, automotive parts,

electronics

Main import

partners

United States15.0%, China14.1%,Argentina 7.9%, Germany6.9%,Japan 3.8% (2010)

Gross external

debt

$310.8 billion (31 December 2010 est.)

Public finances

Public debt 41.4% of GDP (2010 est.)[10]

Revenues $464.4 billion

Expenses $552.6 billion (2010 est.)

Credit rating A- (Domestic), BBB (Foreign), A- (T&C Assessment)

(Standard & Poor's)[11]

A+ (Wikirating)

Foreign

reserves

US$350 billion (September 2011)[12]

Main data source: CIA World Fact Book

Source:http://en.wikipedia.org/wiki/Economy_of_Brazil

1.3 Overview of industries trade and commerce of Brazil

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http://en.wikipedia.org/wiki/Armamenthttp://en.wikipedia.org/wiki/Armamenthttp://en.wikipedia.org/wiki/Armamenthttp://en.wikipedia.org/wiki/Textilehttp://en.wikipedia.org/wiki/Apparelhttp://en.wikipedia.org/wiki/Apparelhttp://en.wikipedia.org/wiki/Petroleumhttp://en.wikipedia.org/wiki/Petroleumhttp://en.wikipedia.org/wiki/Cementhttp://en.wikipedia.org/wiki/Cementhttp://en.wikipedia.org/wiki/Cementhttp://en.wikipedia.org/wiki/Chemicalhttp://en.wikipedia.org/wiki/Fertilizerhttp://en.wikipedia.org/wiki/Fertilizerhttp://en.wikipedia.org/wiki/Consumer_producthttp://en.wikipedia.org/wiki/Consumer_producthttp://en.wikipedia.org/wiki/Consumer_producthttp://en.wikipedia.org/wiki/Footwearhttp://en.wikipedia.org/wiki/Footwearhttp://en.wikipedia.org/wiki/Toyhttp://en.wikipedia.org/wiki/Toyhttp://en.wikipedia.org/wiki/Electronicshttp://en.wikipedia.org/wiki/Electronicshttp://en.wikipedia.org/wiki/Electronicshttp://en.wikipedia.org/wiki/Food_processinghttp://en.wikipedia.org/wiki/Food_processinghttp://en.wikipedia.org/wiki/Transportationhttp://en.wikipedia.org/wiki/Transportationhttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Locomotivehttp://en.wikipedia.org/wiki/Shipshttp://en.wikipedia.org/wiki/Shipshttp://en.wikipedia.org/wiki/Aircrafthttp://en.wikipedia.org/wiki/Aircrafthttp://en.wikipedia.org/wiki/Telecommunicationhttp://en.wikipedia.org/wiki/Telecommunicationhttp://en.wikipedia.org/wiki/Satellitehttp://en.wikipedia.org/wiki/Satellitehttp://en.wikipedia.org/wiki/Satellitehttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Brewinghttp://en.wikipedia.org/wiki/Brewinghttp://en.wikipedia.org/wiki/Tourismhttp://en.wikipedia.org/wiki/Ease_of_Doing_Business_Indexhttp://en.wikipedia.org/wiki/Ease_of_Doing_Business_Indexhttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-World_Bank_and_International_Financial_Corporation-7http://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-trade-8http://en.wikipedia.org/wiki/People's_Republic_of_Chinahttp://en.wikipedia.org/wiki/People's_Republic_of_Chinahttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Argentinahttp://en.wikipedia.org/wiki/Argentinahttp://en.wikipedia.org/wiki/Argentinahttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-trade-8http://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/People's_Republic_of_Chinahttp://en.wikipedia.org/wiki/People's_Republic_of_Chinahttp://en.wikipedia.org/wiki/Argentinahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-9http://en.wikipedia.org/wiki/List_of_countries_by_credit_ratinghttp://en.wikipedia.org/wiki/Standard_%26_Poor'shttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-10http://en.wikipedia.org/wiki/Wikiratinghttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-11https://www.cia.gov/library/publications/the-world-factbook/geos/br.htmlhttp://en.wikipedia.org/wiki/Economy_of_Brazilhttp://en.wikipedia.org/wiki/Armamenthttp://en.wikipedia.org/wiki/Textilehttp://en.wikipedia.org/wiki/Apparelhttp://en.wikipedia.org/wiki/Petroleumhttp://en.wikipedia.org/wiki/Cementhttp://en.wikipedia.org/wiki/Chemicalhttp://en.wikipedia.org/wiki/Fertilizerhttp://en.wikipedia.org/wiki/Consumer_producthttp://en.wikipedia.org/wiki/Consumer_producthttp://en.wikipedia.org/wiki/Footwearhttp://en.wikipedia.org/wiki/Toyhttp://en.wikipedia.org/wiki/Electronicshttp://en.wikipedia.org/wiki/Food_processinghttp://en.wikipedia.org/wiki/Food_processinghttp://en.wikipedia.org/wiki/Transportationhttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Locomotivehttp://en.wikipedia.org/wiki/Shipshttp://en.wikipedia.org/wiki/Aircrafthttp://en.wikipedia.org/wiki/Telecommunicationhttp://en.wikipedia.org/wiki/Satellitehttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Brewinghttp://en.wikipedia.org/wiki/Tourismhttp://en.wikipedia.org/wiki/Ease_of_Doing_Business_Indexhttp://en.wikipedia.org/wiki/Ease_of_Doing_Business_Indexhttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-World_Bank_and_International_Financial_Corporation-7http://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-trade-8http://en.wikipedia.org/wiki/People's_Republic_of_Chinahttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Argentinahttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-trade-8http://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/People's_Republic_of_Chinahttp://en.wikipedia.org/wiki/Argentinahttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-9http://en.wikipedia.org/wiki/List_of_countries_by_credit_ratinghttp://en.wikipedia.org/wiki/Standard_%26_Poor'shttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-10http://en.wikipedia.org/wiki/Wikiratinghttp://en.wikipedia.org/wiki/Economy_of_Brazil#cite_note-11https://www.cia.gov/library/publications/the-world-factbook/geos/br.htmlhttp://en.wikipedia.org/wiki/Economy_of_Brazil


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Brazil has manufacturing, mining and agriculture sectors and rapidly

expanding technology and services industries. It is also home to the most

sophisticated and diversified science, technology and innovation system in Latin

America. Having made important economic reforms over the past few years,

Brazilians are now reaping the benefits of new-found stability and growth. Brazil is

experiencing rising commodity exports and an overvalued currency, driving up the

price of its manufactured exports. International corporations are investing billions in

Brazil, effectively securing its place in regional and global supply chains. The country

is also becoming a major source of outward investment. Furthermore, with 191

million people, a well-educated middle class and millions of working-class citizens,

Brazils importance as a consumer market is on a steep upward swing. To take

advantage of the myriad commercial opportunities that Brazil offers, Canadians willneed to be aware of key commercial influences, including foreign competition, import

tariffs, tax and regulatory systems, labour supply and infrastructure challenges.

Information and Communication Technology (ICT) and New Media: Brazil is

the largest ICT market in Latin America, after Mexico. Canadian ICT exports to

Brazil were $106.1 million.

Clean Technologies: In 2009, the Brazilian environmental technologies market

was estimated by analysts to be worth US$9.0 billion. Given the projected growth

of the Brazilian economy for the next 5 years, and the emphasis on

infrastructure, the environmental industries market is expected to grow by 10%

annually.

Aerospace: Canada is recognized in Brazil as a qualified and cost-effective

supplier of aerospace equipment. One of the major player in the Brazilian

aerospace industry imports 70% of its content and as of 2010, is seeking more

than US$ 17 billion worth of supply.

Infrastructure: Infrastructure is key to the Brazilian governments economic

expansion over the coming years, with Brazil looking at investments of over

US$ 262 billion. The 2014 World Cup, the 2016 Olympics, and the federal

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government infrastructure program offer a broad range of business opportunities

for Canadian firms.

Life Sciences: The life sciences sector in Brazil is among the 10 largest in the

world, and has averaged 4% percent growth per year since 2007.

Mining: Brazil offers great potential for mining exploration activities and an

expanding market for mining equipment and services due to its rich geological

formations and economic stability. Mineral production in 2009 was over US$21

billion.

Oil and Gas Equipment and Services: The current five-year US$224 billion

investment plan of Brazilian oil giant Petrobras is directly related to Brazil's recent

pre-salt discoveries, and represents real opportunities for Canadian industry

willing to undertake investment in Brazil.

Brazil Main Industry Sectors

Brazil has abundant natural resources and its economy is relatively diversified.

A major agricultural power, Brazil is the world's first producer of coffee, sugar cane and

oranges, as well as one of the largest producers of soy. It also attracts many world

groups in the food industry and biofuels. Brazil has the world's largest commerciallivestock herd. Nevertheless, agriculture's contribution to the GDP is relatively small,

accounting for only 6.6%, yet the sector represents 40% of its exports. Forests cover

half of the country, with the largest ombrophilous forest in the world situated in the

Amazon Basin. Brazil is the world's fourth largest exporter of timber.

Brazil is also a great industrial country. It benefits from its mineral ore wealth and

is the second world exporter of iron and one of the main producers of aluminum. As an

oil producer, the Brazil is aiming to become self-sufficient in the near future. The country

is asserting itself more and more in the textile, aeronautics, pharmacy, automobile, steel

and chemical industry sectors. Most of the large automobile manufacturers have set up

their production plants in the country. The industrial sector contributes more than

quarter of the GDP. The tertiary sector represents almost two-thirds of the GDP.

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1.4. Overview of different economic sectors of Brazil

Brazil's major economic sectors are all well developed. The agricultural sector of

Brazil represented a larger percentage of the gross domestic product than industry

until 1945. At that time, the government supported industrialization and direct

investment in industry, with subsidies and trade protection for Brazilian industrial

products. Industry was almost 3 times more valuable than agriculture as a percentage

of gross domestic product by 1999. In the agriculture sector, Brazil is one of the world's

largest producers of soybeans and coffee. International competitors watch Brazil's

weather to determine the success of the soybean and coffee season, setting

international prices based on Brazil's harvest. The agriculture sector represented 8.4percent of the gross domestic product in 1999 and employed 31 percent of the

workforce.

The government uses import taxes to protect many Brazilian industries against

international competition. These industries include textiles, shoes, chemicals, cement,

lumber, iron ore, tin, steel, aircraft, motor vehicles and parts, and other machinery and

equipment. The footwear industry is the most important finished good exported from

Brazil. Government-owned Petrobras and Brazilian Aeronautics Enterprise areimportant companies headquartered in Brazil that produce oil and aircraft, respectively.

The industrial sector represented 31.7 percent of the gross domestic product in 1999.

Twenty-seven percent of the employed workforce was in the industrial sector.

The third most important developed sector of the Brazilian economy is the

services sector. It represented 59.9 percent of the gross domestic product in 1999.

Tourism has increased rapidly with an estimated 4.82 million foreign tourist arrivals and

receipts of US$3.68 billion from foreign tourists in 1998. This represented an increase

from 2.67 million foreign tourist arrivals and receipts of US$2.47 billion in 1996. Forty-

two percent of the employed working force was in the service sector.

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Along with the rapid expansion of its economy in the past decade, Brazil has

expanded various sectors of its economy, such as the industrial sector, which is the

second biggest in the Americas. The rapid expansion of the services industry has

helped to bring down the nation's unemployment rate for the past 5 years.

Brazil is the 9th largest oil producer in the world with a production of 2.57 million barrels

per day. Petrobas, a semi-government owned oil company, is the 8th biggest company

in the world, and is responsible for the nation's overall oil production.

Brazils Industry Sector

1) Agriculture in Brazil is well diversified and the country is the largest producer of

sugarcane, coffee, tropical fruits, frozen concentrated orange juice (FCOG). Its

other production in soya bean, corn, cotton, cocoa, forest products and tobacco.

It s contribution in GDP in 2010 is 6.1 %.

2) Brazil cattle herd is the largest in the world with 20.75 million of cattle in 2009.

3) It has most advanced industry in Latin America i.e. Automobile and parts,

machinery and equipment, textile, computers, cement ,steel, petrochemicals,

consumer durables and food processing.

4) It is a leading producer of hydroelectric power. Also nuclear energy contributes to

4% of Brazils electricity.

5) Service industry includes telecommunication, banking, energy and computing

sector. It contributes 67.5% of the GDP of Brazil.

6) There is a huge inflow of foreign investment and has highest interest rate in the

world.

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1.5 Overview of Business and Trade at international level

Table No : 2Table title: Projected U.S.exports of processed food between 2003-2012

Table No : 3Table title : export and import partners of Brazil

Export Partners 2007 % of total

U.S. 17.8

Argentina 8.5

China 6.1

Netherland 4.2

Germany 4.1

Import Partners % of total

U.S. 16.2

Argentina 8.8

China 8.7

Germany 7.1

Nigeria 4.3

Japan 4.2Source: CIA World Factbook

Source :http://www.propertyfrontiers.com/research/country-

guides/americas/brazil/country-economic-overview.aspx

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1.6.Present relations of Brazil with India

India brazil relations Indias links with Brazil are since five centuries. Portugals

Pedro Alvares Cabral is officially recognised as the first European to discover Brazil in

1500. Cabral was sent to India by the King of Portugal soon after the return of Vasco de

Gama from his pioneering journey. Brazil became an important Portuguese colony and

stop-over in the long journey to Goa. This Portuguese connection led to the exchange of

several agricultural crops between India and Brazil in the colonial days. Indian cattle

was also imported to Brazil. Most of the cattle in Brazil is of Indian origin.

Diplomatic relations between India and Brazil were established in 1948. The

Indian Embassy opened in Rio de Janeiro on May 3, 1948. It shifted to Brasilia on

August 1, 1971 (Brazils capital had moved to Brasilia in 1960).

Brazil and India are large continental sized countries with social diversity,

democratic form of government, a multi-ethnic population, and a large population base.

Both possess advanced technologies. The two countries share similar perceptions on

issues of interest to developing countries and have cooperated in the multilateral fora on

issues such as international trade and development, environment, reform of the UN andthe UNSC expansion.

There is enormous interest in Brazil in India's culture, religion, performing arts

and philosophy. A number of cultural events including performances by famous

Kuchipudi dance group, "Raja and Radha Reddy" were organized in the major cities of

Brazil ahead of the Prime Minister Dr. Manmohan Singh's visit to Brasilia from 11-14

September, 2006. Earlier, a very successful Festival of India was organised during the

visit of President K.R. Narayanan to Brazil in May 1998.

There are numerous organisations teaching yoga and they invite yoga teachers

from India for instructions and learning. ISKCON, Satya Sai Baba, Maharshi Mahesh

Yogi, Bhakti Vedanta Foundation and other Indian spiritual gurus and organisations

have their chapters in Brazil. The University of Londrina has a good specialization on

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India in its Afro-Asian studies department. Mahatma Gandhi is highly regarded in the

country and the government has sought to teach his philosophy of non-violence to the

police to improve its track record. A statue of Mahatma Gandhi is located in a prominent

square in Rio de Janeiro. A group called the Filhos de Gandhi (Sons of Gandhi)

participates regularly in the carnival in Salvador. Private Brazilian organizations

occasionally invite Indian cultural troupes.

In recent years, relations between Brazil and India have grown considerably and

co-operation between the two countries has been extended to such diverse areas as

science & technology, pharmaceuticals and space. The two-way trade in 2007 nearly

doubled to US$ 3.12 billion from US$ 1.2 billion in 2004.

India attaches tremendous importance to its relationship with this Latin American

giant and hopes to see the areas of co-operation expand in the coming years.

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1.7 Pestel Analysis of Brazil

Political.

Brazil has been a leading player in the World Trade Organizations Doha Round

negotiations and continues to seek to bring that effort to successful conclusion.

President Lula has made economic growth and poverty alleviation top priorities.

Export promotion is a main component in plans to generate growth and reduce what is

seen as a vulnerability to international financial market fluctuations. To increase exports,

the government is seeking access to foreign markets through trade negotiations and

increased export promotion as well as government financing for exports.

EconomyTrade: Trade balance (2009)$ 25.3 billion surplus. Exports$153.0 billion. Major

marketsChina 13.20%, United States 10.20%, Argentina 8.36%. Imports$127.7

billion. Major suppliersUnited States 15.69%, China 12.46%, and Argentina 8.84%

Brazil is generally open to and encourages foreign investment. It is the largest

recipient of foreign direct investment (FDI) in Latin America, and the United States is

traditionally the number one foreign investor in Brazil. Since domestic saving is not

sufficient to sustain long-term high growth rates, Brazil must continue to attract FDI.

Many business groups and international organizations have highlighted the need for

Brazil to improve its regulatory environment for investments and to simplify the tax code

in order to attract increasing levels of FDI.

Today, Brazil economy is on the rise. Blessed with abundant natural resources,

Brazil has become the most powerful country in South America in economic terms and

thus is leading the other countries of South America.

With large and growing Agricultural, mining, manufacturing and service sectors,

Brazil economy ranks highest among all the South American countries and it has also

acquired a strong position in global economy.

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Brazils gold production is rated as fourth in the world. The main problem

associated with this factor however, is the pollution from mercury, which is a main

component in the current gold processing techniques. Mercury is used in the process of

separating the gold from other surrounding rock sediments that usually come together

with the mineral when it is mined. The largest gold deposits in Brazil in current times are

found along the Venezuelan Brazilian border. This area is commonly referred to as the

shield and covers an estimated 415,000 square kilometers of jungle and savanna

grassland.

With over 2,500 currently known gold occurrences within the country, Brazilian

gold mining, development, and production is expected to continue increasing

significantly in the foreseeable future.

Brazils gold and mining sector is going through a phase of real growth. New

mine projects and expansions in progress are expected to ensure that the country

retains its leading position in global mineral commodity production for years to come.

Brazilian gold explorers like Magellan Minerals should do very well over the next few

years.

Social

Brazil underwent rapid urban growth; by 2005, 81% of the total population was

living in urban areas. This growth aids economic development but also creates serious

social, security, environmental, and political problems for major cities.

Environmental

Brazil is the worlds fifth largest country with a total area of 8.5 million square

kilometres. It benefits from a good river system and 7.500 kilometres of coastline (1).The country has abundant reserves of natural resources such as iron, copper, nickel,

manganese or tin. Despite having an estimated gold reserve of 2,000 tones the country

accounts only for 2.5% of the global production and many regions are still unexplored,

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which make Brazil an attractive location for mine development and investment

opportunity.

However, the lack of transportation infrastructure (under-developed railway network,

poor quality of the highways with development inconsistent between regions) has longbeen seen as a major obstacle to economic growth.

The country also lacks reliable and affordable energy. Most of the countrys energy is

produced from renewable sources, particularly hydroelectric power plants that provide

four fifths of Brazils electricity. This dependence on hydroelectricity has resulted in

severe supply shortage

Recent development includes the construction of two new railways connecting centralBrazil to ports in the states of Rio de Janeiro and Bahia, and the construction of Au

Superport, a port and industrial complex one and a half times the size of the island of

Manhattan that should be completed by 2012.

Technological

Brazil is the leader in science and technology in South America as well as one of

the global leaders in fields such as biofuels and deep-water oil exploration (7). The

Brazilian government tries to develop and support innovation in business, for example in

2004 the Innovation Law was passed, is meant to provide incentives to increase

innovative activities, facilitate scientific and technological research by private companies

and encourage collaboration between public and private sector .

More specifically, the mining industry has benefited from the Governments

support in terms of technology and research, for example the Center for Mineral

Technology (CETEM) is a federally funded research and development centre under theMinistry of Science and Technology. Sixteen universities now offer courses in geology,

geochemistry and geostatic and seven offer degrees in mining engineering.

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Legal

Brazil has an established Civil Law system based on codification and statutory

legislation. The country ranks as one of the worlds leading jurisdictions for mining

investment but because of its complex federal legal structure, the regulation in this area

is bureaucratic, inconsistent and lacks certainty. The prospecting and mining of mineral

resources may be carried out by Brazilian citizens or by companies duly incorporated in

Brazil holding an authorization or grant by the Republic of Brazil . Mineral resources are

defined and mining rights guaranteed under the Brazils Federal Constitution and

Federal Mining Code.

Mineral resources belong to the state and can only be extracted pursuant to a

concession. According to the Mining Code, mining activities require the grant ofconcessions from the Departamento Nacional da Producao Mineral (DNPM) that

consists of application for prospecting permits, exploration licenses and mining licenses.

A law enacted in 2010 limits foreign investors to own more than 5,000 hectares of land.

Brazilian law also protects Indigenous lands estimated to be around 895,000km. For

example, the Constitution covers the interface between the mining industry and

indigenous rights. It provides that the National Congress must approve the exploration

and mining activities and that the Indigenous community has the right to give permission

and if the project is accepted, to share the results in the conditions defined by the

Congress .

Brazil has also implemented strict environmental regulations. The regulations of

environmental aspects of mining at both federal and local level and the inconsistencies

between regulations in different states can create confusion and duplication in the

application procedures. At Federal level regulations are developed by the Ministry of

Environment and implemented by the National Council of Environment (CONAMA) and

the Brazilian Institute of Environmental and Renewable Resources (IBAMA) controls the

environmental licensing process. Three levels of control have been established, first an

environmental impact assessment (EIA) and environmental-impact reports (RIMA) must

be completed, an environmental license is then required and finally a plan of recovery of

degraded materials (PRAD) has to be submitted.

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The Brazilian tax system is also a matter of complexity. Brazil comprises

numerous federal, state and municipal taxes. The law does not distinguish between

domestic and foreign owned companies. Companies are generally subject to tax at a

rate of 25% (15%, plus an additional tax of 10% on profits exceeding 240,000 BRL),

plus social contribution tax equal to 9% of accounting income. The country has also

implemented a royalties regime for the mining companies, the Compensation for

exploiting mineral resources (CFEM) which varies depending upon the mineral mined.

Gold extraction is subject to this CFEM tax, which is set at 1% of total revenues.

The Brazilian Ministry of Mining and Energy has proposed a reform of Brazils

mining regulation and proposals will be put before the Brazilian Congress in June 2011.

If adopted this reform may have important implications for the mining sector.

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2.1 Introduction of the selected (food processing) Company / Industry / Sector

and its role in the economy of specified country.

Food is an essential part of our lives, which is why the way it is grown, processed

and transported is significant understanding and improving.

Thefood industry comprises a multifaceted network of activities pertaining to the

supply, consumption, and catering of food products and services across the world.

Finished food products and partially prepared instant RTE (Ready-to-eat) food packets

are also a part of the food industry. The food industry employs a massive number of

skilled and unskilled workers.

Components of Food Sector : The food industry is highly diverse and comprises

several important componentsthat are :

1. Agriculture activities for growing crops, raising livestock and sea food.

2. Food processing of fresh products into canned and packed goods, including

frozen foods.

3. Research and development on food technology.

4. Manufacturing fertilizers, farm machinery and hybrid seeds to facilitate

agricultural production.

5. Regulation on food production and distribution to ensure quality and safety.

6. Financial services including insurance and credit to facilitate food production and

distribution

7. Marketing, packaging, advertising and distribution (wholesale and retail)

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BRAZILIAN FOOD PROCESSING INDUSTRY

The food processing industry is the second largest sector among manufacturing

industries in Brazil. In 2009, approximately 15,000 jobs were created in the sector. The

Brazilian Food Processors Association (ABIA) reported that in the same year netrevenue totaled approximately 173 billion dollars, an 8 percent increase compared to

the previous year. Food and beverage industries made up 85 percent and 15 percent,

respectively, of this total. Regarding distribution channels, the domestic market

represented 77 percent of total net revenue in 2009, totaling 132.6 billion dollars, which

includes US$ 3.7 billion of imports. Retail and food service sectors accounted for 71

percent and 29 percent, respectively, of total sales in the domestic market. The biggest

food service buyers are restaurants and bakeries.

Table No: 4Table title: Net Revenue of Brazilian Food processing industry

SOURCE: FOOD PROCESSING INGREDIENTS-SAO-PAULO ATO BRAZIL-12-14-2010

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Figure No : 1

According to Exame Magazine1, of the top 10 leading companies in the food

processing industry, 6 are multinational: Ambev, Bunge, Cargill, Unilever, Nestl and

ADM. The other four are Brazilian companies (Sadia, Brasil Foods, Copersucar and

JBS). Sales by multinational totaled approximately US$45 billion while sales by

Brazilian companies totaled US$ 20 billion

In 2009, the gross sales of the top 20 food processing companies listed by

Exame Magazine, totaled approximately US$82.3 billion and accounted for

approximately 48 percent of the industry gross output of US$173 billion.

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Table No : 5 Table title: Various Food Processing companies in Brazil

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Food Processing companies of Brazil

Some brief introduction of food processing companies of Brazil like Cargil, Sadia isgiven below:

Cargill - Its product line includes cocoa and chocolate, flour, juice, malt, oil and fats,sweeteners, toppings, sauces, etc. Cargills worldwide presence gives a head start in

accessing the best raw materials for the high-fruit content beverages. Cargill offers a

wide range of value-added and innovative solutions for the beverage industry. Cargill's

line of concentrated bases brings major benefits for customers, since quality

standardization till time saving and raw material costs reduction, eliminating process

steps.

Sadia - This Food Company was created in Concrdia, Santa Catarina, Brazil. It ismajorBrazilianfood producer. Sadia is one of the worlds leading producers of chilled

and frozen foods. Brazils main exporter of meat-based products. Sadias brand name

has been voted the most important and valuable brand among all Brazils food brands.

In Portuguese the word Sadia means "healthy". In addition, Sadia has much more to

offer. Their products are highly nutritious, practical, safe to eat and very tasty. Sadia is

proud to have nothing less than 12 industrial plants in Brazil that together produce

over 1.3 million tons of protein-based products coming from chicken, turkey, pork and

beef, not to mention the pasta, margarines and desserts. The line of products

comprises over 2,500 different products to choose, taste and enjoy: varied cuts ofpoultry and pork meat, cooked meats, cold cuts in general, sausages, hamburgers,

lasagna, ravioli and other types of pasta, pre-cooked meat based meals, creamy

margarines, pizzas, soups, desserts etc.

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2.2 Structure, functions and business activities of food processing industry in

Brazil

Brazilian Market for Processed Food

Average incomes in Brazil are modest, but Brazilians spend about 30 percent oftheir incomes on food. Brazils processed food market is an urban phenomenon.

People are acquiring kitchen appliances such as microwaves, which has

contributed to the growth in the use of frozen foods. The market for frozen foods until

recently focused on chicken nuggets, hamburger patties, dairy products, and juices, and

even then in small amounts compared with the United States.

There is a growing trend to market processed foods through supermarkets. The

300 largest supermarket chains account for about 40,000 check-out counters, or half

the total in the sector.

Brazils Processed Food Industry

Brazil has a well-developed food processing industry that provides consumers

with a extensive range of processed foods. Over half of the food consumed in Brazil is

processed. The orange juice, biscuit, chocolate, candy, and dairy product industries

have experienced the most growth in the 1990s. Brazil has 43,000 food manufacturing

and processing plants that provide 745,000 jobs. For many years, the food processing

industry was protected from foreign competition by limited access. This situation beganto change in the 1990s as deregulation of food prices by the government forced

Brazilian companies to pay more attention to quality in order to compete with imports.

Brazils food processing industry, which is 36 percent foreign-owned, includes many

U.S. companies and European-based multinational companies such as Nestl,

Parmalat, and Unilever. The estimated annual gross sales of Brazils food processing

sector are $45 billion.

Leading Sectors

Meat products, fats and oils, dairy products, beverages, and sugar refining are

the largest sectors.

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Wheat milling.

The wheat milling industry in Brazil consists of 235 mills, 180 of which have daily

capacities of 50 MT or less. Of the total installed capacity of 11.5 MMT, 20 of the mills

produce more than 500 MT a day. Santista Alimentos and Pena Branca Agroindustrial

are two of the largest milling groups in Brazil. These mills have formed alliances with

producers of pasta, cookies, and crackers, and with pizza franchisersan important

change in the industry. Four companies dominate the industrial baking sector. Santista

Alimentos and Panco are the major bread companies in a market where per capita

consumption of bread averages 7 pounds per year. In the cookie and biscuit sector,

family-run businesses, such as Confianca and Campineira, were incorporated by

multinationals like Nestl and Danone. Nabisco also has affiliates in Brazil.

Oilseed processing. Annual crush capacity is about 30 million tons. Most production

processing capacity is located in southern Brazil, although several plants were recently

built in the west-central and northern States. Soybeans make up over 80 percent of

Brazils total oilseed crush. Paran, Rio Grande do Sul, and So Paulo are the principal

oilseed processing States. Large crushers in Brazil include Ceval Alimentos

(13.2percent), Cargill Agrcola (5.7 percent), and Incobrasa (4.3 percent). Other oilseed

crushers include Sadia, Sambra/Samrig, Gessy Lever, Bianchini, and Olvepar. Brazil

still lacks adequate storage and transportation facilities to efficiently move production

into consumption and international markets.

Frozen concentrated orange juice.

In So Paulo, 11 companies operating 17 factories produce frozen concentrated

orange juice (FCOJ), processing about 97 percent of Brazils total capacity in a modern

world-class industry. The two largest companies, Cutrale and Citrosuco, control about

half of the processing capacity. Brazilian exports of FCOJ are also dependent on

consumer trends in Europe and Asia, Brazils biggest markets.

Cocoa beans.

About 85 percent of Brazils cocoa production is concentrated in the

northeastern State of Bahia. The remaining production comes from Espirto Santo, So

Paulo, Paran, and Rondnia. About 50 percent of the cocoa crop is processed locally

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into intermediary products (mainly cocoa butter), and the processing industry is owned

by large multinational cocoa dealers and chocolate manufacturers, such as Cargill.

Sugar.

Brazil is among the world leaders in sugarcane, sugar, and ethanol (fuel alcohol)

production and in sugar consumption and exports. It is also among the most efficient of

all the major sugar producers, and Brazils sugar export products are the most diverse.

Brazil can produce either sugar or ethanol from sugarcane, and only about 40 percent

of its cane production is ground for sugar. Brazil has about 370 processing facilities to

produce refined sugar and/or ethanol from sugarcane. About 25 produce only sugar,

145 produce only alcohol, and 200 produce both products. So Paulo is the major

producing State, accounting for 60 percent of Brazils sugar output and about two-thirds

of its alcohol output.Wineries.

Brazil is a moderate producer of wines and is in competition with its neighbors,

Argentina and Chile. Grapes from the Rio Grande do Sul are used in white wines. Santa

Catarina is also a wine district. More than 80 percent of the vineyards have less than 5

hectares and have difficulty competing with Argentina and Chile. The Aurora

Cooprative (Marcus James) is responsible for nearly all of Brazils wine exports.

Beef processing.

Brazil has a modern meat processing industry that consists of about 55 large

meatpackers.. Most beef is trucked in carcass form up to 1,000 kilometers to be

consumed. Only about 20 percent of the beef is packaged in ready-to-serve portions

and sold in supermarkets.

Poultry processing.

Brazil has a poultry industry that is about a third the size of the U.S. industry and

is vigorous in the international market. Perdigao- Agroindustrial SA, Ceval Alimentos

SA, Sadia Trading, and Frangosul are the largest poultry exporting companies,

exporting both whole birds and pieces, mostly to Saudi Arabia and Japan. In poultry

production, about 25 percent of the producers provide 90 percent of the broilers

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Dairy.

The Brazilian dairy industry is dominated by two multinationals, Nestl and

Parmalat, Milk production is highly seasonal and is produced mostly in Minas Gerais,

So Paulo, and Paran. Brazil is a net importer of dairy products. During the off-season,

it is common practice to extend fresh milk supplies by recombining fluid milk with

domestic or imported nonfat dried milk. Fluid milk is marketed mostly through a network

of large private national and multinational companies. Three types of milk are sold at

retail, the most widely consumed being type C, with 3 percent fat content. It is sold in

plastic bags and requires boiling before drinking. Types A and B account for only 10

percent of the fluid milk. Ultrahigh Temperature (UHT) milk is also consumed, due to the

marketing efforts of the multinational Parmalat.

corn products.

Production is dominated by CPC International, a U.S. company. CPC produces

grainbased cereals and dietary staples, mayonnaise, soups and bouillon, and corn oil.

U.S. Investment in Brazils Processed Food Industry

U.S. investment in Brazils food industry tripled from 1985 to 1995.

Borden, Cargill, Coca-Cola, CPC, Kellogg, Kraft Foods, PepsiCo, Philip Morris, and

RJR Nabisco have a presence in Brazil. These companies have considerable market

share in certain sectors and operate across a broad spectrum of products. CPC has its

largest foreign affiliate in Brazil and is the largest producer of most corn products. RJR

Nabisco is the second largest producer of cookies (7 percent of sales); and the leading

producer of baking powder and yeast (80 percent of sales), dessert mixes (50 percent),

and fruit juices (45 percent). U.S. companies compete against such European

conglomerates as Unilever, the second largest food company in Brazil with food sales of

$1 billion. Unilever has operated in Brazil since 1929. Unilever is the top producer of

edible fats and margarine, tomato-based products, canned vegetables, and cottonseed

oil, and ranks second in specialty cheese and mayonnaise production and third in tea

and soybean products.

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3.1 Comparative position of food processing industry of Brazil withIndia/ Gujarat

Table No : 6

Table Title: Major processed fruits and vegetables imported 2007-2008

The food processing industry in India is a sunrise sector that has gained

prominence in recent years. Availability of raw materials, changing lifestyles and

relaxation in policies has given a considerable push to the industrys growth. A thrust to

the food processing sector implies significant development of the agriculture sector and

ensures value addition to it. Processing of fruits and vegetables is a low 2%, around

35% in milk, 21% in meat and 6% in poultry products. By international comparison,

these levels are significantly low - processing of agriculture produce is around 40% in

China, 30% in Thailand, 70% in Brazil, 78% in the Philippines and 80% in Malaysia.

India, with an arable land of 184 mn hectares is, the highest producer of milk in the

world at 90 mn tonnes p.a., second largest producer of fruits & vegetables (150 mn

tonnes), third largest producer of foodgrains and fish and has the largest livestock

population. Considering the wide-ranging and large raw material base that the countryoffers, along with a consumer base of over one billion people, the industry holds

tremendous opportunities for large investments.

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Ministry of Food Processing Industries

The Ministry of Food Processing Industries, GoI, has estimated the size of the Indian

food market at US$ 191 bn (Rs 8,600 bn). The processed food market is projected to be

over US$ 100 bn, of which the primarily processed food market accounts for 60%, whilethe value-added processed food market is around 40%.

Structure of the Indian Food Processing Industry

Industry Sub-Segments

Fruits & Vegetables

The processing of fruits and vegetables is estimated to be around 2.2% of the total

production in the country. The prominent processed items in this segment are fruit pulpsand juices, fruit based ready-to-serve beverages, canned fruits and vegetables, jams,

squashes, pickles, chutneys and dehydrated vegetables. Since 2000, the industry has

seen significant growth in ready-to-serve beverages, fruit juices and pulps, dehydrated

and frozen fruits and vegetable products, pickles, processed mushrooms and curried

vegetables, and units engaged in these segments are export oriented.

Table No: 7 Table Title: Exports of Processed Fruits & Vegetables

(Quantity in MT, Value in Rs Mn)

Source: Ministry of Food Processing Industries, Annual Report 2005-06

Contract farming in wheat practiced in Madhya Pradesh by Hindustan Lever Ltd and by

Pepsi Foods Ltd in Punjab for tomatoes, food grains, spices and oilseeds are some

successful examples of contract farming in India, which changed the farming landscape

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and promoted the cultivation of processable variety of farm produce. Such innovative

practices will power the fruits, vegetables and grain processing industry. Apart from

such initiatives, fiscal incentives and tax concessions will also give impetus to the

sector. The five-year 100% tax exemption announced by the Government in FY05 was

one such incentive for upcoming fruits and vegetable processing units.

Milk and Milk Products

India has one of the highest livestock population in the world, accounting for 50% of the

buffaloes and 20% of the worlds cattle population, most of which are milch cows and

milch buffaloes. Indias dairy industry is considered as one of the most successful

development programmes in the post-Independence era. As per data released by the

Ministry of Food Processing Industries, exports of dairy products have been growing atthe rate of 25% p.a. in quantity terms and 28% in value terms since 2001. Significant

investment opportunities exist for the manufacturing of value-added milk products like

milk powder, packaged milk, butter, ghee, cheese and ready-to-drink milk products.

Meat & Poultry - Since 1995, production of meat & meat products has been steadily

growing at a rate of 4% p.a.. Currently, the processing level of buffalo meat is estimated

at 21%, poultry 6% and marine products 8%. Only about 1% of the total meat is

converted into value added products like sausages, ham, bacon, kababs, meat balls,

etc. Production of meat is governed under local by-laws as slaughtering is a state

subject. Processing of meat is licensed under the Meat Food Products Order, 1973.

Table No : 8

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Table Title: Exports of Meat and Meat Products(Quantity in MT, Value in Rs Mn)


Meat exports have been growing at close to 30% p.a. in quantity terms, largely drivenby poultry, buffalo, sheep and goat meat. Exports of value added meat products are

insignificant. In the domestic market, the growing number of fast food outlets in the

country has had a significant impact on the meat processing industry.

Marine Products Processing of marine produce into canned and frozen forms is

carried out almost entirely for the export market. Infrastructure facilities for processing of

marine products include 372 freezing units with a daily processing capacity of 10,320

tonnes and 504 frozen storage facilities with a capacity of 138,229.10 tonnes.Processed fish products for export include conventional block frozen products,

individual quick frozen products (IQF), minced fish products like fish sausage, cakes,

cutlets, pastes, surimi, texturised products and dry fish etc.

Grain Processing Primary milling of grains is the most important activity in the grain

processing segment of the industry. Around 65% of rice production is milled, mostly in

modern rice mills. However, the sheller-cum-huller mills operating give low recovery.

Dal milling is the third largest in the grain processing industry, and has approximately

11,000 mechanised mills in the organised segment. Indian rice, especially Basmati rice,

has gained international recognition, and is a premium export product. Branded grains

as well as grain processing is now gaining popularity.

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Beer & Alcoholic Beverages India is the third largest market for alcoholic beverages in

the world, and the domestic market is largely dominated by United Breweries, Mohan

Meakins and Radico Khaitan. The demand for beer and spirits is estimated to be around

373 mn cases per year. There are 12 joint venture companies having a licensed

capacity of 33,919 kilo-litres p.a. for production of grain based alcoholic beverages.

Around 56 units are manufacturing beer under license from the Government of India.

Consumer Foods This segment includes packaged foods, aerated soft drinks,

packaged drinking water and alcoholic beverages.

Packaged / Convenience Foods -Consumer food industry mainly consists of ready-to-

eat and ready-to-cook products, chips, salted snacks, pasta products, cocoa based

products, bakery products, biscuits, soft drinks, etc. There are around 60,000 bakeries,

20,000 traditional food units and several pasta food units. The bakery industry is among

the few processed food segments whose production has been increasing steadily in the

country in the last couple of years

Cocoa Products - There are 20 units engaged in the manufacture of cocoa products like

chocolates, drinking chocolate, cocoa butter substitutes, cocoa based malted milk foods

with an annual production of approximately 34,000 tonnes.

Soft drinks - This segment is the 3rd largest in the packaged foods industry, after

packed tea and packed biscuits. The aerated soft drinks industry in India comprises

over 100 plants and provides direct and indirect employment to over 125,000

employees. It has attracted one of the highest foreign direct investments in the country.

Its position is strengthened by strong forward and backward linkages with glass, plastic,

refrigeration, sugar and the transportation industry. Penetration levels of aerated soft

drinks in India are quite low compared to other developing and developed markets,which is indicative of the potential the segment holds for further growth.

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Table No: 9

Table Title: Exports of Consumer Foods

(Quantity in MT, Value in Rs Mn)


SWOT Analysis of Indian FoodProcessing Industry

Strengths

Abundant availability of raw material

Priority sector status for agro-processing given by the central Government

Vast network of manufacturing facilities all over the country

Vast domestic market

Weaknesses

Low availability of adequate infrastructural facilities

Lack of adequate quality control & testing methods as per international standards

Inefficient supply chain due to a large number of intermediaries

High requirement of working capital.

Inadequately developed linkages between R&D labs and industry.

Seasonality of raw material

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Opportunities

Large crop and material base offering a vast potential for agro processingactivities

Setting of SEZ/AEZ and food parks for providing added incentive to develop

greenfield projects

Rising income levels and changing consumption patterns

Favourable demographic profile and changing lifestyles

Integration of development in contemporary technologies such as electronics,material science, bio-technology etc. offer vast scope for rapid improvement and

progress

Opening of global markets

Threats

Affordability and cultural preferences of fresh food

High inventory carrying cost.

High taxation

High packaging cost

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3.2Present Position and Trend of business (Import/export) with India/ Gujaratduring last 3 to 5 years

Recent news for Gujarat in food processing

Blessed with largest coastline and an environment of business, Gujarat seems

to be attracting current players in India to shifting their business from respective states

to Vibrant Gujarat. Honorable Gujarat Chief Minister Narendra Modi has given boost tothis industry by supporting it to meet export needs. It will also employ many women who

are involved in Gruh Udhyog, and provide a strong base to the economy.

Food processing firm Himalya International has started commercial production

at its Gujarat unit. First unit of food processing plant set up at Vadnagar in Gujarat has

started commercial production. Besides, the company announced that its remaining

three units would commence operation in the next four months. The Vadnagar unit will

grow and process 10,000 tonnes of mushrooms, 40,000 tonnes of appetisers and fries,50,000 KL of yogurt and cheese and 100 million cans of soups per annum.

Himalaya International Ltd (HIL), a Himachal Pradesh-based frozen food manufacturer,

will invest Rs.1.4 billion (Rs.140 crore) to set up an export-oriented unit in Gujarat. The

state government is providing 100 acres in Mehsana district.

The Gujarat facility will produce ready-to-eat products like frozen mushroom, mozzarella

sticks, cheese and appetizers and plan to export to Western markets.

The company is also planning to sign an agreement with the Gujarat Tribal

Development Department for starting contract farming. Technical knowhow will be

provided to farmers to cultivate Spanish onions, jalapeno and seedless eggplants,

which the company will buy back for processing frozen food and appetizers. The facility,

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which is expected to start commercial production by next year, will generate

employment for nearly 2,000 people.

In Gujarat, the Agro and Food processing sector has received a big boost in the state.

Some of the salient features of the Agro sector in Gujarat are as:

Oil seed processing - 1200 oil extraction units

49 solvent extraction units

Fruit and vegetable processing - 15 organised units, 30 small/ medium scale

units

Seed spices - 40 units of ground spices

25 units of Isabgol processing

Fish processing - 60-65 sea food processing units

Milk processing - 13 co-operative sector dairies

26 private sector dairies

Gujarat has a vast network of market centres and yards

APMCs: 1178

Main Yards: 160

Sub Yards: 235

Cold storage centres: 2

4-Special Yards: Cotton, Tobacco, Spices and Groundnut

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4.1 Policies and Norms of Brazil for food processing industry- for import/ exportincluding licencing/ permission, taxation

Brazil is a member of the World Trade Organization (WTO) and therefore has

made commitments to subscribe to the Sanitary and Phytosanitary (SPS) Agreement

and to Codex Alimentarius (CODEX) principles. Food regulations issued at the federal

level are contained in various types of legal documents and, in order to be implemented

must be published in Brazils Diario Oficial (similar to the U.S. Federal Register).Brazil

has three levels of government: federal, state and municipal. In the federal government,

numerous agencies and several Ministries share jurisdiction for ensuring the safety of

the Brazilian food supply and regulating imports of agricultural commodities and foods.

However, the Ministry of Agriculture, Livestock, and Food Supply (MAPA) and the

Ministry of Health (MS) - through its National Agency of Sanitary Surveillance (ANVISA)

- are the primary regulators of agricultural products. MAPA oversees and enforces a

large number of regulations pertaining to production, marketing, import and export of

animal origin products, fresh fruit and vegetables, alcoholic beverages, juices, grains,

seeds, and animal feed (including pet food). ANVISA enforces most of the regulations

regarding processed food products. MAPA and ANVISAs regulations may be consulted

on-line. Other Ministries and/or agencies also involved in monitoring/control of food

safety include the Environment Protection Institute (IBAMA), of the Ministry of the

Environment; the National Institute of Metrology, Standardization and Industrial Quality

(INMETRO) of the Ministry of Development, Industry and Commerce (MDIC); the

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National Technical Commission on Biosafety (CNTBio), which is an inter-Ministerial

Commission based in the Ministry of Science and Technology (MCT); and the

Department of Consumer Protection and Defense (DPDC) within the Ministry of Justice.

LABELING REQUIREMENT

The Brazilian Consumer Protection Lei n 8078 of September 11, 1990, requires

that all domestic and imported foods and beverages must provide the consumer with

correct, precise, clear and easily readable information about the production Portuguese.

According to the Consumer Protection Law, the Brazilian importer is held liable in case

of health risk to the consumer of an imported product. The expiration date, validity, or

shelf life date is very important for Brazilian consumers and should never be

overlooked. ANVISA provides the general regulatory framework for labeling domesticand imported food products, MAPA or ANVISA will require additional notes, such as

plant number, product registration number, etc. MAPA requires that, in addition to the

registration of the foreign processing plant, the Brazilian importer must also file a

request for the preregistration of the foreign labels of processed meat, dairy, and

seafood products. Only those products that have their labels pre-approved by DIPOA

are allowed to enter Brazil. For additional information on plant registration, U.S.

exporters should contact the Office of Agricultural Affairs (OAA) in Brasilia.

There are some items required to appear on product front or side labels:

ITEMS GENERALLY REQUIRED ON FRONT PANEL

1) Technical name, according to MAPA or ANVISA classification,2 )Brand, 3 )Quantity

ITEMS GENERALLY REQUIRED ON SIDE PANEL

List of ingredients, Country of Origin,Producer contact information (complete name and

address), Importer Information (corporate name, address, corporate ID), Date of

production, Date of product expiration, Lot, Storage care, Instructions for use or

preparation (if necessary), The expression Contains Gluten or Does Not Contain

Gluten, clearly visible Nutritional information

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MAPAs Inspection Requirements for Meat, Dairy, and Seafood Products

In order to export animal origin (beef, pork, powdered milk, whey, lactose,

cheese, and seafood) products to Brazil, the local government requires that U.S.

processed plants must be inspected by federal agencies. State level inspection is notaccepted and products from these plants will not be registered in Brazil. The only U.S.

federal agencies approved by the Brazilian Government to certify U.S. processing

plants are: the Food Safety and Inspection Service of the U.S. Department of

Agriculture (FSIS/USDA) for meat and poultry, and the Agricultural Marketing Services

(AMS/USDA) or the Food and Drug Administration (FDA) for dairy. The U.S. dairy

product exporter must have the processing plant included in AMSs list of U.S. Dairy

Plants Surveyed and Approved by the USDA Grading Service or have the Central File

Number under FDA. The same procedure applies for exports of U.S. seafood. The U.S.

plant must be inspected by either the National Oceanic and Atmospheric

Administration/National Marine Fisheries Services (NOAA/NMFS) or FDA before

exporting to Brazil, and must be included on DIPOAs list. The request for registration of

the U.S. plant with DIPOA must be made through the USDAs Foreign Agricultural

Service (FAS) office in the U.S. Embassy in Brasilia. The U.S. exporter must provide the

FAS office in Brasilia, the following information:

1. Full name and address of the plant(s), including telephone, fax, and contact

person;

2. Plant registration number with the Food Safety Inspection Service (FSIS/USDA)

for meat products (beef and pork only). Plant registration number with the

Agricultural Marketing Service (AMS/USDA) or the central file number from the

FDA for dairy products. The central file number from FDA or plant registration

number with NOAA/NMFS for seafood products.

3. Description of the product to be exported to Brazil: fresh/frozen beef, beef

products, beef, pork, pork products, prepared foods, milk and milk products

(cheese, whey, butter, butter oil, lactose), and seafood products (in this

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case provide the scientific name of the fish in Latin and how the product will be

shipped to Brazil

The important documentation procedures to be followed by importers in the

country include:In the prescribed bill of entry format, importers must furnish an import declaration,

disclosing the value of imported foods. This must be accompanied by the following

documents:

1. Import permit original - A permit authorised by the Plant Quarantine Officer for

the import of fresh Fruits/vegetables, and processed food is mandatory. The

importer has to clearly state the specified quantity intended to be imported. The

Import Permit issued shall be valid for six months from the date of issue and

valid for multiple port access and multiple part shipments provided the exporter,

importer and country Of origin are the same for the entire consignment. For

frozen/processed meat Products and frozen/processed marine products a permit

is required from Animal Quarantine and MPEDA respectively.

2. Phytosanitary certificate (original) issued at the country of origin or PSC Re-

export format, in case of re-exported consignment along with attested copies of

PSC issued from the country of origin.

3. Customs bill of entry (duly endorsed).

4. Shipping/airway bill.

5. Invoice and Packing list.

6. Fumigation certificate (if required).

7. Certificate of Origin.

8. Bill of lading.

A certification from the port health authority is needed for the clearance ofimported food products at the port of entry. This certificate conforms to the standard

and regulations of the PFA (Prevention of Food Adulteration Act). As most ports

have very limited testing facilities, this certification is based mostly on visual

inspection and records of past imports. Therefore, many importers face

unnecessary delays in clearing their products. Depending on the product and

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experience of the importer, the custom clearance period may last between one day

and one month. An appeal can be filed by the importer at the Customs office at the

port of entry in case of a dispute or rejection of the consignment.

4.2Policies and norms of India for import /export to Brazil including licencing /permission, taxation

Food Product Order (FPO): It was promulgated under Essential Commodities

act in 1955 aiming at regulating sanitary and hygienic conditions in the manufacture of

fruit and vegetable products. Licensing under this order lays down the minimum

requirement for

Sanitary and hygienic conditions in the premises, surroundings and

personnel. Water to be used for processing.

Machinery and equipments.

Product standards.

Besides these, the maximum limit for preservatives, additives and

contaminants have also been specified for various products.

The regulatory functions are carried out at ministry level and also through thedirectorates of fruits and vegetables preservation. This has four regional offices at Delhi,

Kolkata, Chennai and Mumbai under Deputy Directors.

Development functions- Guiding Industries to set up fruit processing industry by new

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technology or by new innovations, improving process of to obtain maximum output from

fruits and vegetables, marketing label requirements of products, suggesting for suitable

products, packaging as per latest trend.

Preachment Inspection of food products for export-Continues expansion of Fruits

and vegetables products for export by the development of fruit pulp juices export, where

the samples are drawn online, cut out for analysis. The quality certificate after

conditions is also issued as per request of parties under preachment. (Quality control

INSPP in 1963).

Financial assistance- By visiting factories as per instruction to manufactures, grant of

FPO license in case of fruits and vegetable units, food parks, bakery units,infrastructural units for food processing industry.

Government Regulation and Support -Since liberalisation several policy measures

have been taken with regard to regulation & control, fiscal policy, export & import,

taxation, exchange & interest rate control, export promotion and incentives to high

priority industries. Food-processing and agro industries have been accorded high

priority with a number of important relieves and incentives.

Regulation and Control

1. As per extant policy, FDI up to 100% is permitted under the automatic route in

the food infrastructure (food park, cold chain/warehousing).

2. Automatic approval to FDI up to 100% equity in FPI sector excluding alcoholic

beverages and a few reserved items.

3. Foreign investments are allowed in SSI reserved items under an export

obligation (pickles, chutneys, bread, pastry, hard-boiled sugar candy, rapeseed

oil, sesame oil, groundnut oil, sweetened cashew nut products, ground and

processed spices other than spice oil and oleoresin, tapioca sago and its flour).

4. FDI up to 100% is permitted on the automatic route for distillation & brewing of

alcohol subject to licensing by the appropriate authority.

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No industrial license is required for almost all of the food & agro processing

industries except for some items like: beer, potable alcohol & wines, cane sugar,

hydrogenated.

5. Animal fats & oils etc. and items reserved for exclusive manufacture in the small-

scale sector.

6. Up to a maximum of 24% foreign equity is allowed in SSI sector.

Fiscal policy and taxation-

1. .Liberal corporate tax policy is applicable for export and domestic earnings,income tax rebate allowed (100% of profits for five years and 25% of profits for

the next five years) for setting up of new agro-processing industries to process

and package fruits & vegetables.

2. Fruits & vegetables, and dairy machineries are completely exempt from central

excise duty. Central excise duty on preparation of meat, poultry and fish, pectin,

pats and yeast is also completely exempt.

3. Quantity restrictions on all food products have been removed. Peak rate of

customs duty has been reduced from 30% to 25% (excluding agricultural and

dairy products) and duty structure on designated items has been rationalized.

4. Customs duty on refrigerated goods transport vehicles has been reduced form

20% to 10%.

5. Excise Duty of 16% on dairy machinery has been fully waived off and excise

duty on meat, poultry and fish products has been reduced from 16% to 8%.

Export promotion-

1. Food-processing industry is one of the thrust areas identified for exports. Free

Trade Zones (FTZ) and Export Processing Zones (EPZ) have been set up with

all infrastructures. Also, setting up of 100% Export Oriented Units (EOU) is

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encouraged in other areas. They may import free of duty all types of goods,

including capital foods.

2. Capital goods, including spares up to 20% of the CIF value of the capital goods

may be imported at a concessional rate of customs duty subject to certain export

obligations under the EPCG scheme. Export linked duty free imports are also

allowed.

3. Units in EPZ/FTZ and 100% EOUs can retain 50% of foreign exchange receipts

in foreign currency accounts.

4. 50% of the production of EPZ/FTZ and 100% EOU units is saleable in domestic

tariff area. All profits from export sales are completely free from corporate taxes.

Profits from such exports are also exempt from MAT.

5. .Agri export zones and food parks6. Setting up of 60 agri zones for end-to-end development for export of specific

product from geographically contiguous areas.

7. 53 food parks approved to enable small and medium food and beverage units to

set up and to use capital intensive common facilities such as cold storage,

warehouse, quality control labs, effluent treatment plant, etc.

Various food laws applicable to food and related products in India

Prevention of Food Adulteration Act (PFA), 1954 and Rules (Ministry of Health &

Family Welfare), . The Standards of Weights and Measures Act, 1976, and Standards of

Weights and Measures (Packaged Commodities) Rules, 1977, Agriculture Produce

(Grading & Marking) Act (Ministry of Rural Development), Essential Commodities Act,

1955 (Ministry of Food & Consumer Affairs), Fruit Products Order (FPO), 1995, Meat

Food Products Order, 1973 (MFPO), Milk and Milk Products Order, 1992, The Food

Safety and Standards Act, 2006

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4.3 present trade barriers for import export of processed food

Major Challenges for the India and Brazil Food Processing Industry are:

Consumer education on nutritional facts of processed foods

Low price-elasticity for processed food products

Need for distribution network and cold chain

Backward-forward integration from farm to consumers

Development of marketing channels

Development of linkages between industry, government and institutions

Taxation in line with other nations

Streamlining of food laws

Lack of suitable infrastructure in terms of cold storage, warehousing, etc

Lack of adequate quality control and testing infrastructure

Inefficient supply chain and involvement of middlemen

High inventory carrying cost

High packaging cost

Affordability and cultural preference of fresh food

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Constraints & Drivers of Growth for India

Growing urbanization, increasing disposable income, emergence of organised

food retail, changing lifestyles and food consumption patterns are the key factors driving

growth for processed foods in India. These are post-liberalisation trends that have givenan impetus to the sector. Consumption patterns in India have been undergoing a visible

shift. Earlier, the share of cereal products was the highest, followed by milk & milk

products, vegetables, edible oil and meat products. However, in recent years, the

growth rates for fruits, vegetables, meat and dairy products have been higher than

cereals and pulses. This shift in turn implies that there is also a need to diversify the

food production base to match the changing consumption preferences.

This shift in consumption follows the pattern observed in developed countries in

the evolution of the global food demand. There is a shift from carbohydrate staples to

animal sources and sugar. Going by this pattern, in future, there will be increasing

demand for prepared meals, snack foods and convenience foods and further on the

demand would shift towards functional, organic and diet foods. Highest priority has been

accorded by the Government for the development of infrastructure. The Government

has already taken several initiatives on this front which include developing of food

parks, packaging centres, modernised abattoirs, integrated cold chain facilities,irradiation facilities and value added centres. The initiative to develop food parks was

taken primarily in order to assist the small and medium enterprises which are unable to

invest in capital intensive activities. So far, 22 food parks have come into operation

which provide common facilities like cold storage, food testing and analysis laboratories,

packaging centres, etc In terms of policy support, the ministry of food processing has

taken the following initiatives:

Formulation of the National Food Processing Policy

Complete de-licensing, except for alcoholic beverages

Declared as priority sector for lending in 1999

100% FDI on automatic route

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Excise duty waived on fruits & vegetables processing from 2000 01

Income tax holiday for fruits & vegetables processing from 2004 05

Customs duty reduced on freezer van from 20% to 10% from 2005 06

Implementation of Fruit Products Order

Implementation of Meat Food Products Order

Enactment of FSS Bill 2005

Food Safety & Standards Bill, 2005

Apart from these initiatives, the Centre has requested state Governments toundertake the following reforms:

Amendment to the APMC Act, Lowering of VAT rates

Declaring the industry as seasonal, Integrate the promotional structure

5.1 Potential for import export in india/ Gujarat market

Potential and prospects of Indian food Industry

Major

gcr of brazil

Documents