Emsk – for the future

EMSK – For the Future

“More than a joint-venture: a

effort to promote innovation”Project of Korean & Global economy

2013 - April 29th

Murilo dos Santos – ID 50131038

[email protected]

• BLUF

• Brazil and Korea data

• About the members – Embraer & SK Innovation

• Commercial aviation industry

• PEST Analysis

• Conclusion

Presentation Topics

BLUF• EMSK: Embraer +

SK Innovation

• Joint-venture to promote R&D

• Main goal: Reduce emissions

• New Materials

• Aircraft components -Battery & fuel components

Brazil

GDP (PPP) US$2.362 trillion

GDP by Sector

Agriculture 5.4%

Industry 27.4%

Services 67.2%

Population 201,009,622

Age structure

0-14 years 24.2%

15-24 years 16.7%

25-54 years 43.6%

55-64 years 8.2%

65 years and over 7.3%

Per Capita GDP US$12,000

Work Force/Pop Ratio 53,28%

Poverty Rate 21.4%

Gini Index 51.9

FX & Gold Reserves US$371.1 billion

External Debt US$405.3 billion

Key-industries: Textiles, shoes, chemicals,

cement, lumber, iron ore, tin, steel, aircraft,

motor vehicles and parts, other machinery

and equipment.

• Petrobras (US$161B)

• Bradesco* (US$83B)

• Itaú Unibanco* (US$73B)

• Banco do Brasil* (US$72B)

• Vale (US$55B)

Brazil – Top 5 Companies

Obs: US$ Billions / Based on the revenues obtained in 2011

*Banks

Brazil – Top 5 Without Banks

• Petrobras (US$161B)

• Vale (US$55B)

• Odebrecht (US$37B)

• JBS (US$34B)

• AmBev (US$28B)

Korea

GDP (PPP) US$1.611 trillion

GDP by Sector

Agriculture 2.7%

Industry 39.8%

Services 57.5%

Population 48,955,203

Age structure

0-14 years 14.6%

15-24 years 13.6%

25-54 years 47.8%

55-64 years 11.7%

65 years and over 12.3%

Per Capita GDP US$32,400

Work Force/Pop Ratio 52,10%

Poverty Rate 16.5%

Gini Index 41.9

FX & Gold Reserves US$326.9 billion

External Debt US$413.4 billion

Key-industries: Electronics, automobile

production, chemicals , shipbuilding, steel.

• Samsung Electronics

• SK Holdings

• Hyundai Motors

• POSCO

• LG

Korea – Top 5 Companies

• Brazil: 3 banks in Top 5 companies

• Korea: Top 5 with high-tech companies

• Korea: ¼ of the Brazilian population but more

than ½ of its GDP

• Korean per capita GDP its almost 3 times the

Brazilian

• Korean international trade its more than 2 times

the Brazilian

• Close numbers in External debt and reserves

Findings

• Core business: aircraft manufacturing

• Founded by the Brazilian government in 1969

• Privatized in 1994

• Total revenues (2011):

5.8 US$ billions

• 19th in the aerospace

manufacturers

• 55th between the

companies operating in

Brazil

• Commercial and

executive jets: 81% of

revenues

Executive14%

Defense18%

Commercial 67%

Others 1%

Embraer - Revenues by Sector

• 5th in revenues between commercial aircrafts manufacturers

• Highest growth in revenues 2010/2011 on this segment

• Energy & Chemicals

• Information,

Telecommunication &

• Semiconductor

• Marketing & Service

• Revenues (2012):

US$ 100 Billions

• Energy, chemicals &

lubricants

• Overseas Resource

Exploration & Production

• Battery Business

• Information & Electronic

Materials Business

• Revenues (2011): US$

62 Billions

Subsidiaries:

• Intensive in technology and capital

• Perspective of growth for the next 20 years

• Asian market (mainly China)

• New demands

Oil consumption

Emissions

• New competitors on Embraer main segment

Aeronautic Industry

http://www.youtube.com/watch?v=wBPY34jCmos

Commercial Aircraft Manufacturing

- Competitors

Forecast – Commercial Aviation

• Political Stability

• Korean government wants to promote a knowledge-based development

• Power of Chaebol

• Intention to approach with Brazilian government

• Opportunities

- Cooperation of both BR and KR governments

• Threats

- Historic of huge intervention

- Popular pressure todecrease benefits to thebig business groups

Korea: Politics

• Right level of income

• Right level of GDP

• Increasing of household debt

• Suffering to recovery due to international scenario

• Financial market

• Threats

- Increase of difficult to borrow money

- SK support could be compromised

• Opportunity

- Labor force can become cheaper

- Korean economy is relatively robust

Korea: Economy

• Families are really

concerned about

education

• High quality of

education

• Experience with high

technology

• Growing appeal of

high speed rail (HSR)

• Opportunities

- Qualified labor force

- HSR growth can drive

air companies to rethink

their fleets

• Threat

- Aging population can

create difficulties to hire

new employers

Korea: Society and Technology

Conclusion

- Good opportunity to exchange know-

how

- Possibility of cost reductions

- Near to the Chinese market

- Qualified labor force

- Possibility of resources from the

governments of both countries

Difficulties of a partnership in

R&D

- Possibility to give to the other part the

tools to became a rival in the future

- SK group already has many resources

and activities in different sectors

EMSK – For the Future

“More than a joint-venture: a

effort to promote innovation”Project of Korean & Global economy

2013 - April 29th

Murilo dos Santos – ID 50131038

[email protected]