Sérgio Costa | Investe São Paulo | Global Cities Initiative

28/11/2012

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Investment

Promotion

Agency

Investe São Paulo – Global Cities

Sérgio Costa

Director

November, 28th, 2012

Investment Promotion Agency

Mission

Being the gateway to new investments

or expansion of existing businesses,

generating innovation, employment and income,

in addition to the continuous improvement

of the competitive environment and

of the image of the State of São Paulo

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Promotion of the image of the State of Sao Paulo

Actions for the Promotion of Competitiveness

• Labor training, Taxation, Innovation, Infrastructure and Licensing

• Studying and proposing public policies

Institutional Activities

• Reception of foreign delegations and organization of international missions

• Support and guidance for municipal governments

Investment Projects

• Technical support and orientation to investors: site location, taxes, infrastructure

• Contact with public and private institutions aiming as investment facilitation

Investment Outreach

• Identification of sectors and companies with investment potential

Areas of Activity

SP


Our Website

SP in Maps

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Our Customers

Portfolio of projects

Number of projects: 59*

Potential Investments: USD 9,4 billion

Potential direct jobs: 27,600

Sectors: automotive, food, oil and gas,

energy, machinery and equipment,

information technology and

communication, solid waste and

biotechnology.

Origin: United States, China, South

Korea, Spain, Japan, Italy, England,

France and Brazil.

* The names of these companies are kept

confidential in compliance with NDA signed with

Investe São Paulo

October 2012

Direct Jobs:

35.290

Exchange: US$ 1 = R$ 1.67

Announced Investments:

USD 8.802 billion

DABO

Brazil in

World Economic Context

http://www.cummins.com.br/cla/index.php

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Brazil, the 6th economy of the planet

15,094

7,298

5,870

3,577

2,776

1st USA

3rd Japan

2nd China

4th Germany

5th France

7th UK

8th Italy

6th Brazil

12thSpain

10th Canada

11th India

9th Russia

2,492

2,198

2,417

1,736

1,676

1,850

1,493

Source: IMF - year 2011

GDP - US$ billions


Selected Countries:

Territory, Population and Economy

Territory > 3 million km2

Economy (GPD) > US$ 750 billion

Population > 100 million

Canada Australia

Russia India China

United States Brazil

Indonesia Nigeria

Bangladesh Pakistan

Japan Mexico

Spain

Germany France United Kingdom

Netherlands Italy South Korea

Source: IMF, World Bank - 2010

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Brazilian Age Structure

Source: IBGE / Revista Veja, December 2010.

0

30

50

80

2020 2010 2050

Opportunity

Larger contingent of working-age

population = possibility of increasing

productivity

Challenges

Increase on health and social security

expenditures


Social Mobility

Year

projection

Percentage of Inhabitants

Source: Banco Central do Brasil/ FGV

7,4%

10,6%

15,5%

37,7%

50,5%

56,5%

26,9%

23,4%

20,0%

28,0%

15,4%

8,0%

2003

2009

2014

A e B C D E

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São Paulo state in the

Brazilian Context


Brazil and São Paulo

Source: IBGE, Brazilian Central Bank , SEADE – Exchange Rate US$ 1 = R$ 1,76

Territory (1,000 km²) 8.515

Population (million) 192

GDP nominal (US$ bi) 2.475

GDP per capita (US$) 12.866

Brazil

São Paulo Territory (1,000 km²) 248

Population (million) 42

GDP nominal (US$ bi) 792

GDP per capita (US$) 19.049

22% of the population

32% of GDP nominal

1,5X of GDP per capita

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• 1st largest cargo airport in South America

• 1st largest producer of sugar cane ethanol in

the world

• 1st largest helicopter fleet in the world

• One of the five largest stock exchange in the

world (BM&FBOVESPA)

• 3rd largest producer of aircraft in the world

• 42% of domestic production of vehicles

• Capital: sixth largest metropolis in the world

• Agribusiness:

Orange – 53% of juice world production

Sugar – 23 million tons/year

Beef – US$ 2.18 billion in exports

São Paulo Highlights


São Paulo Competitive Advantages

São Paulo Competitive Advantages

Largest Consumer Market in LATAM

Skilled Workforce

Supply Chain

World-class Infrastructure

Largest Brazilian Investor in R&D

Environmental Responsibility

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Brazilian State Capitals where the

consumer market grows most

36.59

22.40

8.62 7.78 7.19 6.65 5.75 4.25 4.07 3.65

São Paulo -SP

Rio de Janeiro- RJ

Brasília - DF Belo Horizonte- MG

Curitíba - PR Salvador - BA Fortaleza - CE Recife - PE Porto Alegre -RS

Manaus - AM

Sales increase 2010 - 20201

(US$ billions)

(1) 45 product categories analyzed

Source: Exame Magazine – McKinsey

Exchange rate – US$ 1 = R$ 1.67


20 Brazilian inland cities where

the consumer market grows most

$12,34

$3,35

$2,10

$1,74

$1,20

$1,20

$1,14

$3,05

SP MG RJ PA RS BA GO Others

(1) 45 product categories analyzed

Source: Exame Magazine – McKinsey

Exchange rate – US$ 1 = R$ 1.67

2,34

1,86

1,50

1,44

1,14

1,08

1,08

0,96

0,96

1,08

1,20

1,14

0,96

1,02

1,74

2,10

1,26

1,14

0,96

1,20

Campinas

Santos

Sorocaba

Ribeirão Preto

São José dos Campos

Piracicaba

Jundiaí

São José do Rio Preto

Bauru

Joinville

Caixias do Sul

Rio das Ostras

Campo dos Goytacazes

Londrina

Parauapebas

Uberlândia

Juiz de Fora

Anápolis

Juazeiro do Norte

Feira de Santana

Sales increase 2010 - 20201

(US$ billions)

Share of the cities by state

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São Paulo’s share of the Brazilian output

33,52% Petroleum products

36,76% Biofuels

47,77% Chemicals

55,28% Machinery and equipment

58,13% Electronic components

58,34% Computer equipment and

peripherals

60% Communications equipment

67.83% Manufacture of pharmaceutical

chemicals and pharmaceuticals

72.92% Electromedical and

electrotherapeutic apparatus

and equipment of irradiation

95.84% Aircraft

Selected Sectors

Agência Paulista de Promoção

de Investimentos e Competividade

Higher Education

Source: INEP

572 college level

institutions

1,474,516

students enrolled

The State Government is responsible for three of the best universities in Latin America

Largest number of technological students graduated in Brazil

• 59 thousand students

• 55 technology colleges

• 61 courses in the areas industry, services and agriculture

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Agência Paulista de Promoção

de Investimentos e Competividade

Technical Schools

1274 technical schools

More than 430,000

students enrolled

Largest program of technical education in Brazil:

Source: INEP, Centro Paula Souza

Technical Schools – Etecs

• 226 thousand students

• 208 technical schools

• 121 courses in the fields of industry, services and agriculture


R&D / Innovation

USP, Unicamp

and Unesp

International

recognition

All over

the state

US$ 616 million

annual budget

Fundação de Amparo à

Pesquisa Científica e

Tecnológica (Fapesp)

3 universities among

the ones that most

develop scientific

research in Brazil

19 research institutes

19 initiatives of

Technological Parks

More than 13% of the São Paulo State

revenue is used in high quality

education, research and development.

The State also hosts federal universities

and research institutions.

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State funds invested in R&D (2010)

Source: Coordenação-Geral de Indicadores(CGIN)- ASCAV/SEXEC - Ministério da Ciência e

Tecnologia

5.012,2

488,9 413,5 213,9 209,9 120,4 92,9 70,3 63,5 58,2

SP RJ PR MG SC BA RS DF CE PE

(R$ millions)

72%

28%

SP Demais 26 EstadosOther 26 states


Technology Park System

Source: Secretariat of Development.

19 implementation initiatives

Piracicaba

São José dos

Campos

São Carlos - Damha Campinas

Ribeirão Preto

Sorocaba

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19 out of the 20 best

highways in Brazil

5.400 Km of railways 2 international airports

33 domestic airports Largest port

in South America

800 km of Waterways Pipeline

in industrial centers

• 19 out of the 20 best highways

• 5,400 Km of railways

• 2 international airports

• 33 domestic airports

• Largest port in South America

• 800 km of Waterways

• Pipelines in industrial centers

Highway

Railway

Waterway

Pipeline

Home airport

International airport

River port

Sea port

World Class Infrastructure


• Energy matrix with 55% of renewables

• Competitive advantages for energy production from biomass

• New opportunities in environmental technology markets

• Brazil’s most advanced conservation system

• 17.5% of the state area is of

environmental preservation

• 27 State Parks

• 21 Ecological Stations

• 17 Experimental Stations

• 13 State Forests

Environmental Responsibility

Source: Energy Secretariat of State of Sao Paulo, Forest Foundation

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FIRJAN Index of Municipal Development

Nacional Estadual

1º 1º SP Barueri 0,9303 0,9184 0,9206 0,9518

2º 2º SP Paulínia 0,9290 0,8954 0,9675 0,9240

3º 3º SP Araraquara 0,9281 0,9035 0,9600 0,9207

4º 4º SP Ribeirão Preto 0,9239 0,9299 0,9213 0,9207

5º 5º SP São José do Rio Preto 0,9202 0,8704 0,9546 0,9356

6º 6º SP Indaiatuba 0,9164 0,8631 0,9393 0,9469

7º 7º SP Marília 0,9125 0,8463 0,9615 0,9297

8º 1º MT Lucas do Rio Verde 0,9046 0,8849 0,8650 0,9640

9º 8º SP Taubaté 0,8985 0,9013 0,8951 0,8992

10º 9º SP Itupeva 0,8942 0,8979 0,8921 0,8925

11º 10º SP São Paulo 0,8930 0,8799 0,9121 0,8870

12º 11º SP Santos 0,8924 0,8318 0,9312 0,9143

13º 12º SP São Carlos 0,8906 0,8038 0,9525 0,9155

14º 13º SP Santana de Parnaíba 0,8902 0,9011 0,8508 0,9188

15º 14º SP Jundiaí 0,8898 0,8244 0,9185 0,9264

16º 15º SP Itu 0,8893 0,9166 0,8603 0,8910

17º 16º SP Americana 0,8889 0,7949 0,9606 0,9110

18º 17º SP Bauru 0,8882 0,8516 0,9118 0,9011

19º 18º SP Amparo 0,8872 0,7792 0,9301 0,9522

20º 19º SP Campinas 0,8866 0,8465 0,8888 0,9246

Emprego &

Renda Educação Saúde

Ranking IFDMUF

Ranking IFDM

MUNICÍPIOS BRASILEIROS - Ano 2009IFDM

19 out of the 20 best ranked

Brazilian municipalities are in the State of São Paulo

Economist Intelligence Unit The Economist

Brazilian Investment

Competitiveness Ranking

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General Ranking

Source: The Economist, Centro de Liderança Pública and Veja

http://veja.abril.com.br/infograficos/clp/

Very Good

Good

Moderate

Poor

CLASSIFICATION

NATIONAL

OVERALL

REGION

SOUTH

SOUTHEAST

CENTER WEST

NORTHEAST

NORTH

STATES

#1

Scale – 100 for best, 0 for worst


Economic Environment



NATIONAL

OVERALL

Very Good

Good

Moderate

Poor

CLASSIFICATION

SOUTH

SOUTHEAST

CENTER WEST

NORTHEAST

NORTH

REGION

STATES

#1




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Human Resources



NATIONAL

OVERALL

Very Good

Good

Moderate

Poor

CLASSIFICATION

SOUTH

SOUTHEAST

CENTER WEST

NORTHEAST

NORTH

REGION

STATES

#1



Highways quality

Infrastructure: Highways Quality



NATIONAL

OVERALL

Very Good

Good

Moderate

Poor

CLASSIFICATION

SOUTH

SOUTHEAST

CENTER WEST

NORTHEAST

NORTH

REGION

STATES

#1

SP DF




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Innovation



NATIONAL

OVERALL

Very Good

Good

Moderate

Poor

CLASSIFICATION

SOUTH

SOUTHEAST

CENTER WEST

NORTHEAST

NORTH

REGION

STATES

#1


PPPs and MIP


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Investment with Fiscal and Social

Responsibility

São Paulo State:

Investment Plan of R$ 118.6 billion

Over R$ 3 billions available every year

to be invested in PPPs

Investments forecast in

the Multi-Year Program

2012-2015

State Treasury

R$ 85.2 billion

State-Owned

Companies

R$ 8,4 billion

Private Sector

R$ 25 billion


Innovative Fast Track for PPP Projects

State Decree 57.289 dated August 30, 2011 allows interested investors to present

proposals for PPPs Projects

PRIVATE SECTOR INITIATIVE (MIP)

APPROVAL

PUBLIC CALL for detailed technical

studies, including alternatives

CONTRACT (PPP Project winner reimburses selected

technical study author)

EVALUATION by State Commission

EVALUATION by State Commission

Technical studies

PPP Project APPROVAL

PRELIMINARY PPP PROPOSAL

PUBLIC BIDDING for the PPP

REJECTION

REJECTION

Technical studies

Technical studies

$

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Current MIP Projects

Line 6 – Orange of the Subway

Network of São Paulo Studies under evaluation with the

coordination of the Executive Secretariat of

the Managing Council of PPP

Private Investment - US$ 5, 9 bi

Prison Units in the State Deadline for presentation of studies by

registered parties in August 2012.

Private Investment - US$ 426 mi

Pharmaceutical Factory

Américo Brasiliense – IFAB Studies under evaluation with the

coordination of the Executive Secretariat

of the Managing Council of PPP

Private Investment - USS$ 80 mi

Interactive Class Deadline for presentation of studies by

registered parties in July 2012.

Private Investment - US$ 750 mi

Social Interest of Housing Deadline for presentation of studies by

registered parties in September, 2012

Private Investment - US$ 2,36 bi

Line 18 – Bronze of the

Metropolitan Network of São

Paulo Deadline for presentation of studies by

registered parties in July, 2012

Private Investment - US$ 2,2 bi

Exchange Rate US$ 1 = R$ 1,76

Major Events

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World Cup 2014

• R$ 300 million of state investments in public works around the arena

• Opening Stadium for 65 thousand spectators

• Increase from 42 thousand hotel rooms to 50 thousand

Olympic Games 2016

• R$ 28.8 billion until 2016

• R$ 23.23 billion in infrastructure

• R$ 5.62 billion for operations

• São Paulo is expected to host selected contests

Expo 2020

• Date: May 15 to November 15

• Venue: Pirituba region

• Motto: Power of Diversity, Harmony for Growth

• Public estimated: 30 million visitors

Major Events

Global Cities

Announced Investments, Foreign

Trade and taxes.

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Announced Investments

Brazil x São Paulo

2009 2010 2011 2012

No. of projects SP 113 139 202 134

No. of projects Brazil 271 356 500 277

42% 39%

40%

48%

271

356

500

277

Source: fDi Intelligence from The Financial Times Ltd


Announced Investments

Brazil x São Paulo


Strategic sectors No. Projects SP

(2003-2012)

No. Projects Brasil (2003-

2012) Participation of SP

Aerospace 19 51 37%

Green Economy 38 75 51%

Oil & Gas 7 62 11%

Software & IT

services 165 345 48%

Life Sciences 11 49 22%

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US announced Investments

Brazil x São Paulo

Headline FDI trends by year

Year Number of

projects in SP

Number of

projects in

Brazil

% of SP

Capital

investment in

SP

Capital

investment In

Brazil % of SP

Total (USD m) Total (USD m)

2003 28 83 34% 692,7 6.860,40 10%

2004 15 53 28% 369,4 3.686,10 10%

2005 20 43 47% 504,6 3.653,20 14%

2006 34 53 64% 841,6 5.174,50 16%

2007 29 48 60% 424,6 2.277,20 19%

2008 31 68 46% 2.321,00 9.545,50 24%

2009 37 79 47% 1.529,80 7.588,30 20%

2010 48 102 47% 1.330,00 9.091,60 15%

2011 62 146 42% 4.824,00 11.580,10 42%

2012 50 89 56% 2.243,10 5.062,90 44%

Total 354 764 46% 15.080,80 64.519,80 23%



US companies which announced

Investments in SP

Top 10 Companies: Jobs Created and Capital Investment

Company Name Jobs created Capital investment

Total Total (USD m)

General Motors (GM) 4,402 1,395.90

IBM 2,972 263.80

Owens Corning 537 225.10

Cargill 308 79.90

Ford 2,309 589.70

Microsoft 135 15.40

Harley-Davidson 306 41.60

Motorola Solutions (Motorola) 593 31.30

Deere & Company 724 96.50

DuPont 83 16.20


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U.S origin cities for São Paulo Investments

Source city Projects Companies

Jobs Created

Capital

Investment

(USD m) No % No %

NYC (NY) 34 9.60 32 10.70 7,199 2,303.20

Detroit (MI) 14 3.95 3 1.00 6,711 1,985.60

Chicago (IL) 13 3.67 11 3.68 811 242.30

Armonk (NY) 10 2.82 2 0.67 2,988 268.60

Miami (FL) 8 2.26 8 2.68 232 870.50

Dallas (TX) 7 1.98 6 2.01 676 917.10

Toledo (OH) 6 1.69 2 0.67 545 227.50

San Francisco (CA) 6 1.69 6 2.01 1,427 57.50

San Diego (CA) 5 1.41 4 1.34 234 33.00

Minneapolis (MN) 5 1.41 3 1.00 308 79.90

San Jose (CA) 5 1.41 4 1.34 390 23.70

Milwaukee (WI) 5 1.41 3 1.00 1,041 114.10

Los Angeles (CA) 5 1.41 4 1.34 153 138.70

Akron (OH) 4 1.13 4 1.34 599 68.90

Indianapolis (IN) 4 1.13 4 1.34 1,356 95.40

Stamford (CT) 4 1.13 3 1.00 98 75.10

Houston (TX) 4 1.13 3 1.00 196 42.60

Boston (MA) 4 1.13 4 1.34 633 586.10

Palo Alto (CA) 4 1.13 3 1.00 1,229 37.80

Wilmington (DE) 3 0.85 2 0.67 83 16.20

Other source cities 201 56.78 187 62.54 23,741 6,837.80

Not Specified 3 0.85 3 1.00 113 59.20

Total 354 100.00 299 100.00 50,763 15,080.80



Brazil destination cities of U.S companies

Investments

Destination city Projects Companies

Jobs

Created

Capital

Investment

(USD m) No % No %

Sao Paulo 234 66.10 217 72.58 23,291 7,497.00

Campinas 17 4.80 17 5.69 1,485 471.40

Paulinia 8 2.26 6 2.01 2,403 325.90

Jundiaí 8 2.26 8 2.68 1,169 203.80

Sao Jose dos Campos 6 1.69 6 2.01 1,2 233.20

São Caetano do Sul 5 1.41 2 0.67 3,611 1,161.10

Limeira 5 1.41 4 1.34 824 165.50

Rio Claro 5 1.41 2 0.67 510 168.10

Sorocaba 4 1.13 4 1.34 670 111.40

Indaiatuba 4 1.13 3 1.00 1,083 175.40

Sao Carlos 4 1.13 4 1.34 1,129 1,029.60

Jaguariuna 3 0.85 2 0.67 869 47.30

Taubaté 3 0.85 1 0.33 1,819 432.70

Mogi das Cruzes 3 0.85 3 1.00 489 80.40

Hortolandia 3 0.85 2 0.67 3,245 194.70

Cotia 3 0.85 3 1.00 246 816.80

Alphaville * 2 0.56 2 0.67 127 18.60

Ribeirão Preto 2 0.56 2 0.67 276 59.80

Embu 2 0.56 2 0.67 67 2.00

Cubatao 2 0.56 1 0.33 103 128.00

Other destination cities 23 6.50 23 7.69 4,207 750.00

Not Specified 8 2.26 8 2.68 1,94 1,008.10

Total 354 100.00 299 100.00 50,763 15,080.80


* Alphaville is a Business Center in the cities of Barueri and Santana do Parnaíba

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Foreign Trade

Country 2010 2011

1st USA 12.927.155.024 14.793.421.555

2nd China 9.108.909.926 11.619.421.118

3rd Germany 7.011.731.183 8.164.566.243

4th Nigeria 2.418.700.260 3.661.742.336

5th Japan 3.428.858.958 3.483.675.496

6th Argentina 2.979.281.479 3.315.369.725

7thSouth Korea 2.352.862.160 3.135.444.580

8th India 1.707.825.148 2.567.457.466

9th Italy 1.985.487.795 2.424.987.430

10th France 2.164.389.827 2.424.306.197

Source: MDIC-SECEX.

Origin countries for São Paulo Imports

in US$ FOB


Foreign Trade

Country 2010 2011

1st Argentina 8.460.959.789 9.926.285.750

2nd USA 4.923.373.883 6.245.243.478

3rd China 1.669.127.663 2.876.868.941

4th Netherlands 1.747.308.919 2.115.523.982

5th Mexico 1.955.113.354 2.076.204.885

6th Germany 1.577.666.442 1.822.585.908

7th Venezuela 1.489.102.016 1.784.815.201

8th Chile 1.741.768.520 1.687.968.695

9th Belgium 1.279.412.659 1.553.151.846

10th Russia 1.286.565.803 1.319.658.327

Source: MDIC-SECEX. in US$ FOB

Destination countries for São Paulo

Exports

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Tax Overview

Source: TIPI (Receita Federal do Brasil) and SECEX (MDIC).

Brazil —2012

Tax from Domestic Production and Imports by Categories

Tax Kind Categories Minimum Tax Average Tax Maximum Tax

(values in %)

Domestic

Production

Capital Goods 2,00 9,94 35,00

Consumer Goods 2,00 16,84 300,00

Fuels and Lubricants 8,00 11,63 15,00

Raw Material and Intermediate goods 2,00 8,11 60,00

Imports

Capital Goods 2,00 14,56 35,00

Consumer Goods 2,00 17,88 35,00

Fuels and Lubricants 2,00 10,77 14,00

Raw Material and Intermediate goods 2,00 9,86 35,00


Costs of inputs

6,88

6,22

6,81 6,68

5,69

4,89 4,83

4,24

4,91 4,68

3,22

2,60

1,75

0,71

1,36

2,55

4,78

6,64

7,14

7,53

6,99

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

2011 2012

Source: IPP-IBGE

Cumulative change in the last 12 months (month / month of the previous year) (Percentage)

Productor Price Index of Manufacturing industry

Brasil — 2011-2012

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SECRETARIA DE DESENVOLVIMENTO

ECONÔMICO, CIÊNCIA E TECNOLOGIA

Thank You!

Sérgio Costa Director

Telephone: + 55 11 3218 6061

E-mail: [email protected]

www.investe.sp.gov.br

Sérgio Costa | Investe São Paulo | Global Cities Initiative

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