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International Fashion Chains arrive in Brazil

Despite the challenges, Business of Fashion reports that popular North American fashion companies like Topshop, Gap and Forever 21 have set their sights on the Brazilian fashion market. Since 2012, Topshop has opened three additional stores in the country and plans to open two to three new stores each year for the foreseeable future. Forever 21 will open its first store at Morumbi Shopping in São Paulo this month and plans to expand to open six total stores in Brazil in 2014, while Gap, which first arrived in Brazil in September 2013, promises three more stores for the first semester of 2014. According to market sources, H&M is also thought to be eyeing a Brazil launch in 2014.

These new players will face competition from firms already rooted in the Brazilian market, including C&A, the first international apparel chain to arrive in Brazil. since 1976, its 260 stores have become the largest fashion retailer in the country.

“We know Brazilian women very deeply. Their preferences, tastes, necessities and shopping habits are in our DNA. It’s an expertise we gained with time and lots of research,” said Paulo Correa, vice president of sales at C&A Brazil.

The market is also populated with indigenous low-cost apparel giants like Lojas Riachuelo, Lojas Renner and Lojas Marisa. “We have 212 stores in Brazil,” Flavio Rocha, president of Riachuelo, the largest apparel retailer in Brazil, told BoF. “Last year, we opened 43 new stores, a record for us and we will double our number of stores in four years,” he added. Riachuelo produces most of its many collections in Brazil and is involved in every step of the supply chain, from design to logistics, production and distribution.

“We are prepared to fight a good fight with international competitors. Being local plays in our favour. The global players will have to face several challenges,” Rocha said. “First, there is the hemisphere difference. São Paulo is usually the first store in the Southern Hemisphere for those brands and this generates a serious problem with seasonality. They have the need to create a different collection for very few stores to sell with no scale.”

But despite strong local competition, international apparel players have still been well received. We found a niche that was still unexplored in the local market. Our clients feel finally someone is offering this edgier styles they can find when they travel,”said Daniela Valadão, brand manager for Topshop in Brazil.

 

AAK Invests in Brazil

AarhusKarlshamn (AAK) is one of the world’s leading producers of high value-added speciality vegetable oils and fats solutions. These oils and fats solutions are characterized by a high level of technological content and innovation. AAK`s solutions are used as substitute for butter-fat and cocoa butter, trans-free and low saturated solutions but also addressing other needs of our customers.

Businesswire reports that AAK will initiate construction of a new speciality and semi-speciality edible oils factory in Jundiai, São Paulo, Brazil.

“There is a large potential for AAK in the Brazilian market. It is the world´s 7th largest economy and a number of our global customers already have significant presence. Currently AAK has a well established Chocolate & Confectionery business supplying out of our factory in Montevideo, Uruguay. However, pursuing our global growth strategy, AAK needs to be present with production capability also in Brazil. This new factory is an integral part of AAKtion, and adds presence in a growth market which is identified as strategically important”, says Arne Frank, President and CEO, AAK Group.

The investment is expected to be approximately SEK 400 million over a two-year period. The start-up of the new factory is planned for the latter part of 2015 and fully utilized it will increase AAK´s total capacity by 100,000 to 120,000 MT.

EMBRAER GETS PURCHASE ORDER FROM INDIA

Brazil’s Embraer has received a a purchase order from Air Costa, a startup airline in India, for 50 E-Jet E2 passenger planes in a contract valued at $2.94 billion.  Air Costa also has an option to order an additional 50 planes, which, if exercised, would swell the size of the potential order to $5.88 billion, Embraer said.  The order makes Air Costa the first customer for the E-Jet E2 planes in India, with the delivery of the first E190-E2 plane scheduled in 2018. The E195-E2 plane would be used commercially in 2019.

Amazon’s Kindle sold online in Brazil

On Friday, Amazon started its first Latin American physical goods operation by selling Kindle devices to Brazilian consumers online. Previously, the launch of the Brazilian website in December 2012 only sold e-books.  Kindle devices were only sold through partnerships with local Brazilian retailers.  Three Kindle versions available for purchase on the Amazon Brazil website. The basic version (Wi-fi, 6-inch display) is available for R$299 ($125); the Kindle Paperwhite is retailing for R$480 ($200) and the Paperwhite 3G costs R$700 ($292) to Brazilian consumers.  This compares with the US prices of $69 for the most basic version of the Kindle, $119 for the Paperwhite model and $189 for the Paperwhite 3G.  In 2012, Amazon’s vice-president Alexandre Szapiro said that his challenge was to get Brazilians to read more by offering premium products at a lower price. Since its launch, Amazon Brazil boosted its e-book collection from 13,000 to 28,000 items at an average price tag of R$15 ($6), which can be purchased by any Kindle app user. The company also launched its Amazon Appstore in Brazil in November.

Rio’s Technological Shift

The Guardian has reported that Brazilians and tourists will soon find Rio to be one of Brazil’s popular tech centers.  Anyone doubting Rio de Janeiro’s techward shift need only look at the famous pavement mosaics that mark the promenade along Copacabana beach. These black and white patterns have traditionally resembled the waves across which early settlers and modern tourists travelled. Last year, however, that antique, analogue design has been partly reconfigured to reflect a digital future with the addition of tiled QR codes for smartphones.The tiles show online maps and tourists websites, which will be helpful for visitors during the the 2014 and 2016 sporting events.  However, the tiles have much more significance.  The tiled codes are part of an attempt to makeover Rio into a Latin-American technology hub. This is partly an attempt to ride a nationwide trend. Brazil is rapidly embracing wireless technology and social networks. Thanks to a surge in recent years, there are now more mobile phones (268.4m) in the country than people. Tablet sales have jumped from 220,000 at the beginning of 2012 to more than 5m today. And Facebook use has increased to the point where Brazil is now second only to the US in terms of the number of users.

In Rio alone, Telecom providers are now launching 4G networks, Microsoft has announced a new $100m technology center in the city, and Cisco Systems plans a $500m innovation center in the city as well.  General Electric has opened its first research and development center at the Federal University of Rio de Janeiro’s $500m technology park, which also includes Siemens, Haliburton and Schlumberger among its tenants.

Visitors and Brazilians alike will soon see Rio as both a popular tourist destination, and a center for technological innovation.

U.S. could learn from Brazil’s Bolsa Familia

Is ending poverty as simple as giving people money?  Brazil’s Bolsa Familia program has risen millions of families above the poverty line.  In the U.S., safety net programs are being examined by analysts and government officials to see how effective they really are.  It is true that programs like income tax credit, extended unemployment insurance, food stamps and other safety net programs kept millions from falling into poverty.  A study by the U.S. Council of Economic Advisers estimates that the boost in safety net spending held the increase in poverty to a minimum even as the US endured extreme economic woes.  In the long term however, a recent study on economic mobility in the U.S. found that the figure has been stuck for a half century – despite the many programs meant to help the less advantaged climb the income ladder.  The politics of poverty remain divisive – clouded historically by racial and demographic dynamics.

Brazil confronted a similar political landscape when it began discussing a broad assault on poverty more than a decade ago. The poor were predominantly black, clustered in the north, and uneducated. There were strong arguments that simply giving away money would be a massive rip-off for taxpayers.  Though controversial, the government a decade ago decided that any family under the poverty line would be given enough money to put them over it.  The “Bolsa Familia” program now provides 14 million poor families with much needed income.  There are relatively few strings attached.  The only requirement, is that children in the families who receive funds go to school.  Brazil believes that for the individual family, “income is the easiest criteria to move…start with income and then solve the other stuff.”  After a decade, follow up studies show falling infant mortality rates for the families involved with the Bolsa program; and, remarkably, poor kids are now performing above the national average in high school.  Should the US adopt its own “Bolsa Familia?”

A Coupon for Culture?

Brazil has a new prerogative: promote culture.  The government will begin giving out “cultural coupons” worth $20 a month to individuals that make up to $300 a month.  The money, loaded on a magnetic card, is designated only for purposes broadly termed cultural – though that category could include dance lessons and visits to the circus in addition to books and movie tickets.  Why?  “What we’d really like is that they try new things,” Culture Minister Marta Suplicy said in a telephone interview. “We want people to go to the theater they wanted to go to, to the museum they wanted to go to, to buy the book they wanted to read.”  In all, the government wants to refine citizens taste.

Brazilians pick up an average of just four books a year, including textbooks, and finish only two of them, a study published last year by the São Paulo state government showed. Almost all of Brazil’s 5,570 municipalities now have a local library, but only one in four has a book shop, theater or museum, and only one in nine boasts a cinema, according to the government’s statistics bureau.  “This is innovative and cool, and no one in the world is doing anything like it,” Suplicy said. “My hope is that it will be revolutionary for culture here. It provides an opportunity for people who never had it and, at the same time, has an impact on cultural production.” So far, 1,300 companies and 356,000 people have signed up for the program, and government officials hope as many as 42 million could eventually enroll. State-run companies are obliged to join, and ministers are actively encouraging unions to demand the Vale Cultura in their annual wage negotiations.

Boeing-articleLargeBrazil has recently bought 36 fighter jets from the Swedish company Saab. Brazil decided against Boeing in favor of Saab due to the cooperation agreed upon Saab and Brazils aerospace programs. It will not be until 2018 that Brazil will receive the full amount of the 36 fighter jets however, they did manage to purchase the jets for 4.5 billion dollars. Some blame the spying scandal over the US for Boeings failure to secure the deal.

Fugutive train robber Ronnie Biggsimg_panel_1387370760 made Brazil his home in 1974 after he fled from Britain. He profited from his fame for the incident as he published his book, “Odd Man Out,” while he was living large in Brazil. Biggs lived in Brazil till 2001 when he decided to return to the United Kingdoms. As soon as Biggs made it back to the UK he was rapidly sent back to jail, where he would spend the rest of his days. His ashes are apparently to be spread in the UK as well as in Brazil.

 

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President Francois Hollande of France decided to fund a metro line in Sao Paolo. He realized the need and potential for the line apparently after he endured the city’s heavy traffic. The md
etro line will end up running from the airport to Sao Paolo’s city center, along with the added benefit of more job creation and even better relations with France. France sees the upcoming powerhouse of Brazil, that is why they are one of the biggest foreign investors in Brazil. The outlook for additional trade and investment between the two countries is very high as relations continue to improve.