Brazilian multinational companies make tactical retreat, but keep plans
Valor Econômico 05/05/2009
The Brazilian multinational companies carried out a "tactical" withdrawal in the investments abroad because of the crisis, but that changes nothing in their "strategic" plans. That is what entrepreneurs and specialists assured yesterday during the British Council conference in São Paulo. The data of the Banco Central (Brazilian Central Bank) point to a significant fall in the Brazilian investments abroad. The balance was negative in US$ 392 million in the first quarter. From January to March, the companies invested US$ 2.4 billion abroad, one third of the US$ 7.3 billion of equal period of 2008. And they kept the capital allotment at US$ 2.8 billion.
According to estimates of the Brazilian Society for the Study of Transnational Corporations and Economic Globalization (Sobeet), the balance of the Brazilian investments abroad should remain at US$ 5 billion in 2009, far below last year's US$ 20.5 billion. The calculations made by Sobeet show that 1,816 Brazilian companies are in process of internationalization, with operations in 123 countries. It seems a lot, but Brazil is just crawling. In 2007, last data available, the country represented 0.4% of the foreign direct investments, compared to 10% of the Asian countries. In 2007, the developing countries were responsible for 13% of the investments, above the 5% of 1990. For Sobeet, the crisis should deepen this trend since the emerging economies have been the less affected economies. Some companies, even during the crisis, focus on the internationalization, because their domestic market is saturated. That is the case of São Paulo Alpargatas, the owner of the Havaianas brand. In Brazil, 850 pairs of Havaianas are sold per one thousand inhabitants, which means that four out of five Brazilians buy a pair every year. Overseas, the average is only of ten pairs per 100 thousand inhabitants. In Australia, one of the main markets of Havaianas , the average gets to 100 pairs, but that does not exceed five pairs in Italy, France or England. According to information presented in the conference, the exports represent 13.6% of the sales of Havaianas, far above the 1.3% registered in 1999. Afonso Sugiyama, international products manager of Alpargatas, said in the event that the goal is to increase that share to 40%. With the crisis, Havaianas reduced investments in marketing abroad, but it kept the plans of opening offices in London and Italy.