Interview with Francisco Orjales, delegate of Fira de Barcelona in Brazil
May 5, 2011
How do you see from Brazil Spanish economic crisis and, more specifically, the construction sector?
The news that the Brazilian media disseminated are not very encouraging, especially when referring to the economic results that occur in the construction. But at the same time, there is a great interest of the companies in this country to negotiate with Spain. I think that Brazil is, at this time, a great opportunity for the construction sector.
What possibilities do Brazilian entrepreneurs in Spain?
Spain is not currently a pole of Brazilian investments, for obvious reasons. However, there is really a great interest in establishing 'joint ventures' with companies in areas related to technology, advanced services, products, and machinery to meet the demands of sectors growing in Brazil, such as construction, tourism, oil, etc. Spain is a reference in urban planning, especially Barcelona, which has left great legacies through international events such as the Olympics of 1992.
What are looking for the Spanish businessmen in Brazil?
Spanish companies are interested in to sell their products in Brazil, a country with almost 200 million inhabitants and with a privileged situation of growth. Brazil, India and China are the most popular current markets but, thanks to the successful experience in the Brazilian market of companies such as Telefonica, Banco Santander and Mapfre, among others, the flow of Spanish companies that in the two past years have landed in Brazil is considerable. In fact, the exchange of business Brazil-Spain is regarded as one of the most fruitful of the time, beating countries such as United States and France.
Do as regards the relationships in both directions could differentiate between public and private work?
Yes, they are completely different markets, also for legal reasons. Public works can only be contracted with tenders through very complex mechanisms, forming a large barrier to entry to foreign companies which are not used to the difficulties of the Brazilian public process. But this situation has been improving in recent years thanks in part to mergers between Brazilian and foreign companies. With regard to the construction in the private sector, companies negotiate and close contracts in accordance with their own criteria. We must also highlight the emergence of entrepreneurs property, that are an extension of the business of construction companies, i.e. are themselves which subcontract to third parties to manage part of the works.
Is beyond the interests of Brazilian entrepreneurs to take Barcelona/Spanish experience with Olympic Games, and the changes which will make the World Cup, there other opportunities?
It is clear that these two global events creates many opportunities, but they are independent to the real growth of the country, which presents great expectations in sectors particularly related to transportation, hospitality, technology, construction, etc.
To get an idea of the size of the investment: according to the Brazilian Institute of geography and statistics, construction companies invested in 2008 about 15,000 million euros in building material, much more in 2009 and 2010. Aware of these needs, since Fira have intensified the actions through its delegation in Brazil to promote a greater commercial relationship between the two countries.
In early March, was published in the press that the Brazilian Government looks to tighten up the requirements on imports to protect local manufacturers. What do you think about this? Is it very difficult to Spanish companies that export to Brazil?
Yes, established mechanisms that favour national production, similar to laws already exist in Europe in specific sectors such as oil. However, I do not think that this is reason for Spanish companies could not settle in Brazil alone or through 'joint ventures'. It must be borne in mind that, due to the high demand for companies that want to enter the Brazilian market, the Government has been necessary to create a regulation in this respect.
Of me a very concrete example on some kind of action that you carried out, as delegate of Fira de Barcelona in Brazil, to attract Brazilian buyers to Spain.
The Forum building 1st Brazil-Spain is a prime example. In this meeting will gather in Construmat main associations, experts and companies in the sector of both countries to generate new contacts and business. We have also invited representatives of Compracon (Association of shopping of São Paulo) with the aim of acquiring materials, products, and machinery for production processes made in Spain.
Apart from the constructive sector, what other business possibilities exist between the two countries?
There are many: Melia (hospitality), Mapfre (insurance), Telefónica (telephony), Iberdrola (energy), Santander (Bank).... in the end, all the major sectors of the economy already have representation of Spanish companies and many of them are merged or associated with Brazilian companies, a model which facilitates and speeds up the entry of Spanish companies.
What you need to know the Spanish employer on Brazil to enter the market?
Brazil is not currently a country devoid of capitals. To the contrary. For this reason, Spanish entrepreneur needs to have a technological differential. It is also interesting, again, establishing 'joint ventures' with Brazil companies, because I believe that it is the most effective way at this time to enter the Brazilian market. In addition, should take into account the tax burden, by its complexity.
About Sinaenco
The National Union of consultancy companies in architecture and engineering (Sinaenco) is a business organization founded in 1988 which unites nowadays about 18,000 companies. Its functional Centre is in São Paulo, and has twelve locations has more scattered Brazil.
The Union offers, among others, services research and development of technology, studies of technical and economic feasibility, and consulting for privatizations and concessions of public services. Companies in the sector of construction/architecture, energy, water, transport, industry, or control, among others, have access to these services.
