The Development System of Rio Grande do Sul State (Brazil): Sustainable Industrial Policy for Agribusiness

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1 The Development System of Rio Grande do Sul State (Brazil): Sustainable Industrial Policy for Agribusiness

2 Brazil Population: 195 million inhabitants (5 th ) Average age: 29 Language: Portuguese Area: 8,514,877 sq km (5 th ) Coastline: 7,491 km GDP/PPP: US$ trillion (8th) (2010) GDP/PPP: US$ 2.44 trillion (6th) (2011 The Economist upper position than U.K.) GDP per capita: US$ 10,800 (2010) GDP growth for 2011: 2.73% HDI: Unemployment rate: 6.0%

3 Brazil Wide range of opportunities: Sports events: World Cup 2014 Olympics 2016 Pre Salt and emerging offshore industry Agribusiness, equipment and technology New technologies: semiconductors, biotechnology Clean energy: wind power, biofuels National broadband programme Universities and research infrastructure

4 The State of Rio Grande do Sul Population: 10,695,532 inhabitants (2010) Cities: 497 Life expectancy at birth: 75 years Literacy rate: 95.5% Capital City: Porto Alegre HDI: Small business european background Focus on sustainability and long term projects

5 Strategic Location Rio Grande do Sul is located at the heart of the highest income area of Brazil, Argentina, Uruguay, Paraguay and Chile Paraguay GDP: US$ 16,9 billion Population: 6,5 million Argentina GDP: US$ 326,6 billion Population: 41,8 million Radius of 1,8 thousand km Brazil GDP: US$ 1,161 billion 71% do PIB do Brasil Population: 104,3 million 54,7% of brazilian population Uruguay GDP: US$ 31,2 billion Population: 3,3 million

6 Economy (2011) GDP: US$ billion GDP per capita: US$ 14, Exports: US$ 19.4 billion Imports: US$ 15.7 billion Unemployment rate: 4.5% 3rd largest Participation on Brazil GDP: 6.65% industrial park of Structure of the Gross Added Value of Rio Grande do Sul (2009): Agriculture and livestock: 10% Brazil Industry: 25% Services: 65% Agribusiness GDP: 30%

7 Industrial Highlights 1st center for agricultural equipment 1st center for transport equipment production 1st producer of leather and footwear 2nd center for metal products 2nd center for machines and equipment 2nd center for chemical products 2nd center for rubber and plastics 2nd center for furniture 2nd center for beverage production 4th center for food manufacture 4th center for vehicle production The sector has its origin on the State s vocation to the Agribusiness

8 Industry Geography AGRIBUSINESS METAL MECHANICAL AND MACHINERY ELECTRONICS AND SOFTWARE AUTOMOTIVE PETROCHEMICAL WIND POWER OFFSHORE

9 North Half: Soybean Corn Dairy Poultry Pork South Half: Rice Beef cattle Forestry Sheep/Lambs Rio Grande do Sul location of agribusiness

10 Industrial Policy The Government of Rio Grande do Sul conducted an intense work to complete and present at the March 28th a new industrial policy. The new industrial policy construction involved representatives from all productive sectors, from the farmer entities to the industry representatives. 5 Axes 1. Sector policy (Industrial, technologic/innovation and foreign trade) 2. Cooperation Economy Policy 3. The Policy of the Firm (the Room for Investor) 4. Transversal Instruments 5. Infrastructure programs and projects to the development

11 Industrial Policy Strategic Sectors

12 Agribusiness in Brazil One of the growth s main motive forces. 27.9% of the total industrial transformation (2009 FIERGS) Positive impacts on jobs and income. High competitiveness Remarkable presence in the international scenery. Highest superavit in the trade balance Important source of exchange value In 2010, the Brazilian Agribusiness generated a trade superavit of US$ billion. The agribusiness were not considered, the Brazilian trade balance would have had a deficit of US$ billion in 2010.

13 Agribusiness in Rio Grande do Sul Contributes with 30% of the State GDP and represents more than 50% of the Rio Grande do Sul exports. Corresponds to 12.1% of the national agroindustry (2009 FIERGS). Is the 2nd state in participation after São Paulo only. Grew 11.7% a year in the last 14 years (FIERGS). The agribusiness is highly integrated to the economy of the State: Chaining in front: food production and animal feeds. Chaining to the past: Machinery, implements and fertilizers production.

14 Agribusiness in Rio Grande do Sul Opportunities: Densification of the production chains. Highlights: Precision agriculture. High productivity. Sustainable production. Differentiated production (organic products of high standard, products with higher added value, etc.). Geographic indications.

15 Geographic Indications Indication of origin and designation of origin of fine wines produced at the Vale dos Vinhedos (Bento Gonçalves, Garibaldi e Monte Belo do Sul Aprovale). Indication of Origin of the rice of the State north coast of (Aproarroz). Indication of Origin of the meat, leather and byproducts of the Pampa Gaúcho of the Campanha Meridional (Apropampa). Designation of Origin of the finished leather from the Vale dos Sinos. Designation of Origin of wines and sparkling wines from Pinto Bandeira. Designation of Origin of the sweets from Pelotas. 1st Brazilian Geographic Indication Acknowledgement of the quality and sustainability of the State product!

16 Agribusiness in Rio Grande do Sul 7 agribusiness sectors are prioritized in the Industrial Policy of the State of Rio Grande do Sul: Beef Cattle: excellent genetics (European breeds) and high quality meat. Fed with natural pasture. Pork: Rio Grande do Sul is the largest exporter in Brazil. Poultry Raising: Brazil is the largest exporter in the world. Rio Grande do Sul is the third largest producer. Milk and Dairy Products: highest yields in Brazil. Grain Rice: largest productivity in the world (7.600 kg/ha). Grain Corn and Soybean: great opportunity to add value in the production of biofuel. Wine and Grape Juice: Rio Grande do Sul accounts for 90% of the national chain.

17 Agribusiness in Rio Grande do Sul Numbers for Production Soybean 11,7 million tons (15% of national production). Corn 5,8 million tons (10% of national production). Dairy - 4 billion liters of milk (about 11 million liters per day). Poultry 1,1 million tons (65% of national production) 64% for export. Pork tons (18% of national production). Rice 8,9 million tons (65% of national production). Beef Cattle tons of processed meat (5,5% of national production) - herd of 14,5 million head.

18 International Agribusiness Fairs - Expointer The greatest exhibition trade fair in Latin America 600,000 visitors in ,800 exhibitors in 2011 R$ 850 million in sales in 2011

19 International Agribusiness Fairs - Expodireto The greatest agribusiness exhibition in Latin America focused on planting technology and precision agriculture 185,000 Visitors in exhibitors R$ 1 billion in sales in 2012

20 Conclusions Consolidated industrial structure and skilled labor. Quality products and of high added value. Scenario of income and consumption growth in Brazil and in Rio Grande do Sul. Several state incentives to the productive investment. Production basis for Brazil, Mercosul and other regions. Emerging industry: offshore, wind power, semiconductors, medical devices... Plenty of investments and opportunities in diversified areas. Focus on quality of life and sustainability. Right time for planning and implementing new business in Brazil and in Rio Grande do Sul!

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