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Bravo Rio!Few places on the planet have a higher profile than Rio de Janeiro. But the city – and the regional state of the same name – is so much more than sun-kissed beaches and carnivals, and brims over with natural and manmade wealth. Julio Bueno, Rio’s state secretary of economic development, energy industry and services, proudly boasts that Rio has ‘the best environment for doing business in Brazil and... one of the best anywhere in the world.’ Rio is emphatically its own place, and has an irrepressible personality. It is, however, interlinked with the wider Brazilian economy, which revolves around commodities such as iron ore – Brazil is the world’s largest producer – oil and gas, sugar cane, and uranium reserves yet to be fully exploited. Other opportunities for international investors exist in tourism, forestry and its associated paper and pulp trades, shipbuilding and reinsurance. Rio’s recent boom has derived largely, though not exclusively, from oil. The city has come a long way from the hard times when it ceased to be the nation’s capital in 1960, and public sector jobs decamped en masse to Brasilia. It wasn’t until 1975 that the city and its surrounding state, Guanabra, merged to make a new state. Yet for all the buzz and business it generates, Rio de Janerio is one of Brazil’s smallest states, whose 15 million inhabitants occupy just 0.5 per cent of the country’s land mass. Countries such as Britain have trading relationships with Brazil going back 200 years, when the country’s ports were opened up to British ships. Yet in 2007 only three per cent of all the imports into Rio state came from Britain – ‘below potential’, admits Tim Flear, British consul general in Rio.‘We’re working hard to reinvigorate the commercial relationship through… a government to government forum, with private sector participation,’ he adds. Rio’s seaboard position hands it a great logistical advantage. State governor Sergio Cabral says the new deep-water port of Itaguai ‘has all the conditions to become a hub’. Elsewhere, the port of Sepetiba is being dredged and container terminals are under development. Access is also being improved to the port of Rio itself, which focuses on the cruise market and high-value cargoes. A new port and industrial complex is under way at Sao Joao da Barra, northern Rio, covering 6,000 hectares and including a steelworks and thermoelectric power station. Meanwhile, Rio’s international airport claims to be the largest and most modern cargo terminal in Latin America, and a new international and privately managed airport – 90 miles from the city – started business last year. In general, Brazil appears very fertile territory for new business opportunities: its democracy is now stable; it has the 10th largest economy in the world; and GDP grew by 5.7 per cent in 2007, compared with 3.7 per cent growth in 2006. Brazil’s energy capital Much of this growth derives from the fact that Rio is the energy capital of Brazil. It produces 85 per cent of the country’s oil, and its offshore site at Campos Basin contains almost 90 per cent of known national reserves. The Topi field, discovered last year, is the world’s biggest find since 2000. Rio also produces 45 per cent of Brazil’s gas. BG Group (formerly British Gas) clearly sees a future in Brazil, having bought a 51 per cent stake in the downstream gas distribution business Comgas.More than 70 companies now
operate in exploration and production, around half of them foreign. Brazil claims that the energy sector’s regulatory agencies, ANP and ANEEL, are viewed positively by international investors. The enormous COMPERJ petrochemical project, under construction at Itaborai in the east of the state at a cost of $8.5bn, offers rich prospects for joint ventures. It is being developed by Petrobas, the giant oil firm owned partly by the state. Besides increasing heavy oil refining capacity, COMPERJ is expected to create more than 200,000 direct and indirect jobs, bringing, among other things, plastics industries to the area. Joaquim Levy, Rio’s secretary of finance, says the state wants ‘to get into plastics in a big way’. The spin-off is demand for better logistics – such as expanding the port of Rio so it too can accommodate container ships. Levy says foreign investors are eager to invest. Oil has also catalysed the ship-building industry. The state’s northern sugar cane-producing areas are major producers of biofuels – since the 1980s, increasing numbers of vehicles have run on ethanol or an ethanol and petrol mix. Energy from sugarcane-based bagasse is said to be carbon neutral because cane absorbs carbon dioxide as it grows, offsetting the emissions produced from burning it. 1|2|3 NEXT PAGE »
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