Spotlight on Brazil

Spot Light on Brazil

Solving Business Problems Created by Real Estate

API Global was established in 2001 to help US multinational companies address their international expansion needs in the emerging, hyper-growth Asian markets. So why is API Global now in Central and South America, several Caribbean islands and Europe, and what are we doing there?

With eight offices in South America alone, including two in Brazil (Curitiba and São Paulo), the answer is a lot. Our clients told us they wanted a provider that offered a consistent approach and level of service no matter which real estate market they needed to access. They also told us they wanted to work with a true tenant-rep firm, one not compromised by receiving the bulk of their commission income from landlords as is the common practice in most of the world. Being a client-focused solutions company, we listened, and then expanded our coverage to include both Europe and Latin America. Today we are tailoring solutions to help US multinational companies with our Tenant Turnkey Advantage™ to facilitate their expansion in other geographic regions.

In Brazil, for example, we were recently selected by a large holding company to manage a multi million dollar project. Our client provides products, systems and services to the oil and gas markets around the world. In order to meet its market demand, including a long-term, large contract with the Brazilian government, our client needed to build a 200,000 square-foot facility. Faced with the urgent need to find a site, purchase or enter into a long-term lease and then manage a complex and expensive construction project from a distance, the company turned to API Global for assistance. Today, API Global's Brazilian staff, led by our São Paulo managing director, is working closely with the client and our US-based project management team to ensure that the project meets its schedule on time and on budget.

API Global's single-point-of-contact/single-point-of-accountability was a primary reason that our client selected API Global to manage their Brazilian project, including overseeing the general contractor..

São Paulo is the industrial capital of Brazil.

Approximately one-third of the country's GNP originates from the state of São Paulo. Major districts within the city of São Paulo include Paulista, Farria, Lima, Berrini and Marginales. The city boasts Brazil's most modern highways, two large international airports and Latin America's largest port. This infrastructure makes São Paulo an ideal place for companies to establish their exporting base. According to the IMD's World Competitiveness Ranking, São Paulo's ranking (#43 in 2004) is similar to Spain's (#38) and scores ahead of national economies such as Portugal (#45), South Africa (#46), Italy (#53) and Russia (#54), as well as other Latin and South American countries including Colombia (#47), Mexico (#56), Argentina (#58) and Venezuela (#60). Other major Brazilian states vying for increased international investments include Rio de Janeiro, Parana, Pernambucco, Segipe, Tocantins and Bahia.

Companies invest in South America's largest economy, Brazil, because the country affords, among other reasons, access to:

  • Growing consumer markets in the Mercosul "free trade" area, the world's second largest customs union after the European Union

  • A labor force that has benefited since 1988 by a Constitutional provision that allocates 25% of all state and local tax revenues for education

  • Rich natural resources

  • A diversified agricultural and industrial base, including leading world positions:

    #1 in sugarcane production
    #1 coffee production
    #1 frozen concentrated orange juice
    #2 jeans and iron ore
    #3 corn, pasta and footwear
    #4 beer, ceramic tiles and commercial jet aircraft

How can MNCs address today's challenges as they establish, expand or redeploy operations?

The solution involves selecting the right business partner, planning ahead to gain flexibility (and negotiating power), and, through lease structuring, negotiating the best possible terms. To learn more about how API Global can help companies act quickly and successfully with their international activities, please contact us today.