Mass. delegation aims to drum up business in Brazil
On his 3d trade mission, governor aims to increase exports, improve ties
Executives from some of Massachusetts largest companies and universities are accompanying Governor Deval Patrick on a trade mission to Brazil, hoping to expand their markets in one of the biggest and fastest-growing economies in the world.
With a population approaching 200 million, Brazil is rich in natural resources, including oil, and industrializing rapidly. The economy is expanding at about twice the rate of the US economy, and per capita disposable income has more than doubled in the past decade - creating opportunities for the sophisticated products, services, and research produced by Massachusetts firms and universities.
“Brazil is technologically advanced, active, innovative,’’ said Aron Ain, chief executive of Kronos Inc., a Chelmsford software firm, and part of the delegation. “It’s the kind of economy that wants to use the technology that’s produced here.’’
Patrick left Boston last night for what will be his third international trade mission since taking office. He and a delegation of four will first stop in Chile, spending two days in Santiago, the capital, at the invitation of President Sebastian Piñera, before heading to Brazil.
Brazil is the main event. Nearly 50 business executives, academic leaders, and government officials will land in Brazil Sunday for a week of networking in the world’s fifth-largest country, with the seventh-largest economy. They will visit Sao Paulo, Rio de Janeiro, and Brasilia, the capital.
Among the Massachusetts companies making the trip: computer storage giant EMC Corp. and Internet network company Akamai Technologies Inc. The presidents of the University of Massachusetts and Worcester Polytechnic Institute are in the delegation, as are representatives from Harvard and MIT.
Their focus will be to establish partnerships with Brazilian companies and institutions to help break into fast-growing technology, biotechnology, and alternative energy markets in Brazil. Another goal: attract Brazilian investment to Massachusetts.
The state hopes Brazilian firms will follow the lead of international companies such as Novartis AG, the Swiss pharmaceutical giant, and Dassault Systemes SA, France’s largest software company, which both have large operations in Massachusetts.
Susan Windham-Banister, chief executive of the Massachusetts Life Sciences Center, a quasi-public state agency, described Brazil as “an emerging power in life sciences,’’ such as biotechnology, offering great opportunity for the state.
“There are more than 250 life sciences companies in Brazil, but a lot of them are early stage,’’ she said. “We want to be sure that Massachusetts is top of mind if they are looking for gateways to North America.’’
Brazil is the state’s 18th-largest export market. In 2010, Massachusetts exports to Brazil jumped nearly 30 percent to about $400 million, led by technology and pharmaceutical products.
Massachusetts has other connections to Brazil: More than 68,000 Brazilian-born residents live in the state, one of the largest populations of Brazilian immigrants in the country, according to census data.
Michael Lynch, an economist who follows the Massachusetts economy for IHS Global Insight, a Lexington forecasting firm, said the trip makes sense, “to boost exports and get some demand going,’’ particularly with recent economic troubles in Europe, a major market of the state.
“We’re losing our ability to grow exports in places like the eurozone, where we’ve traditionally been strong,’’ Lynch said. “So a growing economy like Brazil makes sense as a place to focus.’’
EMC already has hundreds of employees in Brazil, and is planning to expand there. In 2008, the Hopkinton company began manufacturing in Brazil, and last June announced an additional $100 million investment in a new R&D center in Rio de Janeiro,
“Brazil is a very attractive place for us,’’ said Joel Schwartz, senior vice president at EMC, who will be part of the delegation. “It has a large population, it’s energy self-sufficient, a combination of hydro and oil, it’s a big exporter of raw materials, and its banking system is solid.’’
Massachusetts is not the first state to come calling on Brazil. The South American country has attracted visits from governors and senior officials from more than 15 states in the past three years.
But breaking into Brazilian markets has not been easy, because of trade disputes over US farm subsidies that limit imports of Brazilian agricultural products, said Rafael Amiel, chief Latin American economist for IHS Global Insight. Brazil is a major exporter of agricultural commodities, such as grain and soybeans.
Brazil also has high tariffs, which make it hard for US products to compete in that country, Amiel said. As a result Massachusetts companies may have better luck establishing divisions in Brazil, instead of shipping products directly to the country.
Kronos has done that. Six months ago it opened a small office in Brazil, with four employees. It already has a dozen companies as customers.
Ain, the chief executive of Kronos, said he is certain his company’s Brazilian customers will increase after the trip. Brazil has a labor force of more than 100 million, presenting an opportunity for Kronos software, which is used to manage workforces.
“I know this trip will accelerate things for us in Brazil,’’ he said. “The wind is going to be at our back.’’