It’s no secret that Brazil has had a tough run over the last few years, and that the world’s fifth largest country has struggled to live up to its status as one of the fast-growing BRIC economies.
Proco Global has had an office in São Paulo for three years, and while it has not been an easy time to be operating there, we are now feeling really positive about the future, and anticipating significant growth in our business.
The problems that have beset the Brazilian economy in the last couple of years have been politically driven, and the impeachment of President Dilma Rousseff for illegally manipulating government accounts, which happened in August, marks a turning point. The country has gone to great lengths to flush out corruption, and so we see a very real sense that rock-bottom has been hit, and now the only way is up.
Our office is led by Director Roberto Coltro, who has developed strong relationships with medium and large clients across the LATAM region, and runs a team of four. He says: “We have seen investments in the country by international companies reduced in recent years, because of a disbelief about the levels of corruption, the political crisis, and economic slowdown. But since the impeachment, everybody in Brazil is seeing light at the end of the tunnel, and we are starting to hear from executives and from companies that things are going to move forward.”
Brazil has the ninth largest economy by nominal GDP in the world*, and its economy is the largest in Latin America and the second largest in the Western Hemisphere. But while the International Monetary Fund predicts GDP growth to be negative this year, it expects a return to positive growth in the economy by 2017, and predicts 2% year-on-year real GDP growth to resume in 2019.**
With a population of 200 million, Brazil has significant commodities, with strong agriculture and minerals industries, and benefits from a huge domestic market. “Now that the skies are getting clearer, we are really going to move ahead with the plans for our operation here,” says Roberto. “We have a lot to look forward to, and a huge market to go after.”
As one of the few specialist recruiters, focused on mid-senior level supply chain and procurement talent, we expect to be called in by companies building up those functions as more strategic units, and unable to source people themselves. “We have been talking to a lot of different clients and prospects, and we can see that’s a real differentiator,” says Roberto. “In the next one or two years we plan to more than double the headcount locally, and we are going to start hiring people to develop South America as a region, looking beyond Brazil.”
Brazil is the world’s largest Portuguese-speaking country, and is surrounded by Spanish-speaking neighbours. Proco Global will start reaching beyond Brazil into the LATAM region, with the hire of some Spanish speakers.
“We are a regional office and we have a lot of really good economies surrounding us that we can go after, like Chile, Peru, Colombia and Argentina,” says Roberto. “We have already been working projects in Argentina, but there are plenty of other opportunities to pursue. We may even add another office in the region at some point; that’s certainly the goal, to have more than one base down here and really establish South America as an important region for the company.”
Three sectors currently drive our business in Brazil, and those are life sciences, fast-moving consumer goods, and industrial equipment. The life sciences industry is huge and continues to grow despite the downturn, with animal medicines a particularly strong business. Elsewhere, the country has a huge automotive segment, but that has been impacted heavily by the recession and so is not currently a focus for Proco Global.
We work with really large multinationals, and with medium-sized companies that are expanding across the region and developing their supply chain capabilities. “Brazil is in a good place for talent right now,” says Roberto. “Supply chain as a specialism is still developing a lot locally – it is not very mature, but it is in a good state. Some companies are very well established regarding strategic supply chain capabilities within their structures, but others, even big ones, do not have the systems that they should. Looking forward, and looking at the growth that the country needs, we still need more mature talent, not only in supply chain but also in planning, procurement, and quality and operational excellence.”
Finding the right people is only going to get more difficult as the economy returns to health. At the moment, Brazil has 11% unemployment, and so it is not impossible to find really good people. “But as the economy improves,” Roberto explains, “we are going to go into growth, and it is going to get much harder to find really good experienced professionals with supply chain knowledge. Clients are going to have to be open to looking at different sectors, and to developing people within their own companies.”
Growth across Latin America has been impacted by the slowdown in the important economies of Venezuala and Brazil, but over the last decade the region has undergone a transformation that has lifted millions out of poverty and swelled the middle classes. As economic growth returns, the buying power of those middle-income groups should attract multinationals to invest, both in Brazil and throughout the continent.
Roberto says: “Longer term we hope to see new companies coming from abroad, and those that already have operations here investing further in expansion and new products. I am already hearing people talking about looking at Brazil in a different way, and starting to see things more positively.”
Our office in São Paulo is hugely important to us, not only for business in Brazil, but across the region. We have a great team on the ground and we are now seeing huge opportunities for growth, so we are looking forward to expanding with our clients as the economy embarks on a new dawn.
To find out more about our operation in Brazil please click here: http://www.procoglobal.com/contact-us/sao-paulo/