Business Plan

---What does MuCho Int. offer?---

 

·        Providing assistance to our U.S. customers in a range of sectors for the start-up or expansion of various companies worldwide.

à           Financial advisement

à           Managerial/Infrastructural set-up

à           Vocational training seminars/internships

à           Technical support and assistance

à           Cultural awareness programs

à           Research and archives

 

·        Making this possible by:

à           Continuous training of all staff

-                    Seminars

-                    Conferences

-                    Mandatory site visits

à           Permanent expatriates

à           Satellite companies

à           Multi-lingual, qualified and highly educated staff

à           Strong relations and connections abroad

à           Industry specific organizational structure

 

---Doing Business In Brazil---

 

Positive:

 

-          Brazilian culture – western values: Although doing business in a foreign country always involves cultural training, the commonalities between the North American culture and the Brazilian culture do in some ways overlap.  However, it is still a very crucial role in any foreign investment to have a good understanding, and an on-going vested interest in the culture and a firm interest in the society as a whole. As business consultants it is crucial for our employees to have a firm understanding of all areas in Brazil, and for this reason we have implemented ongoing and rigorous cultural training. This involves an initial one month cultural training session in various regions in Brazil. Cultural training thereafter is ongoing within the organization, plus a required one-week training session in Brazil/year.  In addition our communications and culture department consists of a group of people who reside in Brazil, and are responsible for establishing the curriculum for training.

 

(Examples: diversity and race/ethnicity, religion, urbanization, etc)

 

-          Economic stability and growth:

o       The Real Plan has enhanced economic activity within business sectors, and re-established a stable economy.

o       Inflation has been controlled, and is currently at around 7.6%.

o        Currently the country risk is below 400.

o        GDP growth has been higher than expected, and in 2005 was 5.2%.

These aspects of the economy in Brazil make it very attractive to foreign investors. Unfortunately interest rates have been high (roughly 16%) as means to control inflation, and this has been a very large problem especially to Brazilian entrepreneurs. Fortunately this is one particular issue as consultants that we do not have to feel the impact of. Dealing with only North American countries interested in investing in Brazil, they have the opportunity to take out loans in US$ at extremely lower interest rates.

 

-          Large domestic market

o       Economies of scale and of scope are feasible in Brazil alone

o       5^th largest country in the world (after China, Russia, Canada, and the U.S.)

o       186 million inhabitants

o       46% of total GDP in all of South America

 

-          Foreign Investment:

o       U.S. has invested 18.2 billion since 2004

o       23% of the largest companies are foreign owned

o       Exchange rate is very favorable for investment

o       Low direct labor costs in comparison to the U.S.

 

-          Various Industries

o       #1 exporter of sugar and coffee, #2 in soy, largest beef cattle in the world

o       Largest supplier of biomass

o       Booming tourism industry

o       Industrial goods manufactured by Brazil are very broad, ranging from:

§         high tech products (airplanes, sateelites, automobiles, computer software)

§         low tech products (textiles and footware)

§         commodity products (steel, iron ore, and petroleum extracts)

§         Provides 80% of the worlds supply of orange juice concentrate, cotton, butter, corn, cocoa, and tobacco.

o       Arable landmass is roughly 113 million acres (not including the Amazon:)

o        Bio-diesel fuel is the leading market in bi-fuel automobiles.

o       Huge mecca for fashion, and attracts designers from Europe

 

-          Recent progressions:

o       Increasing amount of vocational education in Brazilàeducated workforce

o       Low labor conflicts

o       Availability of infrastructure for factories

o       Mercosur makes investment more attractive—availability to other markets

o       Good relations with various corporate organization such as FIESP, CNI

o       Privatization of many industrial sectors

 

Negatives:

 

-          Corruption and inefficiency of infrastructure services: This has and always will be a problem in Brazil and is a huge cultural difference of that in the U.S. Bureaucracy continues as a problem, government agencies are less independent, and security is always an ongoing concern. Our cultural training programs, and the careful establishment of a consistent infrastructure within the organization will help alleviate any potential conflicts that may arise.

 

-          Total tax pressure is very high (38%)

 

-          Unequal distribution of wealth: Poverty remains a predominant problem however the economic sectors that are stable have the means to invest or spend.

 

-          Disagreement with regional trade partners (Free Trade Association of Americas, European Union)

 

--Why Invest with MuCho?—

 

-          As one can see the rewards of investment in Brazil

-          Low risk, high rewards

o       Multiple areas of investment

o       US$ investment (no high Brazilian interest rates)

o       Guaranteed capital