As we have already specified in our our February article, in Brazil there are about 21 million companies.
In that publication, we underlined the sectors segmentation of the Brazilian market. But let’s see more in detail which are the best sectors to invest in.
Different studies have outlined that the three main sectors where it is convenient to invest are the following:
1) Electricity, gas, steam and air conditioning (also from renewable sources): It was announced that renewable electricity sources represented 81.9% of installed production capacity and 87.8% of total production in the country. Hydroelectric power remains the largest source of energy for the South American giant, accounting for 63.7% of all the energy produced and the energy produced by biomass power plants follows with 9.1% (biomass is also constantly growing and now has around 600 exchanges). Wind power plants accounted for 8.1% of the energy produced and 1% of solar plants. This grow is very important for the market so much that reduce form 2% the use of carbon and oil;
2) Public administration and defense; compulsory social insurance: The Brazilian Ministry of Defense budget has grown progressively over the past 12 years, at an average rate of 5%, going from 33 billion reais to 92.5 billion reais. Among the main projects in the program is the SGDC which aims to provide safe means for strategic and defense communication. The total cost of the project is around 2 billion reais, of which 550 million reais were financed by the Ministry of Defense. In addition to ensuring more security, this system will promote a growth of Brazilian industry. The annual growth forecast in the study calculates an expectation “optimistic of economic growth in Brazil, which will be reflected in the Gross Domestic Product.
3) Infrastructure Construction Brazil needs large investments in infrastructure. An estimated minimum requirement of R $ 300 bn per year (around 70 bn euro) is expected for the next 10 years in order to equip the country with the necessary tools to occupy the leadership position it deserves. This slow but steady inflow of capital, with the ever-increasing private participation estimated at 70% of the total investments of the sector, will be able to create good business opportunities, particularly for sub-suppliers of products and services necessary for the implementation of projects in the area of transport, energy distribution and transmission, improvement of services in ports and airports, etc.
In conclusion, Brazil is an important market with great potential and if you want to invest in the South American giant it is important to take into consideration the sectors mentioned above.
All data are updated to January 2019.