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A Director’s Reflection

The Schmid Center for International Business hosted the January, 2012 MBA International Travel class to Brazil. Students visited an array of foreign and local invested corporations to gain an in-depth appreciation of global operations and an appreciation of Brazilian business culture.

In Sao Paulo, a mega city with more than 20 million residents, students’ first stop was the U.S. Department of Commerce. Here, Sean Kelley talked of the export opportunities for U.S. business in light of Brazil’s $735 billion infrastructure upgrade in preparation for the 2014 FIFA World Cup and the 2016 Summer Olympics.

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At UNICA, the Brazilian Sugarcane Association, we learned that Brazil has one of the cleanest energy matrices the world, with flex fuel vehicles comprising 9 out of 10 cars sold in Brazil.

At Itau, one of Brazil’s most successful private sector banks, we learned of the challenging environment for local entrepreneurs, with interest rates to businesses in the 1.8-4.5% per month range, and consumer credit cards averaging 442% per year!


Next up was Natura, an eco-friendly cosmetics company that used only natural ingredients, many sourced in a sustainable fashion from the Amazonia region. With over 1 million sales consultants in Brazil these “Natura Ladies” are ready to give the Mary Kay folks and their pink Cadillacs a run for their money!


On the five hour coach trip to Rio de Janeiro we stopped off in Guarantingueta to visit the German chemical giant BASF. There, Willi Nass, VP of the chemical complex lead the class though a presentation of the BASF corporate strategy of “Transforming Chemistry of Life”.  Later on Friday night we arrived in Rio de Janeiro, allowing for a weekend respite of visits to Cristo Redentor, optional visits to favelas, or paragliding for the more adventurous.


On Monday we refueled with Petrobras, Brazil’s oil giant, and responsible for 1/3 of new oil discoveries in the world. In addition to corporate visits we also dropped by Viva Rio, the highly successful NGO charged with decreasing violence in the city in light of the aftermath of the Candelaria Massacre in 1993.

Our final trip was to the media conglomerate TV Globo with its dominating role in Brazilian culture. Globo captures a commanding 50-65% market share of all TV’s in the country during prime time.  There, Caique Santiago spoke of TV Globo  strategies for new media technologies . Mr. Santiago also shared with us TV Globo’s initiatives with Amigos da Escola, partnerships in social advertising, and the diversity of themes in your telenovelas that focus on and nurture themes of social responsibility.

In between corporate visits students soaked in the differences between “Cariocas” people living in Rio de Janeiro versus Paulistas” those living in Sao Paulo.   The majority vote seemed to favor the beach-loving Cariocas, though I wondered if they would prefer the salaries of the finance-oriented Paulitas!

Until next time,

Noel

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Monday’s take from Yuan-Che

Each day our students will blog about some of their experiences on the Brazil Travel Course.  Our second entry for Monday, 1/23 comes from Yuan-Che Cheng.

 

It was no surprise that traffic was awful in downtown Rio on Monday morning. Thanks to the traffic, I had more time to explore and record the sight of streets and the downtown Rio through my camera. On the way to Petrobras, I saw many stadiums and facilities under construction for the 2014 FIFA world cup in and 2016 Olympic game. In order to be the host of those international contests, Brazil is elevating its infrastructure to a whole new level. Although some constructions are still behind schedule, I think that Brazil will complete them amidst its booming economy. During the visit to Petrobras, I realized that even though Brazil has great natural resources, Brazil still faces many challenges. For example, improvements are needed in the condition of its roads, and Brazil needs better oil extraction technology. With that said, one can see that Brazil clearly has made great progress in last few years.

Petrobras Group Shot
After the visiting of VIVA Rio, I finally figured out a question that had perplexed me in the beginning of the class. Why do Brazilian films keep broadcasting negative image about its own country and making people feel that Brazil is a dangerous and uncivilized country?  I think those videos or films are trying to provoke the government and the public to face those serious issues, because the authority has not put too much effort on resolving the crime or violence issues (or we can probably say the government does not have the ability or resource to deal with those problems). By broadcasting the situation in slums through media, it helps the government and people in the world realize the circumstances in slums, and consider providing help for these communities.

Around Brazil

– Yuan-Che

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Sustainability and Social Responsibility in Brazil

Each day our students will blog about some of their experiences on the Brazil Travel Course.  Our first entry for Thursday, 1/19 comes from Elaine Ho Chen.

Unica Logo

Sustainability and social responsibility was the theme for Thursday’s corporate visits.  We visited UNICA, the Brazilian Sugarcane Industry Association and also Natura, a cosmetic company whose products are made with organic natural ingredients.  There were several key words in each of the presentations that showed that Brazilians are focused on producing products that are sustainable and are socially and environmentally responsible.  Both organizations discussed the principles of reducing greenhouse gas emissions creating products, processes that are renewable, sustainable, and positively impacting the lives of their stakeholders, employees, and the global community.

At UNICA, their presentation explained the sugarcane industry processes, the benefits of sugarcane produced ethanol, how it can reduce the dependence on the global oil supply and how Brazil should be an example of how successfully it can be integrated into daily energy usage.  Sugarcane for sugar and ethanol is produced on only 2.2% of Brazil’s arable land without deforestation or adverse effects on food prices or supplies. It produces about 4-5 times more energy per unit more than other forms of ethanol such as corn, wheat and sugar beets and is a renewable, sustainable crop. Brazil has been able to successfully promote the usage of ethanol due to the integration of Flex Fuel vehicles that can use gasoline or ethanol and also with the government mandate that requires gasoline to have a minimum blend of at least 25% ethanol.  There is a wide selection of Flex Fuel vehicles from 12 different automakers. 50% of cars in Brazil are Flex Fuel and 90% of new cars sold are Flex Fuel.  They are also planning to integrate buses fueled by ethanol into the public transportation fleet and ethanol fueled planes. With the use of sugarcane ethanol instead of gasoline, greenhouse gas emissions can be reduced by 90%. The challenges they are facing now is that the production can vary because of the variation of season and the dependence on the agricultural side of rising land costs and unpredictable climate changes. They also were able to negotiate the removal of tariffs on import and export of ethanol to the U.S. which are the largest consumers of fuel and are in negotiations with the E.U. and in Asia. There will be many more challenges they will face, but they are moving in a positive direction to get the world thinking about using fuels to reduce greenhouse gases and improve the environment in a sustainable way.

Natura Logo

At the factory tour of Natura, we were shown the various ways in which they are able to manage their production processes of their natural beauty product lines and makeup.  They are able to do this by using high tech factories designed with automated inventory management systems, assembly lines that use less power by using natural forces such as gravity.

They also reduce greenhouse emissions by setting up production facilities in the countries they export to and add water to their products at their destination countries rather than shipping the whole thing including the water from the factory in Brazil.  Natura products include ingredients that are native to Brazil and are selectively harvested in a way that does not damage or impact the natural environment and rainforest. Some of these ingredients include acai, brazil nuts, cacao, lemongrass, pitanga, caju and many other natural products only found in the rainforests of Brazil.  The entire harvesting and operations processes are managed and well supervised to ensure the protection of the environment and the sustainability.  The ingredients are harvested by local people in remote regions that would have otherwise have no other way of earning any financial means.  This boosts many communities in these regions by helping create schools, libraries, roads, bridges and anything else the community needs.  Besides nature, Natura’s other focus is on community. This is demonstrated in many places seen around the factory in which are complimentary to all employees and their families, such as the daycare, cafeteria and sports club.

IN THE LOBBY

STORE

Overall, the day was packed with a very active schedule, and it was full  of interesting ways of learning about the importance of people, community, family and environment to the culture of Brazil.   Brazilian enterprises aim to set an example of sustainability and social responsibility to the rest of the world.

– Elaine

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