ÁBACO BBB #11 Brazil Business Bulletin

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HIGH IMPACT IN 2016: New Economic Reality and Policies Create Major Market Entry Opportunities ÁBACO BBB #11 Brazil Business Bulletin Aug.: Rio Olympics Sept.

Sylvester Race POST-IMPEACHMENT, MAJOR REFORMS FOR THE BRAZILIAN ECONOMY Extensive reforms are vital to balance federal budget and resume growth.

of Boston, Banco Central. Meirelles in turn chose noted apolitical pros to preside Banco Central and BNDES Development Bank.

1 HIGH IMPACT IN 2016: New Economic Reality and Policies Create Major Market Entry Opportunities ÁBACO BBB #11 Brazil Business Bulletin Aug.: Rio Olympics Sept.: Rio Paralympics Bienal Art Exposition Nov.: SP Fashion Week Dec.: St. Sylvester Race POST-IMPEACHMENT, MAJOR REFORMS FOR THE BRAZILIAN ECONOMY Extensive reforms are vital to balance federal budget and resume growth. The more conservative new government of interim president Michel Temer already took first steps for an economic turnaround: Named as Finance Minister Henrique Meirelles, conservative ex-ceo of Bank of Boston, Banco Central. Meirelles in turn chose noted apolitical pros to preside Banco Central and BNDES Development Bank. Temer mounted his cabinet with legislators noted for ability to gain consensus in the congress. To cut expenses, reduced bloated ministries from 32 to 23 and vowed to oust 4000 political appointees. Signaled accelerated privatization of state properties such as airports, highways. Revealed plans to get government out of businesses, favoring private enterprise. Reversed foreign policy focus, unfriending populist regimes and seeking favor with main world powers. Same day impeachment of Dilma Rousseff was finalized, flew to China for G20 and trade negotiations. Temer had tacit endorsement of the Senate s 75% that voted to impeach Dilma Rousseff (Workers Party). Brazil #4 in Diabetes 15m sufferers: Brazil trails only China, USA, and India. Since 2003 toll surged 34%; 500 cases appear daily. 5m diabetics suffer complications and/or severe consequences: blindness, amputation, kidneys failure, heart attacks and strokes. Inadequate diet is main cause: 57% of Brazilians overweight, 21% obese. Consume over twice recommended daily sodium intake (>12g x 5g) Brazilians pay on average R$ 610,24 monthly for their health-care plan. This cost increases up to 450%,depending on age. Rio Olympics in Numbers Spectators worldwide: 5,000,000,000 Tourists in Rio de Janeiro: 1,170,000 Foreign tourists: 410,000 with largest groups from USA, Argentina, Germany Journalists present in Rio: 26,000 Hotel occupation: 94% New world records: 27 New Olympic records: 91 Cases of Zika: 0 Notorious Zika virus had worried some Rio Olympics participants. NOT A SINGLE CASE WAS REPORTED. World Health Organization (WHO) had declared Zika outbreak a global emergency, but its director denied virus would affect travel or prevent a successful Olympics in Brazil during the dry late-winter season. ABACO is a Founding Corporate Member of Esomar: World Association of Marketing Research Professionals Click here ABACO Marketing Research - Av. Paulista th floor São Paulo, Brasil - (+55-11) Abaco@AbacoResearch.com 1

São Paulo in Perspective, 2016 Sampa is also the Largest City in the Western World,

Americas, Largest in the Southern Hemisphere, and its Combined Statistical Area

12 São Paulo Capital (million inhabitants) 21 São Paulo Metro Area 27 São Paulo

Brazil 2016 Of Brazil s 5570 municipalities, 17 have 1m+ inhabitants.

Brazilian citizens can vote upon reaching age 16. Voting is obligatory after age 18.

the impeachment of Workers Party President Dilma Rousseff, this calls for heavy

Men 46% Women 54% Almost 9m Voters in São Paulo Capital HIGHER EDUCATION, HIGHER

college educated voters rises 1%. They demand and become more qualified candidates.

2 São Paulo in Perspective, 2016 Sampa is also the Largest City in the Western World, Outside Asia and Africa São Paulo is the Largest City in Brazil, Largest in All the Americas, Largest in the Southern Hemisphere, and its Combined Statistical Area (CSA) is now the 3 rd largest in the World. 12 São Paulo Capital (million inhabitants) 21 São Paulo Metro Area 27 São Paulo Combined Statistical Area urban sprawl 45 São Paulo State 206 million inhabitants, Brazil 2016 Of Brazil s 5570 municipalities, 17 have 1m+ inhabitants. Total population grows 0.8% annually. Brazilian citizens can vote upon reaching age 16. Voting is obligatory after age 18. With 28 parties dueling for space in October s municipal elections, so soon after the impeachment of Workers Party President Dilma Rousseff, this calls for heavy thinking. Men 46% Women 54% Almost 9m Voters in São Paulo Capital HIGHER EDUCATION, HIGHER EXPECTATIONS They rapidly become more sophisticated: Each year the proportion of college educated voters rises 1%. They demand and become more qualified candidates % 16% 19% 22% 19% University High School Elementary School Can read and write 6% 17% 30% 45% % Illiterate 2% ABACO Marketing Research - Av. Paulista th floor São Paulo, Brasil - (+55-11) Abaco@AbacoResearch.com 2

Legacy of the Spectacle The Rio Olympic Games leave a sporting legacy in the Barra da Tijuca district, with 14 new world-class sports venues built, mostly from scratch, to serve both

Marina da Glória hosted sailing competitions on Guanabara Bay and open ocean.

The canoe slalom venue retained its original purpose and also became a public swimming area for the local population.

The Rio 2016 golf venue becomes Rio s first public golf course, creating a long-term legacy for the game in Brazil.

The 31 apartment towers built to house international delegations inaugurate a new upscale residential neighborhood of Rio. The Games economic legacy extends far beyond sport venues.

3 Legacy of the Spectacle The Rio Olympic Games leave a sporting legacy in the Barra da Tijuca district, with 14 new world-class sports venues built, mostly from scratch, to serve both elite and grassroots athletes. Rio s also gains a striking leap in access to high capacity public transport, up from 18% of the population in 2009 to 65% of all Cariocas in Marina da Glória hosted sailing competitions on Guanabara Bay and open ocean. The venue was expanded, updated with new leisure facilities, and integrated with neighboring Flamengo Park. The canoe slalom venue retained its original purpose and also became a public swimming area for the local population. Rio s Olympic Park now features a 12,000 capacity waterfront lawn where sports fans can watch games on giant screens. The Rio 2016 golf venue becomes Rio s first public golf course, creating a long-term legacy for the game in Brazil. Six venues in the Olympic Park form the nucleus of Brazil s first Olympic Training Center, for athletes from Brazil and around South America. The 31 apartment towers built to house international delegations inaugurate a new upscale residential neighborhood of Rio. The Games economic legacy extends far beyond sport venues. During preparation, other areas of Rio received billions in direct investment: Revitalization of the historic, dilapidated port area as Porto Maravilha, a leisure and cultural magnet reopening the city center to the bay. The tourism industry benefits from new hotels and convention facilities. Rio s population gained training and experience in numerous fields, including 1,000,000 English lessons by the Rio 2016 Organizing Committee to staff, volunteers and other stakeholders. ABACO Marketing Research - Av. Paulista th floor São Paulo, Brasil - (+55-11) Abaco@AbacoResearch.com 3

The decision narrows Bradesco s market-share gap with the top three banks. Itau Unibanco Holding became Brazil s largest non-state-owned bank when Itaú bought Unibanco in 2009.

Source: Bloomberg More Churrasco for USA Brazil formalizes a new fresh beef export deal, attracting other new opportunities.

This new arrangement is expected to boost Brazil s world market share from 7% to 10%. Source: Metro.com.

4 Bradesco Wins Approval for $5.2b HSBC Purchase Brazil antitrust regulators approved Bradesco s acquisition of the local unit of HSBC Holdings, requiring that the buyer refrains from additional purchases for 30 months. The decision narrows Bradesco s market-share gap with the top three banks. Itau Unibanco Holding became Brazil s largest non-state-owned bank when Itaú bought Unibanco in Bradesco will total R$ 1.09 trillion in assets, still behind Banco do Brasil, Caixa Economica Federal and Itau. Source: Bloomberg More Churrasco for USA Brazil formalizes a new fresh beef export deal, attracting other new opportunities. Deals may follow with countries like Japan, South Korea and Canada, all with similar sanitary legislation as the USA. This new arrangement is expected to boost Brazil s world market share from 7% to 10%. Source: Metro.com.br Jaguar Land Rover s First Fully Owned Overseas Plant JLR divulged its 240m ($350m) venture in 2013, after a decade of steady growth. Expected 2016 new car sales are nearly half the 2012 peak of 3.8m, but JLR claims 11% growth. "The premium sector has more or less held its ground, so share of total industry has grown for premium and we've been able to robustly hold our position," said JLR Brazil Director Julian Hetherington. Source: Reuters.com Coffee for All Brazilian coffee export led the world again in the last harvest year: 35m sacks yielded the nation US$5.3b. Global warming is soon likely to shrink world coffee growing areas. Source: Destak.com To guarantee total quality for our full-service research, and for demanding international clients, ABACO maintains complete, modern, and secure Qualitative and Quantitative Facilities at São Paulo s ideal location, near top hotels, financial and medical centers. CATI, FocusVision, and audience testing venues are powered by hands-on veteran bilingual researchers. ABACO Marketing Research Avenida Paulista th floor São Paulo, Brasil (+55-11) Abaco@AbacoResearch,com 4

ABSOLUTE QUALITY & CONVENIENCE IN NEW ÁBACO-LAB FACILITY Two FocusVision FGI suites for <15

only full-service qual/quant research facility with all these features: Large audience facility

definition video recording (1080p) and big screen TVs for close-up view Kitchen for F&B testing

security and entrance control Enjoyable proximity of malls, fine restaurants and cultural

Simultaneous translators tested and monitored by Native English Speakers Structure to use two

speaking logistics team Call ÁBACO s Multilingual A-Team Call Abaco s USA tie-line by e-mail

5 ABSOLUTE QUALITY & CONVENIENCE IN NEW ÁBACO-LAB FACILITY Two FocusVision FGI suites for <15 observers and a 50-seat auditorium, all at Brazil s ideal address for research ÁBACO-LAB, the only full-service qual/quant research facility with all these features: Large audience facility and two one-way mirror rooms in the same venue Comfortable space for 15+ observers High definition video recording (1080p) and big screen TVs for close-up view Kitchen for F&B testing and hot meals for observers Venue near 5 star hotels to avoid São Paulo traffic jams 24 hour security and entrance control Enjoyable proximity of malls, fine restaurants and cultural attractions 20 varied restaurants within the building (plus Starbucks) for all appetites Simultaneous translators tested and monitored by Native English Speakers Structure to use two translators at once, for global studies Assistance and all communications by fluent English speaking logistics team Call ÁBACO s Multilingual A-Team Call Abaco s USA tie-line by appointment: ABACO Marketing Research Avenida Paulista th floor São Paulo, Brasil (+55-11) Abaco@AbacoResearch,com 5

Learning from experience: How hosting the Olympics can leave a positive legacy

F E B R U A R Y 2 0 17 Learning from experience: How hosting the Olympics can leave a positive legacy Bill Hanway Careful planning and an eye on the future can help the cities that host them. Deciding