The sheer size of the Brazilian plastics industry is what impresses the first-time, uninitiated visitor to BrasilPlast, Latin America's biggest plastics trade show, which concluded a seven-day run in SÃo Paulo on May 24. Perhaps one shouldn't be surprised, since nearly everything about Brazil,with its 153 million inhabitants, is big. The gross domestic product of the state of SÃo Paulo, one of 24 such entities in the country, is larger than that of Argentina and Chile combined. And the sprawling industrial city of SÃo Paulo is the third-largest in the world, behind Tokyo and Mexico City.
Still, the average North American plastics industry observer is not likely to appreciate that Brazil's 13 domestic makers of injection molding machinery, and 18-20 local extruder makers represent but part of its nationwide plastics machinery manufacturing base of more than 80 domestic firms. Many operate solely on home-grown technology.
In addition, current market shortages notwithstanding, Brazil basically is self-sufficient in plastics materials, with a thermoplastic-resin production capacity of 5 billion pounds per year, serving the country's 6,000 plastic processors.
Consider that economic reforms instituted in 1990 threw open many markets to foreign competition, and that the adoption last July of a new currency, the real, and related policies has slashed annual inflation from a mind-boggling 2,500 percent to roughly 30 percent.
The country is democratically governed, and even the impeachment of its president three years ago did not shake the business markets. Repercussions from December's Mexican peso crisis - the so-called ``tequila effect'' - caused Brazil's stock market to drop about 30 percent, but it since has regained most of that value.
Still, despite a few notable exceptions, the number of U.S. and Canadian firms participating in BrasilPlast and active in the market remains relatively small. That may be partly because commercial hurdles and some Third-Worldlike problems remain.
Just ask Don Smith, international sales manager for Van Dorn Demag Corp. in Cleveland, whose 300-ton injection press destined for the firm's BrasilPlast stand arrived at the port of Santos near SÃo Paulo on May 5 - yet, due to port congestion and bureaucratic red tape, did not get unloaded until May 13, or clear customs until May 23, the night before the show ended! Lucky for Smith, he still managed to sell the machine to a local molder.
Import tariffs and related taxes, though generally falling, remain too high for comfort on many products. For instance, such factors nearly double the cost of imported computers.
But, given its new business-friendly president, apparent economic stability and increasingly free-market policies, Brazil is a market too huge to ignore.
The country now is in a period of adjustment and growth. As a result, advise local U.S. trade officials, those interested in tapping into its markets from afar absolutely should seek a well-established local agent or partner, and be prepared to make a sizable investment over the medium term.
Or, as one U.S. trade official at BrasilPlast, noted: ``It's risky, but the payoff is big.'' Like everything else in Brazil.
Grace is editor of Plastics News.