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Brazil's Rising Star

The Chinese packaging market is projected to surpass the U.S. packaging market volume by 2015. With the attention this news has attracted, packaging manufacturers may be overlooking equally attractive opportunities in another BRIC country, Brazil.

Pw 2337 Farrey Patrick Tint

A 60 Minutes story in January (http://bit.ly/gAy5kf) confirms the potential of this rising market. Noting that Brazil was the last market to be affected by the recent economic crisis and the first to successfully emerge, U.S. companies should consider the opportunities to export to, start new businesses in, or partner with
Brazil’s market of nearly 200 million people.

“Brazil’s production of packaging grew at an astonishing 16.3% in the first half of 2010 and will likely close the year with cumulative growth of about 10%,” according to Salomão Quadros, Coordinator of Economic Analyses of Fundação Getúlio Vargas, an economic statistics research center. This growth creates a Brazilian packaging industry valued at $23.9 billion in 2010, reports the Brazilian Packaging Association (ABRE).

While the Brazilian market has long been self-sufficient, with rich natural resources and growing manufacturing operations, recent trends indicate a significant shift. According to Mauricio Groke, President of ABRE, there have been dramatic changes in both packaging imports and exports. Brazil’s packaging exports grew at almost 16% in 2010 ($185 million), while imports grew almost 57%, reaching about $320 million. Flexible packaging (mostly films) represents the highest percent of both imports and exports, while metal packaging remained the most imported Brazilian packaging material.

Brazilian growth industries for packaging include beverages (+16%), pharmaceuticals (+9.3%) and foods (+5.3%). And in the food category, fruit juices have experienced 20.61% growth, followed by sugar with 15.49%, pet food with 11.22%, preserves and sauces with 8.05% and milk and dairies with 7.02%. Among other packaging users, agricultural chemicals registered an increase of 37% in the first half of 2010, followed by inks and varnishes with 26.5% growth.

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