The Brazilian States: São Paulo

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Hello and welcome again to Denmark Brazil. If you are a new comer, I would like to welcome you, as well. It is always a great pleasure to be contributing a bit more to you. I hope that by the end of this article you will know a lot more about São Paulo.

I am originally from the city of São Paulo. Just in my city there are nearly 11 million living in. I am passionate about this city. As many other cities in Brazil, there are social issues in SP as well but there surely are great things in SP to enjoy.
In case you still have not been to São Paulo I would highly recommend you to take a trip to this vibrant, never stopping Brazilian city.

In this post, I will cover São Paulo’s economy, it’s main economic activities, industries, exports and imports, opportunities and challenges, etc.

Let’s get started…


São Paulo

São Paulo is the first state that is part of the southeastern region of Brazil. São Paulo is obviously part of one of the 26 Brazilian states.

São Paulo makes boarders with four other Brazilian states. In the north and northeast, Minas Gerais, in the south Paraná, in the east Rio de Janeiro and Mato Grosso do Sul at west. Southwards the Atlantic Ocean, imposes a natural limit on the state.

São Paulo has 645 municipalities, and its total area is equal to 248.209.426 km2.According to Wikipedia, this is equivalent to 2, 91%. If that number still is unclear, the state of São Paulo is slightly bigger than the U.K.

The state of São Paulo has now some 40 million people living in it, what is equivalent to nearly 23% of the total Brazilian population.
According to IBGE, São Paulo’s metropolitan population is roughly 18 million people.

It is also very important to highlight that São Paulo is the most international city in Latin America, with nearly 3 million foreigners living in it. The largest minorities in São Paulo are Italians, Spaniards, Japanese, Portuguese and several other smaller minorities.

sao paulo


Tourism in São Paulo

In relation to São Paulo’s tourism, in 2013 São Paulo has received nearly 13, 2 million visitors.

According to visitesaopaulo.com, the average occupation rate of São Paulo’s hotels during 2013 was appx 65, 5%.

Tourists stayed on average 3 to 4 days and the average expenditure of a foreign tourist was on avg. R$533. (In case, need the value in DKK, multiply per 2, 5, or check on a website the exchange rate of the day…)

  • Foreign tourists represent 15% of the total number of tourists that visit São Paulo. The main countries, foreign tourists, come from, are USA followed by Argentina, Germany, Spain, and France.I am enclosing below an info graphic with the main reasons why foreign tourists visited São Paulo.51,1% travel for business reasons,

    25,4% to go to an event ( Tradeshows, parties, etc.),

    10,5% for leisure,

    5,5 % due to studies

    3,1% due to healthcare reasons

    2,9 % to visit family and friends

    1,6% others

 


Here is what you won’t find at the Economist Intelligence Unit about São Paulo 😀

São Paulo’s population exceeds Denmark’s population by at least eight times.

The state of São Paulo is home for the largest consumer market in Brazil due to the socio-economic level of its population.

According to the Brazilian institute of geography and statistics, São Paulo‘s consumer potential is 761, 42 BRL Billion.

According to SEBRAE, – a think tank focused on supporting SME’s in Brazil- there are five factors that turn São Paulo, an important consumer hub in Brazil.Sao paulos main municipalities

 


São Paulo’s Economy

São Paulo is the main supplier of services, inputs, capital goods for the other Brazilian regions and abroad.

According to IBGE and SEADE, the state of São Paulo accounts alone for more than 33% of the Brazilian GDP.

The wealth produced by São Paulo has generated more than 1,2 Trillion BRL in 2012 ( the latest official data), which is equivalent to a GDP of 30,8 thousand per capita.

Tradeshow

  • Services represent 69% of the economic activity
  • Industry accounts for 29% of the economic activity
  • Agriculture accounts for 2%.
  • More than 50% of Brazilian financial institutions are concentrated in SP.

The spreadsheet below will give you an idea of


 Sector Share São Paulo VS Brazil

sector part brazilian gdp sp br

Source: IBGE and SEADE 2012

*Other services include: Tourists accommodation, information services, financial intermediation, insurance and social security services, services provided by companies, real estate activities, public health and education,health and education,domestic services.


*BONUS*

DID YOU KNOW??

  • Just the city of São Paulo, (not the state), account for 12% of the national GDPIf the city of Säo Paulo was a state, it would be the second richest state in Brazil, and it would only be behind the state of São Paulo itself.

    Just the city of São Paulo has a higher GDP than the whole estate of Rio de Janeiro.

    In terms of consumption, the average expenditure in the CITY São Paulo is roughly the same of all families living in the STATE of Rio de Janeiro and 2x higher than families living in the north of Brazil.

    Just the Class A in the city of São Paulo consumes the same amount as all families living in the state of Pernambuco.

    The economy of the city of São Paulo is bigger than the economy of countries such as Portugal ( 229 Billion USD), Finland ( 237 Billion USD) and Hong Kong ( 224 Billion USD)

    The data above was released by the commerce federation of the estate of São Paulo and the Brazilian institute of Geography and Estatistics.


 A quick look at São Paulo’s Main Sectors of the Economy

The state of São Paulo accounts for nearly 37% of the total industrial production of Brazil.

Furthermore 12% of all agriculture income and 33,3% of all revenues generated from services come from São Paulo.

These number are in accordance to a survey released by the Brazilian Institute of Geography and Estatistics ( IBGE) in 2012 and from a the sytem and data analysis foundation (SEADE)

Aerospace and Defense

São Paulo is home for the largest aerospace hub inLATAM. São Paulo accounts for 73% of the total local units, 95% of all employed people and 96% of the industrial transformation value of the aviation industry in Brazil.
If you need more thorough information on the aviation sector, you can check this post about the aviation sector in Brazil and opportunities for Danish companies I have written back in September of 2013.


 Agribusiness

In São Paulo, there are more than 7,9 million hectares of lands available for the agribusiness sector, what represents 32% of the total territory of the state.

According to IBGE the countryside of São Paulo is the largest producer of sugarcane in Brazil and it also accounts for 60% of the total production of orange juice of the world.

The agribusiness sector comprises a wide gamma of activities, ranging from agricultural products to applied biotechnology research.

Among the main exported products, there can be highlighted:

Sugar cane and saccharides ( 9,2 Billion USD),
Cattle (2,6 Billion USD),
Fruits (2,3 Billion USD),
Forest products ( 2,0 Billion USD)
Coffee (0,9 Billion)

Value of the agricultural production of São Paulo in BRL Million
main products Agriculture
OBS: The eggs are measured in dozens and milk in liters
Food Sector

Just like the agribusiness sector, São Paulo also has a strong food sector.
Some 35,5% of the Brazilian industrial food production happens in São Paulo.

The production of sugar should in São Paulo represents 58% of all sugar produced in Brazil. Preserved fruits and vegetables 31%, grounded coffee 37%, dairy 31%.

The food sector of São Paulo accounts for roughly 10% of the Brazilian GDP.

Below a spreadsheet with the gross value of the industrial production of food in SP
food sector sao paulo
Obs:Values in thousand of BRL

Value of the agricultural production of São Paulo in BRL Million

 main products agriculture

OBS: The eggs are measured in dozens and milk in liters


 Food Sector

Just like the agribusiness sector, São Paulo  also has a strong food sector.

Some 35,5% of the Brazilian industrial food production happens in São Paulo.

The production of sugar should in São Paulo represents 58% of all sugar produced in Brazil. Preserved fruits and vegetables 31%, grounded coffee 37%, dairy 31%.

The food sector of São Paulo accounts for roughly 10% of the Brazilian GDP.

Below a spreadsheet with the gross value of the industrial production of food in SP

food sector sao paulo

Obs:Values in thousand of BRL


 Automotive

More than 40% of all automotive factories are located in São Paulo. The main companies installed are Ford, GM, Honda, Mercedez Benz, Scania, Toyota, Volkswagen and recently Hyundai has just installed a site in Piracicaba.

Every year more than 3,4 million units are produced in Brazil, and from this total, 41,5%, (or 1,4 million vehicles are produced in São Paulo)

The image below gives a good clue of the potential market existent in relation to the automotive sector in Brazil and especially in São Paulo.

The picture shows the autoparts sites per state

autoparts distribuition

autopartdistribuition

Machinery & Equipment

According to IBGE the state of São Paulo accounts for 57% of the total transformation value of the sector in Brazil.

The sector of capital goods is mainly concentrated in the metropolitan regions of São Paulo and Campinas, accounting for 37% and 10% of the jobs of the sector, respectively.

It’s worth also to highlight the regions of São José dos Campos, São Carlos, Araraquara, Matão, and Sorocaba.

For the sector of capital goods, there are special financing lines. The idea is to incentive technological innovation and improves the competitiveness of the sector.

Check the spreadsheet below to see the revenues generated with the sales of machinery in the Estate of São Paulo.

Revenues from machine sales

In 2012 and 2013 the machinery market grew as well, but I still haven’t compiled the official data. I’ll be soon posting, when I have it finished.


 Oil & Gas In São Paulo

São Paulo is a national reference in terms of oil and gas. According to the latest balance released by the National oil and gas agency, the five refineries in operation in the state of São Paulo, are responsible for 42% of the total capacity of Brazil. These refineries are responsible for a significant production of oil derivatives like gasoline,liquefied petroleum gas, diesel, among others.

The development agency Invest São Paulo prepared a study that points the seven subsectors of activities related to the Oil & Gas sector, with higher potential of development within the estate.Oil opport
oil opport 2

The next three sectors will stay for another post. I guess today, there was plenty information about São Paulo. The other three sectors missing are:

Oil opport

oil opport 2

The next three sectors will stay for another post. I guess today, there was plenty information about São Paulo. The other three sectors missing are:

  • Healthcare and Life Sciences
  • Financial Services
  • IT and Communications

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Let me know. Please use the discussion thread to express your ideas, or drop me a line on linkedin or at carlos@denmarkbrazil.com

Mange tak!

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Carlos Monteiro is a Brazilian citizen, graduated in Business Administration by the Catholic University of São Paulo. He lives in Odense, Denmark with his Danish Wife, Cathrine, and their half Danish /Brazilian daughter Ines Marie. You are very welcome to be in contact him at any time.

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