16/04/12 - 11h33

Dennis Bruce

Dennis Bruce is president at the Argentine-American Chamber of Commerce in Atlanta, Georgia and he’s also President of Tangonet Business Solutions.

Background

• Business and tourism in Argentina
• Business in South America
• How to start doing business in Brazil?
• Other cities for business in Brazil
• The development of the Brazilian technology sector
• Brazil under construction

Interview

Tom Reaoch:

I met today’s guest last year during his visit to Brazil with a group of clients that he was assisting in learning of Brazil as a business opportunity and again a couple of weeks ago we had a chance to talk again about further opportunities. Dennis Bruce is President at the Argentine-American Chamber of Commerce in Atlanta, Georgia and he’s also President of Tangonet Business Solutions. Dennis is an internationally experienced executive with a passion and proven ability to identify solutions to increase growth and profitability across different industries. His specialties are business development, local, regional and international, business turnarounds, M&A, startups, global sourcing, outsourcing, sales channels and alliance development. So with that Dennis thanks for being part of Talk2Brazil and welcome.

Dennis Bruce:

My pleasure Tom and thank you very much for having me.

Tom Reaoch:

Well, from what we were talking about, we’ve been talking offline in our previous chat and some of when you were here last year with some of your business associates and companies looking to Brazil. First, I’d like to talk about your chamber. What is your role there in Atlanta of offering services to business persons?

Dennis Bruce:

Well, we are what’s called Tom a bi-national chamber, so our focus – I’m President of the Argentine-American Chamber of Commerce and there are other bi-nationals that represent their countries as well. What we do basically is we promote tourism investment and commercial exchange between the countries in the region. Our focus is Argentina and the Southeastern U.S. region. So, whenever a company or a group of individuals are looking at doing business in Argentina or tourism activities in Argentina and vice versa they come to us, look to us for information, contacts, you know we get a lot of requests for tourism. Tourism is a huge industry in Argentina these days. You know, less so in the business area but still some interesting niche areas that are coming up such as renewable energies and biotechnology and the commission (ph) technology as well are some of the areas that are hot and people ask about. So we provide information. We [indistinct] provide platforms and contacts for them to establish the first, let’s say open the door to the country. If you went from the southeast to Argentina will open that door and allow you to get access to the people and the resources that you may need to understand better the market.

Tom Reaoch:

Now, these businesspersons are they generally looking to Argentina specifically or are they looking to Latin America as a whole?

Dennis Bruce:

Mostly from a Chamber perspective we’re dealing mostly with Argentina, Tom. It’s pretty varied. Sometimes, if we get a request, for example, as you know the Americans are not necessarily the most – well, they are geographically challenged, let’s put it that way. Sometimes they’ll say, “You know, can you help us out with something in Brazil?” I can’t – I mean, from a chamber point of view, but we can introduce you to our friend at the Brazilian Chamber and they’ll certainly be able to help you out for anything with Brazil, from a chamber perspective of course. From a business perspective that’s a different story. But if it’s a question of opening those first doors then that’s purely a Chamber activity that we’re happy to do and we’ve done it on many occasions and then to provide some information and we will work with our bi-nationals as necessary and sometimes we hold events together as well. We held them last year as a matter of fact with – we had some attorneys come up from Argentina, Brazil and Chile to talk to the Metro Atlanta Chamber here about opportunities and so forth in the region for each country. So [indistinct]…

Tom Reaoch:

But you as a businessperson that you do offer in Tangonet Business Solutions you do offer service to other countries in Latin America.

Dennis Bruce:

Exactly, and it’s mostly in the southern cone region. Tom, I’ve lived and worked many years in Argentina. I’ve worked many years in different projects in Brazil as well as Chile. So that’s where I feel most at home as a matter of fact. Although we are close to Mexico, I’ve never stepped foot in Mexico. I’m more of at home in the southern area of South America than I am in other areas. Last year, as you know, I went down with one of my clients Trimast and it was an interesting experience. They were very interested in the Brazilian market and it was an eye-opener, I think, for them. I think that they learned a lot. It’s a bit difficult from a cultural perspective. I think it’s very important for companies to understand what they’re getting themselves into. I’m sure you’ve seen this many times as well.

Tom Reaoch:

I agree with you and I’ve seen this specifically with the company that you brought that –and that does repeat. I was impressed at the size of the group because many times even companies of their size may send one or two persons down here to take a look and see. Generally speaking those persons are from commercial areas looking for business but the breadth and depth of the group was really impressive from that, they really wanted their whole group to have, I guess, the same view at the same time and that’s good.

Dennis Bruce:

Yeah, it was good. They’re there in different industries and obviously from a group perspective the idea was, “Well, where do we start?” But, “Where can we start?” “What are the opportunities that Brazil offers for us and how do we start?” Because being so big and diversified, the problem is you have so many different alternatives and so many different ways and so many different possibilities in terms of landing in a different country. But I think that one of the things that was really important was to get them there and they were very open to that and I was very happy that they were open to that. But it was good from a cultural perspective and to illustrate that, I remember when we first arrived. I was with one of the executives, we were on our way to our first meeting in downtown Sao Paulo and we got to a traffic light and he said, “Dennis, where are all the people on bicycles here?”

Tom Reaoch:

All right. Great.

Dennis Bruce:

Well, “Why do you think there would anybody in a bicycle here in the middle of traffic here in downtown Sao Paulo?” I said, “That’s not a typical means of transportation here.”

Tom Reaoch:

That’s true.

Dennis Bruce:

He says, “Well, when I go to Shanghai. You know, half the people we see on the streets are riding bicycles.”

Tom Reaoch:

True. Right.

Dennis Bruce:

You see. So, it’s sort of like – I think the lesson learned there, Tom, is that emerging markets are not in an emerging market. Every market is different. Brazil is different from China. Brazil is different than Argentina although they’re neighbors. Argentina is different than Chile although they’re neighbors. You know, the U.S. is different than Mexico and different than Canada. So, it was that getting used to doing business out of the box, out of what you’re used to do. That I think was the most useful thing that they got out of it and that’s something that you had helped with and the MTMs [ph] helped with and all the people we met there also helped to get through that acclimation period of understanding the country, understanding the people. I think that’s the most important first step for any business going anywhere.

Tom Reaoch:

That’s true and we receive several different – even through the American Chamber in Sao Paulo here in Campinas, I’ve been part of several presentations of different groups coming and those groups were either business persons from a company or a state or regional Chambers coming from the States or similar entities from Europe. But it does tend to be then, let’s say for the first timers coming to Brazil, it is an eye-opener. They are pretty amazed at what the country does have to offer, but also what you just mentioned the impact of how – I wouldn’t say how different – but maybe how different in a good sense from what they expected to see. Sao Paulo is a very cosmopolitan city and other than the bicycles which you mentioned, you could be basically in any big city in the world actually.

Dennis Bruce:

Right. I remember something you told me Tom during, you know, when we first met and in Campinas last year was that Brazil is not one thing. I think that one of the good things that we did with Trimast was that we went to Santa Catarina, we went to Rio, we went to Belo Horizonte, we went to Brasilia. We saw Brazil from, you know, not from the Sao Paulo-centric [theme] which obviously is – Sao Paulo is a very important business center. One of the most important in the world obviously but it is not Brazil and that’s something that we were able to see in Joinville and then in different places that we visited and different factories that we visited as well.

Tom Reaoch:

You do have to see it from all those perspectives and I think that’s good. That’s again, what I said the depth of their visit, it needs to be that way so they can get away with a better understanding of the country and the possibility.

Dennis Bruce:

Right and I think that lessons learned I guess or at least from their perspective what they thought of it was that it was all, you know, an excellent visit. They were very happy with it and the CEO of the company said, “We have to be here.” They’re still not there by the way. But, they’re on their way, I think. But I think there were two things that ––recurring themes, I guess, we would call it was the whole taxation situation in Brazil. The other one was obviously the, you know, their let’s say fear of the corruption issue. Let’s put it that way. I’m not going to say the corruption issue but their fear of it was I think more of what the…

Tom Reaoch:

The unknown. Right? Yeah.

Dennis Bruce:

Fear of the unknown.

Tom Reaoch:

Yeah. I think that’s fair because obviously the taxation is a point that anybody, any business person coming to Brazil, they need to understand that.

Dennis Bruce:

Right.

Tom Reaoch:

Because obviously in any business endeavor there’s going to be a focal point of how you start the business. I think [indistinct], what they are doing is still thinking about how to come. I’ve seen other situations where companies would just come to Brazil and started operations really without understanding the implications of the taxation and literally starting a company or a factory in the wrong place. Then once they understand the internal taxations amongst the different states in Brazil, they found out that they were located in the wrong place.

Dennis Bruce:

Wow, that’s interesting. Yeah. I think one of the other things that I think is related to that Tom, I mean, not directly related to it but one of the things that I took away from Brazil was there’s an enormous amount of incentives to do business in Brazil. At the state level, at the provincial level, the investment agencies, Invest in Sao Paulo, Apex at the federal level, regional, provincial, incentives it’s just – it’s something that you need to pay attention to as well. I think, that there’s a certain complexity to that as well because if you really look at that carefully, you can really use those incentives to your advantage.

Tom Reaoch:

Certainly. Oh, land grants, installations, many municipalities offer earth moving and basic infrastructure to any land that a company would want to build on. So there certainly are a number of incentives across the board.

Dennis Bruce:

Yeah, and we’ve heard say any place there.

Tom Reaoch:

They’re all true. They are real and they have to be part of the equation.

Dennis Bruce:

Right. So when you put that all into the equation, the different incentives which I thought were extraordinary, some of them. Some of them you’ve mentioned it as well was, you know, let’s say, tax exemptions for a number of years. This type of saying, you know, if you put that into the equation and you say, “Well, okay. That’s what the incentives that they’re offering. This is the logistics that we have. This is the taxation issue we have.” It is a complex issue. No doubt about it. Complex issue and you can’t go into it blindly so, I think that that’s why there is some – there was a little bit of trepidation. It was understanding that, yes, well, we need to be there but there also is some apprehension that this is complex and we didn’t really think about it. Obviously that’s where getting the local talent helps and bringing in people who understand that. The different ways that all of these incentives work and the taxation issues work and the logistics work and so forth. Yeah, it’s not easy but it’s certainly comparable.

Tom Reaoch:

It is and I think the way that you organized the trip and the persons and the organizations that they were able to visit with, I think that’s the way it needs to be. We’re getting the cross section of information from different persons during the same visit, that’s always good.

Dennis Bruce:

Right. It did create a bit of an information overload in a sense but once we’ve filtered through the information and figured it out and so forth then there are some interesting ways for companies to do business in Brazil. One of the ways that, you know, that another layer of that is what are the regional and bilateral agreements that are in place in the industry.

Tom Reaoch:

That’s true.

Dennis Bruce:

They manufacture auto parts in Mexico. Mexico and Brazil have a bilateral agreement for autos and auto parts.

Tom Reaoch:

Right. As Brazil has with Argentina, right? So that’s true.

Dennis Bruce:

Exactly, and although they fight a lot about it and it still works for me. As you know when I went to visit the auto parts association last year, the big thing was, “Well, we’re sending auto parts to Argentina so that they can manufacture and then they ship the cars back to us.” So, they’re trying to figure out what the taxation scheme and import tariffs and all that are with that type of logistics and good movement, I think is a challenge but one of the things we talked about with Trimast is maybe it makes sense just to start slowly and try importing through Mexico where there already is a bilateral agreement for auto parts there. That might be a way just to get a feel for it.

Tom Reaoch:

Right. Well, that’s my advise to any company is to find a way just to start.

Dennis Bruce:

Just to start, yeah.

Tom Reaoch:

Set up your office. I have a person here or persons to start understanding that and delving into the details that each one of these questions and really feeding information back to headquarters wherever that may be, but having a better understanding. And that’s really a – we’re not talking of a huge investment, because even as we mentioned offline just starting a company is also an endeavor here.

Dennis Bruce:

Yes, of course. Yeah, and then that’s something that, you know, I was surprised to read that in fact that Brazil’s one of the more complex – it takes almost as long to set up a company in Brazil as it does in, I don’t know, where else? I forget where it was but someplace it was like four months or five months to set up a company. There are different government ministries that get involved in it and so forth. I think that one of the good pieces of advice you gave there as well was in Campinas, was things do take longer than you expect and then you have to be prepared for that and that that’s just part of it. That’s just part of doing business in Brazil.

Tom Reaoch:

But, not specific to this but in general, what is your feeling of the real commitment of companies or of business persons where they’re looking, specifically American companies who’re doing business outside of the States. Because obviously the other side of that with the economic downturn that business was so bad in the States, are they really looking for a long-term commitment or are they just looking, as you mentioned, for a quick hit or a quick fix?

Dennis Bruce:

I think that this—there’s a barrier there, Tom. It’s really hard to put my finger on exactly what it is. Like I mentioned earlier with the U.S. Commercial Service that the U.S doesn’t export much in general.

Tom Reaoch:

Right.

Dennis Bruce:

But there’s an enormous opportunity there. Although a lot of U.S. manufacturing is done offshore, a lot of it’s coming back, well some of it’s coming back anyway. There are niches where there is some manufacturing and I think U.S. products will be well-received overseas. But I think that there’s some barrier and I’m not sure if it’s just a fear of it or just not willing to take the risk, you know I think that there’s a challenge and I think that even from my business perspective I’m out to challenge companies to do business overseas so obviously do it right. But I think that there is a barrier and I think that one of the ways to break down all those barriers is to have that understanding of the local people, cultures, ways of doing business, you know it’s one of the things that we focus on is just trying to get the people understanding local events, something to talk about. Even if it’s just a soccer game. Let’s go down there. Let’s not talk baseball in Brazil. Forget about that it’s not going to work, we’re in Argentina. Let’s go talk soccer. Just be up-to-date on what’s going on with the local soccer teams, engage the locals in conversation on things that interest them and learn about them. That will help, you know, like in any business dealings, it’s all about relationships and you have to build them. It’s an investment. You have to invest that time and make that happen. I think that that’s very, very true in Brazil and in Latin America in general.

Tom Reaoch:

Well, you mentioned soccer and with the upcoming World Cup that will be held here in Brazil that’s attracting – there are ongoing investments right now for a lot of the infrastructure and the legacy projects as they’re called. But there are all kinds of things happening here. They’re from the technology side, from the security side, from everything. So it’s the new stadium’s going up, some new hotels, more recently, a little more than a week ago three of the airports have become privatized so we now have foreign investor groups and I was part of the bidding process that foreign companies with proven track records in building airports were part of that equation. So, that’s all literally happening right now. So there are opportunities for many different companies. Take an airport for instance. Look at all of the infra – not only the building itself but what goes into an airport.

Dennis Bruce:

Right, it’s enormous. I worked with the airport infrastructure and privatizations in Argentina and one of the things that really called to my attention were the airport’s concessions that were recently awarded in Brazil, Tom, was the diversity of companies and geographical regions that were represented. Of course, the group that I did a lot of business with, Corporation in America and Argentina they are a big player. They have the concession together with a Brazilian company in Brasilia and they also have the airport concession in Natal. But, also the South Africans, I think were the ones that won Warullos [ph] and the French company together with the Brazilian company in Campinas in your backyard, I think they won that – so, what’s happening is that I think that the diversity of investments is one thing but the diversity of the origin of those investments is another thing. Like I mentioned to you earlier that I’m getting clients now from Australia, China is knocking at the door. I read recently that of 100% of their investment, China investment in South America, I think between Argentina and Brazil they got 99% of it between the two of them.

Tom Reaoch:

I want to say yes.

Dennis Bruce:

That’s enormous. I mean, that’s incredible when you think about it. So I think that other geographical regions are looking into the areas where maybe Europe is maybe looking more inwards these days with the problems they have and the U.S. may be as well. In the meantime the South Africans are looking to invest overseas and the Chinese are looking to invest overseas and India looking as well. Argentina’s investing in Brazil; Brazil is the largest FDI partner of Argentina so it really is a global economy these days and I think that’s where Latin America isn’t so dependent upon in any one region. There’s such diversity these days of investment partners. I think that’s the thing that’s changed so much over the last 10 or 15 years.

Tom Reaoch:

What I still feel from the American companies’ standpoint, sometimes it’s difficult to look south.

Dennis Bruce:

It is and like I said it’s difficult to put a finger on that and understand why. I mean, even with working with the companies that do business and have successfully done business as well. Most of them are legacy companies that have been there for a long time. I think there are new players that are coming along but it is a slow process and I think that in particular technology companies are—you know, we see a lot of interesting technology companies that want to do business in the region and technology is a very global business anyway so that’s one thing I think also maybe you’re probably see this in Brazil as well is that energy companies are looking, are very much on the hunt globally and in that region particular for investment opportunity. Renewable energy is something that’s hot in both countries as well.

Tom Reaoch:

Yeah, there is. There is a whole sector here that – and just a couple of weeks ago there was what is called the campus party, where they draw all together 5,000 to 10,000 persons that actually camp out and get into a techie environment for three to four days. That has become a focus for a lot of the startups, for a lot of the seed investors coming in order to take a look see of what is happening at the basic level of technology. So a lot of new things come out of that. People working and coming here and investors are now interested in seeding that here in Brazil.

Dennis Bruce:

Yeah, that’s interesting because one of the investment – well, I don’t know if it was investment, I think that’s the wrong term. But, one of the, I guess, incubators that I saw and visited last year was the aerospace cluster over in Sao Bernardo do Campo. I was very impressed by that. I had a tour of that and they showed some of the aerospace research and development activities that was going on there and some of the startups that they were housing – they were incubating. It’s really state-of-the-art stuff. Really things that look to be very much leading edge and of course Brazil has a long history of aerospace development. So that’s something that I think that maybe isn’t on the radar of many people but I think also offers a great investment opportunity or great partnering opportunity at the very least.

Tom Reaoch:

That’s true.

Dennis Bruce:

That’s something that, you know, I think that one of the other take backs that I got from Brazil was the incredible diversity, Tom, of business opportunity investments and it’s just incredible. Everything – when I see –you know just driving along the highway, seeing new plants being built, manufacturing, construction, different industries, just how much the country’s growing and I think for our listeners – for your listeners, that one of the things that really got me or really called to my attention recently was, I was talking to the CFO of Turner Broadcasting here in Atlanta a couple of weeks ago and he told me that the affiliate in Brazil was adding on a 100,000 new subscribers per month which is extraordinary. New cable subscribers that is. So, the middle class is growing and that’s obviously a good thing for Brazil but I think it’s a good thing for anybody who’s willing to invest in new business in Brazil as well.

Tom Reaoch:

No, and the continental size of the country. You know what I mean. Talking about communication and you’re talking about the ramping up and how much of that is also looking forward to the World Cup. Obviously the Brazilians are fanatics for soccer and one of the real drivers right now and what people do want to do and you have the pay per view transmission of the different soccer matches throughout the country and that’s a very strong driver for the cable.

Dennis Bruce:

Yeah, absolutely. I guess, I suppose so. I think that brings along some other different aspects of growth in the middle class and I know that there’s been some talk as well of a housing deficit in Brazil and I think obviously that brings up another opportunity for investment. I’m sure and I know there’s the local program, My Life My House. I know that some people are working with that and doing some projects in the country and in short, I think that when you look at Brazil there is no shortage – there’s not in any one area where there aren’t opportunities to invest in it.

Tom Reaoch:

Right. I don’t want to put you on the spot, but if you were to compare Argentina and Brazil, how would you compare each of these countries on a business perspective and opportunities?

Dennis Bruce:

Well, yeah, you did put me in a spot for sure. But, no problem with that. I think that they’re similar and they’re different but as you know a very long-standing tradition in soccer and they’re very competitive in the business area as well. So, I think there’s some similarities. First of all, diversity. Economic diversity, I think is an important issue for both countries. They’ve both become economically diverse. Argentina has really – I know this from managing several groups, technology-wise they’re second to none. They have an excellent technology infrastructure. They have excellent technology education as well. They produce very good engineers. I think Brazil is a little bit behind in that sense. But I think that…

Tom Reaoch:

I think I would have to agree with you and I think that would be a point I would think that Argentina has a better educational base.

Dennis Bruce:

Yeah, I think that…

Tom Reaoch:

Across the board. Not only at the engineering level but I would think the level of education in Argentina from the public standpoint, the public school sector I would – my personal feeling is that it’s better.

Dennis Bruce:

Yeah, and I think that the Argentines are a little bit ahead in terms of technology, information technology I’m referring to. But I think that Brazil because of its size, because as a necessity I think will catch up. I think that there are some similarities in terms of, you know, obviously agriculture, both countries are very strong, among the top 10 in many, many, many agricultural production and export categories. A long, long list that we don’t have to go through here but that’s one thing where they’re similar, I think that manufacturing has some similarities. Obviously, the automotive sector is, Argentina exports I think 80% of its automobile production to Brazil. Brazil obviously has its own very strong auto manufacturing sector, so a lot of similarities there. I think renewable energy is one area where there’s a lot of similarity as well. I know that there’s some investment going on with some Argentine groups in Brazil and vice versa. I mean, there’s these reciprocal investments going on in energy, in renewable energy, and in more legacy energy platform. So there’s a lot of synergy and a lot of similarities there as well. You know, where it diverges I really don’t know. Obviously Brazil has an aircraft sector, a very important aerospace sector which Argentina does not have. Obviously, Embraer is one of the larger aircraft manufacturers in the world and I think Brazil is one of the top users if not manufacturers of the helicopter if I’m not mistaken. Maybe [indistinct]…

Tom Reaoch:

Users. But, that too, right now many of them are imported but there is local production and more technology coming in that light of having full manufacture. Many of them are just assembled here right now. But that development, because the helicopter is not only for personnel because of the offshore and the oil production; just a mass of fleets of helicopters just going and coming, taking the workers to the platforms. That’s a whole business by itself. That’s just a whole different business.

Dennis Bruce:

Right, exactly.

Tom Reaoch:

Besides the fact, in Sao Paulo obviously you see helicopters coming and going because many executives use them as transportation. But, as they serve as in terms of getting through the different uses—actually, so that Brazil is a major manufacturer of airplanes but we have very few airports when you compare Brazil to say to other continental countries. There are very few commercial operating airports.

Dennis Bruce:

Right, exactly.

Tom Reaoch:

Yeah. So getting around here is difficult.

Dennis Bruce:

Yes, and we all know that anybody I think who’s been to Brazil and obviously I love dearly Brazil but I really have a very difficult time dealing with the airports. Obviously, President Rousseff and her team are dealing with that now with these concessions and they recognize the problem. It’ll take some time but I’m sure they’ll get there with those upgrades that are needed and not only for the World Cup and the Olympics and anything else that’s needed, just the country needs it even without the Olympics.

Tom Reaoch:

We need it right now. That’s true. That’s from the business sector and here specifically in Campinas at the American Chamber we’ve been defending that for years. We need to have the local airports upgraded just from a business sense. That’s still ongoing irregardless of World Cups or Olympics or what have you.

Dennis Bruce:

Right. That just brings more urgency to the situation.

Tom Reaoch:

It does. That’s why we all see it very favorably though, the privatization. Again, yesterday’s newspaper too, the government did declare that all of the tenders, all of the biddings were absolutely correct so it does appear that each of those groups that did win will be awarded the contracts.

Dennis Bruce:

Yeah, and that’s interesting. You know, that gets me back to your question about the difference between Argentina and Brazil and one of the things that Corporation America who I did quite a bit of business with and they’ve been very active in airports, they started 15 years ago with airport privatization so that’s an area where there’s probably more on the Argentine side, there‘s more, let’s say, more knowledge of that airport development and renovation and the terminal activities and the commercial and operation exploitation than in Brazil and I think that’s being borne off by the fact that the Argentines have one (indistinct) construction in Brazil. I think that the ports, airports and roadways are an area that I think is also being addressed but where Argentina may have the slight advantage only because they started that privatization or that concession model earlier, so there they might have a little bit of more knowledge built up in that. But that’s still going to be a partnership agreement with a local Brazilian company, so it’s not going to be that the Argentines are doing this and Brazil is going to be the Argentines are doing this with Brazil in Brazil and likewise, Brazilian companies are partnering with Argentine companies in Argentina so it’s really – and despite of the some of the contentious nature of the business dealings and obviously the competitive nature of the countries they do, you know, and I think every day that goes by they’re working closer and closer together…

Tom Reaoch:

They are and I think that’s fair. I also see that from an American company’s standpoint looking and I think through you as what you’ve shown as a business person, they really do need to look at the southern cone. Not only the individual, not only Brazil or Argentina or Chile because there is so much happening amongst these countries and the interaction is real. So it’s coming to look at Brazil or coming to look at Argentina but you do have to look at both and again, look at Chile. Because business is just crossing back and forth so and there are opportunities for anything that anybody wants to do coming here. They have to look at basically these three countries at the same time.

Dennis Bruce:

And more and more, to that point are more and more – if you establish your company in Argentina and you can easily do business in Chile and Brazil and vice versa. You can establish a fund – especially with and maybe a little bit lesser with Chile because they’re not a full member of [America Sur] but if you are in Argentina, you can enjoy the same type of benefits that you would have if you were a company established in Brazil or Uruguay or Paraguay.

Tom Reaoch:

That’s true.

Dennis Bruce:

So, you can look at it as a region to a great extent. You still have to understand some of the idiosyncrasies and some of the local cultures. I mean, there’s no getting around that but the countries themselves are becoming more integrated. On their own they’re doing that and that’s a good thing, I think. I think the rest of the world should take notice. To be honest with you I think there’s a lot of attention and obviously for obvious reasons going to China and India and maybe other countries in Asia but Latin America and in particular the southern cone deserves the attention of the investors as well.

Tom Reaoch:

But, what is your major challenge in convincing foreign companies to come and look and see?

Dennis Bruce:

Well, I think there’s just so much focus these days on – well, I don’t know if these days is the right term or not. But, I think there’s just so much inward-looking focus, you know, just too much of this is my market, this is where I feel comfortable, this is where I think I should do business and these other opportunities that are more of an afterthought than anything else. There are problems. Obviously there are some barriers to getting products in to Argentina and in to Brazil, it isn’t – and I don’t want to use the term protectionism but I think I will use it because I think that there is some protectionism. It exists all over world.

Tom Reaoch:

Sure, even back and sometimes it’s difficult to get product into the States.

Dennis Bruce:

Absolutely.

Tom Reaoch:

I find it’s no piece of cake to export to the States either.

Dennis Bruce:

No, absolutely and like I said protectionism exists everywhere so to a certain extent, so I think that that’s something that would turn people off is it – you know, “I’m happy, I have a big market here why do I need to go somewhere else?”

Tom Reaoch:

Right.

Dennis Bruce:

I think that barrier, that mindset is slowly coming down, slowly. People are starting to see that they need to look beyond their borders. It’s a mindset issue more than anything else, it’s a comfort zone issue. I think that it will change as time goes on and it’s ironic but when you think about it because in the U.S. we tend to look at things as –we tend to be the promoter of world trade and international trade and open markets and this types of thing. But, you know many times we don’t practice what we preach.

Tom Reaoch:

And to get out and do it, yeah.

Dennis Bruce:

Exactly.

Tom Reaoch:

So, that is the challenge.

Dennis Bruce:

That is the challenge. It’s a mindset challenge. It’s a mindset challenge to step out of the comfort zone to say, “You know, we are going to go somewhere else.” We’re going to learn the language. We’re going to learn the culture. We’re going to get the right people on board. We’re going to get the people to help us to be players, you know, not just let’s say, provisional players, but to be long-term players. To get into markets and being in the markets and have a presence there and understand the markets and, you know, for the mutual benefit of all parties involved.

Tom Reaoch:

But you’d think now in what I’ve been reading and seeing, there seems to be a, let’s say you call an economic upswing in the States. Job creation seems to be coming back. The yearend sales seem to be upbeat. Do you think again, as you just mentioned, companies will start looking inward again thinking that things are becoming better and going to back to my local market?

Dennis Bruce:

Yeah. I think that’s going to be a challenge. I think that there’s going to be a tendency for that. When we talk to the U.S. Commercial Service, we always say in our business group and my company we say “Look, we would love to talk to the companies that want to export and are interested in doing it. So, we can educate them.” That’s the first thing that has to be done, educate.

Tom Reaoch:

Right.

Dennis Bruce:

And hopefully get them to raise their awareness of you can do this. It is possible. But you got to step out and you got to think a little bit out of the box and you’ve got to accept that challenge and I think it will be a very beneficial and a very profitable challenge if you do it the right way. The Commercial Service will come back to us and said, “You know, we get so many people,” and I think there is interest responding more specifically to your question that there is interest to go overseas. But, what we hear and what we experience at times is that companies just aren’t ready. Their processes aren’t ready. Their business model isn’t ready. It’s not suited to it so there is some internal mechanical [indistinct] talking about.

Tom Reaoch:

There are these issues.

Dennis Bruce:

Exactly.

Tom Reaoch:

Yeah, and many times I feel they don’t have persons really up to the plate right now to be able to go to bat for it.

Dennis Bruce:

Yeah.

Tom Reaoch:

So the internal export groups in many companies really don’t exist as they existed years ago.

Dennis Bruce:

Right, exactly. But I think it’s going to come down. I think it will come down and that we’re going to start looking at other markets and NAFTA’s obviously been good for exchange of goods and services between Mexico and the U.S. and some of these other bilateral agreements. Brazil and the U.S. have a bilateral agreement since 1994, I believe, and trade has gone up several 100% in that time between the countries. So those things have definitely help. Those bilateral agreements or regional agreements or inter-bloc agreements, I think those are going to…

Tom Reaoch:

No. They do.

Dennis Bruce:

Chile’s a good example of it where trade has grown considerably. Even Argentina who doesn’t have a bilateral trade agreements trade has grown, not as much as Chile. But I think these bilateral agreements and once trade barriers come down a little bit more, I think that that’s going to be a good impulse for U.S companies to do more business and the other countries as well to do business with the U.S.

Tom Reaoch:

It is both ways, I can see that even from the Brazilian standpoint this is part of what we’ve been seeing and one of the things that did change recently from the U.S. standpoint is opening up and making the visas more readily available because one of the things from the business standpoint here it was very difficult even for business persons, Brazilian business persons to get a visa to go to the United States.

Dennis Bruce:

Yeah.

Tom Reaoch:

So he says, “Why would I want to open a company in the States if I can’t even get there.”

Dennis Bruce:

Right.

Tom Reaoch:

So to have my persons back and forth, it’s difficult. So I see and I can see that changing and apparently a lot has been done very recently to reduce that and to favor the business – not only the businessperson but also tourism. Because you mentioned tourism to Argentina, Brazilian tourism in the United States is an economic factor there. People going not only to Florida but throughout the United States, going and spending money.

Dennis Bruce:

Yeah, and they spend a lot too.

Tom Reaoch:

They spend a lot of money. A lot of money.

Dennis Bruce:

They spend a lot of money. They do, they like coming here and they spend a lot of money and they enjoy themselves and it’s something we need to promote as opposed to put barriers up too, obviously. There are other things that are happening as well; I mean, with Brazil, I just read, I think it was yesterday, that there was a surcharge on Brazilian ethanol that’s been in effect for 20 years…

Tom Reaoch:

Right, that’s true.

Dennis Bruce:

…that was not renewed this year. That’s certainly good news because I think the U.S. has – obviously it’s been mandated to include ethanol in the petroleum mix and the gasoline mix here. Brazil has been doing that for, I don’t know, years I think. When I was there last year I talked to a gentleman who said that they were starting to produce ethanol in 1947 from sugarcane. So, Brazil has a long history of that and they do it quite well and they’ve had…

Tom Reaoch:

They have a lot of it. That’s true.

Dennis Bruce:

Yes, a lot of it. Yeah, exactly.

Tom Reaoch:

It’s not very good.

Dennis Bruce:

[indistinct] of events I guess that’s the way to sum it up.

Tom Reaoch:

It’s the process. That’s the process. Well, I think in that process we were looking forward to seeing you again here in Brazil and hope with some of your new opportunities and some of the companies that you have that are interested in coming that we’re able to meet again and then to share our experiences, okay?

Dennis Bruce:

Well yeah, tomorrow wouldn’t be soon enough to go, believe me. I‘d be ready, I’m ready to go any time and for sure you’ll be seeing me in Campinas before too long. I enjoyed our visit there and I want to thank you very much for your hospitality in Campinas and all your help during our visit last year.

Tom Reaoch:

Well, we hope to repeat that. Okay?

Dennis Bruce:

Yup, we will. We will repeat it.

Tom Reaoch:

Well, we want to thank you for being on this show. We’re coming to the end of our time today. But thanks again for sharing and taking part in Talk2Brazil.

Dennis Bruce:

It was my pleasure, Tom.