Speyside CEO interview with Brasil Econômico
Ian Herbison, CEO of Speyside - a company dedicated to helping foreign investors understand the Brazilian legal and legislative framework - believes the country still offers opportunity
In S?o Paulo in 2009, Speyside, a government relations consultancy, saw the opportunity to explore a country which was, at that time, very much on the world?s radar. The company?s CEO, Ian Herbison, has since been helping foreign investors interested in Brazil to understand the complexities of our legal, legislative and regulatory framework. In 2014, the situation has changed in which Brazil is no longer the favorite of international business magazines, though it is still an attractive option. ?The country offers opportunities because of its immense market size,? said the CEO.
What is foreign investor's perception of Brazil?
Brazil is one of the main destinations for Foreign Direct Investment (FDI), therefore it?s an ever-relevant opportunity.
What do those investors find most attractive about Brazil?
The country?s sheer market size and its emerging middle class continue to provide opportunities for investors. Partnerships created to explore natural resources, especially those related to oil, gas and mining, provide many opportunities as well. From a global perspective, Brazil is highly relevant in those segments. There is also significant interest in setting up factories to produce and sell inside Brazil. Lastly, there is the healthcare sector.
What are the concerns about Brazil?
They are faced with bureaucratic difficulties and some surprises, such as costs, including those related to labor. But they look at both sides of the coin: on one side, they are aware of the challenges awaiting them; on the other, they know that by understanding Brazil?s own particular system, they will be able to seize the opportunities. Part of our work is helping them overcome those difficulties.
When an investor seeks out your company, do they already have references on Brazil?
We usually deal with multinationals which inform themselves about Brazil through articles in major business newspapers, rating agency reports or other sources. As a result of those secondary sources, feelings may vary significantly. The Economist is a typical example: four years ago, this newspaper?s cover featured a picture of the statue of Christ the Redeemer ascending like a rocket from Rio de Janeiro?s Corcovado mountain, representing the country as a global power. Recently, the newspaper issued another cover, this time with the Christ statue plummeting to the ground: Brazil doesn?t seem so appealing anymore.
Is this where Speyside comes in?
Yes. We help them see that reality is somewhere in between those two extremes. Investors need to be reeducated regarding those perceptions. Our mission is to guide them through the subtleties of legislation and regulation. They come with some degree of knowledge, but may be unfamiliar to the peculiarities of each sector. Our consultancy helps them navigate this process.
Do the multinationals which already operate in the country also face difficulties?
In the case of multinational companies, one of the difficulties is that senior executives have to explain the details of Brazil to their headquarters. An example of this is the Brazilian Marco Civil Internet Rights Bill. Many companies were worried about the business implications of the Bill?s approval. Overseas, it seemed like the end of their business model. Executives here went through considerable trouble to explain that the reality was not so bad. That is what we do. We show that there are other ways to interpret and describe the situation on the ground.
Does the electoral process make things more difficult? Is there a preferred candidate, or does that not influence a company?s decision to invest?
The elections in Brazil certainly draw considerable interest, especially because people expect changes in relation to inflation and the low growth of the economy, whether the winner is Dilma (Rousseff) or another candidate. But the outcome of the election is not a determining factor of the intent to invest.
FDI has been stable since 2013. However investment by national companies has fallen significantly. Do foreigners trust the country because they do not know it?
The situation has less to do with Brazil than with the global crisis of 2008. Fortune 500 companies, for example, were forced to make some adjustments in terms of investment and growth projection. That happens all over the world. But we cannot deny there is a certain amount of anxiety over the macroeconomic situation and our own uncertainty about the future.
You are not Brazilian, but your job is to present Brazil to foreign investors. Why do they seek you?
If I were to do this on my own, being a foreigner, it would be disastrous. What?s relevant in this consultancy model is that most of our consultants are Brazilians with extensive experience in government relations, corporate and compliance issues, and all the particularities of Brazil. But it is important to have non-nationals on the team in order to put foreign investors in a context in which they can understand the language.
Have you been able to fully understand Brazil yet?
Not yet. But I will keep on trying.
As published in Brasil Economico