Guest post by Katherine Bante T’13
March 17: After a great week in Rio de Janeiro, the Tuck Brazil trek continued on to Sao Paulo. The difference between the cities is quite striking. What Sao Paulo lacks in natural beauty, it makes up for in a booming economy, nightlife, and traffic. Our group had the opportunity to visit a variety of firms covering financial services, private equity, manufacturing, retail, and consumer products. In Sao Paulo my favorite visits included the airplane manufacturer Embraer and the sugar and ethanol producer Cosan.
Embraer operates competitively within the small commercial plane (under 150 seats), executive jet, and defense aircraft markets. While Boeing and Airbus dominate the large commercial aircraft space, Embraer has carved a niche for its planes within the small commercial aircraft market along with the Canadian manufacturer Bombardier. Nearly 80 airlines operate Embraer planes and if you’ve flown on a regional carrier in the US chances are you’ve flown on an Embraer plane. Our group had the opportunity to discuss Embraer’s current operating position, its history, and the aircraft market as well as tour the manufacturing facility. It was fascinating to learn more about how planes are assembled and how a firm like Embraer manages their complex supply chain. On the day of our visit, planes in various states of assembly for Lufthansa, Alitalia, China Southern, Azul, Ukrainian Airways, AeroMexico, and Air France could be spotted.
A key crop in the Brazilian agricultural market is sugarcane. Cosan is a major player in the sugarcane market and converts its sugarcane into both ethanol and sugar. Unlike most of the world, the majority of Brazilian vehicles have “flex” engines which allow them to utilize any combination of ethanol and traditional fuel. Consequently, the ethanol market in Brazil is quite large and has the opportunity to grow further. Interestingly, while ethanol is produced in the US, American ethanol is corn-based and its production is far less efficient than sugarcane-based ethanol. Production of corn-based ethanol has also contributed to increases in global maize prices, a major food staple for many low-income countries. Cosan has 70,000 hectors of sugar cane and has grown to operate both the upstream production of sugarcane and the downstream logistics and distribution of final sugar and ethanol products.
Our group’s company visits in Rio and Sao Paulo, along with dinners with Tuck alumni in both cities, has given me an excellent introduction to Brazil. I only hope that my future career takes me back to Brazil!