Brazil

Nowadays, Brazil is one of the most well positioned countries in the comity of nations. Its economy is strong, inflation is under control, its democracy is consolidated – and we live in a society where there are no ethnic or religious conflicts. The satisfactory situation of Brazil is known around the world.

However, some people may not know that the northeast region has a large number of entrepreneurial, economic and cultural initiatives never seen before. Benefitting from the good situation in Brazil, the northeast has been transformed by large infrastructure works. In addition, there is a renewal of its political cadres – more in tune with the current time. The northeast region is known, besides its natural beauty, by the hospitality that it gives to people from other regions and other countries. This feature makes it easily and pleasant to those who arrive to adapt.

Thus, the northeast, with its nine states, became the most likely region to receive a wide variety of investments, whether in the industrial, commercial or infrastructure sectors; in cultural or events areas. Those who quickly realised the benefits – either Brazilian or foreign investors – will be the first ones to take the opportunities it offers.

Therefore, Birchwood Stanhope decided to create a niche environment for investors to showcase the talents of Brazil. The objective is to show all the opportunities opening up in the region. Our firm provides the investor, the researcher and the scholar with a compendium of information about the northeast’s economy, in a language both technical and sophisticated – but clear enough to give tools to show the paths of a good deal.

This site lists the real asset areas best suited to receive investment; shows the profile of the different states with the MATOPIBA & Ceara region with their main economic, social and cultural information; lists the main bodies for the development promotion and laws to attract investments.

Birchwood Stanhope offer a unique, dedicated approach for those who want to take the great opportunity to invest in the region. At the same time it is vital for investors who want to know a little more closely the reality in the northeast; a region where there are the most unique and successful economic, social and cultural actions of Brazil

Brazil is the country that detains the most competitive combined position when analyzed through the scope of key economic variables: markets, resources, technology, logistics and capital. Using modern technologies, Brazilian professional farmers develop highly productive Low Carbon Agriculture, integrating agriculture, cattle and forest. 

Agribusiness in Brazil is a world in itself: 388 million hectares of agricultural soil, 16 times the size of the United Kingdom, placing it as the strongest performer worldwide in food production potential: a true food basket for the world.

If we just take into account the region known as MAPITOBA, there are 414.381 square kilometers (16% bigger than entire Germany) gathering the best agricultural soils from the new agribusiness frontiers in Northeast Brazilian states Maranhão, Píaui, Tocantins and Bahia.

Brazil leads the world market in seven of the main agribusiness commodities: soy, chicken, beef, cellulose, orange concentrate, sugar and coffee. It holds the biggest beef cattle herd in the world. The development level of agribusiness in Brazil represents the highest standards worldwide, holding the best productivity in Latin America and Caribbean with an average annual growth of 3.6%.

The efficiency of Brazilian agriculture shows easily: The agribusiness GDP accounts for one fifth of the Brazilian economy. In 2016, the estimated share of agribusiness in the Brazilian GDP was 21.46%.. Brazil also has the biggest water reserve in the world, representing 12% of the total fresh water available on earth.

This scenario has been attracting foreign investors into Brazil’s agribusiness. It is estimated, that in the last decade, Direct Foreign Investment stood for 27% of the total infrastructure/equipment in the farming sector.

MATOPIBA – Brazils new agriculture frontier According to the Brazilian Institute of Geography and Statistics – IBGE, in the territory there are 324 326 farms covering an area of 73,173,485 hectares.

Since 2000, the most competitive agriculture locations in Brazil have been moving further into the Northeast. This new area, called MATOPIBA as it touches 4 states Maranhão, Piauí, Tocantis and Bahia), already covers over 414.381 square kilometers with prime agricultural land (1.7 times larger than the entire United Kingdom) with 2,1million inhabitants (only 3,3% of UK population). The agribusiness production systems that show best performance are the ones dedicated to the production and processing of hardwood (African mahogany senegalensis, Guanandi, Piquiá), functional fruits açaí, graviola), high yield biomass feedstock elephant grass), protein (nelore cattle, sheep) and Starch (manioc, corn). Those are the production systems that we project, design, implement and manage. Besides Mapitoba states, another region stand out as the services capital of Northeast Brazil: Ceará state. Fortaleza, the capital, is already the 5th largest city in Brazil, with over 3 million habitants. Our office is located here, as well as our first farm (Caiçara farm, in Pentecoste municipality).

Most of the soy production in Brazil still comes from the so called “Soy Triangle” aligned between the state of Mato Grosso (MT), Mato Grosso do Sul (MS) and Goiás (GO). However, logistic constrains, the high price of land and the search for better areas have caused professional farmers to move up north towards the new agriculture frontier of Brazil: MAPITOBA states. Most of our projects are being developed in this area, focusing on achieving high capital growth as a consequence of the profitable agribusiness activities on itself and also because of the increasing value of land as a secure asset.

We are located at the newest and most promising Brazilian agricultural frontier: MATOPIBA (an acronym for the northeast states of Maranhão, Tocantins, Piauí and Bahia). Our farms are in Bahia and Ceará, the most developed states in this region.

The route to markets are ensured by main paved roads (BR 235 and PI 144) into high standard exporting ports: Itaqui Port in Maranhão, Pecém Port in Ceará, Suape Port in Pernambuco and Salvador Port in Bahia.

We are also in close range to several prime international airports (São Raimundo Nonato, Petrolina, Teresina; Fortaleza, Salvador, São Luís…) and railways (Transnordestina and Ferrovia Norte Sul).

BRAZIL COMPETITIVE ADVANTAGES ON KEY ECONOMIC VARIABLES

MARKETS

FOOD

Mapitoba farms experience the benefit of having access to several market exits, at different locations and scales. The capital city of Piaui – Teresina – holds approximately 1 million inhabitants, representing a sufficient demand market for food production systems (freeze dried fruits, protein from cattle and starch from manioc).

ENERGY

Bio-fuels. Regarding biomass global demand, we find, especially in Europe, an increasing pressure to use a higher proportion of energy coming from renewable sources and, at the same time, an increasingly more difficult scenario to produce biomasses for energy purposes because of environmental regulations and economic difficulties. Recent studies keep stating the key importance of liquid bio-fuels in the future: the use of bio-ethanol and biodiesel is expected to reach 30% of total fuel consumption in Brazil by 2050, even if we take into account the increase in the use of fossil fuels and electricity for transports across that period; especially after 2030, bio-fuels will take a stronger stand in fuel consumption in Brazil. (“Energy Revolution”, Greenpeace, August 2013). Brazil has the space, the regulation and the technology to supply biomass from high yield crops like Elephant Grass and Pongamia Pinnatta.

HARDWOOD

Noble hardwood consumption markets are spread all over Brazil and in foreign countries. Brazil is already experiencing what is known as a “forest blackout”, when there is not enough wood (either hardwood for furniture and construction or soft wood for energy generation) to attend Brazil ever growing demand.

RESOURCES

In Mapitoba areas, we found a high quality environment to perform high yield agriculture: plenty of rich deep soils with the adequate structure to develop our crops, along with good raining characteristics (between 1.000 mm and 1.200 mm per year) conjugated with one of the largest underground water reserve in the world (adequately extracted for crop irrigation).
Labor resources are available and benefit from adequate professional training in agriculture, forestry and cattle raising techniques.

TECHNOLOGY

The technology used in agricultural projects comes from independent be spoken institutions: EMBRAPA (the Brazilian Agricultural Research Company); Mudas Nobres (state of the art specialists in African Mahogany); Federal University of Piauí (highly recognized for its research performed over soil manipulation and conservancy); Netafim (the Israeli company specialized in irrigation turn-key solutions) and Massey Ferguson (worldwide relevant supplier of farm tractors and equipments.

LOGISTICS

Agribusiness projects (both in Ceará and Piauí states) benefit from a good location: either to receive supplies or to send products to different markets. In Ceará, we have a good road structure leading to the capital city Fortaleza (3 million inhabitants) and connecting with the major secondary cities (Sobral, Itapipoca, Juazeiro do Norte, Camocim…). Piauí road infrastructure reveals enough quality and keeps expanding along with GDP growth.

Export markets are within easy reach, through road, train (Transnordestina and North-South railways), ports (Itaqui Port in São Luís, Maranhão state; Pecém Port and Mucuripe Port both in Ceará state; Suape Port in Pernambuco state) and airplane (International airports at Ceará and Maranhão).

CAPITAL

We can debate over capital relating to two major dimensions: availability of capital to develop the projects and capital growth brought by the projects.

Capital to develop the suggested agribusiness projects derives from private sources (entrepreneurs and investors) and bank funding available in Brazil (Banco do Nordeste, Caixa Económica, Banco do Brasil, Superintendência de Desenvolvimento do Nordeste-SUDENE).

Capital growth happens in two ways: a) the land where farming projects are developed is expected to experience increase in value up to 6 times after the 2 first years (as a result of crop and infrastructure implanting); b) the projects are estimated to deliver an average Internal Rate of Return (IRR) over 15% with simplified Return On Investment (ROI) higher than 300%, in a common 15 years agricultural scenario.

Most of our projects are being developed in this area, focusing on achieving high capital growth as a consequence of the profitable agribusiness activities on itself and also because of the increasing value of land as a secure asset.

Birchwood Stanhope

In addition to investment opportunities we also design tailor-made investment solutions in the form of individual mandates or specific investment strategies and their implementation.

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