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Business

1Challenges is the name of the game

Canada and Brazil, the stages of the world’s largest sports events in coming years, foster the participation of private initiative in different sectors, in addition to encouraging the exchange of knowledge and investment between the two countries

Paula Monteiro 

On the 12th of February 2010, the Olympic pyre will be lit in Vancouver, the capital city of British Columbia, inaugurating the Olympic and Paralympic Winter Games. For 17 days, the world will watch not only the athletes’ performance, but also see the outcome of the investments made by Canada in infrastructure. According to a report by PricewaterhouseCoopers (PwC), prior to the event, the federal and provincial governments destined C$ 525 million to the sector, while groups and companies invested C$ 600 million in other projects.

While Vancouver now experiences the expectations of the games’ inauguration, in Toronto, the capital city of Ontario, the atmosphere is that of planning. Elected to host the 2015 Pan American Games, the city is preparing itself – in the words of mayor David Miller, soon after the announcement – to “realize the best games in history”, with funds forecasted at US$ 2.5 billion, including six spaces, such as the cycling and aquatic centers. However, not only in Canada do opportunities lie in sectors related to the world’s largest sports events. Like Canada, Brazil is leaving behind the phase of commemorations and sketching strategies for the realization of the 2014 World Cup and the 2016 Olympic Games, in Rio de Janeiro, further encouraging the exchange of experiences and generating business between the two countries.

Studies conducted by the Brazilian Ministry of Sports identify civil construction, real estate, oil and gas, services and transportation as the most likely sectors to benefit from the events. Of the R$ 28.8 billion earmarked for the Olympics, R$ 23.2 billion will be invested in services and projects for the population and the sport”, says Orlando Silva de Jesus Júnior, the Minister of Sport, referring to the revamping of the Galeão airport, the expansion and revamping of the metro system, the depolluting of rivers and canals and the building of BRT (Bus Rapid Transit) lanes. “The Olympic Games are expected to impact GDP in a magnitude of R$ 22 billion by 2016, with growth in direct and indirect jobs of 120,800 per year”, adds the minister.
1According to the minister, the games will affect GDP even after they end, in a magnitude projected at R$ 27 billion in the period from 2017 to 2027. In order for these numbers to materialize, the federal government ranks the challenges ahead - – initially, for the 2014 World Cup –, in transportation, ports, airports, telecommunications, hospitality services and public security. For private initiative, the best opportunities are in the hotel industry, in building/revamping stadiums, in commerce, energy, and others. “Brazil is one of the main tourist destinations in the world, which warrants interest in investing in the country. The 2014 World Cup and the 2016 Olympics allow consolidating our presence in a scenario pointing to increasing occupation rates”, states Roland de Bonadona, CEO of Accor Hospitality in Latin America.

Public security – For Edgar Jabbour, public sector industry leader at Deloitte, the size of sites and the degree to which they will participate in the event’s most important activities will dictate the magnitude of each investment. “São Paulo, Rio de Janeiro and Belo Horizonte may have more significant demand in comparison with other regions, which will require more diversified funds, but lesser amounts”, states Jabbour. In turn, Maurício Girardello, a partner at PwC, considers urban mobility one of the greatest challenges for cities to be structured to host the World Cup. “Public security also requires the attention of the authorities”, in his assessment. Girardello argues that even localities that will not host any of the events should invest in infrastructure to attract tourists.

To internationally reinforce the image of an emerging country will certainly foster public-private partnerships (PPPs). “We have been contacted by entrepreneurs interested in investing both in stadiums and equipment, in the hotel industry and in transportation”, reveals Orlando Silva. World Sports – a company that offers technology for sports lawns – is one of the countries waiting for tenders to come out to start work in the stadiums. “We believe the revamping of the lawns will begin in 2012, in time for the 2013 Confederations Cup”, says Roberto Junqueira Gomide, president of World Sports. “Since most of the fields in Rio Janeiro will have the works completed by the time of the Olympics, we will spend the time doing maintenance”, adds the executive, assessing that this segment alone will use up some R$ 100 million.

1Seeking to facilitate rooters’ locomotion, construction company Mendes Júnior currently is dedicated to infrastructure projects. “In Brasília, we worked on the implementation of the LRV – Light Rail Vehicle and the revamping of the Taguatinga Park road”, tells Sérgio Cunha Mendes, the company’s market vice-president. According to him, the purpose of the LRV, which will operate on a 22-kilometer stretch, is to optimize access to the Juscelino Kubitschek airport, the hotel and commercial districts and the Mané Garrincha stadium.

In São Paulo, work is being concentrated on batch 6 of the Metro’s line 2, which will allow the transportation of more than 500,000 new passengers/day, and on the works of the Tamanduateí station, which will integrate the train with the Metro system in São Paulo. The modernization of line A of CPTM – Metropolitan Transportation Company of São Paulo, is another project in progress. “We studied opportunities in other World Cup host cities, in the areas of logistics, commercial, residential and sports complexes”, explains Victório Duque Semionato, executive director of engineering at Mendes Júnior, who estimates initial funds in the magnitude of R$ 6 billion.

Worldwide experience – To meet demand in the air travel sector during the World Cup is one of the targets of Trip Linhas Aéreas. “We intend to double the current fleet to total 63 aircraft, with total investments of about US$ 1 billion”, tells Evaristo Mascarenhas de Paula, the sales and marketing director. The company decided to increase the number of flights to the Northeast. “Our expectation for 2014 is to fly to more than 110 towns with 500 flights per day”, emphasizes Mascarenhas.

Apart from structures in transportation and stadiums, events of the caliber of the World Cup and the Olympic Games generate opportunities in telecommunications. For Telium Networks, the announcement of the World Cup already generated business. “We serve the Architecture and Engineering Trade Entity for which we host the 2014 World Cup portal, tells Fabio Ferragi, product manager.

“Investments in IT and communications (ITC) are expected to reach respectively 5% and 10% of the global amount allocated to the events”, assesses Nelson Wortsman, digital convergence director of BRASSCOM – Brazilian IT and Communication Companies Association. Currently, the entity is inviting international corporations with experience in similar events to contribute to the projects. “This includes segments in which the country lags behind, such as broad band”, he says. For the Olympic Games, the prospect is a more complex scenario since the objective for 2016 is to have a totally digital TV system implemented. “The ITC infrastructure will be a legacy for the country after the events”.

Like the other sectors, the promotional area is preparing to meet demand in coming years. Holding Clube – which congregates six companies linked to events and brand activation – develops communication actions for soccer events. “We orient clients in creating products and directing promotional marketing”, explains the operations director Alessandro Sophia, emphasizing that the requests associated with the World Cup will involve the entire group.

Intermediating corporate interests in sports, Golden Goal intends to use its know how about events, consulting services for clubs and federations, projects developed under the fiscal incentive program or corporate sponsorship/hospitality, to generate new business. “Since 2006, we have used the cabins of Maracanã stadium as a means for companies to entertain their clients and commercial partners”, emphasizes Mauro Corrêa, partner of Golden Goal, mentioning companies such as Souza Cruz, Xerox and Schincariol. “Since 2008, we have also performed in managing cabins in the João Havelange stadium, one of the sites used in the 2007 Pan-American Games in Rio”.

The legal structuring of projects and protection of public and private investments in cities that will host the games is one of the concerns of the Demarest e Almeida law firm, which set up a group of partners and attorneys to provide multi-disciplinary assistance. “Legal services include company incorporations and the obtainment of operation permits, taking part in public tenders, fiscal and corporate bookkeeping, and project-related environmental issues”, explains Tatiana Campello Lopes, one of the firm’s partners, exemplifying some of the services provides. According to partner Bruno de Luca Drago, the segments expected to be in high demand are the hotel and tourism industries, civil construction and adjacent fields – such as cement, steel and sanitation – the transportation industry and the port and airport sectors, media and technology and even language schools.

Translation to English: BeKom Comunicação Internacional

Strategic planning

With investment opportunities in several sectors, Brazil is getting ready for the 2014 World Cup, as shown by the following projected amounts

R$ 33 billion or more are expected to be invested in structural works in São Paulo until 2014

R$ 3.6 billion in funds are expected to be loaned by BNDES for building/revamping stadiums in which the games will be played

R$ 5 billion is the amount expected to be loaned by BNDES for urban mobility projects in the 12 host cities

R$ 2.4 billion is the amount forecasted for the high-speed transportation corridor (LRV) that will link the municipalities around Salvador

R$ 500 million is the amount to be allocated to 14 projects for the revamping of the port area of Rio de Janeiro

R$ 430 million is the amount forecasted for revamping the Maracanã stadium in Rio de Janeiro

R$ 780 million is the amount forecasted for the first stretch of the LRV in Brasília

R$ 1.5 billion is the amount under consideration for the “Cup City” program in Pernambuco

R$ 600 million is the amount set aside by the government of the Federal District to build a new stadium to replace the current Mané Garrincha stadium

Symbols of the sport

Inspired by ocean waves, snow and mountain scenery of regions of British Columbia, the 615 medals of the Olympic Games and the 399 of the Paralympic Games that will be handed out to athletes in Vancouver, in 2010, are a creation of Canadian artist of indigenous ancestry, Corrine Hunt. With a round shape and a design that associates with the image of a killer whale (Olympics) and a raven (Paralympics), the Games’ most important symbol was developed using melted computer circuit boards. Recycling the material valued recovering gold, silver and bronze metals. Details on the pieces are burnt in with laser and each cut is unique, making each piece a distinct one.


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