A
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(1) Agriculture, forestry, logging; (2) trade; (3) parts and accessories for motor vehicles; (4) financial intermediation and insurance; (5) transportation, storage, and postal services; (6) other services |
Financial incentive strategy: campaign donation; personal services |
(1) Reforestation sector |
Origin of this diversification was a government initiative to develop the region through tax incentives. Group A was the first group to diversify in this region |
Origin: Government; Number of sectors: 6; Specific political tactics: absent; Historical relationship: absent.
rnOp
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(2) Seaport |
Business group started this diversification due to the need to export timber. In 2009 group asked for government support in the form of a long-term cooperation. Project was financed by a public pension fund - PREVI, with cheap credit. Group received R$ 750 million in support from the federal government. Moreover, local government backed the project by improving local infrastructure. |
Origin: business group; Number of sectors: 6; specific political tactics: long-term cooperation contract; historical relationship: absent.
rnoP
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B
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(1) Textile; (2) clothes and accessories; (3) agriculture, forestry, and logging; (4) electricity and gas; (5) construction; (6) real-estate services; (7) financial intermediation and insurance; (8) services to companies |
Financial incentive strategy: campaign donation; personal services; information strategy: ex-politician on group's board |
(3) Energy sector |
Group has a strong historical relationship with government. It is the largest group in the sample. In 2001, Brazilian economy had grown less than expected due to electricity rationing. Due to a personal relationship, group diversified into the energy sector. Government originated this diversification, by choosing the group for a program to stimulate electricity generation, which gave the group access to natural gas for 20 years, at low prices. |
Origin government; Number of sectors: 8; specific political tactics: absent; historical relationship: present.
RNOp
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(9) Internationalization of the textile sector and entry into retail |
The origin of this diversification was the group's interest for growing. Entry in the U.S. market took place through a partnership with a local manufacturer. The group was supported in this effort by cheap credit from BNDES-Exim, which provided U$ 40 million for a distribution center in that country. Business group participates in Brazil-USA CEOs' forum, which facilitated relationships and business development in that country. |
Origin: business group; number of sectors: 8; specific political tactics: lobbying; historical relationship: present
RNoP
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(14) Factory in the Northeast of Brazil |
The origin of this diversification was the group's owner, and his business partner was a congressman. They asked for SUDENE's support to build the factory. In 1967, SUDENE and Minas Gerais Development Bank (BDMG) granted a loan of U$ 22.5 million of the 30 million needed |
Origin: business group; Number of sectors: 8 sectors; specific political tactics: lobbying and personal relationship; historical relationship: present
RNoP
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(15) Factory in the Northeast of Brazil |
The government, through BNDES, was the origin of this expansion. The group had personal relationships with politicians. In 1983, BNDES invited the group to take over the assets of a company that had gone bankrupt. This expansion was supported by SUDENE, BDMG and Northeast tax incentives. |
Origin: government; number of sectors: 8; specific political tactics: absent; historical relationship: present
RNOp
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|
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(16) Clothing and accessories |
The origin of this diversification was the local government. The governor of one of the states in the Northeast of Brazil donated land to the group in an inner city of the state to build the new factory. |
Origin: government; number of sectors: 8; specific political tactics: absent; historical relationship: present
RNOp
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C
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(1) Energy and gas; (2) pulp and paper; (3) financial intermediation and insurance; (4) chemical; (5) transportation, storage, and postal services; and (6) services to business |
Financial Incentive Strategy: campaign donation; personal services; |
(4) Energy sector |
One of the largest groups in the sample. Origin of this diversification was the group's interest in the energy sector. The group signed a long-term cooperation agreement with the government, and received investments and tax benefits. |
Origin: business group; number of sectors: 6; specific political tactics: long-term cooperation contract; historical relationship: present
Rnop
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(5) Chemical sector |
The origin of this diversification was the federal government. Group had a partnership with other companies of the sector and BNDESPar, in a project to create an industrial pole in the Southeast of Brazil. Another group, controlled by the federal government, offered R$ 2.7 billion to buy the group's chemical arm (valued at R$ 1 billion) and got it |
Origin: government; number of sectors: 6; specific political tactics: absent; historical relationship: present
RnOp
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(12) Cellulose pulp factory in the Northeast of Brazil |
The origin of this expansion was the group, which developed a relationship with federal and local governments to stimulate growth. There were family relationships between firm and state government, and a long-term contract was signed; state government offered special conditions for building the factory in the state |
Origin: business group; number of sectors: 6; specific political tactics: lobbying; personal relationship; long-term contract; historical relationship: present
RnoP
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(11) Pulp factory in the Northeast of Brazil |
A joint venture with BNDES. The origin of this expansion event was the business group; BNDES holds 27% of the preferential shares in one of the group companies; a long-term contract was signed with state government, which offered special conditions for building the factory in the state. This expansion received federal tax incentives with a 75% exemption of income tax |
Origin: business group; number of sectors: 6; specific political tactics: shareholding agreement with government; long-term contract; personal relationship; historical relationship: present
RnoP
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D
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(1) Rubber and plastic; (2) parts and accessories for motor vehicles; (3) trade; (4) maintenance and repair of machinery; (5) chemicals; and (6) trucks and buses |
Financial incentive strategy: campaign donation; personal services |
(6) Financial sector |
The origin of this diversification was the group, which opened a bank to finance its final customers. In order to get credit approval from BNDES, the group started to act as a direct representative of the bank in the market. |
Origin: business group; number of sectors: 6; specific political tactics: joint-venture with state-owned firm; long-term contract; historical relationship: absent
rnoP
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(8) Internationalization to Egypt |
The origin of this expansion was the group's interest in internationalization. Group approached federal government through an industry association, thus developing a relationship, which led to financial support from BNDES. |
Origin: business group; number of sectors: 6; specific political tactics: lobbying; historical relationship: absent
rnoP
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(10) Portfolio product |
The origin of this expansion was the group. It developed a relationship with the federal government, through an industry association and a personal relationship, which lobbied the government to convince it t to acquire a customized product for serving the rural population. Group was supported by BNDES, which financed the program, and received tax incentives and exemptions. |
Origin: business group; number of sectors: 6; specific political tactics: lobbying; personal relationship; historical relationship: absent
rnoP
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E
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(1) Machinery and equipment, including maintenance and repairs; (2) trade; (3) transport; (4) financial intermediation and insurance; (5) information services; (6) services to businesses; (7) repair and maintenance services; and (8) electronic material and communication equipment |
Financial incentive strategy: campaign donation; personal services; information strategy: ex-politician on the group's board |
(7) Electronic and communication equipment |
Business group, one of the largest in our sample, has a strong historical relationship with the government. Group entered the satellite industry through a joint venture with a state-owned firm. The origin of this diversification was the federal government's National Program for Space Activities, through a direct request for a project that developed a geostationary satellite. |
Origin: government; number of sectors: 8; specific political tactics: joint-venture with state-owned firm; historical relationship: present
RNOP
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(17) Equipment and machinery |
Business group entered the submarine sector through partnership with a small Brazilian enterprise with expertise in nuclear generation of electricity. This enabled the group to participate in a Brazilian Navy project. The origin of this diversification was the government. |
Origin: government; number of sectors: 8; specific political tactics: absent historical relationship: present
RNOp
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F
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(1) Perfumery, hygiene, and cleaning; (2) transport; (3) information services; and (4) agriculture, forestry, and extractive |
Information strategy: lobbying |
(16) Expansion: increased product portfolio through the opening of two factories in the North of Brazil |
The origin of this expansion was the business group. It approached federal and local governments, built relationships with politicians to enable the project, and developed public policies in the region; received tax exemption and benefits, along with permits from environmental authorities. Through a long-term contract, the group got tax reductions for all of the factories' products. |
Origin: business group; number of sectors: 4; specific political tactics: lobbying; long-term contract; historical relationship: absent
rnoP
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