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Production of Pet Products for the Third Largest Market in the World and Which is Still Structuring


Project No: #18229
Capital needed
USD 100,000
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Minimum investment per investor: 20000
Country: Paraguay
State: Asunción
Reason for needing Capital: Project Launch
Stage: Pre-Startup
Ideal Investor Role: Equity partner
Highlights: Brazil is the third largest Pet market in the world and its market has not yet matured like markets such as the US and Europe. Its productive chain is being structured.

On average, the growth of the Brazilian Pet Market is around 7% per year, and the Health niche grew 13% in the last year, almost twice the total market, showing a trend.

On average, the product Produced in Paraguay arrives in Brazil 35% to 40% cheaper than the products produced in Brazil.
What you offer to investors?: 40% of net income.

20% of the Brand.

Brazilian Pet Market

 

Brazil is
the 
third market in the world of Pet
products
,
behind only the U.S. and the U. K. In order to demonstrate that, I send the
link of the journalistic matter of "The Street", dated July 7 of
2016, titled 
"Brazil's Pet Market Shows
its Teeth"

(https://www.thestreet.com/story/13631330/1/brazil-s-pet-market-shows-its-teeth.html) - English.

 

The
Brazilian Pet Market moved by year:

 

2011 - US
$ 3.78 billion

2012 - US
$ 4.43 billion 

2014 - US
$ 5.22 billion

2015 - US
$ 5,62 billion

2016 - US
$ 6,00 billion

 

Amateur growth -
in a news by “Folha de São Paulo”, one of the most prestigious newspapers in
Brazil, entitled "Great Pet Shops Ignores Crises and Open New
Stores", dated February 10 of 2016, Mr. Rodrigo Albuquerque, Managing
Partner of 
Petland Brazil,
mentions:

"It's a market that grows amateurishly. Most of
the operations is commanded by veterinarians of technical profile, who is not
aware of retail, people management to professionalize the business".

(http://www1.folha.uol.com.br/mercado/2016/02/1738213-grandes-pet-shops-ignoram-crise-e-abrem-novas-lojas.shtml ) - Portuguese.

 

The sales
stores still work in a fragmented way, since in 2014 of the 33,500 stores only
5% belonged to large networks.

Currently in
Brazil, the Pet Market is larger than the "White Line" Market (such
as refrigerators and kitchen equipment).

 

 

Manufacture of Antiallergic Products for Pet

 

Create a Brand
of products that will be made with specific materials used to combat allergies.

 

Our strategy
is to present the Brand to the market as a health product, aimed at animals
that have health problems.

One of the
main causes of dog’s visits to veterinarians is allergy.

Some of the
most common factors that produce signs of allergy in the animal are contacts
with flea, tick, homemade powder, dust mites, fungi and yeast; There are also
other more unique agents like plant pollen and cleaning products.

(No Brands
were found for animals with allergies in the Brazilian Market - products were
found but no Brands with this focus were found).

 

The biggest
growth niche of the Brazilian Pet Market is animal health, which, driven by the
advance of technology, projected growth of 13% in 2016, almost double the pet
market as a whole (7%).

This
growth is explained by the change of the behavior of the
owners with their pets
, currently the animals are treated as
members of the family, much as a consequence of the animals now living inside
the houses. To give you an idea, 43% of the owners allow pets to sleep in their
beds.

"As they climb on the couch, sleep in the bedroom and share the
environment with the children, they are better cared for by their owners. The
attitude, once curative, has become preventive"
,
says Gustavo Moraes, business director of the Pet unit of MSD Animal Health,
which last year earned US $ 180 million in Brazil.

 

 

Set Up a Factory

 

For production
of products to Brazilian Pet Market, the best place would be in the Country of
Paraguay.

 

Last year I
had a meeting with the First Consul of Paraguay in São Paulo city and I
realized that production in Paraguay is very advantageous - on average, the
product Produced in Paraguay arrives in Brazil 35% to 40% cheaper than the
products produced in Brazil.

 

The best place
would be Paraguay because of the Paraguayan Maquila Law  and the difference in labor legislation in
each country (Paraguay and Brazil), and both country are part of MERCOSUL, a
Latin American trade agreement.

 

Mercosul:

 

The Common
Market of the South, better known as Mercosul, is an integration project
founded by Brazil with Argentina, Paraguay and Uruguay on March 26, 1991, with
the signing of the Treaty of Asunción, and has as its current objectives:

 

The free
movement of goods and services through the elimination of customs duties and
non-tariff restrictions on the movement of goods;

The
establishment of a common external tariff and the adoption of a common trade
policy in relation to other States, and the coordination of positions in
regional and international trade and economic forums;

The commitment
of participating States to harmonize their laws to strengthen the integration
process

 

To know more
about the Mercosul, visit: 
http://www.mercosul.gov.br -
Portuguese.

 

 

Maquila Project:

 

The MAQUILA
Project is a Law instituted by Paraguay, whose purpose is the generation of
employment and income in the Paraguayan territory by means of differential tax
treatment, destined to encourage industrial enterprises to be installed in the
country.

The first
operations that used MAQUILA was in the middle of 2001.

 

Benefits:

 

SINGLE TRIBUTE
OF 1%: to be applied on the value added to the product within the Paraguayan
territory.

VAT RECOVERY
(Goods and Services Circulation Tax): Maquiladoras are exempt from VAT and can
recover the VAT related to the purchase of goods and services in the form of
Tax Credits.

SUSPENSION OF
TAXES AND IMPORT TAX: Maquila allows companies to import raw materials,
machinery and the necessary inputs with the suspension of taxes and import tax.

 

To know more
about the Maquila Law, visit: 
http://www.maquila.org.py/ -
Spanish.
 


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