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SWISSCAM Panel – How are the main Swiss companies preparing for the economic recovery?

02/Oct/2020 - Webinar

On October 15, SWISSCAM offered a unique opportunity by organizing an online panel with 8 leaders from the main Swiss companies present in Brazil. The event aimed to discuss strategies for economic recovery, after a year as challenging as that of 2020.

The panel was opened by the President of SWISSCAM, Henrique Philip Schneider and by the Ambassador of Switzerland to Brazil, Andrea Semadeni. The Ambassador gave a brief overview of the situation in Switzerland, according to him, it is estimated a drop of 3.8% in GDP, a more encouraging figure, since the previous expectation was for a drop of 6.2%. However, he was concerned about the beginning of the “second wave” of the pandemic on the European continent. Andrea Semadeni also thanked Swiss companies in Brazil, which played an important social role in making several donations for the fight against COVID-19.

Before the start of the panel, we had a presentation by the economist at Pezco, Helcio Takeda. He brought data on the impacts of the pandemic in each sector of the economy and talked about the prospects for the future. Clearly, the sectors most affected were those that depend on the flow of people, such as: air, logistics, leisure and tourism, which include hotels, restaurants, bars, among other services. On the other hand, the durable goods sector grew: “People who did not have their incomes impacted managed to save money, as they did not spend on leisure. A lot of people ended up buying furniture, appliances, building materials and other home improvements.” Still according to the economist, the agricultural, financial and real estate sectors remained firm and were not impacted. For the future, Helcio affirms that it is important that the government be careful with public accounts, continue with the reformist agenda and make adjustments so that the real is not so devalued. “We see a positive horizon, with a 4.2% drop in GDP in 2020, but a strong recovery in 2021, with an expected increase of more than 3% of GDP.

Elber Justo, President of the MSC Mediterranean Shipping Company, was the first to speak on the panel and shared with us that the cargo transportation sector did not stop during the crisis, as Brazil exported a lot, taking advantage of the high dollar and the high demand from China. “Brazil had a great opportunity and took advantage of this space in global trade. While the whole world stopped producing, Brazil met this demand with our agricultural products. Many loaded ships left Brazil. Now these ships are empty waiting for the increase in Brazilian imports to return.” Elber also spoke about the future challenges for Brazil. “Now, with the pandemic more under control, other countries are starting to produce and export again. We will no longer have the abundant space we used to have, we will have competitors and that is worrying for the resumption.”

The elevators industry also does not seem to have felt the impact of the crisis, on the contrary, Flavio Silva, President of Elevadores Atlas Schindler, said that the company took advantage of the momentum of the real estate sector. “In August 2019, 6,300 units were delivered to Brazil, while in August this year, 8,000 units were delivered. The interest rate below 2% stimulated the purchase of new properties.” Flavio also said that elevator maintenance was considered essential during the pandemic and Atlas Schindler employees worked normally during this period.

Miguel Díaz, CFO of Nestlé Brasil, pointed out that the pandemic generated a change in behavior in society, as the Brazilian started to eat at home. “Families ended up allocating most of their budget to food expenses, and emergency aid drove this trend even further. However, this high demand also brought problems and challenges for the company. We saw a greater demand for dairy products, for example, but part of fresh milk in Brazil is imported and the price went up excessively, so we had to deal with these adversities.” Miguel also commented that when cooking at home the Brazilians started to better observe what they eat and to enjoy cooking with their family. “We had an increase in sales of products that consumers consider healthy and of the vegan line. We also sell more food-boosting products to the elderly, who looked for ways to increase their immunity during the pandemic.”

Monica Vassimon, President of Clariant Latin America, showed how in a single company the crisis can have an uneven impact. Clariant is a chemical company that serves different industries and therefore ended up having variations. “We had greater resilience in the personal hygiene, home cleaning and paint sector. But, we know that the increase of paints, for example, is something punctual and will not be maintained. Other sectors were also stable, such as production of edible oils and mining. However, we had problems in the sector of production of automotive chemical materials and in the production and exploration of oil. The oil fields were stopped and there was not so much demand for fuel either.” Monica believes that the recovery will not be quick and recalled that Brazil is trying to recover from previous crises.

Renato Carvalho, President of Novartis Brasil, represented the health sector, the most requested during the pandemic. According to him, Novartis had to act quickly to invest in research on treatments against COVID-19 and also in setting up field hospitals. “This pandemic has shown that one health problem is enough for the entire economy to be impacted. I believe that health will now be a priority issue. I also see that the health sector should undergo a rapid digitalization process going forward. An example of this is telemedicine, its implementation had been discussed for a long time, but there were doubts about the practice. With the pandemic, the use of telemedicine was instantaneous.” Renato was concerned, because due to the pandemic, many people did not perform their periodic examinations. “Unfortunately, today we have patients who are sick and don’t know. That bill will come later, the later the diagnosis, the more seriously ill we will have and consequently more costs as well. The financial cut planned by the government at the Ministry of Health is worrying, especially at a time like this when SUS services will be used more.”

Roberto Hernandez, Executive Director Commercial Insurance, Corporate Life & Pensions at Zurich Seguros showed that moments of crisis are also moments of opportunity. “We took all the projects for 2021 and 2022 out of the drawer and put them into practice in 2020. It was time to accelerate strategies, rather than change strategies. We invest in technological advances. We created new digital communication portals with clients, such as the online inspection and claim service option and we also offer courses to train and help brokers from all over Brazil.” Roberto also said that small companies suffered the most, so it was necessary to negotiate with these entrepreneurs so as not to lose customers.

The airline industry, represented by Lufthansa Group’s Senior Director for South America, Tom Maes, was by far the hardest hit. The losses were enormous and the resumption seems to be far from happening. According to Tom, the forecast is that the sector will only recover in 2026. “We had a huge drop in revenue, but we have fixed costs of 500 million euros, even with the planes stopped. To make matters worse, the ticket refund period will end next year and we will have to take more money out of the cash register. ” The big challenge for the sector is to recover the confidence of passengers, Lufthansa has been taking all the necessary measures to make people feel safe, but Tom asks for help from governments. “It is necessary to unify safety rules in order to have basic travel conditions. Air companies are having to adapt to the rules of each country.” The company’s big bet is that the recovery in tourism will be reflected in ticket sales. “We will offer more tourist offers, we will even increase flights between São Paulo and Zurich. Corporate travel is not our focus right now.”

The last guest to speak was Valdemar Fischer, Syngenta’s General Manager for Latin America. The agricultural sector is experiencing a completely different scenario, the rise in commodity prices and the rising dollar boosted business. “We didn’t stop at any time, on the contrary, we worked even harder, because we were afraid at the beginning of the pandemic that there would be a problem with supply in the country. This problem did not happen and we were able to feed people during the pandemic. Brazil broke this year’s record for the largest planted area.” For Valdemar, with the pandemic, people started to give more value to the agricultural sector and Syngenta realized the importance of continuing to innovate. “We have to keep innovating in order to offer quality, sustainable products at low prices.”

In this very challenging moment in which we live, it was very important to hear the ideas, opinions and experiences of our guests. Congratulations to everyone for their efforts to adapt and innovate in a crisis scenario like this. Members who have lost the online panel can access the recording in the restricted area of ​​the website.