The Brazilian government, with its stability issues, is not expected to make large-scale investments in the short term, but the private sector is expected to boost investment as the economy recovers.
The Brazilian government, with its stability issues, is not expected to make large-scale investments in the short term, but the private sector is expected to boost investment as the economy recovers. Helping this are several initiatives to privatize certain public sectors. Some media reports suggest that the government is planning massive privatization plan that could boost productivity and bring an end to the recession.
“While we expect low investment from Brazil’s government this year and, therefore, less public projects, we expect private sector to grow and increase investments as economy recovers,” said Sara Amorim Costa, Regional Manager at
VIVOTEK. “An important reform of Brazil’s economy is the trend towards privatization of state-owned companies which can potentially attract investments that can be beneficial to us.”
José López Martin, Senior VP for Americas at
IndigoVision agreed to this, adding that the market could bounce back by next year. “The program for privatization and the investments in law enforcement are the governing actions to change this scenario,” said Martin. “The market will return to present robust growth rates by second half of 2017.”
Jose Garcia, Marketing Director for Hikvision Latam at
Hikvision Digital Technology also indicated the company sees private projects as the key demand generator.
“We also expect some vertical markets to generate demand over the next years, such as the recently privatized highways and public transportation,” Garcia said. “We are currently experiencing growth in the education vertical market as well.”
Small and Medium Businesses and Residential
Expectations of large-scale privatizations aside, there are some segments that are currently seeing movement despite the overall gloom. These are the small and medium businesses (SMB) and the residential sector.
Oswaldo Lafee, Marketing Director for Latin America at Hanwha Techwin America said that SMBs and the residential are the only part of the security market that is currently seeing some traction.
“It pretty much may be the only market available right now for the security industry,” Lafee said. “Everything else is very slow.”
Neilor Pedroso, Director of the Brazilian distributor SC Technology too added that while large projects seem to have disappeared, the small projects for residential and businesses are still running.
This has prompted local manufacturers to focus more on this segment as well. “Mainly the low end security is strong in Brazil,” said Bruno Gouvea, Director of Giga Security. “Like the rest of the countries in BRICS, Brazil is also a very low end culture. People go for budget, so small medium systems and with budget costs, that’s the area stronger in Brazil now.”
A Market with Strong Potential
The Brazilian market is weak at the moment, but clearly it has the potential to bounce back. And that is precisely what we can expect from it in the coming months. Industry players across the board agree that by next year the market would begin to pick up.
“The market has a great future, it is quite strong,” said Renan Antoniolli, Manager of the local manufacturer intelbras, acknowledging the difficulties that currently exist.
However, this might be more in the private sector than in the public sector, as the political uncertainties could keep government investments on hold for some more time.