The company intends to follow a double-digit growth rate in the coming years. What the company calls “intersections” between different industries should drive this growth as the company looks at the country with optimism due to a promising availability of renewable energy, agribusiness and technology.
This year, partner-president Marco Castro was reappointed to the position for a new cycle of five years. “What we have noticed is that the world is changing, the challenges have increased, geopolitical themes that influence the market today in a different way than last year”, says the executive in an interview with InfoMoney no evento Zoox Data Revolution.
He says that the company is being prepared for this scenario, with decisions that place it at what he calls “intersections of the opportunities we see at the moment” to double the size of the company in the next five years.
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These “intersections” would be points at which traditionally separate industries mix. An example given by Castro is the emergence of a hospital network resulting from the combination of a large bank, an insurance company and a technology company to compete with a traditional company in the segment. “We don’t know where the next competitor will come from.”
Castro explains that the tax reform has already become important for the company — which, among its main businesses, operates in tax auditing. The change in the regime that begins its transition next year has caused, the executive explains, an overlapping of two environments.
“It opens up an opportunity that we focus on. Some of our people participated in the design of this new tax model and this has been a huge opportunity for us”, he says.
Read the full interview with Marco Castro below.
InfoMoney: This year you took on your second term as head of PwC Brasil with the aim of following the strong growth pace of recent years. How have these first months been?
Marco Castro: We have been practically six months into this new cycle that begins for another five years. What we have noticed is that the world is changing, challenges have increased, geopolitical themes that influence the market today in a different way than last year. We are preparing PwC to act in this scenario, making decisions that place us at the intersection of the opportunities we see at this moment. The expectation is to double the size of the firm in the next five years.
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I would say that we managed to guarantee that this year should be a year of strong growth. We imagine, at least, two digits compared to the previous year. There are some sectors that are performing better in our economy and we have the opportunity and luck to work with them.
IM: Where are these intersections you mention?
MC: Traditionally the industries were separate: agricultural, financial, health sectors. Now they are reconfiguring themselves. What we noticed is that they are creating these intersections and it is not known, for example, where the next competitor for a large hospital network will come from, which could arise from the combination of a large bank with a large insurance company and someone with very powerful technology seeking to operate in a healthcare environment.
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Agribusiness will go through this transformation in a very marked way. Many people from the financial sector will form partnerships to boost agro, technology people creating solutions and innovation for the sector. Several industry solutions will be applied to security, stability, development and the productivity that agribusiness needs.
IM: The tax reform will begin to be implemented gradually from next year. Does the simplification of the system have any impact on the tax audit area for PwC?
MC: In fact, we are working hard to prepare companies for this new tax system, it is a flagship for our tax area. We know that technology is an important element, which is why the consulting and technology areas are developing this in partnership with a series of clients.
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We know that, in fact, it is a transition that does not come all at once. We will have to live at some point with two tax environments, while the legacy is gradually being deactivated for the new one to enter. It opens up an opportunity that we focus on. Some of our people participated in the design of this new tax model and this has been a huge opportunity for us.
IM: Should the reform initially generate a spike in costs for companies and then reduce it?
MC: We see this clearly. It’s not enough to double the structure, but it has to be expanded, bringing in new elements that in the near future will bring a big gain, because it incorporates a lot of technology.
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IM: Despite the geopolitical issues, recent weeks have been positive in Brazil in some aspects: the Ibovespa rose again, the prospect of falling interest rates. Do you see an IPO window approaching?
MC: More than a glimpse, we hope this happens, because companies need it — there are four years without an IPO and follow-on cases are rare. Companies need resources to invest in technology and new industrial parks.
One belief we have at PwC Brasil is that the country has a combination of factors that puts it in such a privileged position at this moment, that it is impossible not to believe that we will have a growth boom, at least in the short and medium term. We are promising in renewable energy, a very powerful agribusiness. We know that the world needs things that Brazil has.
Technology is a huge area of progress as well. Zoox [empresa de dados que promoveu o evento onde a entrevista foi feita] is a Brazilian company that has technology that is competitive with many others out there. So, Brazil has many opportunities. It is natural to see this growth occur gradually, as there are regulatory difficulties and the political environment, creating pressure and caution.
IM: And what are the big themes that PwC has its eye on in the coming years? There’s tax reform, of course, but what else will be important to unlock value?
MC: We look closely at agribusiness, it continues to be a very promising environment, and we imagine that it is in a process of consolidation and sophistication, expanding innovation. It is likely to have a lot of international investment.
Infrastructure needs to be adjusted in Brazil, and it is now becoming a problem for the world, not just for Brazil, because as the world depends on food and other Brazilian products, investment in basic infrastructure needs to be made.
The energy theme is clearly an area of expansion, and along with this comes investment in technology, the data centers in Brazil, and which will cause important growth.
