News from Brazil

Business & Economy

In Brazil on November 19, 2010 at 12:05 pm

ECONOMY

Brazil spends a paltry 1.1% of its GDP on research and development compared with 1.4% in China and 3.4% in Japan. Last year Brazil fell 18 places in Insead’s annual innovation index, from 50th to 68th. Worse still, its ratio of basic-product to manufactured-product exports was the highest since 1978. These figures confront Brazilians with a troubling question. Can their country become an innovator in its own right, or is its recent growth little more than a by-product of China’s appetite for commodities? Read on at The Economist.

Importers face new barriers in Brazil. Customs valuation is the most recent measure Brazil has taken to, quietly, contain the flood of imports. The government wants to escape from the label of “protectionist” and has been avoiding to simply raise import tariffs. The country resorted to other strategies, more sophisticated, which produce the same effect (India-Brazil Chamber).

International investors have pulled the plug on 6 billion reais (US$3.5 billion) in Brazilian timber investments after the Attorney General issued a finding limiting foreign investments in land (Reuters).

AVIATION

Embraer and China’s AVIC International Leasing Co., Ltd. (AVIC Leasing), jointly announced the signing of a Memorandum of Understanding on aircraft financing and leasing during the press conference held today at the eighth China International Aviation & Aerospace Exhibition, in the city of Zhuhai, Guangdong Province, China. The agreement could come to as much as US$ 1.5 billion over the next five years (Embraer, pdf).

In line with the expansion of China’s aviation market and economic development, Embraer forecasts a total demand of 950 new regional jets over the next 20 years, consisting of 20 for 30-60 seats, 425 for 61-90 seats, and 505 for 91-120 seats (Embraer, pdf).

TAM is the most profitable airline company in Latin America and the United States (Xinhua).

BIOFUELS

BP has bid 800 million reais ($466 million) for a 50 percent stake in Brazil’s Cerradinho sugar and ethanol group (Reuters).

Clear definitions of the remaining sustainability criteria for biofuels entering Europe will allow the sugarcane industry in Brazil to develop comprehensive certification schemes that fully meet European requirements. The position was detailed by the Brazilian Sugarcane Industry Association (UNICA) at a roundtable on Moving towards the implementation of sustainable criteria for biofuels, which took place in Brussels on November 16, organised by Brazil’s mission to the European Communities (UNICA).

BANKING

For a central banker to boast of the discovery that a bank he supervises has been overstating its assets, probably for years, it takes some chutzpah. But that is how Henrique Meirelles, the governor of Brazil’s Central Bank, presents a 2.5 billion reais ($1.5 billion) hole in the accounts of Banco PanAmericano, a medium-sized lender. He may even be justified (The Economist).

Banco BMG, the Brazilian lender specialized in consumer loans, has “a great chance” of taking over rival Banco PanAmericano, which last week received an emergency capital injection engineered by the central bank (Reuters).

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HOTELS

Marriott International Inc. plans to boost its hotel count in Brazil to 54 from four. The company will develop 50 Fairfield by Marriott hotels throughout Brazil in a partnership with Rio de Janeiro-based real estate developer PDG Realty SA Empreendimentos & Participacoes (Bloomberg).

MINING

Vale said it will launch an offer to pay up to $3.3 million to buy outstanding common shares of a fertilizer company it bought part of earlier this year (Reuters).

Vale said it plans to invest more than C$10 billion ($9.8 billion) in Canada over five years to increase metals and fertilizer output (Bloomberg).

OIL

The state of Rio de Janeiro has asked the nation’s top court to declare the unconstitutionality of state oil company’s Petrobras oil-for-shares swap with the Brazilian government (Reuters).

Petrobras’ CFO Almir Barbassa

Petrobras could sell off foreign refining assets as it seeks to focus on Brazil’s giant offshore crude reserves (Reuters).

Petrobras expects crude oil exports to rise to 800,000 barrels per day by 2020 as new oil production from vast offshore fields comes online (Reuters).

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