News from Brazil

Business & Economy

In Brazil on January 28, 2011 at 10:05 am

ECONOMY

Brazil’s economy will likely slow this year compared with 2010’s robust growth, but doubts remain whether the new administration’s fiscal and monetary policies will slow it growth enough to keep inflation under control, said a panel of emerging-markets strategists (Nasdaq).

Where does a senior manager cost most? Brazil, according to the Association of Executive Search Consultants (AESC), a trade body (The Economist).

Brazil remains an attractive market for foreign investment, especially for companies seeking to expand their customer base in the country and the surrounding region, according to a survey from KPMG LLP, the U.S. audit, tax and advisory firm (PR Newswire).

Over the past two years, sales of commodities to India increased nearly fivefold, from US$ 370 million in 2008 to US$ 1.74 billion in 2010. The main targets of the indians were the oil and sugar, but the outlook is positive for other products like chicken beef (India-Brazil Chamber).

Brazil’s booming economy registered record low unemployment in 2010 as a strengthening economy created jobs. The rate fell to a record low in 2010, as the country’s economy records the fastest growth since 1985 (Mercopress).

Over 100 top executives and business leaders gathered together in New York City yesterday morning to attend a special breakfast seminar entitled “Brazil: Economic and Political Outlook for 2011” (Brazilian-American Chamber).

Brazil’s current account deficit nearly doubled in 2010 as a buoyant economy and a rising currency boosted imports and strengthened Brazilian purchasing power abroad. Latin America’s largest economy ran a record current account deficit of $47.52 billion in 2010, up from $24.30 billion in 2009 (Reuters).

AGRI

With rapidly growing consumption, top coffee producer Brazil could overtake the United States as the world’s biggest drinker of the beverage in 2012, Brazil’s coffee industry said (Reuters).

JBS SA gave up efforts to raise financing for a Sara Lee Corp. takeover bid, making a spinoff of Sara Lee’s coffee business more likely (Bloomberg).

AVIATION

Brazil’s largest airline, TAM Linhas Aereas, said it expects growth in demand for domestic flights to slow to 15 percent to 18 percent in 2011, but to remain supported by robust tourist and business travel (Reuters).

BANKING & FINANCE

The BNDES’ disbursements reached R$ 168.4 billion in 2010, a 23% increase when compared to the previous year. The result takes into consideration Petrobras’ R$ 24.7 billion capitalization operation. When this operation – a one-off and non-recurring – is not considered, the Bank’s disbursements ended last year at R$ 143.7 billion, a 5% increase when compared to 2009, growth which is compatible with previously made projections (BNDES).

Banco PanAmericano, the Brazilian bank that received an emergency capital injection late last year, will need additional funds to shore up its balance sheet after auditors found more losses, O Estado de S.Paulo newspaper said (Reuters).

Eike Batista is undaunted after his companies lost $7.6 billion of market value in four months and had the biggest flop in Brazil’s initial public offering market since 2008, the billionaire’s investment chief says (Bloomberg).

Banco Bradesco and Citibank have shown interest in buying Banco PanAmericano (Reuters).

Banco do Brasil SA expects its credit- and debit-card business to have a 15 percent share of the market in Brazil within 5 years, President Aldemir Bendine said (Bloomberg).

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INVESTMENT

AkzoNobel has signaled its strategic intent to accelerate growth by investing close to €90 million in a new facility being built in Brazil. The plant, operated by the company’s Pulp and Paper Chemicals business, Eka Chemicals, will supply the world’s largest pulp mill (Reuters).

Nissan Motor Co plans to expand its production line in Brazil or build an entire new factory to meet rising demand for compact cars in the country, O Estado de S.Paulo newspaper reported (Reuters).

BG Group Plc will invest $10 billion in Brazil in ten years to boost output and buy platforms in a partnership with state-run Petrobras (Bloomberg).

MINING & STEEL

Brazil’s recently sworn in government, is concerned about increasing foreign interests in its mining assets and is looking in to the possibility of restricting foreign purchases of mines  (Mercopress).

CSN, Brazil’s largest diversified steelmaking group, boosted its stake in rival Usiminas and said that further purchases could take place, fanning speculation about a possible tie-up between the companies (Reuters).

Heavy rains over recent weeks have interrupted miner Vale’s shipments of 600,000 tonnes of iron ore from Brazil and 500,000 tonnes of coal from Australia (Reuters).

Eike Batista, through his AUX Canada Acquisition Inc, is offering C$12.63 a share for the 80 percent of Ventana (a Canadian goldminer) stock he does not already hold (Reuters).

OIL

Petrobras has taken a step up to third place in the PFC Energy 50, ranking and listing the biggest energy companies in the world based on capital value. Petrobras ended December 2010 at US$ 228.9 billion, relegating Shell and Chevron to fourth and fifth places (BW).

Norwegian oilfield services group Subsea 7 said it had won two contracts from Petrobras for activities offshore Brazil (Reuters).

Petrobras said it found light crude in an deep-water well in the Santos basin, underscoring the potential for new reserves in the so-called subsalt region beneath the ocean floor (Reuters).

Anadarko Petroleum Corp., a U.S. oil producer that has seven exploration blocks in Brazil, found signs of crude in an offshore well below a layer of salt in the the Atlantic Ocean (Bloomberg).

REAL ESTATE

Brazil overtakes China and has the most promising housing market between emerging markets (India-Brazil Chamber).

TELECOMS

Portugal Telecom signed the necessary contracts to seal the purchase of a 22.38 percent minimum direct and indirect stake in Brazil’s main fixed-line phone carrier Oi for 8.32 billion reais ($4.98 billion) (Reuters).

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