News from Brazil

Brazil Business & Economic News

In Brazil on March 11, 2011 at 10:40 am

ECONOMY

Brazil’s archaic labour laws penalise businesses and workers alike. Time for reform (The Economist).

The release of last year’s economic figures on March 3rd was cue for much crowing in Brazil. The economy grew by a blistering 7.5%, a rate unmatched since 1986. But is Brazil now the 5th or 7th largest economy in the world (The Economist)?

The inflow of US dollars to Brazil so far this year (Jan-March 4) marks a surplus of 24.3 billion USD over outflows, which helped to further appreciate the Brazilian Real, according to the latest figures released by the Central Bank (MercoPress).

Retail prices in Brazil, as measured by the benchmark IPCA index, rose 0.8% in February, down from 0.83% January, the national statistics agency said (MercoPress).

Canada lost its top ranking to Brazil this year on Forbes magazine’s list of the number of billionaires each country boasts in the Americas outside the United States, the magazine said in its annual richest-people edition (Brazilian-American Chamber).

Emerging markets face a “definitive danger” from accelerating inflation and should resist the temptation to impose capital controls to stem currency gains, said Arminio Fraga, the head of Brazil’s stock exchange and a former central bank president (Bloomberg).

AUTOMOTIVE

Volkswagen Brazil continues with its plans to develop a car that will be cheaper than the Gol model. According to the Volkswagen Brazil CEO, Thomas Schmall, the price would be around R$ 23,000 (US$ 13,500). The executive, however, didn’t give an estimate of when will it be launched (India-Brazil Chamber).

AGRIPECU

Italian dairy producer Parmalat, seeking to fend off a takeover by a bigger rival, is holding merger talks with Brazilian peer Lacteos Brasil in a deal valued at up to 2.5 billion euros ($3.4 billion), two Brazilian newspapers reported (Reuters).

JBS, the world’s largest beef processor, said that it terminated a joint venture with Italy’s Cremonini after years of wrangling over the partnership (Reuters).

AVIATION

India and Brazil signed a bilateral air services agreement (ASA), based on the liberal ICAO template, which paves the way for increased air-connectivity between the two countries. According to the agreement, both the countries would now be entitled to designate any number of airlines. The designated airlines of each side are entitled to operate 21 services/week in each direction with any type of aircraft not exceeding the capacity of B-747 aircraft (RTT News).

Delta Air Lines is open for more joint ventures and would like to be stronger in India and Brazil in particular (Reuters).

BANKING

Citigroup may hire veteran dealmaker Andre Kok to head its investment banking unit in Brazil. Brazil-born Kok stepped down from Itau BBA last August and recently completed the period when he was prohibited from going to work for an Itau BBA rival, according to the IFR (Reuters).

Banco Santander Brasil SA plans to expand its team of 122 private bankers by as much as 20 percent this year as Brazil’s economic growth fuels demand for wealth- management services (Bloomberg).

Bradesco is the favourite to take a stake in the local banking arm of French retailer Carrefour, a business magazine reported (Reuters).

POWER

Brazil’s state development bank BNDES will buy up to 600 million reais ($361 million) in convertible notes of the Eike Batista owned power producer MPX, which is seeking capital to boost production of fossil fuels (Reuters).

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MINING & STEEL

Vale, the world’s largest iron ore producer, could be forced to pay up to 3.9 billion reais ($2.4 billion) in back royalties to the Brazilian government, the newspaper Folha de S. Paulo said (Reuters).

Cia. Siderurgica Nacional plans to boost its investment in the Brazilian state of Minas Gerais to 15 billion reais ($9 billion) over the next few years, Valor Economico said, citing the state government and the company (Bloomberg).

OIL & GAS

Galp Energia SGPS SA (GALP), a Portuguese oil company, is studying the sale of assets in Brazil to raise as much as 3 billion euros, Jornal de Negocios reported (Bloomberg).

Petrobras received an environmental license to transport natural gas from Brazil’s largest oil field, paving the way for the state-run producer to boost output from the deep-water deposit (Bloomberg).

RETAIL

Havaianas, the Brazilian flip-flop maker part of Sao Paulo Alpargatas SA, is planning to further expand into Europe this year, opening shops in London, Paris, Rome and Lisbon, the Independent on Sunday reported (Bloomberg).

TELECOMS

Brazil’s Oi will invest as much as 6 billion reais ($3.6 billion) this year to expand network and services, compared with 3.1 billion reais in 2010, Chief Financial Officer Alex Zornig said (Reuters).

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