News from Brazil

Brazil Business & Economic News

In Brazil on March 25, 2011 at 11:08 am

ECONOMY

While some data point to a cooling in Brazil’s economy from its surge last year, economists say the tight labor market and high consumer prices could keep pressure on the central bank to raise interest rates yet more this year (Reuters).

Brazil’s unemployment rate rose in February for the second straight month as policy makers took steps to cool economic growth (Bloomberg).

Brazil’s government plans to cut taxes on domestically manufactured tablet computers as part of a new industrial policy aimed at boosting production of high-end consumer technology goods, Communications Minister Paulo Bernardo said (Bloomberg).

AGRI-PECU & BIOFUELS

The Brazilian Development Bank (BNDES) and the Research and Projects Financier (Finep) signed a Technical Cooperation Agreement to carry out the Joint Plan for Supporting Industrial Technological Innovation in the Sugar-based Energy and Chemical Sectors (PAISS) (BNDES).

Odebrecht TransPort – in association with Petrobras, Camargo Corrêa, Cosan Açúcar e Álcool, Copersucar and Uniduto Logística – will design, build and operate starting in 2012, a multi-mode logistics system consisting of a network of multiple-use pipelines extending approximately 1,900 km integrated with the Tietê-Paraná Waterway. The system will allow for the long distance transportation and storage of clear fuels, primarily ethanol – a R$ 6 billion business (Odebrecht).

JBS, the world’s largest beef producer, said it would focus on organic growth in 2011 rather than acquisitions as it consolidates on its buying spree of recent years (Reuters).

Sugar output in Brazil, the world’s largest producer, may be delayed by soaring ethanol prices and above-average rainfall, according to broker and researcher Kingsman SA (Bloomberg).

AUTOMOTIVE

The Brazilian unit of Ford Motor Co filed a criminal lawsuit against the local management of rival Nissan Motor Co for airing a TV commercial that says the U.S. automaker charges customers too much for hatchback models (Reuters).

GP Investments, the largest Latin American buyout firm, agreed to buy a controlling stake in Brazilian stolen car recovery company Sascar Tecnologia for 168 million reais ($101 million), to tap growth in the nation’s buoyant consumer services market (Reuters).

AVIATION

Embraer and ABC Financial Leasing Co., Ltd., a wholly owned subsidiary of Agricultural Bank of China, signed a Memorandum of Understanding on aircraft financing and leasing. The agreement is designed to create new financing opportunities for Embraer to sell aircraft in China and other markets, with a focus on the development of China’s regional, executive, and agricultural aviation. The agreement could come to as much as US$ 1.5 billion over the next five years (Embraer).

Embraer and Alitalia have finalized an agreement for the delivery of 15 EMBRAER 175 and 5 EMBRAER 190 jets through a lease structure to be arranged by third parties (Embraer).

Embraer delivered the first EMBRAER 175 jet to Oman Air. The aircraft will serve the airline’s regional routes operating from Muscat International Airport. The deal was originally announced in November 2009 and includes firm orders for five EMBRAER 175s, plus options for another five aircraft (Embraer).

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BANKING

Brazil’s government announced management changes at state-run lender Caixa Economica Federal at a time policymakers are seeking to implement curbs on lending (Reuters).

Bradesco Asset Management Ltd., Brazil’s third-largest money manager, plans to hire 25 people this year to meet growing foreign demand for local stocks and bonds (Bloomberg).

Banco Bradesco SA is confident it will succeed in buying a stake in Carrefour SA’s financial unit in Brazil, the Financial Times reported, citing Luiz Carlos Trabuco, the Brazilian bank’s chief executive officer (Bloomberg).

MINING & STEEL

Speculation is once again bubbling up that Brazil’s government wants more direct control of Vale SA to focus the mining giant’s vast financial muscle on industrial development and job-creation within Brazil (Foxnews).

Brazil’s biggest maker of steel products for the auto and construction industries, Gerdau SA, plans to sell as much as 4.2 billion Real (2.5 billion USD) of stock, boosting speculation that it has plans to buy a stake in a Brazilian rival, most probably Usiminas (Mercopress).

OIL

Petrobras can “easily” double its 15 billion barrels of proven oil reserves in four to five years, Chief Executive Officer Jose Sergio Gabrielli said (Bloomberg).

TELECOMS

Spain’s Telefonica will invest 24.3 billion reais (US$14.6 billion) in Brazil in the 2011-2014 period, an increase of 52 percent over the prior four years, to tap surging demand for telecommunications services in Latin America’s biggest economy (Reuters).

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