News from Brazil

Brazil Business & Economy News

In Brazil on May 20, 2011 at 8:44 am

ECONOMY

Economists lowered their forecast for Brazil’s benchmark inflation index this year to 6.31 percent from 6.33 percent, according to a weekly central bank survey (Reuters).

Brazil’s federal tax collection reached a record-high of 85.1 billion reais (52.8 billion U.S. dollars) in April, up 19 percent from March and 10.3 percent from the same period last year, the country’s Federal Revenues Secretariat said (Xinhua).

AGRI ETC

Brazilian farmers are spending like never before on farm equipment, fertilizer and other investments, a possible sea change in rural sentiment that could boost long-term output in a country that barely scratches the surface of its agricultural potential (Reuters).

U.S. diversified food company Sara Lee, which controls 22 percent of Brazil’s retail coffee market, is in talks to buy Marata, a local producer of coffee and beverages (Reuters).

The investment holding company of Brazil state development bank BNDES will raise its stake in local beef producer JBS to 30 percent from 17 percent with the conversion of debentures to shares, a source with direct knowledge of the situation told Reuters.

AVIATION

A Brazilian federal judge sentenced two American pilots involved in a fatal air crash over the Amazon rain forest in 2006 to community service (New York Times).

Embraer and Comlux The Aviation Group announced a contract for the acquisition of three large Legacy 650 executive jets for the Fly Comlux Division, in Kazakhstan. The agreement was revealed at the 11th Annual European Business Aviation Convention & Exhibition, EBACE 2011 (www.ebace.aero), in Geneva, Switzerland, and includes options for another four aircraft. The total value of the deal, at list price, comes to USD 90.7 million, and could reach USD 211.7 million, if all options are confirmed. The first delivery is scheduled for the fourth quarter of 2011 (Embraer).

Embraer SA’s E-190 jets, flown by carriers including US Airways Group Inc., need more frequent inspections after tests turned up cracks that may indicate a structural flaw, Brazil’s aviation authority said (Bloomberg).

SPLIT SECOND POLL

BANKING & FINANCE

The BNDES’ disbursements totaled R$ 24.9 billion during the first quarter of this year, with a 2% decrease compared to the same period in 2010. Although small, this was the first reduction in disbursements registered since 2006, taking only first quarters into consideration (BNDES).

Caixa Economica Federal, Brazil’s biggest mortgage lender, is in talks to boost its stake in Cielo to at least 10 percent to expand in the lucrative card payment processing market, a source with direct knowledge of the situation told Reuters.

Banco do Brasil SA may add three funds in by August to invest in the fields of water, renewable energy and homebuilding, said head of the bank’s asset management arm Carlos Massaru (Bloomberg).

A Brazilian investment fund worth $24 million has attracted wealthy investors as the value of auctions of the country’s art grows by as much as 38 percent a year (Bloomberg).

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MINING & STEEL

Vale informs that its Board of Directors approved the nomination of Murilo Pinto de Oliveira Ferreira to succeed Roger Agnelli as Vale’s Chief Executive Officer (CEO), starting on May 22, 2011, at the conclusion of Mr. Agnelli’s term (Vale).

This month, Vale opened its first nickel operation in Brazil. Onça Puma, in Ourilândia do Norte, southeast Pará, is one of the largest ferronickel production plants in the world. The project, which covers the municipalities of Ourilândia do Norte, Tucumã and Parauapebas, has an annual production capacity of 220,000 tons of ferronickel, containing 53,000 tons of nickel, a highly valued product in the steel industry (Vale).

OIL & GAS

A group of Brazilian banks and funds have created a company called Sete Brasil that will build seven deep-water rigs for state-run oil company Petrobras’ offshore exploration campaign (Reuters).

Petrobras likely will choose a less ambitious investment plan than management proposed, sources said, a move that should boost profits and put the brakes on excessive borrowing (Reuters).

Petrobras in the first quarter quickened the pace of drilling in the offshore Santos Basin, Chief Financial Officer Almir Barbassa said, as the firm seeks to speed up development of ultra-deep water reserves (Reuters).

TELECOMS

SK Telecom Co. may win a permit to operate services in Brazil, the nation’s communications minister said, as South Korea’s largest mobile-phone company seeks to expand abroad (Bloomberg).

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