News from Brazil

Brazil Business & Econony News

In Brazil on June 17, 2011 at 9:10 am

ECONOMY

A report published earlier this year by AESC (Association of Executive Search Consultants), a follow-up study performed by Daselin Executive Search, and another released last month by Boyden World Corporation, all confirm one fact, that Brazilian executives earn more per year, on average, than their international counterparts. One major reason for this phenomenon, say all three firms: top level executives in Brazil are in extremely high demand (The Rio Times).

Brazil’s antitrust regulator postponed a ruling on the merger that created food processor Brasil Foods, opening the way for negotiations on an agreement that would allow the company to continue operating (Reuters).

Brazil’s state development bank, BNDES, will likely slash the average size of loans and slow the pace of disbursements this year to help finance smaller- and medium-sized companies, Fitch Ratings said (Reuters).

Economists lowered their forecast for Brazil’s benchmark inflation index this year to 6.19 percent from 6.22 percent previously, according to a weekly central bank survey (Reuters).

Brazil’s retail sales unexpectedly fell in April for the first time in a year, after higher fuel and food prices prompted consumers to buy less and Latin America’s biggest economy showed more signs of slowing (Bloomberg).

AVIATION

KLM has joined the growing list of carriers either launching or increasing services to Rio de Janeiro, with three-times weekly flights starting on November 1. The carrier last served the Brazilian city 12 years ago, but is resuming services ahead of Brazil’s hosting of the FIFA World Cup in 2014, and the 2016 Olympic games in Rio (BusinessTraveller).

Embraer faces a tough test at the Paris Air Show, as management seeks to offset worries over delays in the development of new commercial jets by capturing new orders. Analysts expect the team led by Chief Executive Frederico Curado to seal up to $1.5 billion in sales with Air Lease and Republic Airlines, and turn interest from Chinese, Colombian, Venezuelan and Indonesian carriers into firm orders (Reuters).

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BANKING

Banco do Brasil, Latin America’s biggest bank by assets, is considering buying lenders in Colombia, Peru and Chile to attract corporate clients and increase business with Brazilian companies in the region. Last month the bank announced the reopening of its branch in Montevideo, Uruguay (MercoPress).

BIOFUELS

A decision by the U.S. Senate in favor of an amendment that would end subsidies for the domestic ethanol industry and eliminate the tariff on imported ethanol is being lauded by the Brazilian Sugarcane Industry Association (UNICA) as a clear demonstration that there is overwhelming support for reforming U.S. ethanol policy. “It is an important step towards developing a global market for clean energy,” said UNICA’s Representative in Washington, Leticia Phillips (Unica).

Brazil’s national petroleum agency ANP unveiled detailed plans to tighten government regulation over the ethanol market, giving the sector a first glimpse of how the rules might affect supply and demand for the biofuels (Platts).

SPLIT SECOND POLL

OIL & GAS

Petrobras will boost exploration and production investments in its 2011-2015 business plan and delay some refining projects. The total outlays in the new plan will be close to the $224 billion in its 2010-2014 plan. The shift appeases investors who have fretted that the company is putting too much money into downstream projects that offer lower returns than producing oil (Reuters).

REAL ESTATE

Brazil’s federal government may invest 140 billion reais ($87.5 billion) by 2014 in a second round of its Minha Casa Minha Vida housing program, O Estado de S.Paulo newspaper reported (Bloomberg).

TELECOMS

Foxconn, the makers of the Apple iPhone and iPad got their wish when president Dilma Rousseff signed a provisional measure exempting tablet manufacturers from 9.25% in social security taxes and reduced the IPI industrial production tax from 15% to 3%. The law was made official on Monday.That measure paves the way for the Taipei listed Foxconn Technology  to invest a reported $12 billion in São Paulo state to build Apple products for the local and international markets, especially the Americas.  Foxconn has not confirmed investment talks, but government officials have (India-Brazil Chamber).
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