News from Brazil

Brazil Business & Economy News

In Brazil on August 19, 2011 at 10:19 am


Brazil’s long boom appears to be over. After several dynamic years that saw it earn a reputation among some Western investors as “the near China,” Brazil now looks to be downshifting into a pattern of economic growth of around 3 percent to 4 percent for the foreseeable future (Reuters).

Following are a selection of the promising and the not-so-promising parts of Latin America’s largest economy at Reuters.

Brazil’s Federal program of tax incentives for micro and small businesses, Simples Nacional or Super Simples, is close to raising its threshold to increases the number of participants. The plans were launched last week by President Dilma Rousseff and are expected to be passed quickly through congress. The Super Simples system involves monthly tax and social security payments being collected through a single document thus reducing bureaucracy in order to simplify the process for businesses, hence the name (The Rio Times).

Former Brazilian president Lula da Silva blasted the developed countries lack of political initiative to face the economic crisis and suggested they adopt a strategy similar to Brazil’s (Mercopress).

According to experts, Brazil’s disproportionately high logistics costs, which are estimated to be as much as twenty percent of the country’s GDP (twice as high as in OECD countries) represent a significant threat to Brazil’s continued economic development (The Rio Times).

The BNDES registered net income of R$ 5.3 billion in the first half of 2011. This is equivalent to an increase of 47.8% compared to that in the first half of 2010, which totaled R$ 3.6 billion. This is the highest income earned by the institution in the first half of any year (BNDES).

Economists have been revising down their forecasts for Brazilian economic growth this year amid both a weaker global economy and local factors such as inflation, labour market and government expenditure (Mercopress).

R&I Japan agency last week upgraded Brazil’s credit rating from BBB- to BBB, the second notch in investment grade level, with stable outlook (Mercopress).


A racket that allowed nearly 300 Brazilian firms to evade 1 billion reais ($625 million) in taxes was dismantled. “Operation Alchemy” involved arrests, searches and asset seizures in 18 of Brazil’s 27 states, Federal Police said (Latin American Herald Tribune).

Import licenses are a primordial step when planning on importing to Brazil and as they are issued through Siscomex, The Brazil Business decided to write an article about this instrument (The Brazil Business).

Chery Automobile Co., China’s biggest auto exporter, may see “insignificant” profit margins for the next decade in Brazil, where the company is attempting to triple market share by 2015, said Luis Curi, the chief executive officer for the Brazilian unit (Bloomberg).

SN Power, a hydropower project developer majority-owned by the Norwegian utility Statkraft AS, bought 41 percent of Desenvix SA for $440 million to expand its Brazilian operations (Bloomberg).


Petrobras Biocombustível and Grupo São Martinho, through Nova Fronteira, announces an investment plan worth US$520.7 million aimed at expanding the milling capacity of the Boa Vista plant to 8 million tons of sugarcane from the 2014/2015 season. The unit is located in the municipality of Quirinópolis in Goiás  (BW).

The agricultural and industrial phases of sugar and ethanol production in a Brazilian sugarcane processing mill were closely watched by the Business Director of the Brazilian Export Promotion Agency – Apex Brasil, Rogerio Bellini and the Executive Manager of the Brazilian Business Affairs (BBA) office, Rui Faria Cunha (pictured). BBA is a joint office between Apex-Brasil and the Brazilian National Confederation of Industry (CNI), set up to follow European regulations and trends that could affect Brazilian exports, as well as represent and support Brazilian industry in the European Union. “Anyone wishing to learn more about the sugarcane industry in Brazil will quickly conclude that ethanol is sustainably produced and does not cause deforestation in the Amazon,” said Cunha (Unica).

Bunge will invest $2.5 billion to boost its sugar and bioenergy capacity in Brazil through 2016, the company said. The investments will go into eight of the group’s mills and will expand crushing capacity by 50 percent from present levels to 30 million tonnes a year of cane (Reuters).

The Mozambique government is providing large tracts of land at a symbolic price to Brazilian farmers to produce soy, maize and cotton, Mozambique’s agriculture minister, José Pacheco told Brazilian newspaper Folha de Sao Paulo (Mercopress).


Chilean airline LAN’s takeover of Brazil’s TAM Linhas Aereas could be complete by the end of this year, chief operating officer Ignacio Cueto said (Reuters).


Can Brazil build the massive infrastructure it needs to host the Olympics and the World Cup? Andrew Zimbalist looks thoroughly at Brazil’s long To-Do List (Americas Quarterly).


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The Brazilian IT market has gone from strength to strength in the last few years. The sector is forecast to grow more than 10% in 2011, with revenues exceeding $182bn by year-end, up from $165.5bn generated in 2010, according to IT trade body Brasscom. However, does Brazil have enough people to cater for current and future demand? In the second part of the IT’s Brazil series, IT Decisions provides a summary on the shortage of skilled IT professionals in Brazil.

Brazil registered the sale of 3.86 million computers in the second quarter of 2011, according to the Brazil Quarterly PC Tracker study, released by consulting company IDC Brazil (Xinhua).


Will Petrobras become the world’s largest company? Petrobras reported record-breaking and better-than-expected net profit of $ 6.86 billion in the second quarter of this year, an increase of 31.9% over the same period in 2010.  In the same comparison, EBITDA rose by 4%, to $ 20.25 billion, and net income grew 12% to $73 billion (Forbes).

OSX Brasil SA, the Brazilian oil services company controlled by billionaire Eike Batista, expects to add 14 more floating production vessels to its fleet as Batista’s company develops South American oilfields (Bloomberg).


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