News from Brazil

Brazil Business & Economy News

In Brazil on October 7, 2011 at 11:23 am

ECONOMY

Brazil is set to import more from China than ever in 2011, with total imports from the country amounting to US$21 billion so far this year, an increase of 35 percent, figures from Brazil’s Ministry of Development, Industry and Commerce (MDIC) show (The Rio Times).

JPMorgan Chase & Co.  cut its forecast for Brazil’s economic growth and said it expects the central bank to cut interest rates more than it previously expected as global financial turmoil weighs on confidenc. Latin America’s biggest economy should grow 2.3 percent in the second half of the year, less than a 3.1 percent forecast made in August (Bloomberg).

Brazilian production feels the impact of cheap imports and global slowdown. Output at Brazil’s mines and factories slowed in August, falling a seasonally adjusted 0.2% from July as production in the country’s industrial sector suffered the impact of cheap imports and the sluggish global economy (MercoPress).

The 16 percent depreciation of Brazil’s real in September is likely to boost the value of companies’ foreign revenue, but weigh on businesses with large unhedged debts in U.S. dollars (Reuters).

Brazil registered a trade surplus of 23 billion U.S. dollars in the first nine months of 2011, up 81.4 percent from the same period last year, the country’s Development, Industry and Trade Ministry announced (Xinhua).

Brazil’s deindustrialization might be gradually reversed due to the recent appreciation of the U.S. dollar, lower domestic interest rates and a better fiscal situation (Xinhua).

BUSINESS

This article in The Brazil Business will give an overview of insolvency issues in Brazil and of how it affects economy and becomes a threat to the current credit bubble that has made the country grow.

Both H.E. Ambassador to the Royal Kingdom of Belgium and Grand Duchy of Luxembourg André Mattoso Maia Amado and the Head of the Mission of Brazil to the European Union H.E. Ambassador Ricardo Neiva Tavares will participate in the Trade and Investment Opportunities seminar, with Special Focus on Brazilian Tax Compliance & Planning on November 7th at the Bozar in Brussels.

Deere & Co, one of the world’s biggest heavy equipment producers, will build two plants in Brazil to meet demand from construction and infrastructure projects, Chief Executive Samuel Allen said (Reuters).

SBM Offshore of Rotterdam, the Netherlands, announced it has signed a Shareholders’ Agreement with Naval Ventures Corp. (a member of Synergy Group) to jointly develop and operate a yard and a FPSO integration quayside at Niterói and to jointly upgrade, own and operate a floating crane to provide heavy lift solutions/services in Brazil (Reuters).

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AGRI ETC

Critics complain that a genetically modified bean developed in Brazil, resistant to one of the country’s most damaging agricultural pests, was approved without enough debate or guarantees that the crop will not affect human health or the environment (IPS).

Suzano Energia Renovavel, a unit of Brazilian paper and pulp company Suzano Papel e Celulose SA, will invest about 1 billion reais ($534 million) in new forests and pellet plants in the northeast to tap rising demand for biomass fuel in Europe (Bloomberg).

AUTOMOTIVE

Nissan announces 1.4bn factory in Brazil as it moves overseas fleeing Super Yen. Nissan Motor Co CEO Carlos Ghosn said Japan faces a “hollowing out” of its industrial base should the government fail to take steps to counter the Yen’s rise. Ghosn statements could also be interpreted as a subtle message since Brazilian manufacturing faces problems with a too strong Real (MercoPress).

Carmaker Renault says it will invest nearly $300 million to expand its plant in southern Brazil and increase its annual output. The automaker’s chief executive Carlos Ghosn says the company will invest 500 million reals ($285 million) to expand its plant in the state of Parana. He says the new investment will increase output by 100,000 vehicles by 2013 when the expanded plant will have annual capacity of 380,000 vehicles (Washington Post).

Nissan’s CEO just announced a major — and emotional — new investment in the country. He told Fortune why.

BMW, the world’s largest premium carmaker, will pick Sao Paulo as the site for its first car assembly plant in Latin America, German business daily Handelsblatt reported (Reuters).

Volkswagen AG  plans to invest 3.4 billion euros ($4.5 billion) in Brazil through 2016 (Bloomberg).

The Brazilian government has just jacked up its industrialised products tax on cars that have less than 65 per cent local content. Renault and Nissan are also entering Brazil at a time when the market is slowing. Production plunged last month compared with August, as manufacturers put on the brakes to anticipate a slump in sales (FT Beyondbrics).

Auto production plummeted 19.7 percent from August and sales fell 4.9 percent, according to data released by industry group Anfavea (Reuters).

SPLIT SECOND POLL

AVIATION

Brazil’s TAM and Chile’s LAN will appeal a Chilean antitrust court decision, but the legal process shouldn’t delay the airlines’ planned merger, which should be completed by the end of the first quarter next year (Fox Business).

Embraer sold six planes to GE Capital Aviation Services (Gecas), the commercial aircraft leasing and financing arm of General Electric . The sale, which includes six Embraer 190 jets and the option for six additional planes, is valued at $256.8 million (Reuters).

Airlines may not hold more than a 1 percent stake in groups bidding for airport concessions in Sao Paulo and Brasilia in order to avoid a conflict of interest, the head of the Brazil’s civil aviation authority, Wagner Bittencourt, said (Reuters).

Construction company JHSF Participacoes may invest 400 million reais ($215 million) to build an international private airport for executive jets, Folha de S.Paulo reported. The airport would be built in Aracariguama, 60 kilometers from the city of Sao Paulo (Bloomberg).

BANKING

Banco do Brasil has increased its 51 percent stake in Banco Patagonia to 58.96 percent after closing an offer to buy more shares in the Argentine bank, a stock market filing showed (Reuters).

TELECOMS

President Dilma Rousseff plans about $3.25 billion in tax breaks for companies that build new telecommunications networks, hoping to shield the sector from the global crisis and ensure that strained networks do not collapse during the 2014 World Cup (Reuters).

TIM Participacoes, Brazil’s second-largest wireless phone company, will issue 1.72 billion reais ($926 million) of new shares, the company said in a security filing (Reuters).

The Brazil units of Mexican billionaire Carlos Slim’s telecommunications empire said they will integrate networks and services but gave no details of how an expected merger was advancing (Reuters).

Telemar Norte Leste SA, Brazil’s biggest telecommunications operator by revenue, is close to obtaining a $1 billion syndicated standby revolving-credit line (Bloomberg).

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