News from Brazil

Brazil Business & Economy News

In Brazil on November 4, 2011 at 11:34 am

ECONOMY

Analysts have begun talking about Brazil’s “two-speed economy” – one in which domestic demand and credit growth, though cooling, are still growing at the sort of high levels not seen in many other parts of the world while domestic industrial production is actually in decline (FT Bexond BRICs).

Loan disbursements at Brazil’s state development bank BNDES will miss their initial target for the year, reflecting a rapid economic slowdown in Latin America’s largest economy, the lender’s top executive said (Reuters).

According to the Economist Intelligence Unit, a sister company of The Economist, this year Brazil will overtake Britain to become the sixth largest economy in the world. GDP per person, at around $11,000 (or 19,000 reais) has been growing at an average annual rate of 1.7% since 1990 (The Economist).

Brazil’s Gross Domestic Product (GDP) will grow 3.2 percent in 2011, a report released by Brazilian Banking Federation (Febraban) said (Xinhua).

Brazil posted a trade surplus of 2.355 billion dollars in October, beating forecasts for a third straight month, outpacing imports in the final days of the month following a recovery in global commodities prices (MercoPress).

Brazil’s net debt fell in September to its lowest level since 1997, as a 15% decline in the real last month boosted the value of the country’s near-record 353 billion dollars in foreign currency reserves (MercoPress).

Read the profile of Brazilian central bank chief Alexandre Tombini at Reuters.

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BUSINESS

Plunging profits at Vale SA, the world’s biggest miner of iron ore, have raised concerns about the vulnerability of Brazil’s economy to the global crisis and the fate of the region’s other commodity giants. The Rio de Janeiro-based company took the market by surprise by reporting a third-quarter net profit of $4.94-billion (U.S.), down 18 per cent from last year and more than $1.5b-billion below analysts’ average estimate (Globe & Mail).

This article in The Brazil Business will give you the basic information on how to issue a patent in Brazil.

Japan’s Kirin said it would pay 2.35 billion reais, or 105 billion yen ($1.35 billion), to buy out the minority shareholders in Brazil’s Schincariol, making the beverage maker a fully owned subsidiary (Reuters).

Beverage and snack company PepsiCo Inc will buy Mabel, one of Brazil’s biggest cookie and cracker makers, outbidding international rivals competing to expand in the fast-growing domestic consumer market (Reuters).

Brazil’s building materials industry is expected to grow at less than half the pace originally projected in 2011, industry group Abramat said, trimming its forecast for the third time this year (Reuters).

Brazil’s government has loudly proclaimed a deal it says is worth $12 billion for Taiwanese technology giant Foxconn to produce iPads and build a whole new industry based around screens used in an array of consumer electronics from smartphones to televisions. But the infamous “Brazil cost” — shorthand for the bureaucracy and high taxes that plague business in the country — is already overshadowing the deal, complicating negotiations with Foxconn over the broader investment plan (Reuters).

AUTOMOTIVE

Car sales in Brazil dropped 10% in October compared to the previous month according to the country’s dealers association, Fenabrave turning warning lights on for the global auto industry. This follows September’s decline that affected all of Brazilian industrial production (MercoPress).

AGRI ETC.

About 20 percent of all the sugar waiting to be loaded at ports in Brazil, the world’s largest producer of the commodity, will be shipped to China and Iran, according to data from Williams Servicos Maritimos Ltda. (Bloomberg).

AVIATION

Chilean airline LAN and Brazil’s TAM have unveiled senior management changes as their plan to merge advances. The merger is expected to be completed in the first quarter, and will see the two airlines taken over by a new holding company, LATAM Airlines Group. The two airlines will continue to operate independently, as Brazilian law prevents a foreigners from owning more than 49% of a Brazilian airline (Fox).

Shares of Embraer , the world’s third-largest commercial planemaker, suffered the worst drop on Brazil’s benchmark stock index after reporting weak results and disclosing a bribery investigation (Reuters).

SPLIT SECOND POLLS

BANKING

Banco do Brasil reported a higher-than-expected quarterly profit as lower taxes helped Brazil’s largest bank by assets overcome a surge in bad loan provisions and weak revenue (Reuters).

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RESEARCH & INNOVATION

Vale SA, the world’s largest iron-oreproducer, plans to hire 100 researchers for its technology institute as it seeks to boost production and meet growing demand. The Vale Technology Institute, which the Rio de Janeiro-based company established in 2009 as a non-profit organization to conduct scientific research for the mining industry, has hired 11 specialists and expects to have more than 60 by the end of next year, Luiz Mello, executive director of the institute, said (Vale).

OIL & GAS

HRT agreed to sell a 45 percent stake in 21 Amazon oil blocks to Anglo-Russian TNK-BP for $1 billion, the Brazilian start-up company said. The deal represents a step forward in TNK-BP’s expansion beyond Russia, where the state has curbed private company access to promising offshore areas. It also accelerates the rise of HRT in Brazil, where state-run Petrobras still dominates the oil industry (Reuters).

Petrobras will channel 95 percent of its energy exploration investments to develop fields at home, Chief Executive Officer Jose Sergio Gabrielli said. The company known as Petrobras needs 65 drilling rigs from “now till 2020,” he said (Bloomberg).

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