News from Brazil

Brazil Business & Economy News

In Brazil on February 3, 2012 at 10:54 am

ECONOMY

The Brazilian economy should expand faster in 2012 than the previous year, the country’s central bank governor said, helped by further cuts in interest rates (Reuters).

Despite lobbying by real estate industry representatives, the government has not signaled it is willing to increase the R$500,000 cap on the limit for homes financed by the Sistema de Financiamento da Habitação (Home Financing System, SFH). Brazilian bank Caixa Econômica Federal president Jorge Hereda has said he fears an increase in the limit, as it would justify Rio’s rise in real estate prices. Many believe it would only encourage further increases in an already dangerous market bubble (The Rio Times).

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BUSINESS

The Port of Rotterdam, Brazil’s gateway to Europe and the No.1 port on the Atlantic, has opened a new office in Sao Paulo to reinforce ties with Brazilian stakeholders. Manager will be Peter Lugthart (Port of Rotterdam).

Valeant Pharmaceuticals International Inc said it has bought Brazil’s Probiotica Laboratorios Ltd for 150 million Brazilian Real ($85.69 million) to boost its presence in the sports food supplement market (Reuters).

Fuhrlander AG, a German wind-turbine maker, expects to sign about 900 million reais ($524 million) worth of sales contracts in Brazil this month as it seeks to meet the country’s increasing demand for renewable energy (Bloomberg).

Gafisa SA, Brazil’s third-biggest homebuilder by revenue, received a preliminary proposal for asset acquisition from Sam Zell and GP Investments Ltd. Exame reported earlier this week that Zell was in talks with GP for a partnership to buy control of Gafisa (Bloomberg).

Using portable communications devices is equivalent to working in the office, according to legislation signed by President Dilma Rousseff last month. The law is one more obstacle companies say they face in Brazil, where regulations mandating everything from employer- provided breakfasts to union contributions are a daily drag on efficiency bemoaned for decades as the “Custo Brasil,” or Brazil Cost. It takes less time to set up a business in Nigeria or Mongolia than it does Brazil, according to the World Bank, which ranked it No. 126 out of 183 countries in its 2012 competitiveness study (Bloomberg).

AGRI ETC

Brazil’s orange juice industry said it is urging U.S. authorities to permit a higher level of the fungicide carbendazim in its shipments, several of which have been detained by the United States (Reuters).

Eike Batista, who became Brazil’s richest person by selling shares in commodities and logistic startups, is considering entering the coffee market after setting up catering and sports management ventures last year (Bloomberg).

Brazilian beef exports declined 14% in 2011, to 820.239 tonnes swt, establishing it as the world’s third largest beef exporter behind Australia and the US (Mercopress).

Odebrecht plans to produce sugar in Cuba, the company said as incentives for foreign investment in the Castro family’s regime raise hopes of a recovery in the once-booming sector after decades of decline (MercoPress).

AVIATION

Embraer’s Ipanema agricultural aircraft reached the significant milestone of 1,200 units delivered. The success of this veteran airplane has been proven, year after year, by its great operating results and customer orders. In 2011, 58 of the aircraft were sold in Brazil and the Mercosur region, for an increase of 45% over the previous year. Studies are constantly made to improve the aircraft, which is now powered by ethanol, focusing on customers’ needs and the sustainability of agribusiness (Embraer).

Brazil’s largest airline TAM is cutting back its fleet and focusing on the profitability of existing routes as it sees 2012 air traffic growth slowing to half of last year’s pace (Reuters).

American Airlines announced changes to its coming spring and summer schedule that will expand the airline’s presence in Brazil. Next December, American’s route between Dallas/Fort Worth (DFW) and Sao Paulo (GRU) will be operating with the new state-of-the-art Boeing 777-300ER, making Brazil the first market for the new aircraft.

On Monday (Feb 6), Brazil’s stock exchange, BMF&Bovespa, will hold an auction for the concessions of three of the country’s principle airports – two in the megapolis comprising of the neighbouring cities of São Paulo and Campinas and the other in the country’s capital, Brasília. According to Brazilian media, 11 proposals were filed, not only from Brazilian companies but also including British, Singaporean, American, French and South African corporates, among others (FT Beyond BRICS).

BANKING

UBS AG, which sold its Brazilian lending unit in 2009, is trying to buy another as it steps up efforts to restart an investment-banking business in the country, a person familiar with the company’s plans said (Bloomberg).

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MINING & STEEL

Gerdau SA, Latin America’s largest steelmaker, is seeking to sell 40 percent of its mining unit for about $2.5 billion, a person familiar with the matter said (Bloomberg).

Cia. Siderurgica Nacional SA, Brazil’s third-largest steelmaker, said it concluded “in a satisfactory manner” an accord to purchase a pair of German steel units from Spain’s Grupo Alfonso Gallardo for 482.5 million euros ($632 million) (Bloomberg).

China, the world’s largest iron-ore consumer, tightened rules for ports that handle very large ore ships and oil tankers to ensure safety standards, restricting Vale SA’s plans to serve its main customer with giant carriers (Bloomberg).

Vale is the world’s largest producer of iron ore, and the second largest mining company in the world, and along with Petrobras, headquartered in Rio de Janeiro. On January 30th a fourth Vale Canada worker died within twelve months, prompting Vale to temporarily close all seven of its nickel mines in Sudbury, Ontario (The Rio Times).

OIL & GAS

Demand from emerging markets and financial flows will keep crude prices high and volatile at around $105-125 per barrel in 2012, Petrobras Chief Executive Jose Sergio Gabrielli said (Reuters).

OGX Petroleo e Gas Participacoes SA, the oil explorer controlled by billionaire Eike Batista, plans to drill additional wells at a recent discovery in the Santos Basin and may increase estimated reserves in the area (Bloomberg).

HRT Oil & Gas is drilling in one of the most challenging and isolated spots on Earth: the heart of the Amazon. Founder and owner Mello represents a new breed of Brazilian oilmen, and his company’s arrival heralds the entry of start-ups in a Brazilian industry long dominated by the state-run behemoth, Petrobras, and multinational giants (Washington Post).

TELECOMS

Cell phone company America Movil, owned by Mexican tycoon Carlos Slim, said it had approval from Brazil’s telecom watchdog Anatel to take control of cable television company Net Servicos de Comunicacao (Reuters).

 

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