Brazil 2012 Car Sales Growth Seen At 3-5% – Fiat Executive

Fiat SpA’s (F.MI) commercial director for Brazil Tuesday said he expected the country’s car market to grow between 3% and 5%–if not more–this year as lower interest rates revive demand.

“We think it’s going to grow at the same rate as (Brazil’s) GDP,” Lelio Ramos told Dow Jones Newswires on the sidelines of a car industry event. “Maybe more.”

Ramos said growth would mostly come in the small- and medium-sized car segments of the market.

Ramos said the market would no longer register the fervent growth rates of previous years such as 7% or 8%.

“We won’t grow the way we used to grow,” he said.

In the first half of January, Brazilian sales of cars and light commercial vehicles totaled 119,344 units. Although the number represents a 4.7% rise from the same period last year, it is a 24% decline from the previous month–December–a traditionally strong period for sales.

For all of 2012, the industry associations expect sales to grow between 4% and 5% as the central bank cuts the benchmark interest rate, making it cheaper for consumers to take out loans to buy new cars.

In 2011, Brazilian sales gained 2.9%, less than the 4.2% growth rate that had been expected by car dealer association Fenabrave and the 5% forecast by car maker association Anfavea. These sales missed expectations because of an increase in interest rates as well as credit costs in the first half of the year–measures which were reversed in the second half.

Fiat is the biggest car maker in Brazil by unit sales and Brazil is where its car business–excluding U.S. partner Chrysler Group LLC–makes nearly all its profit.

Source: 4 Traders

Brazil OGX Starts First Oil Production At Waimea Field

Brazilian independent driller OGX Petroleo e Gas Participacoes SA (OGXP3.BR, OGXPY) said that it had started to open the tap on the Waimea field late Saturday as the company starts its first crude oil output.

At 19:46 local time, OGX started the opening procedure for the OGX-26HP well at the offshore field in the Campos Basin. “The flow rate levels of oil will gradually be increased as per industry best practices for an optimal management of the reservoir,” OGX said.

The start of oil production marks OGX’s ascension from a pre-operational exploration company to a full-fledged producer, part of controlling shareholder and billionaire Brazilian businessman Eike Batista’s industrial empire.

OGX originally expected to produce its first oil at the Waimea prospect in the third quarter last year. But the project suffered weather-related and other delays that pushed the date back.

Sister company OSX (OSXB3.BR), also controlled by Batista, is leasing the OSX-1 floating production, storage and offloading vessel, or FPSO, to OGX for 20 years to produce at Waimea. The field is expected to produce about 20,000 barrels a day initially.

OGX holds a 100% stake in the BM-C-41 block in the Campos Basin, where the Waimea field is located. Crude oil output is expected to ramp up to 50,000 barrels a day in 2012 as two additional wells at Waimea are connected to OSX-1.

Source: The Wall Street


Brazilian Businessmen Are The Third Most Optimistic in The World.

According to the International Business Report (IBR) 2012 Grant Thornton International, 74% of Brazilian businessmen are optimistic about the Brazilian economy in 2012.

The Grant Thornton International Business Report (IBR) is a quarterly survey of business leaders from across the globe to measure global business confidence. Launched in 1992, the report is now in its 20th year. The research is carried out primarily by telephone interview lasting about 15 minutes with the exception of Japan (postal), Philippines and Armenia (face to face), mainland China and India (mixture of face-to-face and telephone). This personal approach hopes to avoid discrepancies due to cultural differences.

In 2011, Brazil’s GDP grew around 3%, the second worst performance since 2004 and one of the lowest in Latin America. Experts predict that in 2012 GDP growth will continue modest for emerging markets standards: between 3,5% and 4%. Nonetheless, the level of optimism among Brazilian businessmen about the Brazilian economy increased 24 percentage points over the last quarter. As a result, Brazil  assumed the third position in the global ranking; a huge improvement from the third quarter of 2011, when Brazil ranked 11th.

Brazil’s result defies global average, which stood at zero. Besides Brazil, the only countries where optimism grew were Armenia (16 % points), Greece (10 % points), China (8 % points), New Zealand (4 % points), the United States (3% points), and Ireland (6 % points).

Businessmen optimism has strongly declined all over Europe. The EU region has seen optimism levels fall from 49% in 2011 to 29% in 2012 – a reduction of 20%. In fact, Ireland is the only EU country where sentiment has improved in 2011. The countries that had the greatest declines in optimism were: Thailand (-94 % points), Malaysia (-60 % points) and Singapore (-41 % points).

In Latin America, optimism has also increased over the last quarter (+7 percentage points) to 61%. On the same hand, 24% of the businessmen in the BRIC countries (Brazil, Russia, India and China) are optimistic about the future of the economy of their countries in 2012, up 9% in comparison with the third quarter. Compared with the same period last year, businessmen’ optimism increased 14% in Latin America and 20 % in the BRIC.

Georgia heads the ranking of optimism with 78%, Peru comes in the second place with 77% and Brazil is third with 74%. The list also shows the Philippines (74%), fourth, and India (58%) in the fifth place. Among the most pessimistic, Japan occupies the first place again (-71%), followed by Spain (-62%).

Brazilians are well known for being optimists. One of the country’s main nickname is even “the country of the future.” This is mainly related to Brazil’s abundance of natural resources and yet low general standard of living (GDP per capita is around US$ 10,000 per year).

It is easy to perceive optimism in Brazil’s young generation as well. Inspired by a growing middle class and all-time low unemployment rate –  5.2% in November 2011,  technically total employment – young Brazilians trust they will have higher standard of livings than their parents. By contrast, the general tendency among young adults in Europe is to believe that they will not outperform their parents’ achievements.

Brazilians are also very excited with the leadership of Dilma Rousseff,  the country’s first female president. According to Datafolha, a renowned Brazilian research institute, Dilma has registered 59% popularity, all-time high after one year on mandate. The fight against corruption is the main reason for such an enormous approval rate. In the first 12 months of her 4-years mandate Rousseff has launched a crusade against corruption: seven ministers have already been sacked, six because of corruption scandals.

Recent good news are also another main source of optimism. In the beginning of 2012, it was announced that Brazil has overtaken the UK to become the world’s sixth-largest economy. Additionally, Petrobras’ recent oil discoveries motivated some optimist experts affirm that by the 2020s Brazil could become the fourth-largest oil producer only behind Saudi Arabia, Russia and the United States. 

Source: Forbes

My Business: The economy of the bikini

What makes an entrepreneur? BBC Brazil’s Julia Carneiro and Tom Santorelli hear from Jacqueline De Biase, 49, who started making her own bikinis at home as a teenager and now runs one of Brazil’s leading bikini brands.

It began with a young couple, an idea born over lazy days at the beach and two sewing machines.

Swimwear brand Salinas started making its first bikinis at a home-factory in Rio de Janeiro, Brazil, 30 years ago, opened its first shop in 1990 and today is one of Brazil’s leading bikini brands.

It has 45 shops around the country and sells to 39 different countries. Its bikinis have been on covers of magazines like Vogue and Sports Illustrated, and dressed the likes of Madonna and Naomi Campbell.

Rio-born Jacqueline and Antonio De Biase were still a young couple thinking about their future in the early 1980s.

She used to work as a model and considered becoming a veterinarian; he had just graduated in architecture – and they both spent a lot of time hanging out with friends on the beach.

“Back then, we girls used to improvise a lot to make our own bikinis, because we still didn’t have this bikini industry. The ones we had were very traditional, they came from the 1960s, from the two-piece swimsuit”, remembers Jacqueline.

The couple decided to invest their savings in starting up a company making the types of bikinis their friends would want to wear.

Pulling the strings

“The first thing I did was undo a bikini to see what came out: thread, Lycra and elastic. So I knew that’s what I’d need to put one back together again,” says Jacqueline.

Along with two sewing assistants she set up a home-factory in a small house her grandmother had lent her in Santa Teresa, a quiet residential neighbourhood on Rio’s hilltops.

In a year’s time they were able to make a living from the company’s initial revenue.

After three years they were producing around 2,000 bikinis a month.

At first they sold the items to other shops that would stamp their own logos on them. They then started developing the brand’s own image, reinvesting their profits to make the fledgling company grow.

Today, 425 people work for Salinas in Rio. In 2007, it joined with a men’s clothing brand from the same city, Richards, and three years later they both became part of InBrands, a holding that invests in the fashion industry.

While InBrands manages the business, taking care of finances and all operational issues, she worries about patterns, models, fabrics, style, trends.

“Today, Salinas is very big. It’s very different”, says Jacqueline. “I began doing everything by myself, drawing without knowing how to draw, designing without knowing how to design, directing without knowing how to direct. It was all very experimental at the time, based on trial and error.”

Drawing inspiration

Salinas’s creative office is the experimental laboratory where Jacqueline and her team develop each new bikini model. It occupies the third floor of an old industrial brick building shared with Richards and other brands.

There is colour everywhere: In shelves crammed with samples of different fabrics, in panels on the walls where assortments of patterns are displayed and in racks with body-shaped hangers adorned with bikinis and other clothing items.

Bikinis are still the flagship product, but over time Salinas started making clothing and accessories for the beach such as hats, sandals, shirts and dresses, which today represent about 30% of current production. It has also started making lingerie and Speedo-style swimsuits for men.

Booming Brazil

The company has grown by 60% since 2008, fuelled by internal expansion in Brazil which is now the world’s sixth biggest economy.

But the global financial crisis made the company reconsider its international expansion plans. The Brazilian currency – the real – is strong, and this has been taking its toll on sales abroad, she says.

“The world out there is taking a break, so this is not a moment to force an expansion”, says Jacqueline.

On the other hand, she says, “things in Brazil are booming… from 2007 until now, we’ve doubled the number of shops we have here”.

But opening a business in Brazil can be difficult, she adds.

“There is still lots of bureaucracy, although it has been worse, and taxes are very high. That doesn’t make things easier for businesses that are starting up,” says Jacqueline.

“Sometimes there are incentives for small companies, but then you either have to be really small in order to have this benefit or really large so that these expenses are distributed within the business.”

Jacqueline will turn 50 next February. She has seen bikinis grow skimpy, then larger again; become thongs or look like shorts; gain laces, knots and ruffles.

The one constant, she says, is the unease some women feel when looking at the mirror trying to pick the right bikini to hide their imagined flaws – even if she is the only one to spot them.

“The trick is observing a lot and understanding that every detail can make a difference when our customer tries on a bikini. We have to have all the differences in a woman’s body in mind when developing a collection”, she says.

Source: BBC

SeaDrill Unit in Brazil To Raise Up To $710 Million In IPO

Seabras Servicos de Petroleo S.A., the Brazilian unit of Norwegian oil-and-gas equipment company SeaDrill Ltd. (SDRL), said Monday it plans to raise between 960 million and BRL1.25 billion Brazilian reais ($545 million-$709 million) through an initial public offering on the Brazilian Stock Exchange, or BMFBovespa.

The company plans to offer 48 million common shares priced in an expected range of BRL20.00 to BRL26.00. Trading is expected to begin Feb. 13. The company can offer extra shares if there is demand.

Seabras will sell its shares in Brazil and to qualified investors in the U.S. Investors can reserve shares from Jan. 30 to Feb. 8.

The IPO will be the first offering in Brazil this year. Last year, ten companies held IPOs on BMFBovespa.

BTG Pactual is the lead coordinator.

SeaDrill said it plans to list shares of its Brazilian subsidiary through the Novo Mercado mechanism which has the most rigorous listing rules on the exchange. To qualify, a company must sell a minimum stake of 25%, and all its shares must be common rather than preferred stock.

The company’s shares will trade under the ticker symbol SEAB3.BR.

Brazil’s rising prominence in the global oil industry has attracted a series of oil and gas companies to the local stock market. Companies such as QGEP Participacoes SA (QGEP3.BR) and OGX Petroleo e Gas Participacoes SA (OGXPY), among others, have held IPOs in Brazil.

Source: Fox Business

Obama Orders Steps to Boost Job-Creating Foreign Travel to U.S.

President Barack Obama is taking steps to increase the number of non-immigrant visas, particularly in China and Brazil, and speed their approval to help create tourism jobs in the U.S.

Obama, who highlighted the initiative yesterday in Orlando, Florida, also called for the Commerce and Interior Departments to make recommendations on promoting domestic and international travel in the U.S., including national parks and historic sites.

“More money spent by more tourists means more business and more jobs,” Obama said at the Walt Disney World theme park. The U.S. should be “the top tourist destination in the world.”

Travel and tourism represented about 2.7 percent of U.S. gross domestic product and supported 7.5 million jobs in 2010, according to a White House statement.

The order and the visit to Orlando are part of the administration’s run-up to the president’s State of the Union address on Jan. 24. The speech will focus on the economy and the steps Obama is taking that don’t require action by Congress. Republican lawmakers are intensifying resistance to his agenda as both parties seek the advantage for November elections that will decide the presidency and control of the House and Senate.

Florida is a major prize in the presidential election, with 29 of the 270 electoral votes needed to win the White House and a recent history of swinging between the Democratic and Republican candidates. Obama won the state in 2008 while Republican George W. Bush won in 2000 and 2004.

Fundraisers in New York

Obama followed the stop in Orlando with four fundraisers last night in Manhattan.

As part of yesterday’s action, he ordered the Departments of State and Homeland Security to increase non-immigrant processing capacity in China and Brazil by 40 percent this year and ensure that 80 percent of those applicants are interviewed within three weeks. The administration is also seeking to speed up clearance for pre-approved, “low-risk” travelers entering the U.S.

The administration projects the number of travelers from Brazil will increase 274 percent from 2010 to 2016 and the number from China will rise 15 percent. More than 1 million U.S. jobs can be created over the next 10 years if the country expands its share of the international travel market, according to the White House statement accompanying the order.

Tourism is a major component of Florida’s economy, which is still struggling to rebound from the recession. The president last visited Florida on Oct. 11 when his $447 billion American Jobs Act was being debated in the Senate.

Unemployment Drops

Since then, the state’s unemployment rate has improved, to 10 percent in November from 10.4 percent the previous month, according to the Department of Labor. The national rate was 8.5 percent in December, down from 8.7 percent in November.

Still, Florida’s economic health declined 2.1 percent over the first three quarters of 2011, according to a Bloomberg Economic Evaluation of States Index, which uses employment, real estate, taxes and local stocks to track the direction of state economies.

Florida’s mortgage delinquency rate was the highest in the country through the first nine months of 2011, at 18.9 percent compared with 15.7 percent at the beginning of Obama’s presidency. The national rate was 7.9 percent at the end of September, when the latest data was available from the Mortgage Bankers Association.

Obama’s favorability rating in the state was 45 percent, with 50 percent of the state’s registered voters saying they had an unfavorable opinion, according to a Jan. 4-8 Quinnipiac University Poll. The margin of error was plus or minus 2.6 percentage points.

Presidential Contest

In the Republican presidential race, former Massachusetts Governor Mitt Romney, the current front-runner for his party’s nomination, gets support from 46 percent compared with 43 percent who said they supported Obama.

In a conference call yesterday, Romney referred to Obama’s venue at Disney World to talk about the economy.

“There’s some poetic justice in the president speaking from Fantasyland because, I’m afraid, he’s been speaking from Fantasyland for some time now,” Romney said.

Romney, former House Speaker Newt Gingrich, former Senator Rick Santorum and Representative Ron Paul debated last night in South Carolina before the state’s primary tomorrow. Florida will hold its primary Jan. 31.

New York Fundraiser

Obama, speaking later to a fundraiser for Jewish leaders in New York, predicted that hard economic times would make his re- election difficult.

“Unemployment is still too high, and a lot of people are still hurting and the housing market is still weak,” he said at Daniel restaurant in New York. “In that environment, this is going to be a tough race, regardless of who they nominate.”

In New York, Obama started his fundraising rounds with two separate events at the restaurant on the Upper East Side. About 100 donors will be at the first with ticket prices starting at $5,000, according to an official with Obama’s campaign who wasn’t authorized to discuss the arrangements publicly. The second event is for 60 guests paying a minimum of $15,000 each.

Later, he also spoke with contributors at the home of film director Spike Lee. Tickets for that event are $35,800, according to the official.

Obama finished his evening in New York at a fundraiser held at the Apollo Theater in Harlem. The estimated 1,400 donors also saw performances by singers Al Green and India.Arie. The official said tickets start at $200.

Obama Victory Fund

All of the money collected is for the Obama Victory Fund, a joint fundraising committee put together by Obama’s campaign and the Democratic National Committee.

At his first event, he said that international sanctions have put Iran’s economy in “shambles.”

“We have a united international community that is saying to Iran, you’ve got to change your ways,” Obama said. Sanctions have been “so effective, even the Iranians have had to acknowledge that their economy is in shambles,” he said.

On the Middle East peace process, he expressed disappointment and said, “We still have not seen the kind of progress that I would have liked to have seen.”

He insisted that “Israel’s security is non-negotiable” and pledged, “We will do everything that is necessary to make sure that Israel is able to thrive and prosper as a secure Jewish state.”

Source: Bloomberg