Brazilian faster than overall economic growth

A rare consensus exists among Brazilian economists — the country not only needs to increase investments, it needs to do it at a pace faster than overall economic growth and for at least several years in a row.

“From 2004 to 2011, economic growth was generated by fostering consumption”, says Raul Velloso, managing partner of Brasília’s ARD consulting group. “But that model for development has reached a point of exhaustion”.

Rising salaries, massive welfare and benefit payments, and steadily increasing government spending have led to a huge increase in demand for goods and services. Yet investments haven’t kept up, and industry can’t keep pace, bringing hefty imports, a yawning current account deficit and inflation.

Deterioration is everywhere.

Growth has taken a hit too. Once the emerging-market darling of global investors, Brazil is now in its third year running of sub-par growth. A hoped-for 2013 rebound is likely to fizzle amid a consensus growth forecast of 2.5%. A bit less is expected for 2014.

The complete article is here.

Brazil’s Mills Grows Revenue 28% Percent in Third Quarter

Brazil’s largest rental company Mills Estructuras e Serviços de Engenharia S.A. posted record revenues and EBITDA in the third quarter, the company said, with net revenue of R$222 million (about U.S. $96 million), a 28-percent jump from the third quarter of 2012. Mills posted record revenues in its Heavy Construction, Jahu and Rental business units. Equipment rental revenue was R$170.5 million (about U.S. $73.6 million), a 19.1-percent hike compared to the same period in 2012.


The net revenue for rental totaled R$93.9 million in the third quarter, a new record for a quarter, with growth of 39.4 percent year over year and 4.2 percent quarter over quarter. Mills opened a new branch in Bauru, in the state of São Paulo in the third quarter, its seventh new rental branch in 2013. Mills hopes to open five more branches before the end of the year, giving it 29.


EBITDA for the third quarter was R$106.1 million, a 17.5-percent leap compared with the previous year’s third quarter. Capex totaled R$129.7 million, totaling investments of R$408.2 million (about U.S. $176.3 million) for the first nine months of 2013.


Mills reported that the activity level in the heavy construction sector returned to normal in September, with a positive perspective, as indicated by the expected level of activity for the next six months according to research conducted by the National Confederation of Industry, which reached 55.2 points in October 2013. Cement sales reached 19 million tons in the third quarter, according to the National Union of Cement Industries, with a year-over-year growth rate of 6.1 percent.


See all article here.

Where to start and how to invest in Brazil

Most Brazilian organizations already have some sort of ability in data analytics – but existing solutions may not be sufficient. In that scenario, how can businesses integrate a new set of technologies to what already exists, without wasting time and money? How to avoid the trap of investing in technologies that will be obsolete in a matter of months?


To answer these questions, the ZDNET talked to the director of business analytics at IBM Latin America, Sergio Loza, about how organizations can tackle these areas of concern. Building on its many years of experience in IT, Loza has more recently been helping Brazilian organizations in sectors such as telecommunications, insurance, healthcare, government, specifically around the creation of Big Data strategies.


According to Loza, the first thing to focus on is the areas where benefits can be obtained more rapidly, such as customer relationships, contact and service, as well as operations and finance.


“This is an area where more than half of our customers have invested in. The core operational essence of the organization is also paramount – looking, understanding and measuring processes with the data and making decisions to drive improvements. The area of risk and finance is also crucial: if it’s an insurance or financial services business for example, analytics can greatly improve profitability or the planning and financial performance management financial and can use Analytics to improve such management and therefore, increase business profitability”, says Loza.


According to the consultant, chances of success are bigger if the project was built around the areas where the business has had positive experiences.


“If the organization chooses a vendor platform that covers everything from the warehouse to the analysis, it will achieve progress in a sustainable manner. That’s the recommendation I would give first: start with the best-known areas, with a vendor that has a proven platform with continuity”, says Loza.

 Read full article here.

Brazil: Investors see good in Batista’s bad news

The collapse of the empire of Brazilian tycoon Eike Batista may be bad for his investors and creditors – but for the country’s investment banks it is a much-needed boost.


To pay off billions of dollars of debt accumulated at all levels of his oil, mining, energy and logistics group, Mr Batista has been spinning off businesses in a flurry of dealmaking that has revitalised the mergers and acquisitions market.


Indeed, while volumes are lower this year, some bankers say there is a consistent flow of deals.


“We may have gained a bit of market share”, says Jean-Marc Etlin, chief executive of Itaú BBA Investment Bank.


Read the original article here.


Malls Billionaire Targets Overseas Expansion

Brazilian billionaire Jose Isaac Peres is considering expanding his mall operations overseas as the nation’s trade barriers for consumer goods and rising interest rates limit options to grow locally. Brazil, the biggest emerging economy after China.

Peres, who owns 31 percent of Multiplan Empreendimentos Imobiliários SA (MULT3), the country’s largest mall operator, said he has met with Peter Lowy of Australia’s Westfield Group and executives from Indianapolis-based Simon Property Group Inc. as he seeks opportunities abroad. Chile and Uruguay are attractive markets, Peres said.

“We have the size and the muscle to look abroad and easily compete”, Peres, 73, said in an interview at Bloomberg’s office in São Paulo.

Read the piece here.

Brazil wants triple oil output to 6 Million Barrels/Day by 2035

Brazil’s recently discovered offshore oil fields will triple the country’s current crude oil output to six million barrels per day by 2035, making Latin America’s largest country a leading producer and exporter, the International Energy Agency said Tuesday.

Brazil discovered billions of barrels of crude trapped under a thick layer of salt beneath the Atlantic Ocean off the country’s southeast coast, finds that will make the country the world’s sixth-largest producer and a major oil exporter, the IEA said. Development of the fields, however, will be complex and expensive when compared with other areas holding large oil reserves such as the Middle East or Russia, the IEA warned. Brazil currently produces about two million barrels of oil per day.

In October, Brazil sold rights to develop one of the fields–the Libra prospect–to a group led by state-run energy giant Petroleo Brasileiro SA (PBR, PETR4.BR) that also included Royal Dutch Shell (RDSA.LN, RDSA), France’s Total SA (FP.FR, TOT), China National Petroleum Corp. and Cnooc Ltd.(0883.HK, CEO). The field, estimated to hold recoverable reserves of between eight billion and 12 billion barrels of oil, could cost as much as $200 billion to develop over the next 35 years.

The IEA forecast Brazil’s energy consumption to increase 80% as an expanding middle class buys cars and homes, creating more demand for gasoline, diesel, ethanol and electricity. “Meeting this demand requires substantial and timely investment throughout the energy system–$90 billion per year on average,” the IEA said.

Read more here.