Edition April 2024:  Neo Industrialization Brazil - Paving the Way for Industrial Renaissance?

Edition April 2024: Neo Industrialization Brazil - Paving the Way for Industrial Renaissance?

Prime Story GreyRhino newsletter April 2024 Edition

Pretext

What is Nova Indústria Brasil - the Neo-Industrialization? Nova Indústria Brasil, an ambitious initiative by the Brazilian government to revitalize and strengthen the country's industrial sector: Paving the Way for Industrial Renaissance. A Vision for Sustainable Growth and Innovation.

The Brazilian government has set its sights on a bold vision: to propel the nation toward a new era of industrial prowess. The Nova Indústria Brasil (NIB) program, launched in January 2024, aims to rejuvenate Brazil's industrial landscape, foster innovation, and enhance competitiveness on the global stage.

At its core, NIB is a comprehensive policy framework designed to support and empower the Brazilian manufacturing sector. For a good two months now, we have been receiving regular requests for quick orientation, consulting or project support as a project manager or CRO from foreign strategic investors with a view to NIB. It is particularly noticeable that medium-sized companies from the German-speaking region of Europe have an increased interest in NIB and are looking for a practical way to integrate their project into it. Aspects of relocating production to Brazil come into play here against the background of local and sustainable production. This makes sense when you consider that Brazil obtains 92.5% of its total electrical energy, and around 84% of its total energy matrix, from renewable sources.

NIB can be a real national holistic program

Key Aspects of NIB

Let's delve into the key aspects of this transformative program quickly.

Neoindustrialization and Sustainability

NIB represents a strategic shift toward neo-industrialization - a deliberate move away from deindustrialization. By leveraging sustainable practices and cutting-edge technologies, Brazil aims to reinvigorate its factories, boost productivity, and create quality jobs.

The Role of the Council for Industrial Development (CNDI)

The Council for Industrial Development (CNDI) - comprising 20 ministries, the BNDES (National Bank for Economic and Social Development), and 21 civil society organizations - played a pivotal role in shaping NIB. Their collaborative efforts culminated in a policy document that charts the course for Brazil's industrial future.

Ambitious funding

NIB isn't short on resources. Over the next few years, it will benefit from a staggering USD 60 billion in financing. This substantial investment will fuel critical projects, research, and innovation within the industrial ecosystem.

Targeted missions

NIB sets forth six strategic missions, each aligned with specific sectors:

  • Infrastructure, Housing, and Mobility: enhancing Brazil's infrastructure and urban mobility.
  • Agroindustry: boosting agricultural productivity and value chains.
  • Healthcare Industrial Complex: advancing health-related industries.
  • Digital Transformation: accelerating digital adoption across industries.
  • Bioeconomy and Energy Transition: promoting sustainable practices.
  • Defense Technology: strengthening national security through technological advancements.

Public procurement as a catalyst

NIB recognizes the power of public procurement. By designating specific areas for national acquisition requirements, the program aims to stimulate strategic sectors. This includes promoting clean energy, low-carbon solutions, and urban mobility innovations.

Streamlining business environment

To reduce the notorious "Custo Brasil" (Brazil Cost), NIB outlines 41 projects focused on streamlining bureaucracy and addressing industry challenges. The potential annual savings of USD 18.5 billion underscore the program's commitment to efficiency.

Why NIB matters

The stakes are high. NIB isn't just about factories and numbers - it's about Brazil's economic resilience, job creation, and technological leap. By fostering a vibrant industrial ecosystem, NIB lays the groundwork for a more prosperous and sustainable future.

As the sun rises on this new chapter, Brazil stands poised to redefine its industrial destiny. The journey won't be without challenges, but with NIB as its compass, the nation embarks on a transformative path - one that promises growth, innovation, and a reinvigorated industrial heartbeat.

The challenges - the hurdles

Legacy issues

Brazil's industrial landscape carries historical baggage, including outdated infrastructure, bureaucratic inefficiencies, and a legacy of deindustrialization. NIB must navigate these challenges to create a fresh trajectory.

Complex coordination

With multiple stakeholders - government ministries, financial institutions, and civil society organizations - collaboration and coordination are critical. Ensuring alignment and effective communication among these entities is no small feat.

Funding allocation

While NIB boasts substantial funding (USD 60 billion), allocating resources efficiently across diverse sectors requires strategic decision-making. Balancing immediate needs with long-term investments is a delicate task.

Technological leap

Achieving sustainable neo-industrialization demands technological leaps. NIB must foster innovation, promote research and development, and bridge the gap between academia and industry.

Sector-specific challenges

  • Agro-industry: Enhancing agricultural productivity while addressing environmental concerns.
  • Healthcare Industrial Complex: Balancing affordability, quality, and accessibility in healthcare.
  • Digital Transformation: Overcoming digital divide and cybersecurity challenges.
  • Bio-economy and Energy Transition: Navigating the transition to cleaner energy sources.
  • Defense Technology: Balancing national security imperatives with innovation. This was observed very closely during the visit of French President Emanuel Macron in March 2024. Brazil and France are working together to build five new submarines for the Brazilian Navy. The Brazilian president also called on France to initiate the technology transfer for nuclear propulsion systems.

Public procurement reform

While NIB recognizes the power of public procurement, reforming procurement processes to ensure transparency, fairness, and efficiency remains a challenge.

Political will and stability

Sustaining NIB's momentum across political cycles is crucial. Political stability and commitment to long-term goals are essential for success. This view is by no means certain, as the current opposition, especially in Congress, will attempt to massively torpedo all of the government's plans for regional parliaments in the election year.

Resistance to change

Industries accustomed to traditional practices may resist transformation. Convincing stakeholders of the benefits of sustainable practices and innovation requires persuasive leadership. A not inconsiderable proportion of Brazilian industry works with very old and depreciated machinery and equipment with very low productivity. The previous government had begun a dubious process of massive devaluation of the national currency, which led to the protection of obsolete industry, as Brazil's modern industry, as well as foreign strategic investors, could no longer invest.

Global competition

In an interconnected world, Brazil competes with other nations for investment, talent, and market share. NIB must position Brazilian industries competitively (see previous point as well).

Monitoring and evaluation

Regular assessment of NIB's impact is vital. Establishing robust monitoring mechanisms ensures accountability and course correction.

Despite these challenges, NIB represents a beacon of hope - a commitment to reshaping Brazil's industrial destiny. As the program unfolds, addressing these hurdles will be essential to realizing its vision.

Nova Indústria Brasil (NIB) - Immense Potential to Bridge the Digital Divide

Infrastructure investment

  • Broadband Connectivity: NIB should prioritize expanding high-speed internet infrastructure to underserved areas. This includes rural regions, remote communities, and economically disadvantaged neighborhoods.
  • Digital Inclusion Centers: Establishing community centers equipped with computers, internet access, and digital literacy training can empower individuals who lack resources at home.

Affordability and accessibility

  • Subsidized Internet Plans: Collaborate with internet service providers to offer affordable plans for low-income households.
  • Device Accessibility: Ensure that affordable devices (such as smartphones, tablets, and laptops) are accessible to all. Consider partnerships with manufacturers or recycling programs.

Digital literacy programs

  • Education and Training: Develop comprehensive digital literacy programs targeting different age groups. These programs should cover basic computer skills, online safety, and effective internet usage.
  • School Curriculum Integration: Integrate digital literacy into school curricula to empower students early on.

Inclusive content and services

  • Local Language Content: Promote the creation of digital content in local languages. This enhances accessibility and relevance for diverse populations.
  • E-Government Services: Simplify access to government services online. Citizens should be able to apply for IDs, pay taxes, and access essential services digitally. Brazil already has a very high standard in this aspect; it is much more a question of consistently expanding services.

Public-private partnerships

  • Private Sector Engagement: Collaborate with private companies to sponsor digital literacy initiatives, provide mentorship, and offer internships.
  • Corporate Social Responsibility: Encourage businesses to invest in community development, including digital inclusion projects.

Mobile solutions

  • Mobile Apps for Education: Develop educational apps that cater to different learning needs. These can cover subjects like health, agriculture, and financial literacy. Digitization in education is not a matter of hardware.
  • Mobile Banking: Promote mobile banking services to enhance financial inclusion.

Inclusivity in innovation

  • Startups and Entrepreneurs: Support tech startups and entrepreneurs working on solutions for underserved communities. Encourage innovation that addresses local challenges.
  • Hackathons and Competitions: Organize events that focus on creating inclusive digital solutions.

Data privacy and security

  • Awareness Campaigns: Educate citizens about data privacy risks and safe online practices.
  • Regulatory Framework: Develop and enforce regulations that protect user data and privacy.

Collaboration with NGOs and civil society

  • NGO Partnerships: Work closely with non-governmental organizations to reach marginalized groups.
  • Community Engagement: Involve local communities in designing and implementing digital inclusion programs.

Measuring impact and adjusting strategies

  • Metrics: Regularly assess the impact of NIB's initiatives. Monitor internet penetration rates, digital literacy levels, and participation in online activities.
  • Adaptability: Be flexible and adjust strategies based on feedback and changing needs.

By addressing the digital divide, NIB can empower citizens, enhance economic opportunities, and foster a more inclusive and connected Brazil.

inside the Favela Rocinha, Rio de Janeiro (RJ), Brazil, 2014

Example: Brazil’s Auto Industry Accelerates Investment - All Time Record High!

Revving Up: Brazil's Automotive Sector Accelerates with Major Investments

Since mid-2023, Brazil's automotive sector has been a buzz with excitement as major automakers unveil substantial investment plans. These commitments signal a significant shift towards innovation, sustainability, and technology in the country's auto industry, marking a pivotal moment in Brazil's journey towards green mobility initiatives.

In line with the best international practices, Brazil has, finally, a solid national plan to resume an economic-sustainable and green development, digital and inclusive.

Hyundai's Ambitious Plans

President Luiz Inácio Lula da Silva recently disclosed Hyundai's intention to invest over USD 1.1 billion in Brazil until 2030. This bold move underscores Hyundai's commitment to technological advancement, particularly in the development of hybrid, electric, and green hydrogen-powered vehicles. The meeting between President Lula and Hyundai Group chairman Eui-Sun Chung further solidified this ambitious endeavor.

Volkswagen Doubles Down

Volkswagen, a stalwart in Brazil's automotive landscape, has amplified its investment plans for the 2023-2028 cycle, now totalizing USD 3.2 billion. This strategic decision aligns with the government's MOVER program, aimed at fostering the production of safer and less-polluting vehicles. The program also includes substantial tax incentives totalizing USD 3.9 billion over the next five years, incentivizing sustainable automotive practices.

Stellantis Joins the Race

Stellantis, the parent company of renowned brands like Peugeot, Citro?n, Jeep, and Fiat, is poised to make waves with its forthcoming investment cycle of USD 6 billion. While specific details are yet to be unveiled, Stellantis' commitment underscores a broader trend of automakers betting big on Brazil. The implications of Stellantis' investment could reshape the automotive landscape in the region, further bolstering Brazil's position in the global automotive market. The focus will be on de-carbonization mainly.

Further automotive groups

  • Toyota USD 2.2 billion
  • GWM USD 2 billion
  • GM USD 1.4 billion
  • Renault USD 1.1 billion
  • CAOA Group USD 0.9 billion
  • BYD USD 0.6 billion
  • Nissan USD 0.6 billion

A Shift in Focus

Unlike previous investment cycles that led to increased production capacity and job creation, these new commitments prioritize technology and sustainability. Brazil's industrial production capacity remains below pre-pandemic levels, highlighting the need for innovative approaches to boost efficiency and competitiveness. Despite challenges, these investments signify a concerted effort to drive the future of mobility in Brazil.

The Automation Factor

The automotive industry's transition towards automation has implications for job creation. Between 2022 and 2023, the Brazilian auto industry saw a 3% decrease in employment, reflecting a broader trend of automation-driven efficiencies. As technology continues to advance, automakers are increasingly relying on automation, reshaping traditional employment landscapes in the industry.

In summary, Brazil's automotive sector is experiencing a surge in investment, signaling a pivotal moment in the industry's evolution. While the focus has shifted towards technology and sustainability, these investments lay the foundation for a more innovative and environmentally-conscious automotive landscape in Brazil, driving the country towards a greener, more sustainable future.

Disclaimer: This newsletter post is for informational purposes only and does not constitute official government policy or endorsement. The information published corresponds to the status as of the second half of March 2024. Further investment programs are expected in the coming months.


impressive story from the industry newsroom with high transformational potential

spotlight April 2024: deep dive on Mexican export record to the USA

What's behind the new record world champion Mexico overtaking China?

USMCA & China

Is this a bomb?

Near Shoring? Friendly Shoring? China circumvents US tariffs by shipping more goods through Mexico.

Mexico isn't the only beneficiary of the Chinese initiative to export goods through third countries that could ultimately end up in the USA. To what extent should we not fall for nice words like Near Shoring?

China has shipped more goods through Mexico to the United States, bypassing the high tariffs imposed by former President Donald Trump's government, which have been maintained by the current administration in the White House.

The latest data from Container Trades Statistics show that the number of 20-foot containers shipped from China to Mexico in the first three quarters of 2023 was 881,000, compared to 689,000 in the same period in 2022.

significant container export from China to Mexico

Amid this increase, Mexico surpassed China in 2023 as the largest exporter of goods to the USA, thanks to the growth of truck shipments across the border, as reported in this newsletter in March.

The numbers also highlight the difficulties the Biden administration faces in taking more decisive actions to reduce the USA's dependence on international supply chains dominated by geopolitical rivals like China, whose industrial capacity has given it a significant role in supplying everything from household appliances to electric vehicles.

The USA is the largest consumer of goods worldwide; China is the largest producer of goods worldwide. One way or another, these two realities must intersect.

US measures to realign supply chains and deter China began more seriously in 2018 when then-President Donald Trump imposed heavy tariffs on trade with China. His successor, Biden, has maintained them in the face of ongoing trade and geopolitical competition between the two powers.

Due to the tariffs, direct shipments from China now account for less than 15% of US imports. In 2017, it was more than 20%.

Nevertheless, some Chinese products that were previously shipped directly to the USA still find a way to reach the country without facing the same tariffs.

Reducing dependence on China is an easy phrase for politicians, but the reality is very different, as we saw at the beginning of 2023 in our project in the Mexican automotive industry.

For me, a realignment of global industrial production is a huge undertaking that will require many years and a massive volume of investment and government intervention to achieve. I see no other way if it's genuinely desired.

Mexico isn't the only beneficiary of the Chinese initiative to export goods to third parties that could ultimately reach the USA.

Beijing also records trade surpluses with countries like Vietnam, Singapore, and the Philippines, which in turn show increasing surpluses with the USA - a sign that Chinese manufacturers continue to benefit from American consumer demand for their products.

Among the industries apparently benefiting are Chinese automotive manufacturers. Data from Mexico's National Automotive Parts Association (INA), an industry association of manufacturers in the sector, show that in 2023, 33 Chinese companies operating in Mexico exported $1.1 billion worth of automotive parts to the USA, compared to $711 million in 2021. Mexico imported nearly $9 billion worth of automotive parts from China in 2023, according to INA. Cars imported into the USA from Mexico are subject to a 2.5% tax, while auto parts assembled in Mexico pay between 0% and 6% taxes.

In contrast, cars and auto parts imported directly from China are subject to additional taxes of 25% under the scheme introduced by Trump and maintained by Biden.

If that's the case, I'd like to point out that the rules written years ago for the US-Mexico-China trade agreement are outdated with China's rise as a power in automotive production - providing Chinese companies with avenues to circumvent tariffs. In conversations with partners in Mexico and the USA, I'm learning that the USA is likely to push for stricter new rules on the origin of goods. It doesn't matter who the new president will be as of January 2025.

Current US rules prevent direct shipments, so goods shipped through Mexico without any assembly or action in the country must pay full tariffs. However, Biden is under pressure from unions and Congress to create an even stricter scheme given signs that Chinese components are entering the USA via Mexico. Plans by Chinese companies, such as the electric vehicle manufacturer BYD, to open factories in Mexico also concern the USA. In this regard, we can observe massive Chinese investments in the Brazilian automotive industry.

Aware of the problem, in 2023, Mexico announced tariffs ranging from 5% to 25% on products from countries like China, although it's unclear how the new system will be applied or affect imports.

In December 2023, Mexico also signed a memorandum of understanding with the USA to review foreign investments, including new Chinese electric vehicle factories in Mexico, due to national security risks.

However, analysts and advisors specializing in foreign trade, with whom we have contact, doubt whether tariffs and trade rules will be sufficient to discourage the arrival of products from the world's largest industrial manufacturer at its largest consumer.

Mexico's case illustrates the real paradox. The USA wants to create alternative supply chains in partner countries, such as Near Shoring and Friendly Shoring, but what happens when Chinese companies build these supply chains?


the LatAm story - creating a high impact scenario

spotlight April 2024: Argentina and the shame of Central Bank odysee

Argentina will not be able to abolish its central bank.

Pretext

The elected President of Argentina, Javier Milei, promises Argentinians, once again in the country's dire situation, a dollarization of the economy and the abolition of the central bank to combat inflation ??. It should be clear to the reader that the nation on the Rio de la Plata never introduced even a somewhat independent central bank. The president, a self-proclaimed libertarian and anarcho-capitalist Milei, sets the exchange rate of the Argentine peso - yes, dear reader, you read that right. That's exactly what that self-declared ultra-libertarian did on the first day of his term ??.

Javier Milei promised to bomb the central bank which isn’t an independent instruction in Argentina. The president rules the central bank in Argentina … . Well, he will bomb …, kind of stranger things …, isn’t it?

What actually motivates this government?

Apparently, there is even a lack of basic economic understanding of the nation's situation:

Argentina has neither dollar reserves nor consistent positive trade or financial flows that could guarantee these funds coming into the country.

The government's ability to borrow in dollars from both the IMF and China or other creditors is already severely impaired due to the enormous amount of outstanding debt. It also seems unlikely that Argentinians who possess massive dollar reserves outside the country would repatriate these funds at this time.

Without the supply of dollars through any of these channels, Javier Milei's plan appears difficult to implement. Abolishing the Argentine central bank would bring even more problems to managing an economy that is already in an inflation crisis and has significant chances of plunging into a completely out-of-control financial and economic crisis.

Argentina currently has the world's highest inflation rate at around 255%, significantly ahead of Venezuela or Lebanon.

As a side note, the country also has the highest sovereign default globally. So, also a world champion here.

Is there a basic understanding in Argentina?

It is worth recapitulating the functions of a modern central bank to understand the risk Argentina is facing today as the Milei plan progresses. One gets the feeling that the current leaders in Buenos Aires no longer have such basic understandings, whether it's the president or his finance and economics minister.

Ensuring financial stability

Central banks monitor and regulate financial institutions to ensure the stability of the financial system and prevent banking crises. They establish capital requirements and supervisory standards to ensure the financial soundness of the institutions. Commercial banks multiply sight deposits into loans to their customers. The monetary authority limits this multiplication by requiring banks to hold a portion of their liabilities (third-party funds) compulsorily.

Currency and interest rate control

Dollarization of the economy and thus the money supply would restrict the determination of interest rates to trade and financial flows. In other words, the only way for Argentina to have low interest rates (with a higher money supply) would be through high trade surpluses, and the only way to achieve this in the short term would be by reducing imports through recession and economic contraction. Or, after nearly seven decades of almost constant crisis, finally sitting down and creating a national plan based on the nation's gigantic comparative advantages. Successful examples are Chile and Brazil. Where is an Argentine plan? Never seen - until today.

Lender of last resort

The monetary authority is tasked with maintaining liquidity in the financial system at an appropriate level. If a commercial bank cannot close its cash position and does not receive loans from other commercial banks, it can request these funds from the central bank. For example, the US Federal Reserve helped when banks that had excessive exposure to government bonds during the Fed's interest rate shock got into trouble. Opening a support window in 2023 prevented the collapse of banks SVB, First Republic, and Signature Bank from contaminating the entire US financial system.

Economic policy management

Modern central banks work with the government to coordinate monetary and fiscal policies to achieve common economic goals. They purchase government bonds in the open market to assist in managing government debt. Many central banks also have an explicit inflation target as part of their monetary policy to ensure price stability and promote a healthy economic environment. Of course, this is a questionable practice - no doubt. But that's how it's currently being done.

Conclusion

Abandoning the role of a central bank would mean foregoing a range of tools for control and crisis prevention.

Abolishing the central bank to combat inflation would be tantamount to blaming the medication for the illness.

This viewpoint, incidentally, has been common in Argentina for many decades. And the current president is no exception. A prime example of the distorted national view was Milei's speech at the World Economic Forum in Davos in January 2024. Good analysis, no conclusion for the own nation, a convoluted view of the world.

On the other hand, dollarization of the economy is not an option for a country that lacks excess dollars, trade and financial flows, or monetary reserves.

Javier Milei's next steps should be more pragmatic, one can hope, and the Argentine central bank should remain intact. Past mistakes in economic policy leadership, just remember Carlos Menem, such as insufficient reserve accumulation, excessive subsidies to vital sectors, out-of-control public finances, and inflationary monetary policies, common practices under Peronist governments, do not justify another mistake, which would be abolishing the central bank.


short cuts from industries

spotlight April 2024: Mexico - Brazil - and Russia comes into play

Digital Banking, Mexico

Bradesco obtains digital license for Mexico

The Brazilian bank continues its international expansion in the digital banking sector consistently. Bradesco has received approval from the Mexican financial regulator to finalize the acquisition of the national Mexican company, Ictineco. Now, the transformation into a low-cost digital banking platform begins. With its credit card business, Bradesco already has a customer base of 3 million customers and issuing partners like C&A. The process will be completed in 2025. Compared to Brazil, where digital banking is deeply rooted in the market and represents the highest global standards, Mexico is approximately a decade behind. The growth potential is considered enormous.


Industry, Brazil

Historically highest personnel turnover

In 2023, requests for resignations reached an unexpectedly high level. In total, 7.3 million employees requested contract terminations. This figure represents the highest level since statistical recording began. The main reasons cited include non-market-conforming salaries, favorable job prospects, and lack of development opportunities. Approximately 40% of employees with high levels of education show a tendency to change jobs at the next opportunity. The trend of significantly decreasing unemployment rates will likely further fuel this tendency in 2024.


Electrical energy, Brazil

AES will divest Brazil?

The American company AES Corp, which controls the national energy generation company AES Brasil, begun in March to evaluate binding offers for the sale of its Brazilian operations. The expectation is that the deal will be announced by the end of the first semester of 2024. The business was initiated last year, and the intention of the American company is to exit Brazil and invest in other markets. Among the potential buyers, names like the Chinese producer CTG, the French producer Engie, and the integrated energy groups CPFL and Equatorial are mentioned. The company was a heavyweight investor in the industry. In the 1980s, the company was one of the largest investors in the Brazilian electricity sector, but the game has changed. The American business grew strongly, and AES has recycled its activities in Brazil, preparing the exit by selling the AES Sul power company in Rio Grande do Sul in 2016, Eletropaulo in 2018, and the Uruguaiana thermal power plant in 2020. Renewable energy assets expected to fuel the business. The decision to sell was made months ago. The operation has a significant portfolio of renewable energy parks, which should help attract interested parties. The company has an installed capacity of 5.2 gigawatts (GW) of hydro, wind, and solar power plants, including ongoing and under-construction projects. For those looking to grow in the Brazilian energy sector, the situation has proved more favorable for purchasing existing assets with secured energy sales contracts than for developing new projects, which could favor the business. On the other hand, concerns about future oversupply of renewable energy have deterred some conservative investors. Installed capacity in Brazil, especially of wind and solar power plants, is expected to continue growing strongly and challenge future prices.


radiopharmaceuticals, Brazil-Russia

The Russian company Rosatom expands in Brazil

The Russian state nuclear energy corporation Rosatom aims to expand its presence in Brazil and is already in talks with the Brazilian government to expand its business. As the supplier of half of the isotopes used in Brazil for the production of cancer treatment medications, the Russian company plans to invest USD 5 million in a radiopharmaceutical factory in S?o Paulo, in partnership with private or state partners. Currently, the company is in discussions with the Institute of Energy and Nuclear Research (Ipen) regarding the project. The idea is to build a radiopharmaceutical factory of international standards to sell in Brazil and other Latin American countries, initially using the isotopes supplied by Rosatom. While nuclear medicine presents a promising future for Rosatom in Brazil, the sale of enriched uranium remains the company's largest business in the country. At the end of 2023, the state-owned company signed a new contract for the supply of fuel for the Angra 1 and Angra 2 nuclear power plants in Rio de Janeiro for five years. Plans to participate in the Angra 3 project have been scrapped as the power plant is nearing completion. New projects for small modular floating reactors to supply remote areas such as the Amazon are also on the agenda for discussions with the Brazilian government.


ups & downs

spotlight April 2024: Brazil only

The use of recycled plastic in the Brazilian food sector grew by +19% in 2022. For the past year 2023, growth of significantly over +20% is expected. The national packaging industry is preparing for consistent growth over the coming years.

Retail confidence index in Brazil continues to rise in February 2024. Compared to January 2024, the index rose by another +2.4% in February, reaching a total value of 109.7 points and now clearly navigating in an optimistic environment.

The Brazilian financial market also follows the trend of the national central bank and begins to adjust upward the growth forecasts for Brazil for the years 2024 and 2025. In the first days of January of the current year, the forecast was just over +1%. In the meantime, the forecast has been raised to +1.77%; the central bank's report forecast currently stands at approximately +1.8%. The Brazilian government is currently working with a forecast of +2.2%, with a moderate upward trend. The inflation rate has also been revised downwards and is now forecasted at +3.76%.

In 2023, Brazil produced and consumed more chocolate. Production increased by +6% to a total of 805,000 tons. Per capita consumption increased to 3.9kg.

The Brazilian Development Bank BNDES increased export financing by +176% in the past year 2023 compared to 2022. Thus, the public bank returns to its traditional role.

The Brazilian Development Bank BNDES reduced the spread of the main pre-shipment export credit line Exim by -60%. The new policy has been in effect since the third week of February 2024.

Due to very high temperatures and low rainfall in January 2024, electricity demand in Brazil increased by +6.6% to 71,200 MWm.

Revenue of Brazilian agricultural machinery manufacturers fell by -17.8% in January 2024 compared to December 2023. Compared to January 2023, the decline is -32.8%. The most affected segment is harvesters for the domestic market.

The utilization of installed production capacity of the Brazilian chemical industry falls to the historically lowest level of 64%. In 2023, production fell by -10.3% compared to 2022. Domestic sales declined by -9.4%, while exports registered a slump of -10.9%.

Brazilian industrial production started 2024 in the red. Between 12/2023 and 01/2024, industrial production fell by -1.6%; in the previous five months, it had grown by +2.9%. However, the decline was concentrated in just two sectors: Food and beverages and the production of oil and gas and iron ore. Overall, a further 24% of industrial sectors showed a downward trend, while 72% registered a growth trend. The decline in food and beverages is a traditional phenomenon in Brazil, as manufacturers have been ramping up production since Q3 for the end of the year and the summer vacations. The decline in the commodity sector appears to be primarily due to the deteriorating outlook for China.


iMB news & publishing

spotlight April 2024: project mission outlook - revamp of iMB digital presence and a lot on Argentina

We have almost completely redesigned our website. What was already becoming more and more apparent in recent years is now to be implemented quickly: our website, especially the blog section , has become increasingly important for our clients, former clients and interested parties. The most valuable exchanges in terms of content took place on this basis. And we will continue to expand this consistently over the coming months. It all starts with the additional, exclusive GreyRhino newsletter Roundup - only via our website .

Hyperlink inside - click the image to be redirected to the new webpage

  • As already reported in last month's newsletter, project inquiries in March were again at a noticeably higher level than in recent years. Almost half of all inquiries continue to come from Brazilian companies. The project characteristics are almost equally distributed in the areas of reorganization with a view to improving productivity and business development with a view to opening up new markets.
  • In the case of project inquiries with a view to improving productivity, it appears that national companies seem to want to prepare themselves for competitiveness in the face of massive new investments in Brazil by foreign strategic investors. The aim here is probably to be attractive to new investors as a competent production and sales partner, as well as to prepare for potential competition.
  • The renewed increase in project inquiries from German-speaking clients is encouraging. The inquiries are evenly distributed between Brazil and USMCA, especially Mexico as a production location.
  • The base of new contacts is also developing very dynamically. This also includes contacts with whom we have had no contact in the past five years. Brazil is at the top here with 37.5%, followed by clients from the USMCA region with 30.4% and Europe in third place with 25.1%, with the astonishing new champion Germany at 16.1%. Germany does not lead the ranking, but since the beginning of 2024 it appears to have risen like a phoenix from the ashes with interest in Brazil and Mexico in particular. Germany had almost completely disappeared from the radar since 2014/15.

In March, a clear focus was placed on Argentina via the iMB.Solutions platform. This is because we are currently working on a feasibility study for a strategic investor from the technology sector in a sub-project in Buenos Aires. For those who have not yet had the opportunity to read the publications, here are the links:

Argentina - dancing the crypto tango? Buenos Aires, March 2024

Passionate interest in the potential of cryptocurrencies in Argentina is growing, fueled by economic challenges such as high inflation and instability in the Argentine peso. Interviews and discussions in Buenos Aires reveal a shift towards Bitcoin and other digital currencies as a reliable alternative. This momentum is not merely a trend but reflects historical fiscal instability, as evidenced by recent moves by Argentine provinces to print their own currency. Embracing cryptocurrencies offers benefits such as decentralization, cheap mining costs, and easy access via exchanges, which democratizes financial participation. By breaking free from central bank dependency, Argentina can offer a sustainable alternative to dollarization. However, regulatory actions and full adoption remain uncertain, presenting both challenges and opportunities. This synopsis is based on a feasibility study by iMB.Solutions Ltda. conducted on behalf of a North American strategic investor, prioritizing privacy and security while navigating the dynamic landscape of crypto in Argentina.

PDF download link: Argentina - dancing the crypto tango?

Hyperlink inside the image

GreyRhino newsletter Special Edition March 2024 - El Loco

This Special Edition Newsletter has now been read almost 7,000 times since its publication and has also been downloaded as a PDF. And the readership is still growing. One of the main reasons: a detailed presentation of what liberalism, libertarianism and anarch-capitalism really mean. This has of course become a topic of great interest because of the new Argentine President Javier Milei.

Not read it yet?

Hyperlink:


Hyperlink: GreyRhino newsletter Special Edition March 2024 - El Loco, Buenos Aires, Argentina

get out

On March 16, 2024, iMBdigital.Gallery organized a night walk for photographers and videographers in S?o Paulo. The target zones this time were the Japanese neighbourhood of Liberdade and the Downtown district. Once again, some very creative photo and video techniques were tried out. One of the participants also produced the footage for his vlogs. Interested parties, business travellers and locals from Brazil, France, Switzerland and Canada took part. This time there were a total of 11 participants. If you are a photo or video enthusiast visiting S?o Paulo, don't hesitate to get in touch with us. We can certainly organize a great and impressive photo walk for you. The guys from digital.Gallery know their way around S?o Paulo like the back of their hand.

contact hub iMB.Solutions

contact bot digital.Gallery _

photography night walk Sāo Paulo - Liberdade & Downtown

contact

Have a question or concern? Call or email us.

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feel free, hit the link and send me a a mail [email protected]

don't hesitate and give me a call +55 9 91903 91 49

office in S?o Paulo (Brazil) and Hamburg (Germany)


UnitedInterim - seit 2017 - The Place to be in Interim Management

Für die deutsch-sprachigen Leser des Newsletters wird auch die offene Plattform UnitedInterim empfohlen. Hier kann der interessierte Leser ohne Nebenkosten Interim Manager und unabh?ngige Berater mit unterschiedlichsten Profilen finden. Der Autor des Newsletters GreyRhino newsletter, Frank P. Neuhaus, ist ebenfalls auf der Plattform gelistet. Neben erg?nzendem Informationen zum Profil, sind auch zahlreiche

  • Case Studies des Autors,
  • Blogs des Autors und
  • ein Video Special Brazil mit umfangreichen Videos von und mit dem Autor des Newsletters zum Thema Brasilien

abrufbar. Der Autor des Newsletters ist ebenfalls in den Themen Clustern

gelistet.

Link: https://www.unitedinterim.com/interim-manager/Brasilien-Deutschland-Restrukturierung-Mergers



Roberto Duarte

Sustainable Agricultural Value Chains at Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

7 个月
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