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Brazil chemicals market: Import value of $26 billion in 2011
Brazil Chemicals 2012 - a new market research report on 2014-03-13 19:00:05
The Brazil chemicals market is suggested to have reached a total import value of around $25.9 billion in 2011, with the sector noted for its dependence on imports and lack of exports. The value of imports into the Brazil chemicals market grew 27.9% on the previous year, while Brazilian production declined by 3%.

The process of opening the Brazilian chemicals market and also the stabilization program, with the launch of the Plano Real, in the early 1990s, have created the basis for the solid and sustainable growth of Brazil, despite the increase in the ´Brazil Cost´ that has created serious obstacles for industrial growth.

For this reason, it is no surprise that the chemical segment, a sector with the characteristic of serving the other industrial activities, has had, over the last decade, a rate of growth that reminds us of the Chinese economy. Yet the growth of the market has not been matched by industrial investments in Brazil.

In addition, data collected by ABIQUIM show that the level of investment in industrial projects is below the real possibilities of the Brazilian market, making a total of US$22 billion between 2010 and 2016, while the studies conducted by the institution show a potential of up to US$167 million from 2010 to 2020.

It is not difficult to explain the reasons why the Brazilian chemical segment does not make the necessary investments to accompany the growth of the market: expensive raw materials, with the price of gas being four times what it is on the American market; expensive energy, at almost double the cost in the United States; high interest rates, even though the National Bank for Economic and Social Development (BNDES) has made credit lines available at more favorable rates compared with those of the banking market; high tax burden, particularly taxation on investments in machines and equipment; limited encouragement of R&D; and a currency which is highly overvalued compared with other international currencies. All these factors help to inhibit investors from carrying out their projects.

However, there are positive signs showing that there could be a possible change in this direction, also opening the possibility of a new wave of investments in the segment.

On the one hand, the recent discoveries of petroleum and gas reserves in the layer of pre-salt bring the hope that the companies installed in Brazil may finally count on abundant raw materials at competitive prices, these being characteristics that promote the development of the chemical industry in all countries of the world.

On the other hand, three Government initiatives suggest that the Federal Government has firmly decided to attack the causes of the lack of competitiveness of Brazilian industry: the installation of the Competition Council for the segment, the establishment of a Study Group to define the policy for using gas as a raw material and the hiring, by the BNDES, of a study about the opportunities for diversification of the chemical industry.

Report Scope

Brazil Chemicals 2012 provides coverage and analysis on the entire Brazil chemical sector value chain, from downstream to upstream. Issues explored include regulatory hurdles, infrastructure concerns, the "Brazil Cost", and feedstock issues. This report features editorial from on-the-ground journalists, quantitative information, and exclusive interviews with the industry´s leading players.

This report, Brazil Chemicals 2012, is the result of intense research conducted with executives of Brazilian and multinational companies established in Brazil and clearly shows the international investors all the challenges, risks, threats and, most importantly, the enormous opportunities for investment in the Brazilian chemical industry.

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