PRLog (Press Release)– Mar 31, 2011– Appreciation of the Brazilian real could prove a major setback for petrochemicals industry growth, putting at risk the competitiveness of alfa romeo production and exports as well as increase the cost of business, according to BMI's latest Brazil Petrochemicals Report.
The real had gained significant strength against the dollar from September 2008, following a large influx of US dollars in the country. However, BMI does not foresee a significant appreciation in the currency against the dollar in the short term, given that the Brazilian government, since October 2009, has regularly intervened - through taxes on financial operations (IOF) - in order to stop the currency from appreciating. Our core view in this regard is that a move through the BRL1.64/US$ level would likely trigger more intervention, which should limit upside potential against the dollar for the time being.
The domestic market has huge potential which alone will alone sustain healthy sales growth, if economic activity is maintained at current rates. With domestic demand surging and the export picture turning increasingly favourable amid strong Asian demand for Brazil's varied commodities complex, the medium-term outlook for Brazil is one of above-trend growth, with annual real GDP growth set to average 4.9% y-o-y between 2011 and 2015. BMI points out that currency woes add more concerns to the position of domestic producers in the market.
We caution that Brazil's petrochemicals industry remains vulnerable to global economic trends. A further external shock - possibly in the form of a major correction in China's real estate market - could see a decline in manufactured exports. With a widening current account deficit only made sustainable by high levels of both fixed and portfolio investment, a prolonged period of capital flight would undermine prospects for strong growth.
On the upside, there are also long-term commitments to infrastructural spending that should ensure that petrochemicals segments tied to construction, particularly PVC, grow at a sustained rate above that of economic growth. We are forecasting Brazil's construction industry to grow 6.2% in 2011, down from 10.8% in 2010, but it should pick up from 2012. Upside risks for our forecast from 2011 are present owing to President Luiz Inacio Lula da Silva's PAC II, announced in March 2010. The PAC II targets investment of BRL959bn into construction, with a large portion going to infrastructure. These programmes will be more than enough to support the domestic petrochemicals industry and could also boost Brazilian petrochemicals imports.
Another important petrochemicals market, the automotive industry, is also set to grow rapidly over the next five years, due in large part to domestic demand. BMI forecasts vehicle sales will exceed 5mn units in 2015, up from a record 3.4mn units in 2010. BMI believes there is little to make carmakers wary of a slowdown in demand as they continue to pour new investments in the country. Carmakers are set to invest US$11.2bn in Brazil over the next two years, according to estimates from the National Association of Motor Vehicle Manufacturers (Anfavea). The same consumer trends that are fuelling growth in the automotive sector are also evident in packaging and household goods production, which also rebounded in 2010.
Brazil is third in BMI's Americas Petrochemicals Business Environment Ratings with a composite score of 63.5 points. While it has a re audi latively large petrochemicals industry, Brazil's score is weighed down by a higher level of risk than most other countries in the region, with its long-term financial market risk a notable cause of concern. Brazil's only chance to climb the ratings and overtake Canada is if the latter reduces its capacities, which is a distinct possibility as the Canadian petrochemicals industry struggles to compete in the global market and the US market remains in the doldrums. Brazil is 8.3 points ahead of Mexico and 12 points behind Canada.
For more information or to purchase this report, go
0 komentar:
Posting Komentar