Brazil Set for Growth
I recently had a very interesting telephone conversation with David P. Nick, President and CEO of DPNA International, Inc. In the course of talking about this month’s ABRAFATI event in Sao Paulo, Brazil, Dave educated me on the BRICS alliance. I often read about the fast-growing economies and coatings growth in Brazil, Russia, India, China and South Africa (the BRICS countries), but I did not realize that these countries have formed a trade alliance unlike anything else.
BRICS is not a formal trading bloc, but rather a loose economic alliance not based on currency, politics or traditional trading guidelines. Each of these countries has something the others want. To name a few, Brazil has land, oil and agriculture products; Russia, oil and gas; China, an enormous work force and the need for oil and gas; India has extensive IT knowledge and resources; and South Africa has precious metals and diamonds, and is the gateway to Africa. Rather than establishing trade agreements based in dollars or euros, these countries have created barter agreements. For example, China might agree to build a highway system in South Africa, complete with funding, a labor force and equipment, in exchange for a multi-year contract to develop the country’s coal or metal resources.
Such an alliance has the potential to make these countries’ continued growth something real and sustainable. It isn’t dependent on what happens in Europe or the United States. According to Nick, “BRICS represents a collective shift in economic power from the G-7 developed countries to the developing world, and many other countries are eager to join the club.” I look forward to reading more about BRICS and watching its development in the coming years.
Despite a recent press release from ABRAFATI (Brazilian Coatings Manufacturers Association) that indicates that coatings growth in Brazil diminished this year compared to the 10% growth in 2010, the future looks bright. The overall growth of the coatings industry in Brazil this year should be 1.3% (due to the questionable international economic climate and a hesitation to remodel or build), reaching 1.377 billion liters, whereas a 4% expansion of sales is expected in 2012.
In an effort to foster economic and social development, the Brazilian government has launched a housing program, Minha Casa Minha Vida 2, and has extended the IPI tax reduction. According to Dilson Ferreira, Executive President of ABRAFATI, “It is important to stress that, in addition to the great events that we will have until 2022 (including the 2014 FIFA World Cup and the 2016 Summer Olympics), which will ensure a sustainable growth, the structural reasons that stimulate sales will still be present for many years to come. Among these factors, the most noteworthy are investments in housing and infrastructure, the amplification of segments related to oil exploration and distribution, the strengthening of the internal market and the growth of the middle class.”
In an effort to reach this growing market and the attendees at the upcoming ABRAFATI event, PCI introduces our first Portuguese supplement in this issue, which will be distributed at the show. We hope our Portuguese readers will find this information helpful and informative, and that we will be able to provide further supplements like this in the future.
BRICS is not a formal trading bloc, but rather a loose economic alliance not based on currency, politics or traditional trading guidelines. Each of these countries has something the others want. To name a few, Brazil has land, oil and agriculture products; Russia, oil and gas; China, an enormous work force and the need for oil and gas; India has extensive IT knowledge and resources; and South Africa has precious metals and diamonds, and is the gateway to Africa. Rather than establishing trade agreements based in dollars or euros, these countries have created barter agreements. For example, China might agree to build a highway system in South Africa, complete with funding, a labor force and equipment, in exchange for a multi-year contract to develop the country’s coal or metal resources.
Such an alliance has the potential to make these countries’ continued growth something real and sustainable. It isn’t dependent on what happens in Europe or the United States. According to Nick, “BRICS represents a collective shift in economic power from the G-7 developed countries to the developing world, and many other countries are eager to join the club.” I look forward to reading more about BRICS and watching its development in the coming years.
Despite a recent press release from ABRAFATI (Brazilian Coatings Manufacturers Association) that indicates that coatings growth in Brazil diminished this year compared to the 10% growth in 2010, the future looks bright. The overall growth of the coatings industry in Brazil this year should be 1.3% (due to the questionable international economic climate and a hesitation to remodel or build), reaching 1.377 billion liters, whereas a 4% expansion of sales is expected in 2012.
In an effort to foster economic and social development, the Brazilian government has launched a housing program, Minha Casa Minha Vida 2, and has extended the IPI tax reduction. According to Dilson Ferreira, Executive President of ABRAFATI, “It is important to stress that, in addition to the great events that we will have until 2022 (including the 2014 FIFA World Cup and the 2016 Summer Olympics), which will ensure a sustainable growth, the structural reasons that stimulate sales will still be present for many years to come. Among these factors, the most noteworthy are investments in housing and infrastructure, the amplification of segments related to oil exploration and distribution, the strengthening of the internal market and the growth of the middle class.”
In an effort to reach this growing market and the attendees at the upcoming ABRAFATI event, PCI introduces our first Portuguese supplement in this issue, which will be distributed at the show. We hope our Portuguese readers will find this information helpful and informative, and that we will be able to provide further supplements like this in the future.
