7 - Trends in Brazil S.R de Aqiuno
Transcript of 7 - Trends in Brazil S.R de Aqiuno
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BRAZILS FORGE TRENDS
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GDP
0.880.84 0.87
0.64
0.55 0.5 0.55
0.66
0.88
1.09
1.37
1.65 1.62
2.14
2.45
2.25
2.05 2.09
0
0,5
1
1,5
2
2,5
3
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
USD(trillion)
The GDP grew consistently until 2011 in dollars
Low growth in the last 3 years comparing to other developing countries
7th biggest economy in the world (at the moment)
GDP growth (%)
2007 2008 2009 2010 2011 2012 2013 20146.1% 5.2% -0.3% 7.5% 2.7% 0.9% 2.3% 1.8%
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Inflation and Interest Rate
Inflation (%)
2007 2008 2009 2010 2011 2012 2013 2014
4.5% 5.9% 4.3% 5.9% 6.5% 5.8% 5.9% 6.4%
Interest Rate (%)
2007 2008 2009 2010 2011 2012 2013 2014
11.2 13.7 8.7 10.7 10.9 7.1 9.9 11.5
Historically, Brazil has had a high rate of inflation, and the government tries to
control it by increasing interest rates
A lot of volatile money coming into the country
Forging parts are expensive to export
Brazil is importing many manufactured goods because of the strong currency
(Real)
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International Reserves
51 43 36 33 35 3749 52 53
85
180 193
238
288
352 373 358 340
0
50
100
150
200
250
300
350
400
USD(bliion)
Twelve (12) years ago, the international reserves were USD 30 billion
In 2012, international reserves hit a record of USD 373 billion. Now they are
lowering due to the end of the trade balance surplus
Three (3) years ago, Brazil was self-sufficient in oil, but the government is subsiding
gasoline to lower the rate of inflation
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The Brazilian Government
Hostile business environment:
83 different taxeseach company spends 2,700 working hours per year on taxes
Taxes are 36% of the GDPmuch higher, if you compare to the United States (26%) and
Mexico (14%)
too much bureaucracyit takes 150 days to open a company
Lack of confidenceThe government does not respect contracts
The government has been unable to complete several infrastructure projects:
- Public transportSo Paulo has 20 million inhabitants and only 70 km of underground
lines- Roads1 ton of soya beans costs 200 dollars to reach the harbor
- Electricityall projects are at least one year delayed
All these factors bring low investments into the country only 19% of the GPD
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The Brazilian Government
There have been strong public demonstrations against:
- the government
- the Congress- rises in public transport fares
- violence
- corruption
- the 2014 FIFA World CupUSD 13 billion were spent on the event
- the low quality of public education
The Government has been losing popularity since 2012, falling from 70% to 40%
After the presidential elections in November 2014, several strong economic
adjustments are expected
The government net debt is low compared to other economies
Government Net Debt Comparedto the GPD
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
50.0% 48.0% 46.0% 45.0% 38.0% 41.0% 39.0% 36.0% 35.0% 33.0% 32.0%
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People
181184 186
188 189191 193
195 196198
201 203
170
180
190
200
210
Population
(m
illion) Population
3,0403,607
4,739
5,788
7,194
8,623 8,373
10,980
12,580
11,340
10,199 10,300
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2.000
4.000
6.000
8.000
10.000
12.000
14.000
GDPpercapita
(USD)
GDP per capita
Population of 203 million in 2014small growth trend
More than half are in the middle class
Two income sources per family trend
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Work Force
A 5.5% unemployment rate in Brazil is regarded as full employment. The
salaries and costs with salaries are high compared to other developing
countries
Companies pay 100% of benefits on salaries. For example, if a workerhas USD 1000 in wages, the company spends USD 2000 on that worker
9,99,3
7,8
8,1
6,76,0
5,5 5,4 5,5
0,0
2,0
4,0
6,0
8,0
10,0
12,0
Unemploymentrate
(%)
Unemployment
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Vehicle Production
2069
15731350
16811817 1791 1827
23172530 2611
29773215 3182
3381 3407 3342
3740 3700
446 457304 339 235 159 169 260
319432 544
597 512716 828 764 791 700
0
500
1000
1500
2000
2500
3000
3500
4000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e
Vehicles(thousand)
Brazils 2013 close-to-record vehicle production will not happen again this
year:
- increase in vehicle taxes
- exports to Argentina will decrease 40%
- 2014 FIFA World Cup holidays
- Over a 2-month vehicle inventory stored
Brazil Argentina
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Vehicle Production
28 automotive industries
19 brands
90% of cars are bi-fueled (alcohol or gasoline)Taxis are tri-fuel (alcohol
or gasoline or gas)
50% of the production are small-sized cars
6th biggest automotive industry in the world
Since 2012: Euro-5 trucks
850,000 Cars + Trucks Imports600,000 Cars + Trucks Exports
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Brazilian Forging Production (thousand metric tons)
Argentina and other South American countries
(Metric tons)
2008 2009 2010 2011 2012 2013 2014
Drop forging,
press, upset
forging , and
cold forging
384 305 370 400 354 425 360
Open-die
forging, and
ring rolling
66 52 63 68 63 75 65
TOTAL 450 357 433 468 417 500 425
TOTAL 93 74 90 97 90 80
45 forging plants
26 Sindiforja associates
18,000 employees
50% idle
High electricity prices: 0.15 USD per
0.15 KWh
High steel prices20 to 30% more
expensive than international prices
Labor is 28% of the cost2011 2012 2013 2014e
272 173 220 180
Brazilian Trucks and Buses (thousands)
TheForge Industry
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Autoparts Production - 2012
335
295
216
103
73 6742
28 23 22
190
0
50
100
150
200
250
300
350
400
USD(billion
s)
2/3 of the Brazilian forged autoparts are imported
Strength of the Brazilian currency (Real (R$))Less competitiveness
Sindiforja Associates
- 199257 forge industry associates and 4 steel makers
- 201426 forge industry associates and 2 steel makers
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Silvia Ribeiro de Aquino
Sindiforja Brazilian Forging Association
http://www.sindiforja.org.br/home.asp
http://www.sindiforja.org.br/home.asphttp://www.sindiforja.org.br/home.asp