ECONOMIC & COMMERCIAL REPORT Number 07 | DECEMBER 2014 Embassy of India BrasĂlia
Brazil after Elections More stories: Latest trade stats | APEX Brazil | New Brazil Export website
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Economic and Commercial Report
Index Editorial Board Economic and Commercial Report Number 07 December 2014 Published by Embassy of India BrasĂlia SES 805 Lote 24 BrasĂlia-DF
Editor: Raj Srivastava Layout and Research: Ana Carolina S Nappo
04 Brazil Balance of Trade - Nov/14 05 Brazil internalizes UN
international rules on commercial contracts
06 SISCOMEX Drawback 07 New tool: Brazil Export website 09 Special Article: APEX Brazil 10 Focus Story: Brazil After Elections 12 Praj Industries wins Petrobras order
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Brazil Balance of Trade November 2014
B
4
razilian trade gap increased to USD 1.18
51.5 percent and 1.5 percent respectively over
billion in October of 2014 from a USD
a year earlier. Meanwhile, imports decreased
0.22 billion shortfall a year earlier, as
15.4 percent to USD 19.5 billion. Yet, October
lower prices for key exports keep dragging sales
had 23 working days in 2014, the same as in
down. In October, exports shrank 19.7 percent
2013. On a monthly basis, working-day adjusted
year-on-year to USD 18.33 billion, following a 6.6
exports fell for the fourth consecutive month
percent drop in September. In volume, exports
by 10.6 percent and imports decreased 9.2
of coffee hit the highest in four years: 3.09
percent. Year-to-date, the country’s trade deficit
million 60-kg bags compared with 2.92 million
widened to USD 1.87 billion compared with a
a year earlier. Volume sales of orange juice,
USD 1.99 billion gap a year earlier. Exports
crude oil, and sugar raw increased 73.2 percent,
and imports decreased both by 4.2 percent.
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Economic and Commercial Report
BRAZILIAN ECONOMY
Brazil internalizes rules of international commercial contracts
B
razil
internalized
by
Decree
No. 83 countries, accounting for over 90% of
8,327 / 2014, the United Nations
international trade, are part of the convention.
Convention on Contracts for the
I
International Sale of Goods. The international treaty promotes uniformity of rights and duties of the parties to international sales contracts between companies based in different countries.
W
ith
n the last 7 days, the federal government also internalized other major international acts for foreign trade and favoring Brazilian
exporters. The first decree extending schemes drawback regarding the trade agreement with
the
internalization
of
the
Chile and the second drawback schemes
agreement, there will be more
under the trade agreement with Bolivia. The
legal certainty and predictability
third establishes the preferences granted in
in international transactions, also resulting in a
trade between Brazil and Venezuela, ensuring
potential reduction of litigation and legal costs
100% preference for tariff universe of Brazilian
for companies engaged in foreign trade. In
exports, except for 777 codes, which converge
case of disagreement between the contractors,
for
comprehensive
preferably
by
2018.
the convention promotes understanding by providing clarity about the rules. Currently,
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SISCOMEX Drawback system
S
S
was developed to computerize request procedures,
T
ince the 13th of October, operators of foreign trade have started testing the training environment of the new module
o, will be possible to reduce operating costs and deadlines analysis and approval, facilitating the use of the
Siscomex Drawback Isenção WEB. The system mechanism and encouraging Brazilian exports.
analyses, granting and control of foreign trade operations supported by that mechanism, the exemption method. This mode, currently manual
he final release of Siscomex Drawback Exemption WEB is scheduled for December 1, ending up, thus, phase test.
process is performed by, through paper forms. At this stage, may be evaluated all the features of
W
the system and its integration with the Siscomex
ith the new system, procedures will
Export WEB (Novoex). Only integrations with
be automated, since the proof of the Siscomex Import (Import Licenses -; LI and operations carried out, involving
Import Declarations -; OF) not available, but the
the purchase of inputs, imported or purchased
tests may be conducted with invoice information,
in the domestic market, used in the production
since the rules of the system will work similarly
process, exports or equivalent sales of goods
to the corresponding import cases. There will
produced, to control inventory replenishment
also, in the help system menu, a booklet with
with tax exemption. The system will insert data
details of the procedures to be followed in
into batches and electronically attach documents
the preparation and use of a concession act.
to prove, analysis or application of such approval, eliminating the present paper routes.
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Economic and Commercial Report
Brazilian Exporters Catalog of Brazilian companies
B
razilian Exporters is a Federal (external
of Textile and Apparel Industry (ABIT) and the
link) Government initiative to promote
National Union of Auto Parts Manufacturers
Brazilian companies on the Internet and
Industry (Sindipeças). Other partnerships are
its products in international markets. The creation
being configured with the purpose of promoting
of a new version of Brazilian exports is intended
the product in international business sites.
to provide not only a powerful communication
A
tool, but also look for synergies between the various measures taken by government agencies in this area in order to strengthen and unite efforts to greater visibility to Brazilian exporters.
T
he
bout 18 000 exporters are included in “Brazilian Exporters”, whose database is updated monthly through automatic
inclusion of new exporters operating in the Integrated Foreign Trade System (Siscomex) or
project
is
supported
by
the
through Simplified Export Declaration (DSE ). The
Department for Trade Promotion (DPR), operations os companies that are already members Ministry of Foreign Affairs, the Brazilian
are also updated monthly by the addition of new
Trade and Investment Promotion Agency (Apex-
products and markets. In order to give impetus
Brasil), Secretariat of International Affairs of to the showroom, “Brazilian Exporters” maintain Ministry of Agriculture, Brazilian Foreign Trade
the registry of companies that have exported
Association (AEB), the Brazilian Foreign Trade
in the past two years - and the current year.
Companies Association (ABEC), and professional associations such as the Brazilian Association
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W
ith elegant design and easy to search, the new version also offers the service of “Virtual Showroom” which allows companies to customize their participation websites, in Portuguese, English and Spanish, by the insertion
of text presentation, business information, images , video and geolocation. Foreign importers interested in doing business can access the Virtual Showroom and send their proposals directly to the participating companies through the form available at the store.
C
ompanies that have not exported yet, but have the exporting potential may apply for admission to “Brazilian Exports”. It is sufficient to access the website and submit the form on the “Request for Accession” which is located on the main page. Companies that do not wish
to participate in “Brazilian exporters” should send message to “Vitrine Responde” with its manifestation. investments
I h
mportantly,
all
translation
of
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services the
text
provided
in
presentation
Brazilian of
the
exporters company
ttp://www.brasilexport.gov.br/mdic-2?l=en
Good businesses!
Economic and Commercial Report
are
for
free,
Spanish
including and
the
English.
special article
APEX BRAZIL - Brazilian Agency for Export Promotion and Investment Services To Help You Do Business With Brazil
Apex-Brasil
investment
The Agency also supports foreign investors
opportunities to attract foreign direct investors
willing to identify local companies, universities
to Brazil. The Agency focuses on companies
and research centers to establish partnerships,
and projects that offer technological innovations
joint-ventures or other types of collaboration.
and
strengthen
Moreover, Apex-Brasil can help capital investors
industrial supply chains, have a direct impact
and in the process of identifying opportunities,
on national job creation and improve the
projects and companies for venture capital
volume and diversity of Brazilian exports.
and private equity investments in the country.
The Agency is prepared to assist in all
Apex-Brasil has assisted investors and
steps of the investor’s decision-making process.
industries from numerous countries in setting up
Our service portfolio ranges from identifying and
new facilities, and has played a key role in directing
contacting potential investors for a particular
investments to Brazil, contributing to an economic
industry segment to supporting a future investor
development strategy by stimulating the highest
understand Brazil. We prepare analyses covering
quality companies to invest in priority industries.
new
promotes
business
models,
industry sectors and markets, economic trends, and general guidelines on legal and fiscal matters, and we provide information on input costs,
Visit: www.apexbrasil.com.br
suitable locations and talent pool availability. Using an extensive network of companies, associations and authorities, Apex-Brasil also acts as liaison between potential partners, key suppliers and regulatory and local authorities.
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FOCUS STORY
Focus:
Brazil after elections
Brazil’s presidential elections on October 26
deprived areas in large cities voted for Rousseff.
resulted in a narrow reelection for President Dilma
On the other hand, Neves commanded a
Rousseff, the Workers’ Party (PT, Partido dos majority of the vote in the richest regions and Trabalhadores). Her opponent Aécio Neves, from
with the higher income blocs of voters. In the
the center right Brazilian Social Democratic Party
end, Neves did not manage to convince Brazilian
(PSDB, Partido da Social Democracia Brasileira),
voters – although he came close to doing so.
was ahead in the polls by a narrow three percent
A Folha de São Paulo article points out that
margin in mid-October (51-49). However, as
the breath of Rousseff’s win (72 percent of the
election day approached, Rousseff pulled ahead
vote) was of great importance to her electoral
with a six percent advantage in the late polls (53-
victory and came from the Northeast, Brazil’s
47). Rousseff ultimately won with a 51.6 percent poorest region. Voters in the North and Northeast of the vote against 48.4 percent for Neves.
have good reason for wishing the PT government
Voting behavior in Brazil was clearly divided to stay in power with its continued commitment along regional and class lines. The majority of to reduce poverty and inequality. These regions low-income voters in the most impoverished
have experienced the biggest change during
parts of the country and the most resource- PT’s 12-year governance in terms of growth
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would not need drastic measures, as when
Interestingly, Rousseff’s 53-47 percent win
former President Lula first came to power,
against Neves in the Southeastern state of Minas
since the economic situation currently was
FOCUS STORY
and steady improvement of its living standards.
Gerais was also very important not only because not anywhere as serious as it was in 2002. Neves served as state governor between 2002
Nevertheless,
although
Brazil
does
and 2010, but also because it is one of the not face immediate destabilizing tendencies riches states in Brazil. Rousseff’s victory in from
the
international
financial
markets,
Minas Gerais is noteworthy since it contradicts the re-elected government in Brasilia faces the general trend of Brazil’s electoral behavior,
significant
challenges.
The
government
and is the home state for both candidates.
must assure renewed economic growth in
The election was not merely a question a context of mild economic recession and of whether voters wanted to retain the benefits
difficulties
in
reaching
the
government’s
and improvements they would gain with the
goals related to its budget and inflation rates.
PT, or those they wished to receive with the
This is a complex task in a context where
PSDB. The two candidates promoted two
the population expects a further expansion of
distinct national projects on how to foster the
the Brazilian welfare state, which has been in
country’s economic and social development.[8]
construction since the introduction of democracy in 1985. Such an expansion would require further
Future Outlook
budgetary expenses, which in turn would make a balanced budget more difficult to achieve. An
At this moment, the future outlook for the
expansion of inclusionary social policies and
country remains uncertain. Financial markets
universal welfare state services has been a
and São Paulo’s stock exchange responded
priority during the ruling epoch of the PT and
unenthusiastically to the victory of Rousseff
one, which its supporters expect to continue.
and the coalition government led by the PT, Rousseff stressed in her presidential speech but are now in recovery. The government did on the night of the election that she would take not feel hurried to react to the drop but decided
economic measures to re-invigorate economic
to initiate a broad dialogue with different growth. Her goal is to maintain the economy groups in society, including all productive
to guarantee high levels of job creation.
sectors with a view on developing appropriate
Additionally, she will strive to ensure that real
economic policies. Dilma underlined that Brazil
incomes do not shrink as a result of high inflation.
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SPECIAL ARTICLE
Praj wins Petrobras order
Praj Wins an Rs. 235 Crore Order for Oil & Gas Process Skids for Petrobras Project in Brazil Praj Industries, a global process solutions company, has won anRs.235 crore order for oil & gas process skids for Petrobras, a multinational Fortune 500 Oil & Gas corporation based out of Brazil. Originally published by Praj Industries Limited
QGIT, the main contractor for the Petrobras project in Brazil, has awarded the order for skids on Praj. In this project, Praj will provide detailed engineering, procurement, manufacturing of skids along with all related equipment. The weight of individual skids range from 50 to 150 tons. Some of the units will be large, multi-storied skids.
Praj will manufacture these process skids as per ASME and Brazilian code requirements at its SEZ, Kandla units in Gujarat, India.
On this occasion, Mr. Pramod Chaudhari, Executive Chairman, Praj Industries said, “This is a very prestigious order for Praj and for the Emerging Business of Critical Process Equipment & Systems (CPES). It opens the door for Praj’s CPES business in the Latin American market. Praj ethanol business is already established inLatin America for past two decades where it enjoys a significant market share. Our investments into the additional manufacturing facilities at Kandla are bearing fruits. Praj is also getting established as a key player for process equipment & systems in the hydrocarbons sector. Praj Critical Process Equipment and Systems business:
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Economic and Commercial Report
SPECIAL ARTICLE
Praj embarked upon the Critical Process facilities
have ASME
U
and
U2
Stamp
Equipment and Systems (CPES) business in
certifications and are approved by many
2009, leveraging its strength in engineering
global Customers for their global sourcing.
and manufacturing of equipment & systems for turnkey plants and high quality, critical fabrication. Praj offers Critical Process Equipment & Systems for a range of applications across industries like oil & gas, chemicals, fertilizer, etc. Praj
has
the
ability
to
design
and
manufacture static equipment and process skids as per various global standards, giving it a competitive edge. Praj’s CPES business has supplied Equipment and Skids to more than 15countries worldwide in last 5 years. Praj has four well equipped manufacturing facilities with excellent connectivity to Ports and Highways. For
heavy
fabrication,
a
dedicated
manufacturing facility has been set up at Kandla SEZ with separate shops for stainless steel and carbon steel fabrication. These
For more information, visit http://www.praj.net. Media enquiries:
VinatiMoghe VP, Corporate vinatimoghe@praj.net
Sohini Dam Asst. Manager, Corporate Communication sohinidam@praj.net
Suman Sharma Metigon Enterprises
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namaste
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