Amata spending R$100m on Brazil’s first engineered wood plant

Amata, a wood supplier for pulp and paper companies, as well as mills, is betting on growing demand for sustainable construction materials. The company is investing R$100 million to build Brazil’s first large-scale factory of engineered wood, expected to begin operating in 2022 with an annual capacity of up to 350,000 square meters. The site has not been picked yet, and the plant will start operating at a lower capacity, which could increase along with demand. Amata does not have a defined controlling shareholder, having among its investors several equity investment funds (FIPs), especially Brasil Agronegócio (29.40%), Urbis (18.58%) and Brasil Sustentabilidade (14.70%). It was founded a decade ago and currently has pine forests in Paraná, eucalyptus assets in Mato Grosso do Sul and native-wood sources in Pará and Rondônia.

Source: Valor Econômico

Vale maintains iron-ore targets despite Chinese outbreak

Vale confirmed Tuesday it would not change the iron-ore output target for 2020 despite uncertainty caused by the coronavirus outbreak in China, its primary market, and severe rainfall affecting Minas Gerais in the last two months – the state host some of its mines. The mining giant expects to produce between 340 million and 355 million tonnes of fines, its main product. Investors who expected lower targets to prevail as the company keeps digesting the impact of Brumadinho reacted well to the announcement.

Source: Valor Econômico

Official bodies confirm record grain haul

Continuing favorable weather in most grain-producing regions of Brazil led the National Supply Company (Conab) and the Brazilian Institute of Geography and Statistics (IBGE) to raise grain output estimates for the 2019/20 cycle, currently in the harvest phase and expected to reach a new record. Conab, which manages Brazil’s farm resources, sees the total reaching 251.1 million tonnes or 1.3% higher than predicted in January. It is also up 3.8% from the 2018/19 cycle, which saw inclement weather hurting Brazil’s soybean yield. IBGE, for its part, revised estimates upward to 246.7 million tonnes, 2.2% higher than the last cycle. Soybean is the standout grain of this cycle, with output recovering 7.1% from 2018/19 to 123.2 million tonnes.

Source: Valor Econômico

Banrisul sees individual loans driving credit growth up to 13% in 2020

Banco do Estado do Rio Grande do Sul SA said Brazil’s economy is on track to improve further in 2020, which could help the bank achieve double-digit loan growth this year.

The lender announced financial guidance for 2020, including a forecast for its credit portfolio to expand between 9% and 13%. The growth should be driven by loans to individuals, which are foreseen rising 10% to 14%. Real estate loans and credit to companies, meanwhile, are expected to increase up to 7% and up to 6%, respectively.

Banrisul, as the bank is known, also sees provision expenses as a percentage of its credit portfolio totaling between 3% and 4% in 2020. It anticipates a return on average equity in the range of 14% to 17%.

“Due to the slight recovery of the economy, credit losses tend to decrease, but provisioning levels are expected to be at 2019’s levels, as well as fundraising,” the lender said.

Banrisul reported fourth-quarter 2019 net income of 397.2 million Brazilian reais, up from 252.5 million reais in the prior-year period. The result came as allowance for loan-loss expenses declined to 265.1 million reais from 449.8 million reais.

As of Feb. 10, US$1 was equivalent to 4.31 Brazilian reais.

Source: News Now

Log brings forward 2024 target for leasable areas

Log Commercial Properties is bringing forward to 2021 the goal to deliver more than 1 million square meters of gross leasable area (GLA) to its portfolio of warehouses, which had been scheduled for 2024 in the company’s growth plan. The commercial property company ended 2019 with 866,670 square meters of GLA in its portfolio. Since the plan was announced, the company has purchased areas corresponding to an additional 152,000 square meters. Lands that make it possible to build another 460,000 square meters of GLA are under negotiation. According to CEO Sérgio Fischer, acquisitions projected in the growth plan could be concluded by the beginning of next year – the deadline is the end of 2021. The company’s global investments in expansion amount to R$1.5 billion.

Source: Valor Econômico

Novartis mulls bringing cell therapy to Brazil by next year

Six months after taking over the command of Novartis in Brazil, Renato Carvalho is already working with the Ministry of Health and regulator Anvisa to bring innovative treatments to Brazil by next year, including cell therapies. He says that access to these therapies by Brazil’s public healthcare system will be one of the pillars of his tenure at the Swiss drugmaker. “There are possibilities like risk-sharing or even funding where Novartis would cover part of the cost,” Mr. Carvalho says. Novartis mulls bringing to Brazil CAR-T Cell, a fully individualized cell therapy. CAR-T Cells are defense cells (T lymphocytes) extracted from your own body and manipulated to become more aggressive against the disease. According to Mr. Carvalho, it costs about $1 million in the US and has already treated 2,100 patients in 21 countries. It is a priority for Novartis and the drugmaker is already in talks to have a CAR-T Cell center in Brazil by 2024 that will also serve Latin America, the executive says.

Source: Valor Econômico

Syngenta expands coffee bartering in Brazil

Syngenta, a multinational agrochemical and seed company controlled by state-owned companies ChemChina and Sinochem, is expected to receive 800,000 bags of 60 kilos of coffee as payment for the purchase of crop inputs this year, a 33% increase over the 600,000 bags of 2019.

Considering current commodity prices in the domestic market, the volume represents almost R$380 million. Coffee is almost a separate business for the company, which sells coffee bags for importers from all continents. “Currently, 70% of the defensives purchased for crops in Brazil are traded via barter [exchange of inputs for future harvest],” says Roberta Armentano, general manager of Syngenta’s Nucoffee, a platform to connect farmers.

Source: Valor Econômico

Volvo expands investment in Brazil

The Swedish truck and bus manufacturer Volvo will invest R$1 billion in Brazil from 2020 to 2023. The funds will be allocated to research and development of products and services in all businesses, including construction equipment and marine engines, CEO for Latin America Wilson Lirmann says. With the new injection, investments in the country since 2017 will reach R$2.25 billion in 2023.

Source: Valor Econômico

Copom cuts Selic again but sees steady outlook

The Central Bank’s Monetary Policy Committee (Copom) “sees as adequate interrupting” the current monetary easing cycle after making a 25-basis-point cut in the Selic that brought Brazil’s benchmark rate to another historical low of 4.25%. The post-meeting statement cited the lagging effects of monetary easing started in July 2019 as one reason to dismiss any further cuts in the short term, emphasizing the need for “cautious” policy even as its next decisions will continue conditioned on the evolution of economic activity, risks and inflation projections. Copom officials underscored that inflation now appears headed to the now reduced target of 3.75% by 2021 after staying below official goals in the last few years. But the minutes also cited the potentially inflationary effects of monetary policy becoming more effective as ongoing reforms transform financial intermediation in capital and credit markets as one potential risk.

Source: Valor Econômico

Anatel director promises to “upgrade” 5G auction rules

Brazilian Telecommunications Regulatory Agency (Anatel) director Moisés Moreira believes the body finally managed to reach an agreement with all stakeholders to build a consensus proposal for auctioning 5G services in Brazil and promised to “upgrade” the current framework. Mr. Moreira says he will suggest setting aside spectra for small-scale regional providers but declined to reveal which proposal for the 3.5GHz band he will add. The current rules have yet to approved and submitted to a public comment period before an auction, possibly in the second half. The auction’s case rapporteur first submits a proposal to Anatel’s board, with each director deciding whether to vote on it or introduce their recommendations.

Source: Valor Econômico