Regulator tries to spur innovation in insurance industry

Automation Software Technology Process System Business concept.

The wave of innovation is growing in the insurance sector with the help of the regulatory stimulus to the so-called “insurtechs” – a promise, among other things, to shorten the long and full of red tape process to pay damages. Several products are supposed to use artificial intelligence to validate claims, sometimes in real time. Many insurances will be bought on demand, “like a Netflix coverage,” says Rodrigo Ventura, CEO of 88i, one of the 11 companies selected by regulator Susep to test the new system. Intermittent insurance will be also offered, and, in the future, it will cover risks that are not currently accepted, such as pandemics.

Source: Valor International

https://www.valor.com.br/international/briefs

EDP makes deal targeting solar power market

EDP Brasil is expanding its business on solar power, one of its main growth drivers for the coming years. The Portuguese power company closed a partnership with Blue Sol – a São Paulo-based company dedicated to the distributed generation segment – in order to expand in the B2C market, serving homes and small companies with micro and mini photovoltaic solar generation systems. The electric company committed to invest around R$20 million in Blue Sol in 2021, with the final goal of acquiring a stake of up to 40% in the company.

Source: Valor International

https://www.valor.com.br/international/briefs

Smurfit Kappa invests in Brazil

Irish company Smurfit Kappa, Europe’s largest corrugated cardboard packaging manufacturer, is expanding production capacity at its plant in Pirapetinga, Minas Gerais, by up to 20%. About a month ago, the company raised €660 million through a primary stock offering and part of the proceeds will come to the country.

Source: Valor International

https://www.valor.com.br/international/briefs

Solvay to raise investments after gas regulatory framework

Belgian chemical company Solvay, owner of Rhodia, plans to keep the pace of investments in Brazil in 2021 and pouring R$100 million in the local operation. A large industrial consumer, the company mulls it will be able to raise injections in the coming years after the expected new regulatory framework for gas. The bill was passed by the Senate in early December and is about to be analyzed again by the Chamber of Deputies. According to the company, the Brazilian product will compete better under the new framework. Natural gas is used as energy and raw material in the sector, responsible for 25% of industrial demand in the Brazilian market. Consumption is expected to triple by 2030 in the wake of the new framework.

Source: Valor International

https://www.valor.com.br/international/briefs

Suzano raises pulp prices for China

The recovery of pulp prices gained traction in the fourth quarter, driven by Chinese demand and problems in the supply of long fiber, which also have repercussions on short fiber. Suzano, the world’s largest producer of eucalyptus pulp, announced three price adjustments since October for the Chinese market and fiber prices will begin 2021 with increases in all markets, a move not seen in months. Suzano’s commercial head for pulp, Carlos Aníbal de Almeida, says the industry enters 2021 under “very favorable conditions.” “Demand is heating up in all regions,” he told Valor. The strong demand for sanitary paper in North America and Europe and for all kinds of paper in China helps to explain the higher prices. The appreciation of different currencies against the dollar has also played a role.

Source: Valor International

https://www.valor.com.br/international/briefs

Banco Alfa takes $265m loan from IFC to finance hybrid, electric cars

Banco Alfa will receive a $265 million loan from the World Bank’s investment arm International Finance Corporation. It is the entity’s first line for a Brazilian lender focused on green mobility. Alfa will use the funds for financing flex, hybrid and electric cars. The first tranche of the financing is made up of a $100 million line of IFC resources and $65 million from other lenders. The banks participating are Itaú BBA, Santander and Banco de Occidente. The second tranche, of $100 million, is expected to be released in 2021. The IFC loan is expected to boost Alfa’s car finance portfolio, currently around R$2.5 billion. Alfa’s executive director Fábio Raposo says hybrids and electric cars represent only 1% of Brazil’s fleet, while in Europe they are already 16%. “This percentage should increase in the coming years in Brazil. It is an unavoidable trend.”

Source: Valor International

https://www.valor.com.br/international/briefs

O Boticário raises R$1bn in sustainability-linked bonds

Cosmetics giant O Boticário, in partnership with Itaú BBA, raised R$1 billion in five-year bonds linked to sustainability goals. Known as “sustainable-linked bonds” or “SLBs,” these securities reinforce the issuing company’s commitment to improvements in business sustainability and to environmental, social and corporate governance practices. It is the first operation of its kind in the Brazilian market. In September, pulp and paper maker Suzano issued $750 million with the same type of bonds abroad. Unlike green bonds, funds raised with SLBs are not stamped for use in specific projects. Instead, the company makes commitments to environmental goals.

Source: Valor International

https://www.valor.com.br/international/briefs

Azul projects 28% growth in cargo transportation revenue in 2020

Azul will end the year with better performance than expected at the beginning of the coronavirus pandemic, CEO John Rodgerson said in an online presentation to analysts. The company highlighted the performance of the cargo transport segment, whose revenues are likely to grow 28% in the year, while sales from passenger transport is expected to drop 42% compared with 2019. Mr. Rodgerson recalls that the company made several moves along the year to control expenses and costs and has managed to preserve R$8 billion in cash. The company estimates savings with a reduction of variable costs (R$3 billion) and fixed costs (R$4.4 billion). Azul had predicted to close the year with 40% of the network that operated before the pandemic. The share was now updated to 70%.

Source: Valor International

https://www.valor.com.br/international/briefs

Thyssenkrupp expects to double in size in South America in 3 years

The German industrial group Thyssenkrupp expects to double in size in South America in three years, even after selling the elevator division worldwide. The company hopes to achieve the goal with new fronts, with a focus on the naval defense ship division operated by Marine Systems, which already has a €3 billion contract to supply four frigates to the Brazilian Navy by 2028. The operation in South America closed the fiscal year ended on September 30 with revenues of R$3 billion — up 1% year over year. Brazil accounts for 80% of the group’s revenues in the region.

Source: Valor International

https://www.valor.com.br/international/briefs

Sugar production, exports expected to reach all-time highs

Sugar production and exports are poised to reach all-time highs in the 2020/21 crop. The Brazilian Sugarcane Industry Association (Unica), which represents mills in the Center-South region, says sugar production is likely to reach 38.4 million tonnes this season by March, up 43.5%. The projection of the National Supply Company (Conab) for the region is similar — 38.6 million tonnes. Conab’s forecast for the country is 41.8 million tonnes, up 40.4%. Unica also says Brazilian exports are likely to reach 31 million tonnes. Around 46% of the raw material should be used to produce sugar — Brazil also makes ethanol from sugarcane. The results reflect the decision of the mills to take advantage of remuneration for sugar, driven mainly by the weakened real against the dollar and the dry weather, which yielded the best-quality cane in seven seasons.

Source: Valor International

https://www.valor.com.br/international/briefs