The production of cow’s milk in Brazil became 31% more expensive in April due to the rising feed costs. Soybean and corn, whose prices have skyrocketed since 2020, weigh heavily on the composition of animal feed, representing between 40% and 60% of the costs in dairy farming, analysts and producers say. “The producer bought a bag of corn for R$35 to R$40 a year ago, and today he spends around R$100,” says Ronei Volpi, president of the Sectorial Chamber of Milk at the Ministry of Agriculture, Supply and Livestock.
Mexican steelmaker Simec plans to invest $300 million to double the size of its factory in Pindamonhangaba, São Paulo. The company, which has been operating in the country since 2015, is confident that demand from the real estate and infrastructure segments will remain strong in coming years. Currently, the factory has capacity to produce 500,000 tonnes of crude steel per year. Simec became the third largest long steelmaker in Brazil, with a market share of about 8%, after acquiring plants from ArcelorMittal three years ago.
Before taking office, the Jair Bolsonaro administration set a goal of increasing annual investments in infrastructure to R$250 billion by 2022. A survey by Inter.B Consultoria, however, shows that public and private investments in the area totaled R$115.2 billion last year, lower than the R$118 billion in 2019 and R$117.6 billion in 2018. In 2017 it was R$114.7 billion. This covers investments in the transport, electricity, telecommunications and sanitation sectors.
The Amazon rainforest highlights the challenges involved in protecting the planet while creating economic development opportunities. The key to success is partnerships between nonprofit organizations and the private sector, Brad Smith, president at Microsoft Corporation, told Valor. In Brazil, the company is using artificial intelligence to help Fundação SOS Mata Atlântica analyze river data and predict the level of water quality. The goal of the project, started in 2019, is to help government decision-making. In October 2020, Microsoft announced another project, in partnership with Vale and the Imazon institute, to use AI to predict the most likely areas of deforestation.
Afya Educacional, the largest medical education group in the country, closed an agreement to buy Unigranrio for R$700 million – the largest deal ever made by the company, which in two years acquired 14 assets. With the transaction, Afya adds 1,700 medical students to its base. Today, the group has 12,800 students enrolled in this undergraduate course, with average tuition of R$8,000. Medicine is the most profitable course in higher education in Brazil because of its monthly fees, high demand and low rates of default and dropout.
Former vice-president of the United States, environmentalist Al Gore, said that Brazil may see a 17% drop in its GDP by 2048 if it does not adopt measures to mitigate global warming, that is, to contain the burning of forests and eliminate carbon emissions from its production structure. The projection, Mr. Gore said, comes from a report by insurance company Swiss Re. He spoke at the 4th edition of Cidadão Global, an event organized by Valor Econômico and Santander bank this Tuesday. As usual in his books and documentaries, Mr. Gore described with countless statistics the environmental situation in Brazil in his opening speech. The country’s contradiction is clear for him: with one of the most promising power generation mixes in the world, Brazil has records of deforestation and forest fires. He said that land use in Brazil is a “particularly important” point and that deforestation in the Amazon is “a major concern.” From the long list of solutions, Mr. Gore mentioned energy transition and highlighted Brazil’s leadership in this agenda. “Brazil is already one of the global leaders of the clean energy transition when it comes to cost reductions and now has the cheapest wind power in the world, at R$1.07 per kilowatt-hour. It is astonishing. And since the Paris Agreement was signed in 2015, wind power capacity has doubled. In Brazil, the cost of electricity from building a new wind plant is already cheaper than continuing to operate an existing coal or gas plant,” the environmentalist said.
The National Supply Company (Conab) indicated that the coffee harvest should total 48.81 million bags. The volume is 22.6% smaller than the record of the last cycle, 63.08 million bags. In the first survey made in January, the state-owned company estimated that production would be between 43.8 million and 49.5 million bags. The reasons for the drop are the negative biennial of Arabica coffee (when plants normally produce smaller fruits) and adverse weather conditions. Coffee is being harvested after the crops have faced more than two months of dry weather.
The French group Saint-Gobain has been maintaining strong expansion in the three segments in which it operates in Brazil and estimates a 20% surge in revenues for 2021, surpassing last year’s 13%. The businesses of construction materials and retail, glass for the automotive industry, and tubes for the medical sector reached revenues of R$10 billion in 2020. From January to April, revenue is up 30% year over year. Because sales have heated up strongly since mid-2020, amidst the pandemic, the company expects for the second half a similar performance to the same period last year.
XP will start financing clients in mergers and acquisitions. Guilherme Benchimol’s brokerage, which was authorized to operate as a financial firm, has been making moves to strengthen itself as an investment bank and better compete with already established rivals. The brokerage’s investment banking team gained prominence in recent years in the capital markets, with new IPOs and secondary offerings. With the consolidation of domestic companies because of the pandemic, XP also wants to gain ground in M&A. To lead this business, XP brought Marco Gonçalves at the end of December after buying Riza, a firm specialized in M&A. Mr. Gonçalves’s goal is to make XP a leader in these transactions, overtaking Itaú BBA and BTG Pactual. In recent years, BTG and Itaú BBA have taken turns as Brazil’s number one in transactions.
Santa Catarina-based utility Celesc will launch a trading company to enter the free market for electricity, besides structuring a subsidiary in the segment of distributed generation. The group, known for its performance in the regulated market of energy, now wants to position itself in the modalities in which consumers can choose their suppliers. Celesc’s goal is to have, in the next five years, a revenue of R$2 billion with the trading company. CEO Cleicio Martins says that the trend towards migration to the free market means that industrial companies represent only 10% of the group’s revenues, despite receiving about 45% of the energy consumed in the state.
