OECD invites Brazil for global plan on carbon pricing

Ficheiro:OECD logo.svg – Wikipédia, a enciclopédia livre

The Organization for Economic Co-operation and Development (OECD) has invited Brazil to participate in a global plan it is articulating on carbon pricing, Valor has learned. The goal of the plan is to avoid trade wars amid the decarbonization of economies.

Carbon pricing is considered one of the good ways to tax polluters for their emissions. The issue is to determine what this price should be and establish a global solution.

The OECD Secretary General, Mathias Cormann, sent a letter to Economy minister Paulo Guedes explaining that his idea is for a group of countries to start working on mapping the carbon price, examining its impact and trying to avoid the multiplication of unilateral measures.

The plan is to gradually draw countries into discussions that could lead to an understanding on a voluntary basis on the best carbon tax and other environmental measures. This could later become a global agreement, along the lines of the international agreement to tax multinational companies more heavily with the support of 136 nations, well beyond the 38 members of the organization.

The Brazilian government has not yet responded, but initial reactions in Brasilia seem positive, amid concern about the unilateral “carbon border adjustment mechanism” announced by the European Union on July 14.

According to that, Brussels will set a carbon price for imports of iron and steel, aluminum, cement, electricity, and fertilizers. The goal is to avoid that polluting industries move to countries where standards are less strict and carbon dioxide emissions are not taxed.

Brazil is the eighth most vulnerable country to taxation in almost $2 billion of exports to the European market, basically on steel products, according to the United Nations Agency for Trade and Development (Unctad).

Source: Valor international

https://valorinternational.globo.com/

Petrobras likely to benefit from rising oil prices in 3Q

Petrobras pede esclarecimento ao governo federal sobre privatização da  companhia

Driven by the higher oil prices in the international market, Petrobras is expected to report again a robust quarterly financial statement on Thursday, when it releases the results for the third quarter. The company is expected to present higher operating revenues and cash generation. After the oil company announced, in August, the early distribution of $6 billion to shareholders, related to 2021, it will not be surprising if it makes a new announcement of this type.

Goldman Sachs believes that Petrobras will again report strong free cash flow in the third quarter and that this will make room for the company to pay up to $5 billion in additional dividends without compromising the debt reduction target. The oil company ended the second quarter with gross debt of $63.7 billion, just above the $60 billion target, which works as a trigger for the new shareholder remuneration formula — which provides for the distribution of 60% of the difference between the operating cash flow and investments.

The company is expected to benefit from high oil prices in the third quarter, when a barrel of Brent was traded, on average, at $72. For comparison purposes, in the same period of 2020, the average price was $44, while in the second quarter the international price of the commodity was $69.

With this, the expectation is that Petrobras’s net revenues will jump 74% year over year and grow 11.2% compared to the second quarter of 2021, to R$123.1 billion, according to the average of projections of four firms heard by Valor (Ativa Investimentos, BTG Pactual, Credit Suisse and Goldman Sachs).

In the case of the EBITDA, which measures the capacity to generate operating cash, the average of the projections is R$63 billion for the third quarter. The figure means a growth of 88.4% year over year and of 1.7% compared to the second quarter.

According to Safra, the financial results will benefit from the higher prices of oil and oil products and also the greater use of refineries in the quarter. The growth in fuel sales should help offset weaker oil and gas production, which fell 4.1% year over year to 2.83 million barrels of oil equivalent a day.

Net profit projections for the months between July and September range from R$11.2 billion (Credit) to R$24.6 billion (Active). The actual result depends a lot on the calculated non-recurring effects, which makes the profits projection a difficult task for analysts.

The average of the forecasts is R$18.27 billion, which would mean a reversal of the loss of R$1.5 billion reported in the third quarter of 2020. In comparison with the second quarter of 2021, however, the average of the projections represents a 57% contraction.

Credit points out that Petrobras’s cash in the third quarter will be positively impacted by the money raised from the sale of the remaining stake in BR Distribuidora (now Vibra Energia), for $2.2 billion, and by the signing of the co-participation agreement with the Chinese companies CNODC and CNOOC regarding pre-salt in the Búzios project, which guaranteed $2.9 billion in financial compensation to the Brazilian oil company.

On the other hand, cash will be negatively impacted by the payment of the first installment of early dividends, of $4.1 billion; the early redemption of bonds worth $1.3 billion in September; and the settlement of the term of commitment with Petros, of $250 million. Credit Suisse also expects that the Brazilian oil company’s debt will be negatively impacted by the start of operations of a platform in Sépia.

The Institute for Strategic Studies on Petroleum (Ineep) said Petrobras’s positive result will be driven by the domestic market. On the expenses side, the institute mentions that the weakened real will negatively impact the debt and financial results as a whole.

Source: Valor international

https://valorinternational.globo.com/

Galp targets new sectors in Brazil

Upstream no Brasil | Galp

Galp CEO Andy Brown believes oil prices are “too high” for both industry and consumers. “We are entering a difficult time in the oil market. We hope production will keep up with demand and not put too much pressure on prices,” he told reporters in Rio de Janeiro, on his first visit to Brazil after taking over the Portuguese oil company.

The executive pointed out that European companies are investing less in exploration and production of new areas of oil and gas, especially in a new frontier, less known regions. “We need to find a balance in which companies invest in exploration and production so that demand is met. Oil consumption will start to fall at some point, but we don’t see signs of that yet,” he said.

In this context, Galp intends to expand its activities in Brazil beyond exploration and production of oil and gas. The plan is to also operate in power generation with renewable sources and in the commercialization of natural gas and electricity. The company will invest $300 million to $400 million in renewables in Brazil as it sees great attractiveness here to start developing the portfolio of 4 gigawatts of clean energy it intends to have in Latin America by 2030.

The entry into the Brazilian solar energy market was announced last week, with the acquisition of two 300-megawatt projects in Bahia and Rio Grande do Norte. Although the initial investment occurred in the Northeast region, Galp is studying new opportunities across the country, both in government electricity auctions for the regulated market and in contracting in the free market.

Mr. Brown said Galp is looking at solar and wind generation projects, which in the future may help to develop initiatives in green hydrogen and batteries. “We see Brazil as an attractive market, in which there will be an increase in energy consumption. Renewables are very competitive,” he said.

The executive said the company also plans to start in January 2022 the commercialization of natural gas produced by the company in the country. Mr. Brown recalled that Galp has stakes in the Tupi and Sépia fields, operated by Petrobras in the Santos Basin’s ultradeep waters known as pre-salt. “We have our own associated gas production in these areas, and we also have access to gas from other companies. We want to be leaders in commercialization,” he said.

In addition, Galp is studying projects to supply liquefied natural gas in the country to supply the electricity system, the executive said. “There have been droughts recently and there is increased demand for electricity. If hydroelectric plants continue with weak generation, the country will need much more gas than it is producing,” he said.

In the oil and gas industry, Galp is interested in the second transfer of rights surplus bidding round. “We are interested and have considered participating in the auction, but we have no announcement to make so far about any intention to bid,” he said.

Scheduled for December 17, the auction will offer stakes in the areas of Atapu and Sépia, in the Santos Basin. The blocks failed to attract bids in the first auction, in 2019. The executive shows confidence to invest in the country despite the recent crises. “Inflation is high and there are political uncertainties here, but Galp is used to it. The company has been in the country for 20 years and has seen many changes of government. We have great confidence in Brazilian institutions and in the respect for contracts,” he said.

Galp’s production in Brazil reached 116,000 barrels of oil equivalent (boe) per day in the third quarter of this year. Altogether, the company has already invested $5 billion in the pre-salt, especially in the Tupi and Iara blocks, in the Santos Basin, where it holds minority stakes. The group’s exploratory portfolio also includes fields in the Campos, Pernambuco-Paraíba and Barreirinhas basins.

The executive highlighted, however, that Galp will not invest in little-explored areas in the next years. “We are not going to drill more new frontier areas. We already have many resources under development that will keep us busy for the next decades. At the same time, it is still very uncertain what will happen with the demand for oil,” he said.

For Mr. Brown, the low number of areas auctioned in the 17th round of the National Petroleum Agency (ANP) earlier this month is linked to changes in the industry amid the energy transition, which leads companies to be pickier about investments. “For an international oil company that wants to take part in the energy transition, it will become increasingly difficult to find capital to invest in new blocks. The industry is changing,” he said.

The executive declined to comment on the possibility of privatization of Petrobras, of which it is a partner in most projects in the country. “We have a lot of respect for Petrobras, which has a great technical ability to deliver projects,” he said.

Source: Valor international

https://valorinternational.globo.com/

Port of Santos privatization to reduce tariffs by 30%

The privatization of the Port of Santos, the largest in the country and through which 28% of all Brazilian foreign trade passes, will require R$16 billion in investments and lead to an immediate 30% drop in the main tariff paid by shipping companies. The future owner of the port complex will need, among other interventions, to increase the depth of the channels from 15 meters to 17 meters and to pay for a tunnel linking Santos to neighboring city Guarujá.

The privatization model, which was studied by the Brazilian Development Bank (BNDES), is virtually ready and should be put out for public consultation in the second half of November.

The contract will be in force for 35 years, with the possibility of extension for more five years, in order to accommodate any needs for economic and financial rebalancing. The auction, scheduled for the end of 2022, will be won by the highest bidder.

To avoid potential conflicts of interest, the government decided to limit the participation of operators of leased terminals in the port and of shipowners. They will only be allowed to have up to 15% individually or up to 40%, when added together, in the block of shareholders.

The auction is scheduled for the last quarter of 2022 and Infrastructure Minister Tarcísio Freitas said he is confident in drawing large international investors to the dispute. Back from a recent tour in New York, where he went to pitch Brazilian concessions, Mr. Freitas reported having heard special interest for the privatization of the port. “Santos is our crown jewel,” the minister told Valor, stressing the prospect of turning it into a hub for ships in Latin America.

BNDES studies indicate that demand will virtually double over the next four decades. The total cargo handled should increase to 291 million tonnes in 2060 from 148 million tonnes in 2021. In the case of containers, it will almost triple.

This will demand a resizing of the port. In the list of works to be executed, deepening dredging works will require around R$700 million. It will allow ships up to 400 meters long to dock in Santos.

Today the port can receive, with restrictions, ships of the New Panamax class. These are up to 366 meters long and have a capacity of 14,000 TEUs (twenty-foot equivalent unit). This type of operation was approved by the Navy in February of this year. Before, Santos was only able to receive ships that were 340 meters long and had a capacity of approximately 9,000 TEUs.

Diogo Piloni, national secretary of Ports and Waterway Transport, said that R$10 billion in private investments are expected from the future concessionaire in maintenance dredging. The contract will have performance goals. If the level of service decreases, due to lack of dredging at the appropriate time, there will be a discount on the fees charged. “If there is a loss of draft, operators will lose revenue.”

According to him, virtually the entire basket of port tariffs will have a drop in relation to the values charged today. The waterway access tariff – individually the one that weighs the most on shipping companies – will be reduced by 30%, Mr. Piloni said.

Source: Valor international

https://valorinternational.globo.com/

Guedes now defends going over spending cap to pay for social program

Guedes fala em 'passaporte da imunidade' para curados da Covid-19 e ganha  apoio do Ministério da Saúde - Jornal O Globo

President Jair Bolsonaro ordered that families included in a new cash-transfer program have a support of at least R$400, Economy Minister Paulo Guedes said in an event of the real estate development industry. To make the extra spending possible, the minister plans to ask for a “waiver” of R$30 billion or bring forward the revision of the spending cap, scheduled for 2026.

The waiver would be like asking to leave R$30 billion outside the spending cap to spend on the transitional part of the benefit. It would be, Mr. Guedes explained, an “authorization to spend this temporary layer of protection for the most fragile” to “mitigate the socioeconomic impact of the pandemic,” he added, without elaborating.

Another possibility, he said, would be to match expenses adjusted by an inflation index with the spending cap, which is adjusted by another index. He did not elaborate on that either, but said that with this there would be an “expansion” of available funds. “It would be like bringing forward the 2026 spending cap review,” he said.

The spending cap is adjusted by the Extended Consumer Price Index (IPCA), which amounts to 10.25% in the 12 months to September. A large set of expenses, including social security, continuous cash benefit (BPC, a pension for poor elders and disabled people), salary allowance and unemployment insurance, are adjusted by the National Consumer Price Index (INPC), which stands at 10.78% in the 12 months to September.

Mr. Guedes said the government wants to be “reformist and popular, not populist.” In addition, the minister said he is still studying the final model for the cash-transfer program Auxílio Brasil to pay on average R$400 for 17 million families. Bolsa Família, the social program in place now, includes 14 million families. “Whatever the solution is, it is a political decision.”

According to Mr. Guedes, the R$400 benefit will be temporary because senators have not passed the Income Tax overhaul bill, which would give a permanent source for the social program.

“Without the Income Tax [overhaul], we have no source to create a permanent program,” he said. “So we have to create a transitional one.” This would last until December 2022, an election year, and President Bolsonaro will run for reelection.

The minister explained that there was an equation involving a constitutional amendment proposal (PEC) to make room under the spending cap for the new program, while the income tax overhaul proposed by the economic team would generate a source of funds. As the Income Tax bill did not pass in the Senate, the government had to “take action,” Mr. Guedes said. “The government decided to create what would be – technically it is not that yet – a basic family income program.” He said it is a “prototype” of what a basic family income program would be, with a permanent part and a transitional part, until a funding source is found.

However, the whole plan envisaged a “sustainable” benefit of R$300. According to the minister, the government ended up “making a larger number to compensate for price increases.” The minister said the pandemic has aggravated important social imbalances. “We are aware of this and therefore creating programs that mitigate the problem.” He commented that 50% of world inflation today is in food and energy, and that the impact hits the most vulnerable.

Mr. Guedes’s remarks after the regular close of markets set off a substantial worsening movement in domestic assets late Wednesday. The remarks, however, only affected those that were traded in the extended session, but should be reflected in a pressured opening on Thursday.

“His remarks were very bad,” said the strategist of a brokerage firm, who asked not to be named. “He apologized for the higher spending and even said they could bring forward the spending cap review.”

(Marcelo Osakabe, Felipe Saturnino, Victor Rezende and Matheus Prado contributed to this story.)

President Jair Bolsonaro ordered that families included in a new cash-transfer program have a support of at least R$400, Economy Minister Paulo Guedes said in an event of the real estate development industry. To make the extra spending possible, the minister plans to ask for a “waiver” of R$30 billion or bring forward the revision of the spending cap, scheduled for 2026.

The waiver would be like asking to leave R$30 billion outside the spending cap to spend on the transitional part of the benefit. It would be, Mr. Guedes explained, an “authorization to spend this temporary layer of protection for the most fragile” to “mitigate the socioeconomic impact of the pandemic,” he added, without elaborating.

Another possibility, he said, would be to match expenses adjusted by an inflation index with the spending cap, which is adjusted by another index. He did not elaborate on that either, but said that with this there would be an “expansion” of available funds. “It would be like bringing forward the 2026 spending cap review,” he said.

The spending cap is adjusted by the Extended Consumer Price Index (IPCA), which amounts to 10.25% in the 12 months to September. A large set of expenses, including social security, continuous cash benefit (BPC, a pension for poor elders and disabled people), salary allowance and unemployment insurance, are adjusted by the National Consumer Price Index (INPC), which stands at 10.78% in the 12 months to September.

Mr. Guedes said the government wants to be “reformist and popular, not populist.” In addition, the minister said he is still studying the final model for the cash-transfer program Auxílio Brasil to pay on average R$400 for 17 million families. Bolsa Família, the social program in place now, includes 14 million families. “Whatever the solution is, it is a political decision.”

According to Mr. Guedes, the R$400 benefit will be temporary because senators have not passed the Income Tax overhaul bill, which would give a permanent source for the social program.

“Without the Income Tax [overhaul], we have no source to create a permanent program,” he said. “So we have to create a transitional one.” This would last until December 2022, an election year, and President Bolsonaro will run for reelection.

The minister explained that there was an equation involving a constitutional amendment proposal (PEC) to make room under the spending cap for the new program, while the income tax overhaul proposed by the economic team would generate a source of funds. As the Income Tax bill did not pass in the Senate, the government had to “take action,” Mr. Guedes said. “The government decided to create what would be – technically it is not that yet – a basic family income program.” He said it is a “prototype” of what a basic family income program would be, with a permanent part and a transitional part, until a funding source is found.

However, the whole plan envisaged a “sustainable” benefit of R$300. According to the minister, the government ended up “making a larger number to compensate for price increases.” The minister said the pandemic has aggravated important social imbalances. “We are aware of this and therefore creating programs that mitigate the problem.” He commented that 50% of world inflation today is in food and energy, and that the impact hits the most vulnerable.

Mr. Guedes’s remarks after the regular close of markets set off a substantial worsening movement in domestic assets late Wednesday. The remarks, however, only affected those that were traded in the extended session, but should be reflected in a pressured opening on Thursday.

“His remarks were very bad,” said the strategist of a brokerage firm, who asked not to be named. “He apologized for the higher spending and even said they could bring forward the spending cap review.”

(Marcelo Osakabe, Felipe Saturnino, Victor Rezende and Matheus Prado contributed to this story.)

Source: Valor international

https://valorinternational.globo.com/

Fintechs resort to IPOs in American market

One of the most anticipated IPOs of the year, by Nubank, is expected to take place in November and confirm a pattern that has been taking shape among fintechs: the listing in the American market. The offering, which could give the company a market capitalization between $50 billion and $70 billion, illustrates a move that has already been made by some Brazilian companies that have technology at the center of their businesses and which tends to gain more strength in the coming months, given the weakening of the local stock market, in a period of high interest rates and uncertainties arising from the electoral process.

In addition to Nubank, Banco Inter has publicly expressed its intention to list its shares on Wall Street. And sources say that Locaweb, which launched its IPO in the Brazilian market in 2020, is also moving towards a dual listing. The company said in a note that “there is no advanced process of structuring the listing in the U.S., changing headquarters or any definition on the matter.”

What is clear, looking at the performance of the shares of Brazilian companies that are currently traded on Nasdaq or Nyse, is that the American market is increasingly seen as an alternative, especially for technology-related companies.

This occurs because of the size of this market and also because of the access to investors who are more familiar with the profile of high-growth companies such as the “techs”. Recently, this asymmetry of conditions has become even more marked by the instability of the Brazilian stock market, which made a series of IPOs unfeasible in the second half of this year in Brazil.

One of the companies pulling the line towards New York in 2018, PagSeguro saw its shares rise 70% since its debut, well above the benchmark stock index Ibovespa, which fell 16.7% in dollar terms in the period, a survey by Meraki shows.

Stone shares have appreciated 55% since its IPO, also in 2018, a period in which the Ibovespa fell 6.99% in dollars. XP is up 36% since its debut in New York, in 2019, while the Ibovespa fell 22% in the period.

Fabrício Larguesa — Foto: Claudio Belli/Valor

Fabrício Larguesa — Foto: Claudio Belli/Valor

For Fabrício Larguesa, equity and derivatives trader at Meraki, the loss of traction in the Brazilian market explains part of this disadvantageous picture for shares traded here. The rise in interest rates and, more recently, the risk aversion environment that has been established in recent weeks has justified a migration of investors from the stock exchange to fixed income.

And this resulted into a net outflow of R$2.2 billion from stock funds in the month to the 18th and R$3.6 billion from multimarket funds. This recent worsening has extended the level of discount that some companies traded on B3 have in relation to their global peers or even to Brazilian companies listed in New York.

An example is Locaweb, whose stocks were listed on the Brazilian stock exchange B3 in October 2020, and is traded at 11 times (enterprise value-to-sales, a metric that compares the company’s total value to its sales). VTEX, which launched its IPO in the United States in July this year, has a much larger multiple of 22 times.

According to Mr. Larguesa, the analysts’ view is that Locaweb could be trading at a multiple close to 16 times, were it not for the negative conditions and loss of liquidity in the local market.

The same goes for companies in the education sector: while Yduqs, listed on B3, is traded at 11.6 times (price-to-earnings ratio), Arco Educação, listed on Nasdaq, has a multiple of 18.5 times.

Among fintechs, the most emblematic comparison is between XP, whose shares are traded today with a multiple of 6.2 times using the price-to-book ratio, and BTG Pactual (2.4 times).

Mr. Larguesa says that, in addition to the current conditions in the Brazilian market, the size of the American market also justifies the decision of companies to list their shares there. “In addition to being very liquid, the American market gives access to global investors who are restricted from operating in other markets,” he observes. “For a company that wants to position itself internationally, it makes sense.”

For Eduardo Mendez, capital markets and equity distribution head at Morgan Stanley, it is possible to say that there is a tendency for companies to access the American stock market, but only for specific sectors, such as technology. This happens because there is a consistent universe of companies in this sector on the American stock exchanges, with similar business models, which helps to define the price for the offer.

And, in Brazil, the representation of the technology sector is less than 5%. “But it is important to say that it is not trivial to make the decision to list outside the country. It has a complex compliance process, there is need to report results in another language, it’s a very robust process,” he said.

At the same time, investors in the United States are much more used to dealing with this company profile, which has high growth potential and low cash generation, said Bruno D’Ávila, an analyst at Mauá Capital. “In the United States, investors are more prepared and have more willingness to pay for these shares than in Brazil,” he said.

With these favorable conditions, companies that list their shares in New York naturally have a greater share of foreign capital than they did before the offer in Brazil, notes Mr. Mendez, with Morgan Stanley. He estimates that, in an IPO abroad, between 70% and 80% of listed shares are held by foreigners, and the rest, by investors whose decision-making center is in Brazil. In a similar offering in Brazil, the ratio tends to be balanced between the two investor groups.

This factor helps to expand offerings abroad. “The Brazilian manager primarily looks at the local market, while the international manager sells a global strategy, they have a greater quantity and variety of assets,” he said.

Another highly considered point is related to the regulation of the stock market in the United States. There, it is possible to issue different classes of common shares, which makes it possible for the company’s controlling shareholder to have less than 50% of the capital. In other words, it is possible to sell a larger share of the company’s capital while maintaining control, said Vitor Saraiva, head of capital markets at XP. This move makes a lot of sense for new companies, in which the entrepreneur has an important role in the company’s management, he said.

Faced with this competition, B3 has made efforts to encourage companies to adopt dual-class stocks. According to specialists, it is impossible for the Brazilian stock exchange to face the valuation gains that companies achieve in the United States

With a dual listing – a possible path to be followed by Nubank–, the local market also gains liquidity. For the companies, it makes sense to keep a part of the capital traded on the Brazilian stock exchange since relevant investors like some pension funds do not have access to the international market due to tax or internal regulation issues.

Source: Valor international

https://valorinternational.globo.com/

Seara bets on growing plant-based protein market

The Power of Plant-Based Proteins - Tufts Health & Nutrition Letter

In a bid to make plant-based proteins present in everyday dishes, Seara is going to expand the portfolio of Incrível, a brand dedicated to products that mimic the flavor and texture of meat. Leader in the Brazilian plant-based market with a share of more than 60%, Incrível wants to show consumers that vegetable proteins are not restricted to special occasions.

Seara is launching a line with five new products made up of vegetable proteins that emulate chicken fillet and chicken cubes, steak, ground beef, and beef strips. “Brazilians have their daily dishes, and we don’t eat hamburgers and breaded products every day,” says Gabriela Pontin, head of Seara’s plant-based business unit since May.

According to Ms. Pontin, Incrível’s new line was conceived after surveys with more than 3,000 people – including customers and potential consumers. Undoubtedly, the vegetable hamburger is the great attraction of the plant-based market, but the assessment is that the possibility of using the products in common dishes, such as stroganoff or ground beef with zucchini, will help Seara to accelerate the pace of growth in this category, which has been growing at expressive rates.

Globally, the plant-based market grows from 15% to 17% per year. In 2020, it grossed $6 billion, according to data from The Good Food Institute. The segment represents less than 1% of the global protein industry, but projections indicate it could reach 8% in a few years. “It’s going to be a huge market, for sure,” says Ms. Pontin.

In Brazil, where the plant-based business began to be explored later than in Europe and the United States, the growth rate is naturally higher, 40% a year, said the executive. With recent product launches, Seara believes that Incrível will be able to surpass this level of growth, reaching 50% in 2022. The five products are added to the 11 SKUS – hamburger, sausage, breaded chicken, cod, among others – which Incredible already offered.

The new Incrível line will be produced by Verdali, a partner from Videira, in the state of Santa Catarina. According to Ms. Pontin, the products were developed jointly by the two companies. Incrível’s other products continue to be produced in Seara’s own factories, according to her.

Seara is not the first to launch plant-based products for everyday meals. Fazenda Futuro, a foodtech created by Marcos Letta, brought ground beef and chicken strips to the market. BRF, which debuted in the plant-based market with the Veg&Tal line, already had chicken in strips, cubes and shredded, as well as ground beef. Compared to rivals, Seara is the first to launch versions of the whole product (plant-based beef steak and chicken fillet).

In the Brazilian plant-based market as a whole, Seara have the lead. According to data from Nielsen consultancy for the second quarter, the Incredible brand had a stake of 60.7%. Veg&Tal was ranked second, with 13.1%, and Fazenda Futuro had 6.2%. As a market that is still in the early stages of development, innovations have the potential for major changes. No wonder no one wants to miss out on a chance to nip a bigger slice.

For JBS, Incrível is another initiative to advance in plant-based. In the United States, the company created Planterra Foods, which owns the OZO brand. In Europe, the company paid €341 million to buy Dutch company Vivera. The company has also added plant-based items with Pilgrim’s acquisition of Kerry’s prepared food business.

Source: Valor international

https://valorinternational.globo.com/

Brisanet gets ready to compete in 5G auction

Brisanet faz IPO hoje e se torna a 9ª empresa cearense a abrir capital na  Bolsa - Negócios - Diário do Nordeste

After lining up R$1.4 billion with its debut offer on the stock exchange this year, the fiber-optic internet provider Brisanet is getting ready to compete for the 3.5 GHz regional lot in the 5G auction next month.

The lot includes one of the least profitable parts of the sector, which is the commitment to take the internet to 1,423 municipalities with less than 30,000 inhabitants in the Northeast region. Still, Brisanet CEO Roberto Nogueira believes there will be more than one interested.

The regional lots cannot be contested by large telecommunications companies but may be the target of new market entrants, such as investment funds. In an interview with Valor, Mr. Nogueira said Brisanet will enter the dispute alone, without forming a consortium. “We won’t have a partnership, we’ll fill this space,” he said.

For Mr. Nogueira, the challenge of taking fiber internet to remote areas in the Northeast region is not as big for Brisanet as for other companies in the sector. Over the past 11 years, the company has been connecting to small municipalities in the region, with significant growth as of 2015.

“We have a competitive advantage. The challenge for other companies is not just to invest in 5G, but to have capillarity and a business model with returns like the one we have structured over the last 15 years,” he says.

For Mr. Nogueira, revenues for regional lots should not be that large, as they would make an investment by companies unfeasible.

In 1998, in the city of Pereiro (Ceará state), Mr. Nogueira, then a 26-year-old small entrepreneur, implemented in town the first low-cost internet by radio in the country. That year, the municipality still did not have a telephone line, which was crucial for establishing a connection. About 23 years later, last June, Brisanet launched an IPO.

In recent years, the company’s operation has grown to the point of challenging large telecommunications companies in the region. The company ended September with 790,731 customers spread across seven states in the Northeast region – Ceará, Rio Grande do Norte, Paraíba, Pernambuco, Alagoas, Piauí, and Sergipe –, and with its fiber cabling passing in front of more than 3.7 million households in 110 cities. During the month, 129,000 ports were added, corresponding to 213,000 homes.

In an initial coverage report of Brisanet’s shares, BTG stated that, in the Northeast region, the company benefits from an environment of less competition in relation to other regions of the country.

However, according to the company itself, competition with small providers has grown. In September, the increase in the customer base was 17,800, lower than initially estimated.

“Even being the largest organic growth among internet providers, Brisanet expected to be growing at a faster pace. However, the current situation, in which inflation has affected the purchasing power of families, especially in the Northeast region, where the poor are more numerous, and competition for prices with small providers has made the migration process to more gradual and slower Brisanet”, the company said in a statement.

Source: Valor international

https://valorinternational.globo.com/

Deforestation in Xingu may reduce rainfall in Mato Grosso

Massive deforestation in indigenous lands and protected areas of the Xingu  Basin, Pará and Mato Grosso, Brazil | EJAtlas

Deforestation in the Xingu River region may reduce by 7% the average annual rainfall in the state of Mato Grosso, one of the largest agricultural centers in the world, with more than three million inhabitants and eight hydroelectric plants. During the drought, the impact can reach a reduction in rainfall of 15% of the historical average. The center and northwest of the state are the most affected regions.

These are the findings of the study “Mapping the effect of deforestation on rainfall: a case study of the State of Mato Grosso,” carried out by researchers from the Climate Policy Initiative (CPI) and the Pontifical Catholic University of Rio de Janeiro (PUC-RJ).

This is a new model, made by computers, observing the relationship between rainfall and deforestation. The impact of deforestation can affect rainfall in regions thousands of kilometers away from where it occurred.

CPI’s senior analyst for sustainable infrastructure Rafael Araújo studied the path of clouds formed in the ocean and that feed on water vapor when they pass through the forest. He observed the path of the winds until reaching agribusiness production in Mato Grosso.

“In the same way that it is possible to follow a river upstream until reaching its source, it is possible to follow the direction of the wind to identify its path from the ocean,” explains Mr. Araújo.

“The first step was to understand the relationship between forest and precipitation. We used the entire Amazon rainforest in South America to estimate the relationship. Once we understood the relationship, we simulated different scenarios,” says the economist and author of the study.

The researchers studied the path of the winds in the dry and rainy seasons. “In July, the winds are coming from outside the Amazon, passing through the Northeast region and reaching Mato Grosso. They deliver little rain because there are no trees on the way throwing moisture up,” explains Mr. Araújo. “But in February, the clouds are carried by the Amazon rainforest and arrive in Mato Grosso with a lot of humidity.”

To measure the forest’s contribution to the process, Mr. Araújo considered a scenario in which all 11 Xingu indigenous lands were deforested. The region covers parts of the states of Mato Grosso and Pará. Later, he developed the climate model that relates deforestation and rain. He used monthly data between 1985 and 2020.

“The question we asked was: if the Xingu region is deforested, what will be the loss?” said Juliano Assunção, director of the CPI-RJ. “Then we pursued a simple story: clouds rise in the oceans, receive additional load from the forest and collapse in Mato Grosso,” he explains.

The study shows, for example, that more prolonged droughts may happen, putting Mato Grosso’s agriculture at risk and preventing the sector from having a second harvest in some regions of the state.

“In discussions about climate, the forest is often reduced to a carbon sequestration mechanism and forest loss is only used to account for emissions; however, another important ecological service that deserves greater consideration is the forest’s ability to control rainfall on a continental scale, something that affects agricultural production, power generation and urban water supply,” says the study.

“There are studies indicating the negative impact of climate change on rainfall in Brazil. This is not under our control, but there is a portion of the rain that depends on protecting the Amazon, and this we can control,” says Mr. Araújo.

“The new tool can help governments and populations in the arguments to strengthen conservation efforts,” says the text. The model can be adapted to other regions of Brazil and South America. New developments of the initiative will address the energy and supply sector of cities.

Source: Valor international

https://valorinternational.globo.com/

Politics Brazil expands carbon emission reduction targets

Global carbon emissions are set to rise in 2018 — Quartz

The new version of the Sector Plan for Adaptation and Low Emission of Carbon in Agriculture, or Plano ABC+, intends to slash carbon emissions by 1.1 billion tons until 2030—seven times as much as the original plan, whose first stage was carried out over the last decade.

The Plano ABC+ will be presented by the Brazilian government in the next United Nations Climate Change Conference, COP26, to be held in Scotland from October 31 to November 12.

The revised targets were disclosed Monday (Oct. 18) by Brazil’s Minister of Agriculture, Livestock, and Supply Tereza Cristina. To reach them, the government plans to introduce sustainable production technology in 72.68 million hectares across the country in the next nine years, among other measures. The area is equivalent to twice the size of the UK.

The initiatives also include a 208.4 million m³ increase in the volume of animal waste treated and the expansion of number of cattle fattened through the intensive grazing termination method (the provision of feed to animals in the drought period and the improvement of manure in pastures) to 5 million. Under this method, fattening is quicker, and the emission by the cattle of carbon dioxide, one of the causes of the greenhouse effect, is reduced.

During the plan’s launch ceremony, Minister Tereza Cristina said that, despite the ambitious goals, Brazilian agribusiness has the conditions to meet them. “We have one of the world’s most ambitious public policies in agriculture, with daring goals aimed at enhancing the sustainability in Brazilian production over the next decade and keep agriculture at the vanguard of efforts in tackling climate change,” she declared.

Regarding Plan ABC, executed from 2010 to 2020, the Agriculture Ministry announced that results surpassed the estimates. In the last ten years, the initiatives succeeded in preventing the emission of 170 million tons of carbon dioxide and in benefiting 52 million hectares with more modern production technology—46.5 percent above the original target, the ministry reported.

Initiatives

The new plan introduces an integrated approach in production areas, sparing as much land as possible and following the Forest Code, also conserving soil health, water, and biodiversity. This approach is said to boost income generation through environmental services generated by the ecosystems during agricultural production.

Eight forms of technology are laid out in the plan: the recovery of degraded areas; the planting of 4 million hectares of forest; the treatment of animal waste; the intensive grazing termination; the use of micro-organisms from bio-supplies; the direct planting of grains with a minimum of soil overturning and permanent coverage of living plants or straw; an efficient irrigation system with low water consumption; and integrated planting systems between different cultures and vegetables.

Source: Agência Brasil

https://agenciabrasil.ebc.com.br/en