Blockchain could have prevented INSS fraud, experts say

Features like records immutability, traceability, and programmability could block unauthorized deductions from pension benefits

 

 

 

 

06/03/2025 

Blockchain technology could have prevented a multi-billion fraud that hit Brazil’s National Institute of Social Security (INSS), according to technology specialists consulted by Valor. Key features of blockchain—such as immutability of records, traceability, and programmability—would help stop unauthorized deductions from social security benefits.

Edilson Osório, founder of the blockchain authentication company OriginalMy, notes that blockchain alone wouldn’t resolve all problems. However, the fraud could have been entirely avoided by combining blockchain networks with digital identity systems.

The main advantage is that all information recorded on a blockchain is immutable. In other words, it cannot be edited or altered once entered. According to Mr. Osório, tying the authorization of payroll deductions to a signature that validates a retiree’s digital identity would ensure verified consent and offer irrefutable proof of when that consent was given.

The Brazilian government already uses blockchain to register the National Identity Card (CIN), which includes a digital version integrated with the gov.br platform. Since 2023, the “b-Cadastros” solution—a shared blockchain registry developed by the Federal Revenue Service in partnership with Serpro—has been used to issue the CIN. The document aims to centralize the CPF (individual taxpayer number) as the sole reference for accessing public services like SUS (public healthcare), INSS, Bolsa Família, and voter registration. Public Management Minister Esther Dweck has stated that the CIN seeks to eliminate fragmented civil records.

However, the INSS systems affected by the fraud do not yet use such technology. Caroline Nunes, founder of InspireIP—a blockchain-based intellectual property registry platform—says that Brazil’s social security systems suffer from fragmented data across different databases developed in various generations of IT infrastructure. “The INSS systems are connected via APIs or other types of interfaces. We’re dealing with information transfers between systems and agencies,” she explains.

All information registered on a blockchain is immutable: it cannot be edited or altered.

Murilo Cortina, head of new business at QR Asset, argues that the current system is vulnerable to unauthorized changes, deletions, or data entries by individuals with privileged access. “Blockchain technology, which underpins the entire crypto ecosystem, proposes a new architecture for storing and verifying data. Each record is validated by multiple independent parties—called nodes—that share an identical copy of the full history. This eliminates the risk of unilateral manipulation and ensures that everyone sees the same version of events,” he says.

According to Ms. Nunes, it would be possible to migrate all systems to an interoperable blockchain shared among government agencies, such as the Drex platform currently under development by Brazil’s Central Bank. Drex is a “tokenized” infrastructure for the financial system. “Drex could significantly advance blockchain identity. You could register the ID on the network just like a physical identity card, but on the blockchain,” she suggests.

A critical challenge would be adapting the system’s usability for retirees, many of whom are not comfortable using digital platforms. Mr. Osório proposes linking a digital identity app to a physical card, which could be used to sign authorizations. “A person would go to an INSS office, insert the card, and enter a PIN. Then, the office could proceed on their behalf,” he explains.

When asked for comment, the INSS said it monitors blockchain developments but has no active studies regarding its implementation. “While the INSS monitors the evolution of technologies such as blockchain and recognizes their potential for enhancing security and transparency, we inform that there are currently no ongoing studies for its specific adoption in payroll-deductible or association-linked discounts,” the institute said in a statement.

*By Ricardo Bonfim — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Gol parent says merger still on track despite Azul restructuring

Abra Group CEO Adrian Neuhauser says both airlines are cleaning up their capital structures, paving way for possible merger

 

 

 

 

06/03/2025 

Adrian Neuhauser, CEO of Abra Group—the holding company that controls Gol and Avianca—said the group remains interested in airline consolidation in Brazil. According to Mr. Neuhauser, Azul’s recent decision to file for Chapter 11 bankruptcy protection in the U.S. does not alter Abra’s plans to pursue a potential merger between the two Brazilian carriers.

“We made public a memorandum of understanding [MOU] outlining a potential tie-up between Gol and Azul, and we also submitted that MOU for regulatory approval,” Mr. Neuhauser said during a panel at an event hosted by the International Air Transport Association (IATA) in New Delhi. He emphasized that the group still sees a clear opportunity for consolidation.

Mr. Neuhauser noted that both carriers have similar financial structures and are now working to clean up their balance sheets. “Gol is expected to exit Chapter 11 this week,” he said. “We’re happy to see Azul making progress in its restructuring, and we hope that opens the door to consolidation, which is something we intend to pursue.”

During the panel, Mr. Neuhauser was asked whether Latin America’s airline industry might see further restructurings. The region has been marked by several high-profile bankruptcy cases in recent years, including Avianca, Latam, Gol, Aeroméxico, and now Azul.

Mr. Neuhauser responded that such restructurings were a natural outcome in Latin America, where airlines received far less government support compared to their peers in the U.S. and Europe—where public funds helped sustain operations during crises.

“That’s why we saw them all go through restructuring one after another. But we don’t expect more large carriers in the region to go through this. That cycle is behind us,” he said.

After prolonged but unsuccessful attempts to restructure its debt through direct negotiations with creditors last year, Azul announced on May 28 that it had filed for Chapter 11. Through the process, the airline aims to restructure roughly R$35 billion in debt with creditors and investors.

However, Azul entered bankruptcy proceedings with a secured debtor-in-possession (DIP) financing package worth $1.6 billion. It also secured about $950 million in exit financing commitments from bondholders and strategic partners, including American Airlines and United.

With these guarantees and advanced negotiations, Azul has indicated that it expects a swift process.

During its first hearing at the New York bankruptcy court overseeing its case, Azul informed Judge Sean H. Lane that it anticipates a confirmation hearing for its Chapter 11 exit plan to be held on December 28. If approved, the company expects to emerge from bankruptcy within 90 days—by March 2026.

The confirmation hearing is one of the final stages in the Chapter 11 process, during which the court must approve the airline’s restructuring plan.

*IATA covered the reporter’s travel expenses.

*By Cristian Favaro, Valor — New Delhi

Source: Valor International

https://valorinternational.globo.com/

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GNA opens Brazil’s largest thermal power plant at Porto do Açu

With R$7bn in investments, GNA II boosts gas-fired capacity and strengthens energy security

 

 

06/02/2025 

Gás Natural Açu (GNA), a joint venture between Siemens Energy Sip Brasil and bp, has launched operations at its second power plant in Porto do Açu, in northern Rio de Janeiro state. The project, which received R$7 billion in investments, is now the largest thermal power plant in operation in Brazil.

The new facility, GNA II, has an installed capacity of 1,673 megawatts and was recently approved for operation by Brazil’s electricity regulator, ANEEL. Capable of supplying energy to roughly 8 million homes, the plant positions GNA as the operator of the largest natural gas-fired power complex in Latin America.

GNA II complements the company’s first plant, GNA I, which has been running since 2021 with a capacity of 1,338 MW. Together, the two units represent 17% of Brazil’s thermal generation capacity and play a crucial role during dry seasons when hydroelectric output declines.

The goal was to establish a gas hub at Porto do Açu, GNA CEO Emmanuel Delfosse told Valor. “These plants are like insurance for the power system as they come online when they’re most needed.”

The plants are connected to a private liquefied natural gas (LNG) regasification terminal with a daily capacity of 21 million cubic meters. This allows GNA to import LNG and convert it back to gas for power generation. Combined, the thermal units consume about 12 million cubic meters per day, roughly equivalent to the energy consumption of the entire state of São Paulo, according to Mr. Delfosse.

With GNA II operating under a 40% inflexibility clause, the system is contractually required to use the plant at least 40% of the time during Brazil’s dry season, from July to November.

The facility runs on natural gas and was contracted through Brazil’s energy auctions. It operates in a combined-cycle configuration, improving efficiency and lowering emissions. However, it lacks “fast ramp” capability, meaning it must be brought online several days in advance—a limitation in terms of operational flexibility.

GNA II is part of the federal government’s revamped Growth Acceleration Program (PAC), which targets key infrastructure investments. The total investment in the GNA power complex stands at R$12 billion. “It was a major technical and logistical challenge, especially during the pandemic,” Mr. Delfosse said. “Doing business in Brazil is complex. The scale of this industrial venture alone—R$12 billion—is remarkable.”

The project also has room for significant expansion, with 3.4 GW of additional capacity already authorized from an environmental standpoint. Any future development, however, will depend on demand in upcoming energy auctions.

GNA’s shareholders played critical roles beyond capital contributions. Siemens Energy supplied three gas turbines and one steam turbine, while bp handled the gas supply. Chinese state-owned company SPIC joined the venture during a period of heavy Chinese investment in Brazil’s power industry. Prumo Logística, which manages Porto do Açu’s infrastructure, is also a stakeholder in GNA I.

*By Robson Rodrigues — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Trump tariffs stall wood pulp price recovery

Prices in top buyer China may have fallen as much as 20% since the mid-April peak

 

06/02/2025

The heightened uncertainty triggered by U.S. President Donald Trump’s new tariffs has led to a slowdown in pulp demand, particularly in the United States and China. The measures also brought a halt to the upward price cycle that had been building since the start of the year.

According to the Foex index from Fastmarkets, the net price of bleached hardwood kraft pulp (BHKP) in China dropped by $77.9 over the past month, with the most recent weekly quote at $517.47 per tonne. Market sources report some resales taking place below $500 per tonne—though those levels have yet to be reflected in official indexes.

If confirmed, these prices would represent a decline of more than 20% from the April peak, amounting to a drop of approximately $120 per tonne.

Suzano—the world’s largest producer of BHKP—had been implementing monthly increases of $20 for Asian markets since the beginning of the year, capitalizing on stronger-than-expected momentum.

According to the company, price adjustments in January, February, and March were implemented successfully. However, instability caused by the new tariffs derailed April negotiations, which failed to move forward. In other words, beyond halting the price rally, the uncertainty-driven downturn effectively wiped out Suzano’s gains from the first quarter.

During a conference call, Leonardo Grimaldi, Suzano’s executive vice president for pulp sales and logistics, said the current price level is “unsustainable” and expressed hope for a normalization of market negotiations in May.

Fastmarkets’ outlook calls for weaker prices in the months ahead, with a possible recovery by year-end. “If global demand for pulp—particularly in China—continues to grow, that could support a price rebound later this year,” said Rafael Barisauskas, Latin America economist at the consultancy.

While the tariffs aren’t the sole cause of the downturn, they have certainly added another layer of complexity.

Since last year, the supply-demand dynamics in the pulp market have been shifting. Some Chinese producers have resumed operations, and new capacity has come online—such as Suzano’s Cerrado Project. The new facility began the year running at full capacity, producing 2.55 million tonnes annually, ahead of the Brazilian company’s own projections.

“Uncertainty about demand in Asia and the U.S. has led buyers to adopt ‘just-in-time’ purchasing strategies, avoiding inventory buildup throughout the supply chain, which has restrained pulp consumption,” Mr. Barisauskas explained.

Data from the Pulp and Paper Products Council (PPPC) for April, cited in a BTG Pactual report, reflect this trend. According to the council, inventory days rose to 44 (47 days for hardwood pulp and 41 for softwood), and the system operating rate stood at 80%, which the bank classified as “underutilized.”

Despite the volatile environment, total pulp shipments rose 2% year-over-year in April, driven by a 15% increase in exports to China. In Latin America, the figure dropped 9%.

After reporting first-quarter results, Suzano CEO Beto Abreu stated that the company had not yet seen changes in demand but remained cautious about market dynamics in the coming months.

In mid-May, during a conversation with reporters, Marcos Assumpção—Suzano’s executive vice president of finance and investor relations—was asked whether the company planned to reduce production to help balance supply and demand.

According to Mr. Assumpção, Suzano has identified operations with higher production costs but does not intend to cut output. “What we’ve said is that we will sell everything we produce,” he affirmed.

One concern for the industry is whether Chinese pulp originally intended for the U.S. might be redirected to other markets. “China will likely face some difficulty exporting short-fiber pulp to the U.S. The big question is whether Chinese buyers will absorb the volume or send it elsewhere,” said Klabin CEO Cristiano Teixeira during a conference call. The company’s outlook for demand in this segment over the coming months is negative.

In the case of softwood pulp (pine), Mr. Teixeira sees a more favorable dynamic, as most of China’s imports in this category come from the U.S. “Any global softwood pulp producer becomes a potential supplier to Chinese buyers, and Brazil could benefit,” he added.

Despite the recent impact, it’s too early to determine whether these shifts signal lasting changes for the industry, said Ambassador José Carlos da Fonseca, president of the Brazilian Paper Packaging Association (Empapel) and international relations director at the Brazilian Tree Industry (Ibá).

Earlier this month, the U.S. and China agreed to lower reciprocal tariffs from 125% to 10% for 90 days while negotiations continue. “Right now, we’re at the peak of this cycle, but the world won’t be the same—even if this passes,” Mr. Fonseca said.

*By Helena Benfica — São Paulo

Source Valor International

https://valorinternational.globo.com/

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Share block sales hit R$15bn, nearing record in Brazil

Strategy emerges as main exit route for investors on B3 stock exchange

 

 

 

 

06/02/2025 

In Brazil’s sluggish stock market, the sale of shares through block trades has become the main exit route for investors in listed companies. So far in 2025, these deals have totaled about R$15 billion, already approaching the record R$17.7 billion set in 2020.

The largest deal this year took place in January, when Rubens Ometto’s Cosan sold part of its stake in mining giant Vale, moving R$9 billion—the biggest block trade ever on the Brazil’s B3 stock exchange. Investment firm Pátria sold a R$2.2 billion stake in gym chain Smartfit. Telecom operator Vivo held an auction of surplus shares worth R$1 billion. Canadian pension fund CPPIB offloaded R$700 million in GPS. Other transactions involved Carrefour, Clearsale, and Vitru Educação, the latter just last week.

Investment bankers say several shareholders are considering selling stakes through blocks, likely as more companies gain value on the exchange. Because these are fast-moving transactions, companies can launch an offer without prior notice, avoiding market volatility. A decision to sell can be made in one day, with banks quoting the deal—and execution happens at the opening of the next trading session, minimizing exposure to market swings.

Bruno Saraiva, co-head of investment banking at Bank of America (BofA) in Brazil, noted that a recent regulatory change now allows larger block sales without the previously required 48-hour notice, which had previously made many deals unfeasible. In a block trade, a bank offers a firm price for the shares, so the seller knows upfront how much they will receive. But when exposure to the market lasted longer, high risk often dampened banks’ appetite to structure such deals.

“It was a regulatory advance in Brazil. It created more flexibility,” Mr. Saraiva said. Under Brazilian law, block sales can only involve secondary tranches—that is, shares held by existing shareholders—because the law grants current shareholders preemptive rights, a structure only possible through a public offering.

Thus, companies that need to raise cash must turn to follow-on offerings.

Given this year’s tough and volatile market, the trend is for stake sales through exchange auctions. “We should see more block trades than other types of transactions,” Mr. Saraiva said.

With this momentum, volumes are expected to keep growing. Fábio Federici, head of equities at Goldman Sachs in Brazil, sees potential for a record year in 2025 as block trades increasingly become the preferred tool for monetizing investments. Beyond private equity firms’ portfolio sales, which can be auctioned on the exchange, he said controlling shareholders might also sell surplus stakes that do not jeopardize control. Other potential block sellers include funds that bought shares when the market was down, or even credit funds or banks that saw debts converted into shares.

“These are positions that easily surpass R$50 billion,” Mr. Federici said. “There’s a lot of pent-up deal flow,” he added, emphasizing that block sales are the most suited to the current market. “This type of operation is more adaptable,” he stressed.

More deals

Leonard Linnet, head of equities at Itaú BBA, said more deals are likely as stocks appreciate, a movement that has begun with the Ibovespa stock index’s current levels, reflecting the inflow of foreign capital. “It’s already starting to make sense for us to push some transactions,” he said.

Mr. Linnet pointed out that despite the benefits, block sales are not suitable for all companies, being more recommended for highly liquid stocks. In other cases, when a company needs to meet investors through management roadshows, a follow-on offering may be more appropriate.

Fabio Nazari, head of equities at BTG Pactual, added that follow-ons are also the path for companies seeking to raise funds and improve the quality of their shareholder base, as public offerings involve building an order book. He noted that the flow of foreign investors arriving in Brazil after “Liberation Day,” when U.S. President Donald Trump announced tariffs, has driven up many stock prices, creating room to unlock not only block trades but also follow-ons. “Deals are starting to move forward,” Mr. Nazari said.

Contacted for comment, Vitru said that “the sale of shares is a routine procedure, common in the capital markets. Vitru’s governance remains unchanged by this move.” The other companies did not comment.

*By Fernanda Guimarães — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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