ConJur launches new edition of the Brazil Justice Yearbook

26 de agosto de 2022

In its 11th edition, the Brazil Justice Yearbook describes the role of the Judiciary Power amid the grave crisis raging among the powers. Based on the 80 million lawsuits under way in the country’s courts and tribunals, the publication clearly shows that it is to the courts that the people turn to when they wish to ensure their rights. The Yearbook it is the English version of the Anuário da Justiça Brasil. 

The reader will find on the pages of this Yearbook a selection of the rulings of the Supreme Court and higher courts that have defined the course of the country and the case law on the most controversial and recurring topics in court.

In addition to the profiles of the justices heading the Judiciary Power, this edition also brings, for the first time, the voting tendencies of each judge in the main legal areas — if they lean more towards the legalistic or guaranteeist point of view in the criminal sphere, the tax authorities or the taxpayer on tax issues or vote more in favor of the consumer or the worker. This is essential information for those who follow the daily routine of the Brazilian courts.

The 2022 Brazil Justice Yearbook also offers data on the productivity of each court and its members: the number of cases assigned, judged, and in backlog.

A special report features the changes in the case law of Carf (the Administrative Tax Appeals Court) after the end of the tiebreaker vote, and includes the profile of the new Chief Justice Carlos Henrique Oliveira, and the members of the council’s Superior Chamber.

The reader will also learn more about the members of the National Justice Council, the National Council of Prosecution Services, the Brazilian Bar Association, the Brazilian antitrust authority (Cade), and the Federal Audit Court.

The digital version of the 2022 Brazil Justice Yearbook is free of charge and will be available online at anuario.conjur.com.br and in the Anuário da Justiça app. The printed version is for sale exclusively at Livraria ConJur.

2022 BRAZIL JUSTICE YEARBOOK
Issue: 2022
Number of pages: 288
Publisher: Consultor Jurídico
Printed version: R$ 40 at Livraria ConJur
Online version: available at anuario.conjur.com.br or in the Anuário
da Justiça app

Advertisers of this edition
Arruda Alvim & Thereza Alvim Advocacia e Consultoria Jurídica
Associação Educacional Nove de Julho – Uninove
Ayres Britto Consultoria Jurídica e Advocacia
Conselho Federal da Ordem dos Advogados do Brasil
Dannemann Siemsen Advogados
Décio Freire Advogados
JBS S.A
Machado Meyer Advogados
Refit
Sergio Bermudes Advogados

80.000.000 de motivos
ConJur lança nova edição do Brazil Justice Yearbook
Em sua 11ª edição, o Brazil Justice Yearbook mostra o protagonismo do Poder Judiciário em meio à grave crise entre os poderes. Diante de 80 milhões de processos em tramitação nas varas e tribunais do país, a publicação deixa claro: é à Justiça que a população recorre para garantir seus direitos.

Nas páginas do Yearbook, o leitor encontra uma seleção das decisões do Supremo Tribunal Federal e dos tribunais superiores que definiram os rumos do país e da jurisprudência nos temas mais controversos e recorrentes na Justiça.

Além do perfil dos ministros da cúpula do Poder Judiciário, novidade desta edição é a tendência de voto de cada um deles nas principais áreas do Direito: se mais legalista ou garantista na esfera penal, se mais favorável ao fisco ou ao contribuinte nos temas tributários, se tende a decidir a favor do consumidor ou do trabalhador. Informação fundamental para quem acompanha o cotidiano da Justiça brasileira.

O 2022Brazil Justice Yearbook apresenta ainda dados da produtividade de cada tribunal e de seus integrantes: a quantidade de processos distribuídos, julgados e em acervo.

Reportagem especial trata das mudanças na jurisprudência do Carf (Conselho Administrativo de Recursos Fiscais) com o fim do voto de qualidade e traz o perfil do novo presidente, Carlos Henrique Oliveira, e dos conselheiros que integram a Câmara Superior do conselho.

Conheça também os integrantes do Conselho Nacional de Justiça, do Conselho Nacional do Ministério Público, da Ordem dos Advogados do Brasil, do Conselho Administrativo de Defesa Econômica (Cade), do Tribunal de Contas da União.

A versão digital do 2022 Brazil Justice Yearbook é gratuita e está disponível no site anuario.conjur.com.br e por meio do app Anuário da Justiça. A versão impressa está à venda exclusivamente na Livraria ConJur.

2022 BRAZIL JUSTICE YEARBOOK
Edição: 2022
Número de páginas: 288
Editora: Consultor Jurídico
Versão impressa: R$ 40 at Livraria ConJur
Versão online: disponível no site anuario.conjur.com.br ou no app Anuário
da Justiça

Anunciantes desta edição
Arruda Alvim & Thereza Alvim Advocacia e Consultoria Jurídica
Associação Educacional Nove de Julho – Uninove
Ayres Britto Consultoria Jurídica e Advocacia
Conselho Federal da Ordem dos Advogados do Brasil
Dannemann Siemsen Advogados
Décio Freire Advogados
JBS S.A
Machado Meyer Advogados
Refit
Sergio Bermudes Advogados
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Revista Consultor Jurídico, 26 de agosto de 2022, 9h00

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Bradesco, BV create independent asset management firm

New company is born with R$41bn and will have a compensation formula to draw, retain talents

08/25/2022

Roberto Paris — Foto: Ana Paula Paiva/Valor

Roberto Paris — Foto: Ana Paula Paiva/Valor

The creation of a new asset management company by Bradesco together with the assets that came from BV DTVM aims at building a structure similar to that of independent assets and wealth management firms. This means having a corporate model capable of attracting and retaining professionals, in addition to assessing possible acquisition opportunities, especially in the universe of alternative funds, said Roberto Paris, Bradesco’s managing director.

The deal complements a niche in which Bradesco’s asset management business did not operate directly, and makes this core of private banking originated from the BV base gain an appearance of wealth management, in which banks do not need to hold custody of assets, said José Alberto Salvini, CEO of BV. “It has to do with the partnership structure, to make things easy, aligned with the interests of investors, portfolio managers, and with more agility in offering more complex alternative products that require specific approvals, which can sometimes take longer in a conservative structure,” Mr. Paris said.

According to him, the investment industry in Brazil has undergone profound changes and, along the way, many specialized assets of several types have emerged. BV Asset has participation, development, and real estate funds. “Bradesco even provides clients with third-party [alternative] products, but it didn’t participate directly in this market,” Mr. Paris said.

The asset management company, with no name yet, is born with R$41.7 billion under its umbrella, and R$22 billion in private banking custody. The idea is that the new brand will not refer to any of the groups to which it will be linked and will even operate at different addresses of the two banks. At the end of July, BV ranked 24th in Anbima’s ranking of asset managers. It had R$12.9 billion in private-equity funds, including wealth management funds and investment organizations. The firm’s real estate funds have R$6.1 billion, and there are more R$8 billion in hedge funds. Fixed income, the large base of Bradesco Asset Management (Bram), totaled only R$11.3 billion.

According to the agreement, Bradesco will hold 51% of BV DTVM’s capital, will have a majority of representatives on the board and the members will choose jointly who will be the executive leadership of the operation. Currently, the asset management company and BV’s private bank are institutionally represented by Luiz Sedrani, the firm’s chief investment officer. The value of the deal was not disclosed.

Mr. Salvini, with BV, said that the partnership with Bradesco makes perfect sense because the portfolios complement each other. On top of that, having access to a giant distribution channel, such as Bradesco’s, is an advantage, as well as other possibilities that arise from the partnership. “Our private banking model is likely to improve a lot. Bradesco offers products that we don’t have, they have BAC in Florida [which props up Bradesco’s platform in the U.S.], and our clients will be able to use this channel,” he says.

According to him, if BV DTVM had partnered with BB Asset, from Banco do Brasil, of which BV is a partner, this would not bring so much difference in the supply of products. In addition, as the asset management firm is controlled by a state-run bank (Banco do Brasil), it would face more difficulties in hiring professionals in an industry in which the compensation model is tied to the performance of the funds.

BV is focused on retail, and the executive realized that if he wanted to do something different, he would need to find a strategic partner. “We didn’t even get to talk to other players, the match with Bradesco was complete.”

Today, BV DTVM is connected to the main investment platforms, although with a small presence in some. The association with Bradesco does not change this performance. The offer to private-banking clients is likely to include investment consolidation services, access to other applications, and an online trading platform, in addition to estate and succession planning.

As for the products offered, the BV DTVM’s executive acknowledged that the company is known for its structured funds but says that it does not intend to be limited to that. “We will also have liquid funds, with very specialized people.” Considering the custody part, BV DTVM has almost 150 employees. Mr. Salvini says the private-banking team is being expanded, but that the staff does not need to grow that much in the coming years.

In its history of consolidation, Bradesco has always preferred complete acquisitions, but this design is not defined at the start of the deal with BV. “At the first moment, it is a partnership, that’s what you have, and it is expected to continue for a long time. As time goes by, everything can be evaluated, but the goal is to keep this structure to serve the client and consolidate itself as an independent reference asset management company,” says Mr. Paris. Mr. Salvini said that it is not in BV partners’ plans sell the entire operation.

This year, Bradesco took over BNP Paribas’ wealth management portfolio in Brazil and had already made a similar move with J.P. Morgan’s private equity structure. “The strategies are ultimately aimed at strengthening services to high-income clients,” Mr. Paris says. In 2015, one highlight of the acquisition of HSBC was the high-net-worth client base the English group had in Brazil. Bradesco gathered then R$100 billion in private banking and about 15% of that came from HSBC. Currently, Bradesco has R$380 billion in private banking and R$544 billion in asset management.

*By Adriana Cotias, Álvaro Campos — São Paulo

https://valorinternational.globo.com/
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Imports of solar equipment doubled in first half, study shows

Survey shows imports may enable capital expenditure of R$35bn in projects

08/25/2022

Industry foresees a “race for the sun” this year, as consumers are expected to join now to use the grid free of charge by 2045 — Foto: Pixabay

Industry foresees a “race for the sun” this year, as consumers are expected to join now to use the grid free of charge by 2045 — Foto: Pixabay

Imports of solar equipment to supply the markets of distributed generation (own generation) and centralized generation (large-scale farms) have risen 100% year-over-year in the first half of 2022, a survey with 1,600 companies linked to the sector found.

This can enable capital expenditure of R$35 billion in the entire project cycle and represents an installed capacity of nearly 10 gigawatts-peak. The data was released by Greener, a consulting company specializing in studies about the solar power market, during the event Intersolar South America.

“We had a strong acceleration in volumes in the first half of the year, with more than 100% growth in equipment arriving in Brazil, especially photovoltaic modules, which indicates an investment of more than R$35 billion. Distributed generation is the main driver of this growth,” Marcio Takata, a director at Greener, told Valor.

The study also found a slight decrease in prices. The previous survey pointed to an 8% increase in solar panel prices due to freight costs, commodity prices and exchange rates.

Now the prices of photovoltaic systems have cooled by 4.3% for the final consumer due to cheaper freight costs, the stronger real, growing competition in the domestic market and the larger number of equipment distribution companies as a result of the sector’s growth.

“Unlike three years ago, Brazil is now among the main markets. This brings competition in manufacturing and distribution. Today, there are more than 200 distribution companies in Brazil. Not so long ago, there were at most 20 companies,” he said.

The return on investment has also dropped to four years. An average residential system in Brazil costs R$19,500 for 4 kWp, compared with R$20,600 a year ago. The reduction in the discounts for distributed generation installations as of 2023 should change this situation, since the industry foresees a “race for the sun” this year, as consumers are expected to join now to use the grid free of charge by 2045.

The change in the rules for solar generation associated with the increasing interest of power consumers in reducing costs has driven growth. “This shows that distributed generation is a competitive solution for consumers, even though electricity bills [in general] have dropped due to the reduction of the state tax [ICMS],” the executive said.

On the other hand, the high interest rates held financing back. About 54% of sales were financed, compared with 57% in the previous survey. Mr. Takata bets that despite pressured production chains, the solar power industry should maintain strong growth in the coming years.

*By Robson Rodrigues — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Brazil’s grain production expected to break new record

Total production of 271.4 million tonnes is expected for 2022/2023

08/25/2022

A soy farm in Brazil: production of the oilseed will reach 150 million tonnes in 2022/23 — Foto: Anna Carolina Negri/Valor

A soy farm in Brazil: production of the oilseed will reach 150 million tonnes in 2022/23 — Foto: Anna Carolina Negri/Valor

The Brazilian production of grains is expected to hit a new record in the 2022/23 crop, according to the first projections of the National Supply Company (Conab) for the season, released on Wednesday.

Driven by the increase in the area and good profitability of soybean, corn, and cotton crops, the harvest may grow 13.5% and reach 308 million tonnes, despite the increase in production costs — if, of course, the weather is favorable.

If the projection is confirmed, it will be the first time that the Brazilian grain harvest will exceed 300 million tonnes. More than 90% of the volume, or 294.3 million tonnes, will come from soy, corn, cotton, rice, and beans.

For the 2021/22 harvest, Conab estimates a total production of 271.4 million tonnes, with some crops still being closed, such as corn, wheat, and cotton.

According to the state-run company, soy production will reach 150.36 million tonnes in 2022/23, 21% more than in 2021/22, and a new record. Even with higher costs, the attractive prices of oilseeds in the international market are expected to stimulate a 3.5% increase in the area, to 42.4 million hectares.

The productivity of the 2022/23 cycle may also recover after the drought that affected the South region and part of Mato Grosso do Sul earlier this year.

With better crop yields and higher production volumes, Conab believes that soybean exports will grow 22.2% and reach 92 million tonnes in 2022/23, another record — Brazil leads the global production and exports of the grain.

With the advance of soybeans, the area planted with corn is also expected to grow in the second crop of the 2022/23 cycle and contribute to a total production estimated at 125.5 million tonnes, an increase of almost 10% over 2021/22.

For the second yearly crop, an 8.2% increase in harvested volume is expected, to 94.53 million tonnes. In the first harvest, the area is expected to fall 0.6%, estimates Conab, and production may reach 28.98 million tonnes.

In the case of cotton, the state company indicates a harvest of 2.92 million tonnes (7% more than in 2021/22), with increases in area and productivity. It is also expected a resumption of exports to a level close to 2 million tonnes.

The scenario is supported by good fiber prices defined in anticipated sales, which guarantee good profitability for the activity. But the uncertainties about the world economy, with the possibility of a recession in some countries and a decrease in demand, keep the segment on alert.

Rice and beans have similar scenarios projected by Conab, with a slight reduction in area and production adjusted to demand — and normality as far as domestic supply is concerned. The crops are impacted by the good profitability of “rivals” soy and corn.

The production of rice in the 2022/23 harvest is likely to be around 11.2 million tonnes, Conab said. The bean harvest tends to follow close to 3 million.

Conab also released its projections for the meat market, which will again face tight margins with the increase in costs driven by still firm corn prices.

Even so, Brazil may slaughter 30.1 million head of cattle in 2023, up 2.7% year-over-year. The increase is due to the movement made by cattle breeders to retain cows in recent years.

With a larger herd, beef production is likely to grow 2.9%, with the beginning of the process of culling cows in the livestock cycle. This way, exports tend to grow 5% next year. The per capita consumption in Brazil may see a slight increase and reach 26 kilos per inhabitant per year.

Poultry slaughter may increase by 3.2% in 2023, to 6.29 billion chickens. Foreign sales may fall 1.7% and stand at 4.5 million tonnes. The combination of these factors will result in a probable increase in domestic supply of 4.2%, raising per capita availability above 51 kilos per inhabitant per year, Conab projected.

The opening of new markets for Brazilian pork, such as Southeast Asian countries and Canada, is likely to mitigate the fall in exports to China, where the pig herd is recovering after a sanitary crisis.

The tendency for 2023, according to Conab, is an increase of 6.7% in slaughtering, but there will be no increase in the production of protein because of the lower average weight of the animals, due to the high costs of feeding the herds.

*By Rafael Walendorff — Brasília

Source: Valor International

https://valorinternational.globo.com/

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Governments rush to launch last auctions in 2022

There are bids scheduled for five assets, which may draw R$22bn in construction works

08/25/2022

In the final months of their terms, the federal and state governments are still trying to get infrastructure projects off the drawing board despite the difficulties in attracting investors – as became clear during last week’s auction of Congonhas, one of Brazil’s busiest airports, in São Paulo. For now, five assets are still scheduled to be auctioned later this year.

The main auction, scheduled for September, is that of Noroeste Paulista, a set of roads put on the block by the São Paulo state government with an estimated capital expenditure of R$10 billion. Two other state projects in the sector are scheduled for this year, in Rio Grande do Sul and Mato Grosso do Sul. Besides these, the Ceará government will launch next month two public-private partnerships (PPP) for basic sanitation.

The five contracts combined may total R$22 billion in new construction works if they materialize.

Since the end of last year, a combination of challenges has made it difficult to draw investors to infrastructure auctions. The situation is unlikely to change by the end of 2022. Rising interest rates, high inflation, global political uncertainties, elections in Brazil, and the oversupply of projects for a limited number of investors are cited as reasons by analysts.

Claudio Frischtak — Foto: Ana Paula Paiva/Valor

Claudio Frischtak — Foto: Ana Paula Paiva/Valor

“The big challenge is in drawing new operators and new investment funds. Today, we are very much in the hands of the incumbents,” said Cláudio Frischtak, CEO of the consulting firm Inter. B. In his view, among the barriers to attracting new groups are issues that will not be solved in the short term, such as the loss of the country’s investment grade and public authorities’ anti-environmental rhetoric.

Despite the short deadline and the difficulty in finding interested investors, some other projects governments still plan to put on the block this year could attract bids, in the market’s view.

The privatization of the Port of São Sebastião, an asset that has drawn interest, could still be launched on time, said David Goldberg, a partner at consultancy Terrafirma. “It is a simpler project that requires few investments and has a low barrier to entry,” he said. The auction is being analyzed by the Federal Court of Accounts (TCU). The public spending watchdog could speed up the analysis if the rapporteur of the case confirms such understanding.

The new auction of the airport of São Gonçalo do Amarante (Rio Grande do Norte) may also be carried out this year, said Mr. Goldberg, who led part of the technical studies. He sees this one as a highly-anticipated project as well. “This asset is already ready. There aren’t many investments planned.”

In the highway sector, the Ministry of Infrastructure plans three more highway concessions in the fourth quarter. The first is BR-381, a federal road in Minas Gerais, which included another federal road before a haircut was put in place to simplify the contract. Investments should total R$5.5 billion. Analysts are skeptical of this bid, largely because of the tight deadline.

In addition, the federal administration and the Paraná state government plan to auction two sets of roads totaling R$15 billion in capital expenditure. Mr. Frischtak believes that the auctions may still be held on time, but strong opposition to the collection of tolls in the state could be an obstacle.

There is also a long list of relatively mature projects that will be postponed to 2023 – and therefore depend on the outcome of the elections. There are several examples in the road segment: the new auction of the BR-040 highway, four highway lots in Paraná, and the PPP of São Paulo’s beltway (north stretch), whose auction has been scheduled for January 2023.

Another important auction unlikely to be launched this year is the one for the privatization of the Santos Port Authority (SPA). The Ministry of Infrastructure still includes the project in its forecasts. Yet the Brazilian Development Bank (BNDES), which coordinated studies on the matter, and market analysts no longer see this possibility given the complexity of the contract and question marks about the model.

There is still uncertainty regarding the continuity of several concession projects pushed forward by states and the federal administration given the change of government in 2023.

However, the perception is that many plans will continue, and logistics assets have the greatest chance of surviving the government transition, said Marcos Ganut, a partner at Alvarez & Marsal. “There is a global scenario of demand for food. This will not change because it does not depend on local policies. Market and government will be interested because these construction works are also important job generators,” he said.

*By Taís Hirata — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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BTG Pactual picks first projects for impact-investing fund

Bank has allocated 43% of R$542m raised last year in two technology companies

08/24/2022

Patricia Genelhu — Foto: Silvia Zamboni/Valor

Patricia Genelhu — Foto: Silvia Zamboni/Valor

A year after raising R$542 million for its first impact-investing fund, BTG Pactual has allocated 43% of its funds to two technology companies: Alliare (agribusiness) and Gran Cursos Online (education). Now, in order to invest the remainder, the bank has on the radar the health sector and projects linked to waste management and circular economy, including the development of sustainable materials for the packaging chain. Projects focused on energy efficiency, drinking water, and basic sanitation are also eligible.

According to the commitment made when it raised the funds, the bank has until 2024 to invest them. “We are optimistic about the pace of allocation and we believe it will happen before the end of the three-year term,” said Patricia Genelhú, head of sustainable and impact investments at BTG. The fund expects to return the capital to investors by mid-2028 – with profit.

Ms. Genelhú said that the entire investment rationale replicates what BTG Pactual’s asset-management business seeks with its conventional private-equity funds, and with the same consistency in terms of performance. The target return is 20% above Brazil’s official inflation index IPCA. “The difference is that it brings the best sustainability practices in the projects that receive investments, monitors the strength of the agenda in the companies, and looks at maximizing the impact.”

The distribution of the shares was concentrated on pension funds, with 39 investors in the A class. This is an audience that has looked more closely at ESG. Yet, the fund has also attracted high-net-worth families and a chunk of high-income retail. With checks starting at R$100,000 for the B share class, it has built a base of 716 individual investors.

Founded in 2013, Gran Cursos Online is a provider of preparatory programs for public hiring tests, professional exams (such as those applied by the Brazilian Bar Association and the Federal Accounting Council for new lawyers and accountants) and graduate programs. According to BTG, the investment in the company is justified by the promotion of inclusive, equitable and quality education, which contributes to reducing poverty and fostering employment. In April, the company acquired the UniBagozzi university to expand in distance education. In higher education, the goal is to reach 1 million students by 2026.

In the annual report of the impact fund, the management team mentions that the company pioneered the subscription model in the market of preparatory courses for public hiring tests with affordable prices. Since the capital injection, there has been a 38% increase in the base, with 476,000 paying students, and 71,000 enrolled in free programs on the platform. Considering people that passed public hiring tests this year, 26.5% studied with Gran Cursos, 72% of which coming from public schools. A share of 56% are black and mixed-race people, 68% have incomes of up to two minimum wages, 62% are women, and 51% of the students came from cities with less than 200,000 inhabitants.

Aliare, the other company that received investments, has taken technology to the fields with the objective of supporting agriculture in the transition to a low-carbon economy and increasing the income of farmers. According to BTG, the company contributes to a better efficiency in the use of inputs, preservation of natural resources, and food security. The result of the merger of two groups focused on the development of software for agribusiness, the company founded in 2019 Conexa, an innovation hub to encourage the development of technology startups in the sector.

Beyond the impact fund, Ms. Genelhú said that BTG’s asset management company has been focusing on other sustainable investments, such as a dedicated debt portfolio in emerging countries, as well as a strategy of reforestation assets.

In her view, the sustainable finance market is gaining prominence, with companies interested in being recognized as issuers by ESG criteria. The challenge, she said, is to avoid “greenwashing” practices.

*By Adriana Cotias — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Stocks may rise if Vale joins sustainability index, investors say

Shareholders believe company can return to listings with ESG improvements

08/23/2022

Brumadinho disaster contributed to several questions about the Vale’s environmental and safety practices — Foto: Bruno Correia/Nitro via AP

Brumadinho disaster contributed to several questions about the Vale’s environmental and safety practices — Foto: Bruno Correia/Nitro via AP

Since Vale became a “true corporation” in 2020, the market has been speculating about the sale of significant parts of the shares that are still in the hands of the former controlling group of the mining company. But as the company still trades at a discount compared with international peers, some of these shareholders are expecting higher prices to leave their positions. These shareholders expect, for example, that Vale will return to the sustainability indexes of stock exchanges, which could reduce the gap between the mining company and stocks of its main competitors – BHP Billiton and Rio Tinto.

Of Vale’s former controlling group, only Previ (8.61%) and Mitsui (5.99%) maintain more than 5% of the company’s capital. Bradespar, the equity arm of Bradesco and a shareholders since privatization, in 1997, now holds a 3.59% stake. Shareholders in this group has been selling stocks gradually and reducing their stakes, but still hold relevant positions. The exception is the Brazilian Development Bank (BNDES), which left the company completely.

The shares, which traded around R$98 in July last year, is now just under R$70. In March 2020, due to the effects of the collapse of the tailings dam in Brumadinho, the company fell to R$25.66 in the stock market. Sources recalled that some analysts put the target price at R$150 at some point and estimated that the return or entry into sustainability indexes could drive prices and the sale of stocks by former members of the controlling group.

The problem is that some banks have seen difficulties for Vale to deliver the expected growth in iron ore production and the commodity is not expected to maintain the high prices seen recently. These two factors are penalizing the company. Itaú BBA, for example, downgraded the company this month to “market perform” in the wake of lower iron ore prices, lower than expected production growth and higher cost of capital.

Investors who left the company, however, could look again at Vale as the company advances in ESG, as there are funds with governance rules that require investing only in companies with certain governance and sustainability “stamps.” But much work is needed to get there.

Dam accidents at Samarco (a Vale-BHP Billiton joint venture) in 2015 in Mariana and Vale’s own disaster in Brumadinho in 2019 have contributed to several questions about the company’s environmental and safety practices. The Government Pension Fund of Norway, for example, sold its entire stake in Vale in 2020 after the accidents. Also after Brumadinho, the Church of England divested its positions in the company.

Vale was part of B3’s Corporate Sustainability Index (ISE B3) between 2011 and 2015 and was removed after the Samarco dam collapse. The purpose of the ISE is to measure the average share price performance of companies selected for their commitment to corporate sustainability. The index supports investors in their decision-making and induces companies to adopt ESG best practices.

Companies apply for the ISE every year, and the exchange holds a selection process. In the United States, the Dow Jones Sustainability Index follows the same line: companies apply and there is a methodology to be followed.

After Brumadinho, Vale has significantly changed its ESG approach. Although it is not part of the portfolio of the main sustainability indexes of stock exchanges in the world, the company uses the reports and evaluations of the Dow Jones Sustainability Index and other ESG data providers — such as MSCI, Sustainalytics, ISS, and Glass Lewis — to develop and implement the best environmental, social and governance practices in its internal actions and processes.

In 2019, Vale mapped the top 63 ESG gaps and created an action plan to bridge them by 2030. So far, 54 of those gaps have been solved, and the company estimates that three more will be closed this year. Among those already completed are the further detailing of executive compensation; the consolidation of a majority of independent members on the board of directors and the CEO; and due diligence processes concerning human rights.

“The company is undergoing an intense cultural transformation, which seeks to put people and safety at the center of the decisions,” Vale said in a statement.

A source close to the company said that, today, Vale is “fully capable” to be part of the sustainability indexes of stock exchanges and emphasizes that the steps taken by the company in the ESG area are “solid in all spheres.”

“The [ESG] goals are completely tied to executive compensation and solidly embedded in the strategic plan. After Brumadinho, there was a very solid work of culture change in the company,” said the source, for whom it would be “no surprise” that the mining company would be included in the sustainability indexes.

The source added that, in this process, the company is likely to face “prejudices” still related to the accidents with the dams, since “outsiders and stakeholders may not see the depth of the changes in the company.”

“I don’t see why Vale shouldn’t join [sustainability indexes] in 2022 or 2023. I don’t see why it shouldn’t plead [for the entry],” says the source, recalling that the company was the first major mining company to commit to Scope 3 decarbonization goals, which consist of helping to reduce customer emissions.

Another source linked with investors in the company stressed that Vale has “come a long way” in setting and meeting ESG targets. “As the company continues to deliver on its commitments on this front, closing gaps, ESG rating providers should begin to recognize the company’s improvement,” says the source, who declined to provide a forecast for when the mining company will rejoin sustainability indexes.

For him, predicting the timing of this return to the indexes is very difficult, because there are subjective aspects of great relevance, such as the absorption of the effects of Brumadinho by stakeholders. “It takes time and a lot of effort from the company to prove that won’t happen again,” he said.

The source also recalled that, about the discount against international peers, there is still an operational issue, since Vale has been having difficulty in delivering the expected production volume. In other words, the mere entry into sustainability indexes may not guarantee a significant surge in the short term. “There is also a discount because of the operational performance below expectations in recent years,” the source said.

*By Rafael Rosas, Juliana Schincariol — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/
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Camil buys PepsiCo cookies to speed up growth

Food company also takes a 10-year long licensing of Toddy brand

08/24/2022

Luciano Quartiero — Foto: Divulgação

Luciano Quartiero — Foto: Divulgação

Food company Camil announced Tuesday the purchase of the Mabel brand of cookies and the 10-year-long licensing of the Toddy brand. The business, which had been bought by PepsiCo in 2011 for R$800 million, was now sold to Camil for less than R$200 million, sources told Pipeline, Valor’s business website.

The acquisition still depends on approval by the antitrust regulator CADE. Camil CEO Luciano Quartiero said the deal may add about R$1 billion per year to the company’s revenues in the medium term.

In the fiscal year 2021, which ended in February, Camil’s revenue reached R$10.26 billion, with a growth of 20.8% compared to 2020. Net income increased 3.5% in comparison, to R$478.7 million, and operating income, measured by EBITDA, rose 2.9%, to R$809.8 million.

According to information from the companies, the Toddy line of cookies is the second-largest in sales in Brazil, with a top-of-mind awareness above 98%. Besides Toddy cookies, the acquisition includes the brands Doce Vida, Mirabel, Elbi’s, and Pavesino.

Also included in the deal are the industrial plants in Aparecida de Goiânia (Goiás) and Itaporanga D’Ajuda (Sergipe), with around 800 employees in total. According to Mr. Quartiero, the two units have idle capacity, which strengthens the growth potential of the operation — which also involves other assets that produce Toddy cookies.

“We will be able to double Mabel’s sales volume without new investments”, Mr. Quartiero told Valor. According to him, the acquisition was carried out with the company’s own cash. At the end of the second quarter of the current fiscal year, in May, cash reserves totaled R$1.3 billion.

The executive emphasized that the purchase has great synergy with the company’s operations. “Cookies are a large value-added category that can be sold to our customers with all the others we work with. This is a huge force to accelerate our growth,” he said.

Since July 2021, Camil has made five acquisitions, in line with the CEO’s previously announced strategy. The first was Dajahu, in the Ecuadorian rice market. In August last year, the company bought Santa Amália and entered the pasta area. In September, there was the incorporation of the Seleto coffee brand, and the announcement of an investment in the company Café Bom Dia, with the relaunch of the União brand, also in the coffee market. In December, Camil announced the acquisition of Silcom, in Uruguay, a healthy products company. Considering these five deals, Camil invested R$848 million.

“Fifteen years ago, Camil was only a rice and beans company. Today, these products represent 35% of the company’s consolidated revenue,” said Mr. Quartiero. The CEO adds that new acquisitions are still on the radar, to reinforce the new “multiple company” profile in the food area.

The acquisitions and growth have not yet been reflected in stocks. With little liquidity, they continue to show little oscillation, although its net debt is also considered relatively low — R$2.1 billion at the end of the second quarter (leverage of 2.4 times).

Therefore, in March the board approved a buyback program for up to 10 million shares within 18 months. This left Camil with 360 million common shares outstanding.

*By Fernanda Pressinott — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Analysis: Falling inflation expectations are off Central Bank’s horizon

Drop has not yet been able to positively contaminate projections for longer-term inflation

08/23/2022

Central Bank’s building in Brasília — Foto: Jorge William/Agência O Globo

Central Bank’s building in Brasília — Foto: Jorge William/Agência O Globo

Inflation expectations for this year and next have dropped substantially last week, but there was no benefit, for now, in the time horizon that really counts for the conduct of monetary policy.

The market’s inflation forecast for 2023 declined to 5.33% from 5.38% last week. At this percentage, it exceeds both the center of the inflation target range pursued by the Central Bank (3.25%) and the top of the range (5%). But the drop represents an important improvement.

It is very likely that such a decline was caused by a slowdown in current inflation. Central Bank President Roberto Campos Neto predicted, in a statement last week, that the more favorable inflation rates in the short term could have positive effects on longer-term inflation expectations.

In fact, the inflation projection for this year has been receding strongly after the government cut taxes to lower fuel and other prices, and the price of oil fell on the international market.

As a result, the market’s inflation projection for this year went to 6.82% from 7.02%. The economic analysts that renewed their projections in the past five days already forecast even lower inflation, at 6.69%.

But this lower inflation has not yet been able to positively contaminate the inflation projections for the longer term. The inflation rate expected by the market for the 12-month period ending in March 2024 is at 4.47%. It is more or less stable compared to the 4.48% a week earlier when considering the monthly inflation projections of the period.

The market projection is well above the informal target for the period, of 3.18%, calculated from the interpolation of the 2023 (3.25%) and 2024 (3%) goals. The Central Bank, however, estimates inflation at 3.5%. Last week, Mr. Campos Neto said that this spread between the official projection and that of the market could be explained by the fact that the monetary authority estimates a stronger impact of the interest rate hikes made since March 2021 to lower the price index.

The Central Bank decided to focus more on the March 2024 target because, according to its reasoning, the deadline is distant enough to not be contaminated by the temporary tax-cut measures put in place by the government. Some of these are to be reviewed in the first quarter of 2023.

The government, however, is beginning to discuss extending tax cuts in early 2023 as well. Since these measures are being taken in a fiscally unsustainable manner, without the support of permanent revenue gains, the benefits may have to be revised again – which should increase uncertainty about inflation projections for 2024.

Some analysts, however, believe that the slowdown in short-term inflation could have permanent positive effects on longer-term expectations. According to this reasoning, expectations are very much influenced by what happens to current inflation, although the theory says that it should only be determined by the underlying inflation trend.

Inflation expectations for 2024 were steady at 4.41% last week, after rising from 3.3% the week before. Leading indicators are dubious about what might happen in the coming weeks.

The average of expectations (sum of projections, divided by the number of projections) is at 4.47%, above the median of projections (projection with the most central value), which is the official indicator of expectations. This suggests that projections may rise.

The median of the projections of the 78 analysts that renewed their estimates in the last five days fell to 4.3% from 4.42% last week. It is thus lower than the 4.41% median of the 116 analysts that updated their projections in the past 30 days, which is the official measure of expectations.

By Alex Ribeiro — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Energisa enters two states with an eye on new businesses

Energy arm will start to operate in group’s concession area

08/23/2022

Roberta Godói — Foto: Silvia Zamboni/Valor

Roberta Godói — Foto: Silvia Zamboni/Valor

Energisa is growing in non-regulated activities with an innovative strategy. It is using (Re)energisa, its arm in the distributed generation, free market trading, and value added services segments, to offer in its concession area in the states of Mato Grosso and Mato Grosso do Sul solar subscription services and distributed generation (self-generation).

The strategy focuses on the opening of the energy market, energy transition, and empowering consumers. In this scenario of modernization of the power industry, the company is investing R$1.1 billion to take advantage of opportunities to drive businesses in new states. The amount represents 18% of the total invested by the group.

Roberta Godói, the company’s vice-president of energy solutions, told Valor that the legal framework of distributed generation, in January, created a sense of urgency in the development of new projects in this segment. The industry foresees a “race for the sun” this year, as consumers are expected to join now to use the grid free of charge by 2045.

“It was the trigger we needed to outline a plan. We have 91 megawatts of distributed generation, and we want to end the year with 230 MW,” she said. “We have already bought all the inputs for components to build all plants for 2022 and a little bit for 2023.”

The strategy required some working capital, but the group is flush and aims to lock in costs – the disruption of production chains has caused concern in the sector and made capital expenditure more expensive.

Until now, distributed generation projects were focused on power utility Cemig’s area in the state of Minas Gerais, one of the best regions for solar power generation in Brazil. The new business front in the Central-West region is not necessarily a market to be explored, since the company is active in the regulated market, but aims to keep customers who want to migrate to distributed generation within the group’s umbrella.

“We are going to the states where Energisa is already operating because these are markets that bring a lot of opportunities. These are thriving states where the agribusiness sector drives services, industry, and commerce. It is key for us to be in our areas.”

It may seem strange for the company to operate in its own concession area, since the connection of distributed generation systems to the grid harms the distributors’ market. However, the idea is to capture this client who wants to stop being a regulated consumer.

The utilities complain, since consumers migrate and they lose part of those who pay sectorial charges. In the case of (Re)energisa, it evaluates opportunities to maintain revenues, since the consumer is still a client, but in another business area. In this case, with the solar subscription service.

“If clients across Brazil are already starting to migrate to distributed generation, then let us be in our areas. If they are going to move on to solar power, we can keep them,” she said.

The company focuses on the solar generation because retail and small and medium-sized companies take advantage of the more modular systems compared to those of other sources, while construction works take less time. The executive came from the telecoms sector, where she followed the disruptive opening of the market to consumers.

Less than a year and a half ago, she left the telecoms sector for Energisa in one of the most promising fields of the power industry, one with aggressive targets. “With the plants in operation, we have now 2,200 customers. At the beginning of the year, there were 1,700. We want to end the year with 5,200.”

Although all the plants generate solar power, the company is studying biogas, since the concession area has a strong agribusiness vocation with residues from agribusiness.

There is more than 12.4 GW of installed power in the segment of self-generation, data from the Brazilian Electricity Regulatory Agency (Aneel) show.

*By Robson Rodrigues — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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