World’s gazing at Brazil, EU leader says

European commission vice president says he is pleased with the promise of zero deforestation

01/23/2023

Frans Timmermans — Foto: Divulgação

Frans Timmermans — Foto: Divulgação

“The eyes of the world are turned to Brazil”, says Frans Timmermans, Executive Vice President of the European Commission, and leader of the European Union international climate negotiations. The Dutchman, who is on a two-day visit to the country, wants to hear from the Lula administration what the plans to contain deforestation are, visit the Amazon, and initiate talks for COP28, the UN conference on climate change to be held in December in the United Arab Emirates.

Mr. Timmermans is also in charge of the debate on the European Green Deal at the European Commission, the executive branch of the block. The environmental agenda today is an economic agenda, and this was clear in the latest movements of the European Union, which is usually in the forefront of this issue and is concluding two legislations that affect Brazil — the one that wants to curb the importation of commodities linked to deforestation and the one that will adopt a mechanism for adjusting the carbon border.

The regulations have been viewed with anxiety by developing countries. “The climate crisis is a global crisis, and we can’t solve it by pushing emissions elsewhere,” he says, admitting that what is driving deforestation is the demand from markets like the EU for commodities like cocoa, coffee, palm oil, beef, and soy. “This new law will be holding us accountable for our consumption patterns,” he notes.

About the border tax on carbon from products, he says it is neither punitive nor protectionist. “We have done our best to design it in a way that respects global trade rules,” he says, adding that the system focuses on cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen.

“Renewable hydrogen will be an essential component of the future clean industry,” he acknowledges. Some industries such as steelmaking, chemicals, or long-distance trucks cannot become electric and need an energy carrier. That’s where hydrogen comes in. “It’s the rock star of the energy transition,” says Mr. Timmermans.

In recent years, and forcefully at recent COPs, the European Union has said it needs to broaden the donor base for climate finance. The UN Climate and Biodiversity conventions say it is the industrialized countries that are responsible for providing funds, but the Europeans argue that the world is not the same as it was 30 years ago. “Every country that is part of today’s industrial and economic elite can and must contribute to keep our planet a safe home for humanity,” argues Mr. Timmermans.

Mr. Timmermans recalls that G20 countries are responsible for 80% of emissions and “must improve their climate commitments.” In Brasilia, the European Commission vice president is expected to hold bilateral talks with Vice President Geraldo Alckmin and Ministers Marina Silva (Environment), Silvio Almeida (Human Rights), and Sonia Guajajara (Indigenous Peoples) before going to Belém. He will also visit Colombia and Mexico.

Before leaving, he gave an interview, in writing, to Valor. See below the main parts of it:

Valor: What are the goals of your visit to Brazil? How can European Union collaboration happen during Lula’s administration?

Frans Timmermans: This is the first time I will be in Brazil as executive vice president of the European Commission. I have already been here as a Dutch foreign minister and even lived in São Paulo when my father was the Dutch consul in the city. Right now, the eyes of the world are on Brazil. I was happy that I already had the opportunity to meet President Lula at the end of 2022, still as president-elect. We talked for a long time about the opportunities for the EU and Brazil to work together, including in the fight against deforestation, and about Brazil’s candidacy to host COP30. The desire to host the global climate conference in Belém and the decision to submit this candidacy soon after the inauguration say a lot about the government’s great ambitions for climate and environment.

Valor: President Lula and Minister Marina Silva are committed to zero deforestation, but Brazil will need help, especially after the Bolsonaro years. How can Europe help?

Mr. Timmermans: They have many ideas on how to stop deforestation. They know that it is in Brazil’s interest to do this. During my visit, first of all, I intend to hear what the new government is planning. The Amazon is an ecosystem of global importance, but how the forest is protected in Brazil is a sovereign decision of your country. I am happy that the government is so strongly committed to zero deforestation. You can be sure that the European Union is seriously considering how to help Brazil achieve this.

Valor: How and when the legislation of not importing goods produced by deforestation will come into operation? Although it is understood that the law goes in the right direction, not to stimulate deforestation, some people see it as protectionism and a barrier to the European market. What do you think about this?

Mr. Timmermans: Deforestation and forest degradation are important drivers of climate change and biodiversity loss. But what is driving deforestation? It’s the demand from markets like the EU for commodities like cocoa, coffee, palm oil, beef, and soy. So, this new EU law will be holding us accountable for our consumption patterns. More than 1 million European citizens have demanded that we do this so that our consumption in Europe does not cause environmental damage elsewhere. The law applies to European and non-European traders alike, and we take care to ensure that it is fully compliant with international trade rules. The goods I have mentioned, but also wood and rubber, can no longer be sold on the EU market if they are produced by deforestation. Once the law is fully adopted, there will be a year and a half to implement the new rules.

Valor: The European Parliament approved in December the first border tax in the world, the Carbon Border Adjustment Mechanism (CBAM). Will it be valid only for European companies outside Europe or for all? Will there be a test time and priority sectors? The measure is also seen as protectionist.

Mr. Timmermans: With CBAM, we want to avoid “carbon leakage.” I mean that efforts within the EU to reduce greenhouse gas emissions must not lead to Europe exporting emissions to other parts of the world. The climate crisis is global, and we cannot solve it by pushing emissions elsewhere. We also want to encourage clean industrial production in other countries. The result is simple: the less carbon that is incorporated into a product, the less CBAM will apply. CBAM is not punitive and it is not protectionist. We have done our best to design it in a way that respects global trade rules (WTO). The system focuses on products: cement, iron and steel, aluminum, fertilizers, electricity, and hydrogen. It will be introduced gradually over the next few years. In the transition phase, which will begin in October, importers of goods under CBAM will only have to report the greenhouse gas emissions incorporated in their imports; there will be no costs. Only after the transition period will they have to pay for the embedded carbon emissions. This price will be equivalent to the carbon price of products manufactured in the EU.

Valor: In the climate COPs, the EU has advocated the expansion of the number of donors to climate finance. Developing countries understand that this is rewriting the Climate Convention and even the Paris Agreement.

Mr. Timmermans: Every country that is part of today’s industrial and economic elite can and must contribute to keeping our planet a safe home. We cannot base new financing arrangements on an economic division that made sense in 1992. That would only allow countries that are now major economic powers to say, “Oh, we are part of the developing world, so we have no legal, moral or political obligation to contribute.” That is why the EU was so adamant in Sharm el-Sheikh [host of the COP27 in Egypt] to prevent the Damages Fund from being based on the same treaty article as the previous funds. This is not rewriting the convention. We are simply using other parts of the treaty. We need to do this if we want to achieve the necessary change and bring these funds to the countries that cannot cope with the climate crisis on their own. We need to bring in international and development banks and be able to attract private financing. That is the only way we can succeed.

Valor: There is a race in the world for the production of hydrogen, with more than 60 countries getting ready. Is there a demand for so much supply?

Timmermans: Absolutely. Renewable hydrogen will be an essential component of the future clean industry. Some industries such as steel, chemicals, long-distance trucks, and buses can’t go electric and need an energy carrier. Hydrogen will be critical in our industrial future. It is truly the rock star of the energy transition. Right now, we are living in the dilemma of who comes first. The industry wants to switch to hydrogen but is still reluctant to invest because they are not sure there will be enough supply. Potential producers, on the other hand, are not sure because they want to know if there will be buyers. We are developing a hydrogen bank in Europe to help fill this gap. We are also looking at cooperation with countries that are developing their renewable energy sector, to see if we can help transfer knowledge and create clean industrial value chains around the world.

*By Daniela Chiaretti — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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U.S. lifts import barrier on carbon steel plates from Brazil

Brazilian exports of steel products totaled $9.3bn in 2021 and are expected to grow this year

01/23/2023

(USITC)

The United States International Trade Commission (USITC) decided to lift the antidumping duty applied to Brazilian exports of carbon steel plate, in force since 1993.

According to the Ministry of Foreign Affairs, the U.S. will no longer charge additional 74.52% ad valorem duties on the import of carbon steel plates from Brazil.

“It should be noted that there was no change or revocation of trade defense measures for the other markets subject to the end-of-period review conducted by the USITC, with Brazil being the only country excluded from the surcharge,” said the Foreign Affairs Ministry, known as Itamaraty.

In a statement, the Brazilian government said it was proven that the extinction of the measure for Brazilian exports will not result in material damage to U.S. industry.

According to Itamaraty data, in 2021 Brazil exported $9.3 billion in steel products. Of this, 54%, or $5.1 billion, were destined for the United States. Brazilian exports related specifically to carbon steel heavy plates totaled approximately $75 million in 2021, a market that may increase after the surcharge lift.

*By Matheus Schuch — Brasília

Source: Valor International

https://valorinternational.globo.com/
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Vtex seeks support of U.S. companies to expand global presence

Step is necessary before growing in Europe and Asia, says executive

01/20/2023

After speeding up online sales during the Covid-19 pandemic, navigating through high interest rates and inflation, Brazil’s retailers are now seeking efficiency instead of accelerated growth. Representatives of these companies visited the pavilions of the NRF 2023 retail conference, in New York, this week, in search of answers to pragmatic questions through technology instead of futuristic trends.

“It’s no use talking about metaverse if I can’t integrate my stock with the online operation, for example,” said Rafael Forte, CEO of Vtex, a Brazilian multinational software-as-a-service company for online sales, which joined the list of Brazilian unicorns in September 2020 and went public in the New York Stock Exchange (NYSE) in July 2021.

Brazil’s retail results with the last Black Friday, which came below 2021 in gross sales, do not mean that the industry has not raised its margins in the period, said the executive. “The first thing that changed [in retail since last year] is that the game now is profitability and it is not made only with sales increase. You need to have margin and streamline the operations,” said Mr. Forte.

Working with leaner inventories, in reduced spaces or inside stores, as U.S.-based Macy’s has done in 35 stores over the past few years; betting on salespeople who attend customers in a customized way through WhatsApp, as fashion retailer C&A has done; or integrating the items on the shelf to the online sales inventory, as Carrefour has done, are some strategies in the search for efficiency shared by these companies during the NRF 2023.

For Vtex, which was born as an e-commerce platform and expanded its operations into software for managing other fronts of the sales chain, gaining the trust of U.S. companies is the focus before expanding operations in Europe and Asia, said the executive.

In September, the company opened an office in a prime area of Manhattan, where 40 people work. “If you build credibility here [in the U.S.], the global market respects it, so we need to have that focus,” he said.

Vtex has 2,400 clients in 38 countries. In the U.S., it has local contracts with AB Inbev, Motorola, Stanley, Black & Decker, and Whirpool. Brazilian clients currently generate 53% of the company’s revenue, and Latin American clients, more than 90%.

Before building a base in one of the most expensive square meters in the world, however, Vtex had to lay off employees, an adjustment measure that almost no unicorn – technology-based companies valued at over $1 billion – could avoid since last year.

The team of 1,850 people in February has dropped to 1,400 now. “We hired a lot of people, since 2020, when we had 400 people, to meet demand from retail, which was under pressure [in the pandemic] and then needed to streamline operations,” said the executive. “When you grow very fast like that, it is inevitable to lose efficiency, so we had to look inward and search for that again.”

The measure reflects greater investor caution in the face of the slowdown in the U.S. and global economy, causing technology companies to also seek efficiency. “Just as retail has been looking for efficiency, so have we.”

In the third quarter of 2022, Vtex’s revenue totaled $38.8 million in the first quarter of 2022 – of which $36.5 million in software-as-a-service subscriptions –, up 21.6% year-over-year. The net loss of $11.5 million in the September quarter was 47.7% lower than a year earlier.

(The reporter’s travel costs were covered by Vtex.)

*By Daniela Braun — New York

Source: Valor International

https://valorinternational.globo.com/
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Unemployment is down, but improvement loses steam

Rate fell for sixth time and is now at 8.1%

01/20/2023

Job creation was more modest, suggesting a slower start of 2023 — Foto: Marcelo Camargo/ABr

Job creation was more modest, suggesting a slower start of 2023 — Foto: Marcelo Camargo/ABr

The good performance of the labor market in 2022 showed signs of exhaustion again in November, but it remains heated. In line with other signs of deceleration seen in the economy in the final stretch of last year, job creation was more modest, suggesting a more cautious start of 2023 for Brazilian workers.

According to the Continuous National Household Sample Survey (Pnad), released on Thursday by the statistics agency IBGE, the unemployment rate in the country was 8.1% in the moving quarter ended in November 2022, compared to 8.9% in the previous quarter ended in August.

The result was in line with the median expectations of 27 consulting and financial institutions consulted by Valor Data, which pointed to a rate of 8.1% in the moving quarter that ended in November 2022. It is the sixth consecutive quarter of decline in the rate, which reached the lowest level since April 2015 (8.1%).

In absolute numbers, the country had 8.7 million unemployed — people aged 14 or older who looked for a job but couldn’t find one. This is 3.7 million fewer people than in the same period in 2021. The employed population reached 99.7 million people, a new record in the survey, which began in 2012.

Despite the apparent good numbers, the improvement seems to be losing steam. The rate of expansion of the employed population, which was 2.4% and 1.5% in the previous two quarters, slowed to 0.7% in the survey period. According to the seasonally adjusted calculations of banks and consulting firms, it is already possible to see a drop in the employed population.

According to Bruno Imaizumi, an economist at LCA Consultores, the employed population has had a net negative variation for three months. This effect has not yet impacted the unemployment rate only because the labor force participation rate —including those looking for work — has also fallen again.

“If we used the labor force participation rate of the pre-pandemic period, of 2019, this unemployment rate would be 2 percentage points higher than the current number,” notes the economist, for whom the unemployment rate is expected to rise again in the first quarter of 2023.

In Santander’s seasonally adjusted calculations, there was a 0.4% drop in the labor force in November, followed by a retreat of the same magnitude in the employed population. As a result, the bank’s seasonally adjusted unemployment rate ended stable at 8.6% in November versus October.

“The result of the Pnad continues to show an overheated labor market. However, unemployment remains at low levels because of the reduction in labor force participation,” says Santander’s report, signed by Gabriel Couto. “We expect a slowdown in this improvement, but the maintenance of a low market participation rate means a downside risk to our projections.”

Coordinator of IBGE’s Household Sample Surveys, Adriana Beringuy, ponders that it is necessary to wait to better evaluate the loss of breath of job creation. Occupation also comes from successive growths. “Maintaining a high level is difficult,” she said, recalling that 2022 was a year of adjustment, especially in the services sector.

A point celebrated by Ms. Beringuy was the growth in the average income of workers, which rose 3% in the November quarter, to R$ 2,787. With this, the real income bill customarily received by occupied people was R$272.998 billion in the moving quarter ended in November, up 3.8% compared to the previous moving quarter.

In the year-on-year comparison, the average income of the Brazilian worker advanced by 7.1% in the quarter ended in November 2022, which was the first increase after six quarters of decline.

Contributing to this improvement was the growth in the formal sector, which reached 36.8 million, up 2.3% from the previous quarter. On the other hand, the informally employed population fell by 1.3%. Besides the improvement in the occupational composition, Ms. Beringuy also cites the easing of inflation in 2022, compared to the same period in 2022, to explain this first reaction of income in the year-on-year comparison.

Rodolpho Tobler, a researcher at the Brazilian Institute of Economics of Fundação Getulio Vargas (FGV Ibre), points out that, despite all the improvement in the market, the average usual income has not yet returned to pre-pandemic levels.

“It is natural that, when many people stay out of the labor market, the return happens with lower salaries. But this challenge remains for 2023, and the point that worries us is that this year tends to be a more difficult one. The economy was already showing signs of slowing down at the end of last year, and the labor market, with some lag, may notice this as well,” he said.

*By Marcelo Osakabe, Lucianne Carneiro — São Paulo, Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/
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Americanas is excluded from Brazil’s main stock index

Since January 12, when “accounting inconsistencies” were revealed, the stocks lost 91.6%

01/20/2023

Americanas filed for court-supervised reorganization after accusing creditor banks of executing “illegal withdrawals” — Foto: Divulgação

Americanas filed for court-supervised reorganization after accusing creditor banks of executing “illegal withdrawals” — Foto: Divulgação

In a session marked by the Americanas’s request for bankruptcy protection, accepted by the courts, and exchange of accusations between the company and its creditors, the retail giant shares ended Thursday’s trading session – its last but one in the Ibovespa – with a drop of 42.53%, at R$1 each, while Ibovespa rose 0.62%, at 112.922 points. Since the 12th, when “accounting inconsistencies” were revealed, the stocks lost 91.6% of their value.

As forecasted by market participants, Americanas filed for court-supervised reorganization on Thursday after accusing the banks with whom it has debts of performing “illegal withdrawals” and suffocating its cash. On the other end, creditors criticized the stance of the company’s primary shareholders and say, according to sources, they feel “betrayed” by the company’s decision to go to court.

With so many uncertainties, investors renewed negative bets against the company and, consequently, against the shares, which plunged again into negative territory in the session. More than that, after the filing for a court-supervised reorganization, the company will be excluded after Friday’s trading session from the 14 indexes in which it participates on the B3, including Ibovespa.

“Given the progress of the discussions over the last few days, we imagine that the scenario would move towards a non-agreement between creditors and shareholders, that is, towards the effectiveness of the supervised reorganization request. In general terms, in this case, nobody wins: neither creditors, nor shareholders, nor the company— the latter being at least preserved from a bankruptcy decree,” said Victor Penna and Georgia Jorge, with BB Investimentos. The analysts have a sell recommendation for the stock.

Pedro Serra, head of research at Ativa Investimentos, points out that the company and its shares will go through even more difficult times ahead. The executive says that the weakness of the company’s cash flow will bring about several problems, which are likely to end up causing customers and investors to migrate to competitors.

“The company will not be able to invest in marketing, in free-shipping campaigns. Retailers no longer want to sell through Americanas’s online marketplace. If we think about the clients, they won’t want to buy with the company now either. So, the room for maneuver is much smaller. I believe that further ahead it will either go out of the market or take a long time to become competitive again. This means that a relevant slice of the market will be left for others to grab,” he said, indicating that Magazine Luiza, whose common shares rose 7.02%, and Mercado Libre (BDR up 1.59%) may be the main competitors benefited.

Still, the market has questions about the performance of the sector in 2023. In a report in which they point out preferences for the year, Genial analysts say they are cautious about e-commerce companies, especially when analyzing the development of debt dynamics for this year.

*By Matheus Prado, Augusto Decker — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Banco Inter unveils plan to reach 60m clients in 5 years

Also, CEO announced plans for better efficiency index than Brazil’s large banks

01/19/2023

João Vitor Menin — Foto: Silvia Zamboni/Valor

João Vitor Menin — Foto: Silvia Zamboni/Valor

Banco Inter wants to reach 60 million clients by 2027, CEO João Vitor Menin said on Wednesday during the company’s Investor Day. The bank outlined in the event a five-year plan with three goals, named 60-30-30. In addition to gaining new clients, Inter wants to increase the return on equity (ROE) and efficiency index to 30%. Mr. Menin believes that the goals are challenging but feasible.

In order to have 60 million clients in five years, compared with 25 million today, Inter would have to gain about 7 million per year, a little less than the 8 million per year it has gained in the last two years. The efficiency ratio – the lower, the better – would have to fall by more than 30 percentage points and would be better than the average of the large incumbents, which is around 35%.

The ROE of 30% would come with a profit of R$5 billion per year, with a loan portfolio of R$100 billion. In the third quarter, the portfolio totaled R$22 billion, there was a net loss of R$30 million (or adjusted profit of R$23 million), and ROE was negative 1.7%.

“By balancing investments in technology with growth and profitability, going far beyond banking services, Inter has become the first Super App in the Americas. We have built a set of offerings from our digital account that are unmatched in the market,” said Mr. Menin.

In his view, the bank is in its early stages of evolution, but the positive results show that it is time to take Inter to the next level. “We are confident that we have the right strategy, solutions, and team to execute our plan, pursue our goals and deliver sustainable growth.”

According to Mr. Menin, as Inter grows its customer base and improves monetization, he expects the efficiency rate to be higher than its peers over time, not least because, unlike incumbent banks, it does not have legacy systems and a branch network. “Our metrics and performance indicators will also continue to grow as we continue our expansion,” he said, adding that Inter brings together the best of both worlds, banking, and technology, creating a better customer experience that generates better returns for all stakeholders.

*By Álvaro Campos — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Court-supervised reorganization is imminent for cash-strapped Americanas

With low cash position, retail giant tries to reverse bank compensations while negotiating a standstill

01/19/2023

Company has R$800 million available in cash, sources say — Foto: Marcia Foletto/Agência O Globo

Company has R$800 million available in cash, sources say — Foto: Marcia Foletto/Agência O Globo

Nine days ago, when Americanas presented the accounting inconsistencies to the market, the then CEO Sergio Rial pointed out a comfortable cash position to face the current obligations and run the operation while the company started renegotiations with the creditor banks and investigations about possible frauds. At that time, the announced cash was R$7.8 billion.

The reality of the company’s cash position now, however, is R$800 million available, sources told Valor’s business website Pipeline. This is what has made the company anticipate in the coming days (hours, potentially) the filing for a court-supervised reorganization.

“This is being decided right now. It may be filed in the following hours,” said a source.

The company considered about R$3 billion in receivables from suppliers that it would get earlier from banks – this door, however, was closed by the lenders given the exposure already taken and the ratings downgrade. BTG Pactual and BV (former Votorantim) last week offset or froze a total of R$1.4 billion (R$1.2 billion from BTG and R$220 million from BV).

Another R$1 billion are financial investments without immediate liquidity, half referring to a LFT (Financial Treasury Bills) Bacen, which is part of a regulatory requirement. There was R$2.4 billion left for the operation, but since the beginning of January, the retail giant has already consumed R$1.6 billion in its business routine – a retail operation, as is known, is highly capital intensive.

“The cash position now is of R$800 million,” a source said. “The company will have to accelerate the filing for a court-supervised reorganization.” The internal understanding, according to Pipeline, was that a standstill would provide 30 days for the negotiation, before the protection from creditors ends. If there was no consensus, then the plan would be ready.

But there is no more time, as an injunction obtained today by BTG made clear. “R$1.4 billion doesn’t solve the company’s life today, but it buys operational days,” said a source.

Safra also blocked the company’s access to the system today, according to sources, but it was still unclear whether the compensation was made, according to Pipeline. The volume here was much smaller, around R$92 million.

The banks are questioning in court the validity of a court-supervised reorganization, considering a scenario of fraud. The company tries to separate operation and investigation and insists, in meetings with creditors, that guilty individuals will be held accountable and that the primary shareholders remain committed to inject nearly R$7 billion in the business.

The company is still trying to overturn the injunction obtained by BTG for the compensation of R$1.2 billion. If this decision is reversed, it can suspend the filing for a supervised reorganization in the short-term. The question is not only the amount asked by the bank, but other possible compensations.

In the dispute with BTG, the bank argues that the discussion should happen in arbitration and that there is an acceleration clause. The company has replied in court, saying that there are different agreements with the bank and that there would be no early settlement clause in the receivables.

In the operation, suppliers that normally sell on credit terms already demand cash payment, which is likely to complicate the retailer’s stock.

*By Maria Luíza Filgueiras — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Shareholders sue Americanas executives for losses

Lawyer hired to defend their rights also intends to hold accountable auditors of PwC

01/18/2023

Legal strategy targets personal assets of executives and the controlling group — Foto: Dado Galdieri/Bloomberg

Legal strategy targets personal assets of executives and the controlling group — Foto: Dado Galdieri/Bloomberg

Minority shareholders of retail giant Americanas will request the Prosecution Service (MPF) in Brasília to investigate criminal responsibilities and freeze assets of those responsible for a potential fraud that resulted in accounting inconsistencies totaling R$20 billion unveiled by the company last week.

“From the standpoint of criminal law, I’m not going after the business; I’m going after the individuals,” says criminal lawyer Daniel Gerber, hired by a group of the retailer’s minority shareholders. “It makes no difference to me whether Americanas goes into receivership,” he adds.

This is because Mr. Gerber’s legal strategy targets the personal assets of executives of Americanas and of the controlling group, who “by action or omission” are responsible for the multi-billion loss. The lawyer also intends to hold the executive directors of PwC, the company that audited Americanas’s earning reports, accountable.

Last Friday, the MPF in São Paulo started to investigate evidence of insider trading in the sale of Americanas shares. Mr. Gerber explains that a second possibility would be to request to join this case as a victim. An asset manager, who spoke on the condition of anonymity, said he was surprised that the former CEO of Americanas, Sérgio Rial, participated last week in a closed conversation at BTG Pactual with investors and analysts about Americanas’s situation.

“It’s the basic premise of the stock market: everyone should have access to the same information. It’s a public market,” says the financial market source, adding that the information disclosed in the conversation between Mr. Rial and the investors was only available to a limited group of interested parties.

In this source’s view, Americanas failed both in the way the inconsistencies were disclosed to the market and in the explanations afterwards. “They [Rial and the executives who had just joined the company] had to take the problem, study it, and explain to the market exactly what happened. To this day, we don’t know exactly what occurred,” criticizes the manager.

A second source, who closely follows the unfolding of the crisis in court, says the company’s main goal at the moment is to reach an agreement with the creditor banks. The tension between the retailer and its creditors grew after the decision in court on Friday granting Americanas protection from creditors for 30 days. In the evaluation of this second source, issues such as the possibility of foreign shareholders to file a class action are secondary at the moment.

*By Rodrigo Carro — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/
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Nubank secures loan from IFC to strengthen operation in Colombia

Brazilian bank’s local subsidiary is the fastest-growing credit card issuer in the country

01/18/2023

David Vélez — Foto: Ana Paula Paiva/Valor

David Vélez — Foto: Ana Paula Paiva/Valor

Nubank will strengthen its presence in Colombia with a loan of up to $150 million from the International Finance Corporation (IFC), a member of the World Bank Group. The local currency loan over a period of three years will be used to boost the growth of the local operation and expand access to financial services in the country.

With more than 400,000 cards issued in the last 10 months, Nu Colombia – a subsidiary of Nubank – is the fastest-growing credit card issuer in the country. “We are proud that an institution like IFC has trusted us to continue generating a positive impact in Latin America,” said David Vélez, CEO and founder of Nubank.

“Our loan to Nubank means more Colombians will have access to more and better financial services,” said IFC’s managing director Makhtar Diop. “Greater financial inclusion is a must for economic growth, and digital banking will play a key role in meeting the needs of underbanked and unbanked retail customers.”

Nubank has more than 70 million customers in Brazil, Mexico and Colombia.

*By Álvaro Campos — São Paulo

Source: Valor International

https://valorinternational.globo.com/
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Mobile chocolate bio-factories to help Amazon preservation

People of the forest learn to add value to cupuaçu seed with Instituto Amazônia 4.0

01/18/2023

Ismael Nobre — Foto: Carol Carquejeiro/Valor

Ismael Nobre — Foto: Carol Carquejeiro/Valor

Hundreds or even thousands of mobile and dismountable chocolate factories distributed throughout the Amazon Forest, operated by local people, including indigenous people. The idea, which will start to be implemented in March four communities, came from the initiative of a small group of scientists who created Instituto Amazônia 4.0 – and have in common the preservation of the forest. They saw in these mobile bio-factories, or Amazon Creative Laboratories (LCAs), as they are called, a way for the people of the forest to add value to cocoa and cupuaçu seeds, which they currently sell as raw material or with little processing.

The investment so far amounts to R$5.6 million, without considering the donations of knowledge, equipment, and working hours provided by companies, volunteers, and chocolate experts.

IDB Lab, which is the innovation laboratory of the Inter-American Development Bank, is investing R$3 million this year in the current phase of the project – the proof of concept, with technology provided by NEC do Brasil, to prove that the project is feasible and financially viable. The funds are destined to take the innovation to the communities and hire Conexsus, which will prepare them for the business – credit profile, knowledge of what they are selling, rounds of negotiations with municipalities and more.

Another R$2.6 million have been invested so far in the cocoa-cupuaçu value chain, considering consulting, equipment purchase, transformations made in equipment, and technological adaptation. The funds were financially executed with the purchase of the geodesic domes, a type of triangular structure tent, rigid and resistant that constitutes the structure of the bio-factories. They were designed, with no money involved, by Atelier Marko Brajovic, using light, resistant, and demountable materials.

The prototype of the factory was made in São José dos Campos (São Paulo). A unit is being set up in Manaus (Amazonas), where the plants will be produced and then transported to the forest.

These factories allow cocoa and cupuaçu seeds to be processed into high-quality chocolate. Thus, instead of the price of R$10 per kilo of raw material sold, the communities will be able to earn R$200 per kilo of “fine” chocolate produced, said Ismael Nobre, a professor and researcher at the University of Campinas (Unicamp/SP).

A biologist, Ismael Nobre takes part in the project with his brother, climatologist Carlos Nobre, who was part of the international team of scientists awarded the Nobel Peace Prize in 2007; and professor Tereza Cristina Brito Carvalho, from the Polytechnic School of the University of São Paulo and coordinator of USP’s Sustainability Laboratory.

In 2017, less than half a dozen scientists created the Instituto Amazônia 4.0. Today, the Nobre brothers and Professor Carvalho remain. Professor Ismael, executive director, says that the institute represents the fourth industrial revolution and seeks to foster a new bioeconomy in the Amazon rainforest, through the hands of traditional and indigenous peoples.

Without polluting or harming the environment, the bio-factories will produce chocolate, taking advantage of the natural cacao and cupuaçu plantations, abundant in the forest. The business will be in the hands of the first chosen communities — riverside dwellers, quilombolas (descendants of escaped slaves), extractivists, and land reform settlers. Later, they will be expanded to other populations.

The riverside and quilombola communities already ferment cocoa and sell it to the fine chocolate industry. With this benefit, the price of R$10 for the raw material rises to R$30. Everyone is already involved in improving fermentation and learning methods to produce chocolate. These groups use rudimentary techniques and low-tech elements, but they are not satisfied with selling the product so cheaply, while ready-made chocolate costs about 20 times more, said Professor Ismael. The nascent chocolate is called “tree-to-bar.”

Abundant cocoa in the management area, existing work with the fruits, non-conformity with the sale price, and effort to add value were the main criteria adopted by the institute for choosing the communities that will receive training and will have priority in the search for support for the viability of business.

After the philanthropy capital used to start the process, investment funds will be needed for the massive implantation of the factories in a commercial system. The model will be conceived in such a way that local production can pay for the installation of the available factories.

The institute is thinking of a business model in which communities can “sign a factory,” which will be available as a service, and not as a possession, so communities do not need to have several million reais or the ability to contract donations or loans, said Professor Ismael. It’s something like software as a service, which the big tech companies have embraced.

More than a dream, the project is in the proof-of-concept phase. After the kick-off, scheduled for March, the four communities will be trained for eight months. For this, a complete itinerant factory, including a place for classes, will be taken from one community to another, starting with the extractive reserve and then moving on to the area of land reform settlers, quilombolas, and riverside dwellers, in that sequence. In 2024, another phase is expected to begin, expanding to the entire Amazon. But the financial equation is still being put together.

Technology engineers, food engineers, software engineers, personnel specialized in mechatronics (a combination of mechanics and electronics), architects and other specialists face the challenge presented by the scientists — to design a chocolate factory that could be built elsewhere and then assembled in the forest, at the same time modern and simple to operate.

Companies from different sectors joined the project. Companies from different sectors joined the project, such as NEC, which became a partner of the institute and took care of all the communication. Cristiano Blanez dos Santos, director of innovation at the company, says that it took two years of discussions and studies to decide which technology to offer. For communication, they chose radio.

Four internet service providers were identified, each about 30 kilometers from the communities. An antenna at the provider and another at the factory will enable communication, which will be made up of other equipment, such as routers and switches to distribute the signal throughout the facilities. Surrounding populations are potential customers for these companies.

The factories will have cabling, computer, access control to the machines by facial recognition, voice commands, electronic sensors, oven, all automated and coordinated by the institute, said Blanez dos Santos.

“The person doesn’t even need to be able to read the machine instructions,” said the biologist. “The machine will support several languages, including indigenous languages. Even the indigenous people who doesn’t speak Portuguese will be able to operate the machines like any of us and make production happen.”

The dome environments are triangular, divided into the factory; roasting, oven and mill; and a place to mold the chocolate. The biggest tent is the factory tent, 5 meters high and 11 meters in diameter. Each unit is 100 square meters. The classroom dome has capacity for 40 students and is equipped with teaching materials such as tablets and electronic whiteboards, as well as software that connects the classrooms with the factory. While learning, the student sees what is happening in the factory. Through the internet of things, the data generated goes through the network.

“We created a ‘plug and play’ factory,” said Professor Ismael, playing with a concept that indicates ease of use. “In a week, you have a factory ready. It’s all modular and doesn’t need a foundation or earthworks, the systems have a floor that makes the leveling.”

The institute associates the culture, customs, and recipes of the people of the region with the expertise of renowned chefs from the chocolate industry, chocolatiers, engineers, and technology specialists. It was from this fusion that the portable bio-factories of the Amazon Creative Laboratories (LCAs) emerged.

One of the collaborations came from Cacauway, a chocolate factory located on the Tranzamazônica highway, in the municipality of Medicilândia, in Pará. Professor Ismael says that the business arose from a cooperative of producers who planted cocoa and sold it to large traders. Afterwards, they decided to set up a factory, today with their brand already consolidated. “But they had huge challenges, it took them years to reach a financial equation,” said the professor. “It was challenging to successfully replicate the business in many places, and to this day they still struggle.”

However, communities enter the business with an advantage. They will not need to repeat all the steps taken by Cacauway. The process and technology have already been developed and facilitated. With this, the initiative to add value will be available to many populations, with the potential to generate multiple similar businesses, says Professor Ismael.

Other experts taught their recipes. The aggregation of value in this type of production is considered somewhat complex, with many variables to be mastered.

The institute’s research is currently focused on cupuaçu, cocoa, Brazil nuts, açaí, oils and genomics. The most advanced project is the cupuaçu-cocoa laboratories. In 2018, researchers chose cocoa as the first value chain to work on. The cupuaçu seed, with which it is possible to produce chocolate that competes with cocoa chocolate, is not used today by the communities – it is thrown away.

At the beginning of the project, in 2019, after learning about the extraction processes, the researchers made a layout of what the chocolate factory would be like. With the Covid-19 pandemic, the process was delayed, but it took off and maintained an accelerated pace in 2020 and 2021.

The solar energy system powers the entire factory and eliminates the need for a thermal power plant. A water production plant guarantees the purity of the liquid, classified by the health regulator Anvisa for use in the food chain. The water treatment station, with non-polluting resources, is computer controlled and has several filters to eliminate particles, odors, bacteria and chlorinate. The professor claims that this treatment was provided by São José dos Campos-based company Resix, which patented the automatic chlorination system.

The energy equation was developed by the institute, but the solar power that will be used in the factory will be able to serve the whole community later.

A chocolate manufacturer from São José dos Campos (Argonay) also collaborated, says Professor Ismael. “The owner of the factory is an aerospace engineer who is now dedicated to chocolate. He has the mind of an inventor, he is an engineer, capable of taking chocolate and translating it into technologies.”

With the evolution of the process, the scientists hope that technologies, collaboration and promotion can and will enable vertical value chains where local communities are the owners of the processes, generate more funds, more wealth from the input of the forest, imagines Ismael Noble.

*By Ivone Santana — São Paulo

Source: Valor International

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