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
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
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.
Also, CEO announced plans for better efficiency index than Brazil’s large banks
01/19/2023
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.
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
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.
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
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.
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
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.
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
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.
Aim is to open more room for allies and non-elected politicians in boards
01/18/2023
Luiz Inácio Lula da Silva — Foto: Eraldo Peres/AP
Less than a month after the beginning of its term, President Luiz Inácio Lula da Silva’s team is preparing a clean bill that aims to change the State-owned Companies Law. The goal is to open more space for allies and non-elected politicians in board positions of state-run companies run by the federal government or states. The effort is seen with suspicion by market agents and specialists, who highlighted risks of setbacks in the governance of these companies.
Valor has learned that the draft is being prepared by the Chief of Staff Office’s Secretariat of Legal Affairs (SAJ), with the support of the Federal Attorney General’s Office (AGU). After that, the government plans to ask an allied senator to accept the suggestions and introduce a draft to replace the proposal already passed by the Chamber of Deputies at the end of last year, which was put on hold in the Senate after the issue generated negative reactions in the financial market. If passed, it would have to go back to the Chamber before being signed into law by the president.
At the time it was passed by the lower house, the presidential transition’s team did not want to leave its fingerprints on the bill. The idea was criticized by economic agents due to the possibility of appointing former lawmakers and union members to management positions in companies such as Petrobras, Caixa Econômica Federal, and the Brazilian Development Bank (BNDES), which is forbidden by law today. Now, however, the draft may move forward with the support of the government, which will seek to consolidate its governing coalition in Congress.
It has not yet been defined whether the flexibilization will be total or partial in terms of access to positions that are currently restricted to civil servants. Mr. Lula’s aides say that, for now, the idea is that the government’s clean bill opens space for allies of the Lula administration only in boards. This means, in practice, a space of 317 positions on the boards of directors of these companies for the president to appoint, with greater freedom, in his new term.
But, in case the clean bill proposes a flexibilization also for the management positions, this number increases by 272 positions. In all, there would be 589 prominent posts available. These numbers exclude, however, Eletrobras and Codesa, which were privatized recently. The list of positions is included in the latest annual report of the Special Secretariat for Privatization of the former Ministry of Economy.
After the draft is ready, the government’s allies are expected to take the proposal to Senate President Rodrigo Pacheco. The proposal is at the upper house at the moment. Last year, however, the presidential transition team was not able to convince senators and the matter was put on the back burner.
One reason for this objection from some lawmakers is the fact that the proposal now being considered reduces to just 30 days from 36 months the quarantine period for people who held party decision-making structures or participated in electoral campaigns to serve as CEOs or executives in state-owned companies or advisors to regulatory agencies.
In this battle, on the other hand, the federal government has the support of the so-called “Centrão” — a cluster of center-to-right parties — and Chamber Speaker Arthur Lira, who backed the advancement of the matter when it was still under analysis in the lower house. Mr. Lira and the lawmakers see in the measure a way to appoint allies in strategic positions that have already served parties known for cronyism.
“The Law of State-Owned Companies, in its origin, was thought to guarantee a more specialized profile for the leaders of the state-run companies and regulatory agencies,” said Pedro Henrique Costódio Rodrigues, a lawyer specializing in administrative law. “The changes proposed make the criteria and requirements more flexible, and this leaves room precisely for political appointments and the occupation of these management positions by lawmakers,” added the lawyer, for whom a more flexible approach would increase the possibility of political influence in the state-owned companies.
*By Renan Truffi, Fabio Murakawa, Fernando Exman — Brasília
The project, however, still depends on environmental permits
01/17/2023
Maraey — a tourism-residential project run by foreign investors in Brazil — has reached an agreement with Marriott International to build three hotels on the property, located in Maricá, Rio de Janeiro state. In total, R$ 2.3 billion in investments are planned for the three structures. With the agreement, the U.S. hotel chain promises to launch the Ritz-Carlton Reserve luxury brand in South America.
Maraey is devised by IDB Brasil, a company that owns 840 hectares of land and will own the hotels. The company is formed by a group of Spanish, Brazilian, American, and Chinese businessmen, led by the Cetya and Abacus groups. Their activities are mainly in construction through the development of real estate and hotel projects. The company in charge of the construction is still to be defined.
The plan is ambitious, since the Brazilian hotel market has difficulty attracting large luxury brands due to issues such as exchange rates and unprofitable tariffs. In Rio, one of the main luxury brands today is Fasano, which is national.
It was only last year that Marriott brought the first JW Marriott unit to Brazil — opened in São Paulo, in the building formerly occupied by the Four Seasons. The company will also give its name to one of Maraey’s hotels. The Rio de Janeiro version of the JW Marriott will be one of the first of the hotel group to adopt the “all-inclusive” model (tourists pay a daily rate that includes all expenses inside the hotel).
A theme hotel called Rio Autograph Collection is also planned, the first with the Rock in Rio music festival brand.
The hotels will have more than 1,100 rooms altogether, all operated by the U.S. giant. Maraey’s final project foresees one more hotel, which is still under study.
“In association with the hotels, we foresee the offer of 244 exclusive branded residences (villas, duplexes, and apartments),” Emilio Izquierdo, Maraey CEO, told Valor. In total, 80 will use the Ritz-Carlton Reserve brand and the rest will be under the JW Marriott brand.
“We are creating a unique tourist destination in this strategic market for us, which is Brazil,” says Laurent De Kousemaeker, head of development for Marriott International. The forecast is to start construction in the second half of this year. The group is now seeking permits from the Environmental Institute of Rio de Janeiro and a construction permit from the city hall.
Mr. Izquierdo said that after the agreement with Marriott, the group will launch in the next months a hotel real estate fund focused on qualified investors to raise funds. The idea is to also seek international contributions. About 40% of the project should be raised through the fund, and the rest will come from debt. “We are studying the support of banks such as the development bank BNDES and IDB, and we also believe in the support of other financial institutions”, he said.
According to De Kousemaeker, the luxury lodging sector in Brazil is still evolving. “In markets where we do not observe an oversupply problem, we already see potential to induce new demand and some luxury hotels achieve high rates in local currency, when compared to other destinations in the region,” he said.
Despite its natural beauty and strong culture, Brazil has been unattractive to international tourism. According to data from the World Tourism Organization, Brazil ranked number 49 in 2018 in the number of international tourists, with 6.6 million. France, which leads the ranking, received 89 million that year.
The entire Maraey project encompasses 840 hectares, 6.6% of it with buildings. The total private investment will be around R$11 billion. The idea is that it will become a true luxury city, with more than 8,000 high-standard homes and services.
Suppliers want to receive cash for new deliveries; shopkeepers fear drop in sales
01/17/2023
Americanas contacted sellers on Monday to reassure them about possible risks — Foto: Dado Galdieri/Bloomberg
Americanas already faces difficulties negotiating with large suppliers and insurers, sources say. Among small shopkeepers who supply its online marketplace — the company’s largest business — lawyers have guided them to divert sales to other platforms to protect themselves against possible issues in the operation.
Some fear that the company will lose customer traffic online — after the crisis became public — and that this will lead to a cascading effect: fewer people visiting, who buy less, which ends up leading shopkeepers to reduce their actions on the group’s platform.
On Monday, several meetings took place between manufacturers and their legal departments, and also between marketplace vendors and their lawyers. In the last hours of the day, Americanas contacted sellers to reassure them about possible risks.
Among some durable goods industries, it was adopted on Friday, the policy of authorizing the sale through a contract for a cash payment of the purchase — Samsung has already followed this path.
According to three sources, international credit insurers have reduced the limits of the credit line for guarantee operations for industries selling goods to Americanas. The supplier protects itself from payment problems from retailers, so the risk is on the insurer.
Mapfre reduced the company’s line on Friday, which was available for industrial companies to close sales, sources say. Insurers working for LG, Motorola, and Samsung have adopted the same practice. Those limits can be adjusted automatically. Mapfre, Samsung, LG, and Motorola declined to comment.
“They have a very low tolerance for scenarios like this, including because they have already experienced losses at retailers in other emerging markets. Americanas is not a relevant partner [in durable goods], it is not very strategic for those brands, which would even help now to postpone a little bit these revisions in the lines,” says a person familiar with the matter.
Multinational manufacturers do not sell without being insured for close to 100% of the value, which guarantees 100% of the receivables. Some insurance companies accept to open lines with 70% and 80% coverage, but only when the client has very low risk — unlike Americanas today.
In September, Americanas had 107 days of products in inventories, an increase of 11 days compared with the second quarter, but this volume usually falls right after Christmas. In periods of low seasonality, they range from 80 to 90 days. In product lines that retailers call “curve A” — of high turnover –, such as television sets and cheap cell phones, the average stock at retail ranges from 40 to 50 days, sources say.
“There is information that electronics suppliers have frozen new orders until they understand how the payment of the new bills will be,” says a source linked to the industry, who cited the provisional measure that protects Americanas from creditors for 30 days.
After Friday’s provisional measure, the due date for new deliveries is normal. In a sale made before the measure, Americanas may not pay, because the credit is subject to future judicial reorganization, which Americanas may file for after 30 days, said two lawyers who analyzed the measure.
“But the industrial companies can’t bring forward expiration of anything from the past,” says the lawyer of a retailer that once asked protection from creditors. “And in new contracts, suppliers can require to receive cash, and that is likely to be their move,” the lawyer said.
The text of the request states that among the protections for the company is “the preservation of all contracts necessary for the operation of Grupo Americanas, including credit and supply lines.” In other words, industrial companies and sellers could not cancel contracts unilaterally.
Regarding the marketplace, Americanas’s online competitors see, since Sunday, a certain increase in inventory in their systems, and believe that part of it comprises sellers who reduced lots for sale in Americanas’s websites (the group operates businesses such as Shoptime and Submarino as well).
About 65% of Americanas’s sales happen through the online marketplace (third-party products). The remainder refers to products from its own inventories. The company has more than 150,000 merchants registered on the platform. Online marketplaces are maintained by revenue from services sold to merchants – the greater the flow, the greater the revenue.
Valor found out that Americanas teams informed Monday, in calls to shopkeepers, that sales are normalized, in “good pace,” and that the company will not change the conditions of their contracts. The lines of factoring of receivables had no changes until Monday.
In practice, the funds from shopkeepers’ products sold through online marketplaces are “locked” in a closed account, which the platform cannot block, according to a system created a few years ago to protect digital transactions. For the website, only the commission fee is free. But some shopkeepers fear that Americanas will raise commissions or increase deadlines for the release of funds from the sale of their products. Today, the value is released every two weeks.
Americanas said it “maintains the normal flow of transfers in its online marketplace and paid sellers normally on Monday.” In a note, the company said that “the operations continue in the same way, both for small partners and for industrial companies that use the company’s platform.”
Three law firms heard by Valor, which are being consulted or hired by the online marketplace’s shopkeepers, have advised clients to keep their contracts to avoid possible questioning in court, but to also review conditions.
“The agreements will be maintained, but the conditions are of autonomy of the sellers,” says a lawyer consulted today. “That is the guidance we have given to the sellers.” This means that the shopkeeper can change, in his account of products sold on Americanas, the amount they charge for freight, product price, and the number of items for sale on the platform.
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