Brazilian industry invests to respond to Chinese demand

12 September 2006

Sao Paulo, Brazil, 12 Sept – The growing demand from Chinese companies is “heating up” Brazil’s basic industry, which is receiving an increasing amount of investment, according to a report by newspaper Folha de São Paulo.

Folha said in its Monday edition that in just the first half of the year the chemical, steel making, mining and paper sectors received investment for 15 new projects totaling almost US$4.5 billion.

Industry professionals are optimistic, especially as prices are increasing on international markets, but there are concerns, as voiced by a director of steel working company CSN that the problem is that nobody knows how much demand there will be from China in the future.

Despite this, CSN’s strategy, according to the paper, is to maintain a balance between supply and demand and, if in future prices fall, not to increase production capacity too much.

The National Industry Confederation (CNI), the largest industrial association in Brazil, sees the boost China is giving to Brazilian industry as positive.

“”China has been a source of opportunities and industry has to have support from the government and the national Economic and Social Development Bank and to know how to make the most of the moment,” the coordinator of CNI’s International Negotiations, Soraya Saavedra Rosar, told Macauhub.

Rosar added that the advances made by Brazilian industry showed that Brazil was diversifying its exports, which used to be focused on products with less added value. (macauhub)