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Brazil Becomes a Leading Buyer of Consumer Products Companies Worldwide

Sadia & Perdigão Together with China and India, Brazil stood out in terms of acquisitions of companies that produce consumer products in the last quarter of 2009. This information is included in study “Cautious optimism – Analysis of transactions in the global consumer products sector”, by consultancy company Ernst & Young.

According to the study, the three countries were involved in a total of 25 acquisitions in the last three months of last year.

Of this total, ten transactions involved Chinese companies, eight of them were Brazilian organizations and seven, Indian. The explanation for the performance above the global average, according to Ernst & Young, is the presence of a great population in these nations, the higher urban concentration, mainly young, and the emerging middle class.

“When compared to mature and stagnant markets, despite the heating up of the economy, emerging nations undoubtedly represent the greatest opportunity for growth for companies in the sector of consumer and retail products,” stated Sergio Citeroni, the global account leader at Ernst & Young.

Brazil also had the largest volume of transactions in the food sector last year, due to the purchase of Sadia by Perdigão, which resulted in BRFoods.

The acquisition was the sixth largest in the consumer market. The country led in negotiations with foreign investors in the last quarter of 2009. Of the eight transactions with Brazilian companies in the period, six involved foreign capital.

Paint Market

Paints sales should grow 3.4% in Brazil this year, to reach 1.145 billion liters, according to forecasts by the Brazilian Paint Manufacturers Association (Abrafati). Real estate, the auto industry and infrastructure works should boost the sector.

Last year, paint producers had a slight retraction in sales, 2.1% less than in 2008. But that, according to the executive president at Abrafati, Dilson Ferreira, was an exceptional year. “If we compare 2009 to 2007, sales grew 6%,” he said. According to him, the growing trajectory should remain in coming years.

“We have many positive factors to stimulate direct sales of paint, as well as painted goods, among them greater access to credit, lower interest rates, a reduction in the industrialized product tax (IPI) levied on some products, greater levels of employment and income as well as a great volume of funds for housing,” said Ferreira.

The executive president at Abrafati believes, however, that companies with an export profile should have some difficulty in 2010. Last year, paint sales on the Brazilian market totaled 1.1 billion liters. In 2006, the total had been 968 million liters of paint.

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