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Machinery Industry in Brazil Worried High Interest Rates Will Stunt Its Growth

Machinery Brazil’s machinery and equipment industry recorded growth of 19.9% in revenues in the first three months of the year, compared with the same period of 2009, having totaled 16.7 billion Brazilian reais (US$ 9.5 billion).

In March alone, the sector posted 7.2 billion reais (US$ 4.1 billion) in revenues, the best result ever for the month, representing growth of 47% over March of last year. The balance was disclosed  by the Brazilian Machinery Manufacturers Association (Abimaq).

The secretary director of Abimaq, Carlos Pastoriza, stated, however, that 2009 was a particularly bad year, and earnings in 2010, with the exception of March, are still below the average for the last few years. “We are still going through a process of recovery from the international financial crisis.”

Pastoriza claimed to fear that the recovery seen in the past few months might be harmed by the increase in the benchmark interest rate (Selic) and the appreciation of the real (Brazilian currency) against the dollar. “This growth may be strongly affected by the increase in the Selic rate,” he stated.

The appreciated exchange rate was also pointed out by the Abimaq as one of the factors that harm exports. Machinery sales to foreign countries dropped by 4.4% in the first quarter compared with the same period of 2009, and totaled US$ 1.88 billion. In March, however, there was growth of 50% compared with February, with sales totaling US$ 850 million.

Imports , though, are on the rise and reached US$ 5 billion, a figure 5% greater than recorded in the same period of last year. The United States are the leading exporter of machinery to Brazil, and accounts for 25.8% of Brazilian purchases, followed by Germany (13.2%) and China (12.5%). Pastoriza claimed that the Asian country is increasing its export volume to Brazil, and will probably surpass Germany by the end of the year.

Biotechnology

Twenty-two Brazilian companies and entities linked to biotechnology are taking part in the BIO International Convention 2010, held on May 3 to 6, in Chicago (USA), in partnership with the Brazilian Trade and Investment Promotion Agency (Apex-Brazil).

At the Convention the BrBiotec Brazil brand will be launched, to characterize the country’s products at the international level. Brazil will have a large stand and will hold many presentations during the event.

The biotechnology market generates in the Country around US$ 10 billion/year, with the largest emphasis on the public health and natural environment areas, but the National Biotechnology Policy, established in 2007, estimates that the Country will be among the five largest worldwide business poles until 2015.

“Our purpose is to promote Brazil as a high-quality supplier of products developed based on the production and handling of microorganisms or on a part of them, and related services, far beyond the country’s image as a traditional ethanol producer,” said Sergio Risola, Cietec’s executive director.

The initiative is a joint work by Apex-Brazil (Brazilian Trade and Investment Promotion Agency), Biominas Foundation, Cietec (Technological Companies Incubating Center), the National Social and Economic Development Bank (BNDES) and Bio-Rio Foundation.

Until now, BrBiotec, the Biosciences Integrated Sectorial Project held by Apex-Brazil, has a platform with 23 companies and 28 aggregated institutions. The purpose is to extend the number of members and attract at least 50 companies until this year’s end.

The study Panorama on Biotechnology in the World and in Brazil has shown that the Brazilian biotechnology scientific production in areas such as animal and vegetal reproduction, biological control in agriculture, biomass conversion and biodiversity has been highly important, by occupying the first 15 positions in global terms between 1998 and 2007 in the worldwide ranking. And Brazilian universities have been ranked among the Top 25 in terms of scientific production in all 14 biotechnology areas included in the survey.

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