07 November 2011 23:11 [Source: ICIS news]
BUENOS AIRES (ICIS)--Brazil has the world’s seventh-largest chemical industry, but the country could be overtaken by India if investments in production are not made, industry association Abiquim said on Monday.
The goal of the nation's industry is to become the fifth-largest in the world, but growing trade gaps and the lack of investments could derail that plan, said Abiquim president Fernando Figueiredo at the 31st Latin American Petrochemical Association (APLA) annual meeting in Buenos Aires.
Brazil’s strong currency is also holding the country back by limiting exports, he said, predicting that the Brazilian real is likely to stay overvalued.
Figueiredo called for improvements to Brazil’s tax system, citing tax disparities within the country that hurt competitiveness. He also called for lower taxes and greater access to credit.
Brazil’s chemical industry could generate 2m direct jobs if investments in production are made, he said.
While chemical demand will still increase without the investments, the jobs will go elsewhere because Brazil will continue to rely on imports, he said.
Figueiredo praised Brazil’s development bank (BNDES), but he said small and medium-sized businesses still struggle to get credit because of stringent loan-guarantee requirements.
The 2011 APLA conference ends on Tuesday.
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