Brazil should use US as example of chemical renaissance

21 May 2013 22:37  [Source: ICIS news]

SAO PAULO (ICIS)--Brazil has the ability to become a major player in global manufacturing if it gets its house in order, an executive from Solvay Group’s Rhodia division said on Tuesday.

The South American country’s growth has been below expectations for the last three years with only 1-2% GDP increases, while inflation has jumped 6% each year, said Marcos Curti, director of engineering plastics for the Americas. He made his comments on the sidelines of the Feiplastic 2013 convention.

The imbalance between slow GDP growth and higher inflation is dropping Brazil behind the rest of the world, he said.

“We do need … in this country to address the competitiveness issue, to provide the conditions for the chemical companies and plastics companies to face the tough competition around the world,” Curti said.

Examples of such a turnaround are out there, he said, pointing to the shale revolution in the US and how it has starkly changed the face of chemical and plastics production there.

The US was “able to recreate the chemical industry”, Curti said. “Our country is not doing the same, so we should learn the lessons in [the US] and be able to recover our capacity to grow faster than the market.”

Manufacturing in Brazil is a high-cost proposition for most products in comparison to the rest of the world, he said.

“But our country, if it intends to be global, it needs to act global to be part of the global economy,” Curti said.

To do so, Brazil needs to pay less for energy, improve its transportation logistics, develop its people better and reduce taxes, Curti said.

Brazil is one of the most expensive places to produce in the world,” he said. “We became expensive before we became rich.”

If all of that was done, Brazil could become that global player in 10 years, Curti said.

“To reorganise an industry takes time,” he said. “The example of the US is an example for all the world … It takes time.”

Feiplastic runs through Friday.

By: Jeremy Pafford
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