07 January 2014 19:42 [Source: ICIS news]
CAMPINAS, Brazil (ICIS)--Brazil has reduced its import tariff for titanium dioxide (TiO2) to 2% from 12% to help the country meet domestic demand for the pigment, the nation's paint manufacturers association said on Tuesday.
The tariff is valid for imports of up to 120,000 tonnes of TiO2 for a period of 12 months.
The reduction is a result of a move by the paint association, Abrafati, which argued that domestic production cannot meet the country's demand.
Brazil has two TiO2 plants that have a combined capacity of 120,000 tonnes/year, according to ICIS plants and projects
"It's been a while we've been working with the Brazilian government to obtain the exoneration of essential raw materials for production, which includes the TiO2," the association said.
As the measure is valid only for a limited period of time, Abrafati said it needs to make new requests.
"The benefit [of this measure] for the coatings industry … is to have access to raw materials at lower prices, without generating additional impacts to its costs," it said. The paint industry's production costs are rising faster than the inflation rate of Brazil.
Abrafati said it cannot pass through those production costs to its customers and final end users.
The coatings industry's profitability is decreasing, it said. Meanwhile, the cost of imported raw materials is rising because the real is weakening against the dollar.
According to the association, the measure has still to be approved by Mercosur.
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