Chinese competition stimulates new projects
Valor Econômico - 03/17/2008
The competition with the importations has been a vital factor to lead part of the industrial sectors to also increase the investments. The sectors of textiles, clothes and footwear, which directly suffers the competition of the Asian products, accelerated the investments in order to modernize plants and increase the capacity. According to data from the BNDES, in the 2006/07 biennium, the clothing sector received R$ 196.1 million (US$ 111.4 million) in funds, 77% more than in the 24 previous months. The sector of leather and footwear increased the financings by 52.9%, to R$ 487.1 million (US$ 276.8 million), and the textiles sector had an increase of 10.6% in loans, to R$ 472.1 million (US$ 268.2 million). "These sectors clearly signal the interest in becoming stronger so as to recover their share in the domestic market", affirms Mariano Laplane, director of the Institute of Economics of the State University of Campinas (Unicamp). The approvals of the BNDES for these three sectors also point to greater investments in the future. They have grown 25% for the textiles sector and 50% for clothing. The 40% increase in the importation of machinery and equipment in 2007 put on alert the national industry that operates at 82.5% of the capacity and fears losing the market for the imported products which became cheaper because of the low exchange rate, says Luiz Aubert Neto, president of the Brazilian Machinery Manufacturers Association (Abimaq). Economists consider the paper and cellulose sector the only one in a sensible condition.