Industrial investments to increase future offer
Valor Econômico - 03/17/2008
Between 1996 and 1997, the Brazilian industrial sector went through a strong expansion, marked by the opening of plants and investments in the modernization of the existing units. One decade later, a new movement of investments in the construction of plants is consolidated - this time on a more generalized way. Economists believe that the change not only reveals the interest of the companies in meeting the current domestic demand, which has grown uninterruptedly since 2004, but also a strong confidence in the future performance of the domestic market. According to the data from BNDES (Brazilian Social and Economic Development Bank), between 2006 and 2007, the processing industry received loans of R$ 51 billion (US$ 29 billion) to increase its productive capacity - a volume 32% above the outlay of the previous biennium. In 2007 alone, the bank financed the construction of 49 industrial units and the improvement of 68 other existing units in the country. Vehicles, machinery and equipment, metal works and energy are in the sight of the Central Bank. The strong demand in the domestic market in the last two years increased the level of capacity used in these segments to near its limit. For the economists heard by Valor, there are no reasons for panic. The perspective for this year is still of a warmed demand and accelerated industrial activity, but the sectors that leverage the economic activity are also between the ones investing the most in the expansion of units, according to data from BNDES. The disbursements for the car sector amounted to R$ 8.25 billion (US$ 4.7 billion) between 2006 and 2007 - second segment of the industry that invested the most in the expansion, after food and beverages, according to BNDES. The National Association of Automobile Manufacturers (Anfavea) recently informed that the sector will invest US$ 15 billion in the next years in order to increase the installed capacity from 3 million to 5 million vehicles/year. The car sector has been responsible for one third of the expansion of the industrial activity and it contributes to increase the demand of basic sectors, such as the metallurgist, rubber and plastic, and machines and equipment. In fact, the use close to the limit of the capacity in basic sectors is what concerns the most, since an explosive demand would cause an increase in the prices of inputs and inflationary pressure throughout the chain. The metallurgical sector, which operated at 91.4% of the capacity in January, received R$ 5.38 billion (US$ 3.1 billion) in funds from the BNDES between 2006 and 2007, and, last year, it received approval of R$ 3.4 billion (US$ 1.9 billion) - part of these funds will be allocated by the industries this year. The optimism is also true for the sectors of foods, chemicals and rubber and plastics, which increased investments in the last two year and operate with a capacity close to 80% - these sectors are among those that have invested the most since 2006.