Special Edition: ABCC visit to Brazil - April 2008

ABCC links with FIESP and CIN (International Business Centre)

In order to strengthen the relationship between the ABCC and FIESP (Federation of Industries of São Paulo), the ABCC participated at meetings at the Department of Trade and Foreign Affairs of SP (DECEX) with Mr. Ricardo Martins (Managing Director-DECEX) and Mr. Atila Berardinelli (International Affairs - FIESP), discussing cooperation and collaboration in fostering trade between Australia-Sao Paulo.

Facts about São Paulo State:
The state of São Paulo has a territory of 248,808 square kilometers, 39 million inhabitants, which is equivalent to the population of Argentina. Highly urbanized, the population of the state of São Paulo is distributed among its 645 municipalities, but the biggest urban concentration (almost 50%) is in the metropolitan region of the capital, the city of São Paulo.

SP’s Consumer Market:
São Paulo is the country's largest consumer market. The state's Gross Domestic Product is U$ 189,6 billion (source IBGE, year 2000) accounting for 33,67% of the country's GDP.

Foreign Trade:
Considering the total of the Brazilian exports, 35,42% were generated by the state of São Paulo.

Infrastructure:
The state's infrastructure for transport services, energy and telecommunications is outstanding with three international airports, 26 thousand kilometers of paved highways and waterways, such as Tietê-Paraná, providing integration with Mercosul countries, in addition to possessing the Latin America's most important port, the Port of Santos.

Industries:
São Paulo also possesses the largest industrial complex in Brazil. There are more than 100 thousand industries of the following sectors: textiles (19,1%), metallurgy (14%) food and beverage (13%) and chemicals (4,1%). Together they represent 43,5% of Brazil industrial GDP and produce jet airplanes, automobiles, shoes, optic fibers, computers and many other products, with the necessary quality to compete anywhere in the world.

The head offices of the 16 of the 30 largest privately held companies in the country are located in the State, which receives every day new industries and attracts some of the biggest international conglomerates.

ABOUT FIESP:
Within this scenario emerges the Federation of the Industries of the State of São Paulo, FIESP, an industrial entity created in 1931, which congregates 127 industrial associations and acts as a speaking partner to government and civil society.
FIESP monitors and fosters business relations with all countries worldwide. Its head offices, a pyramid-shaped building, which stand out on Paulista avenue, the city´s main calling card, receive visits from many business delegations, presidents and ministers from several different countries.
FIESP also promotes events with Brazilian and international experts of different economic sectors, in addition to organizing seminars, business opportunity meetings, as well as training and management courses, among others.

ABOUT CIN NETWORK:
The International Brazilian Network of Business Centers is a great project that has been developed and coordinated by the National Industry Confederation, linking all the International Business Centers and the Federations of Industries from the Brazilian states. Its main objective is being a facilitating center to support producers and exporters who are interested in starting or expanding their businesses abroad, through information exchange.

ABOUT CIN FIESP:
The CIN Center, which was create in 1999, is linked to the International Relations and Foreign Trade Department (DEREX).
By offering business interfaces to national and foreign companies, the Center not only provides a proper ambient for business dealings but also furnishes the operational tools which help facilitate negotiations between individual businesses and companies from other countries.
The purpose of all this is clear - providing successful international business agreements. Through the Center, any company can access valuable information from several areas, such as: import, export, joint venture, commercial representation, overseas business publicity and promotion, among others.

MAIN ACTIVITIES:
Brazilian Exporters Directory: Available in three languages at the Brazilian Network of International Business Centers website - www.brazil4export.com

BON - Business Opportunities Bulletin: It makes available business opportunities from foreign companies that are interested in importing or exporting. Your company may divulge offers or demands on this Bulletin.

Market Surveys: It aims at preparing an efficient import or export strategy, identifying markets (countries) to several products.

World Importers / Exporters Research: It identifies foreign importers or exporters from targeted markets.

Fairs and Events: Information about events in Brazil and worldwide. Your events may be divulged on our calendar, by simply sending us information about them.

Brazilian Business Opportunity: Spreading Brazilian companies' products and services, in English, on the Brazilian Network of International Business Centers - CINs - www.cin.org.br

Trade Missions and Business Conference: CIN promotes, organizes and participates of Trade Fairs and Missions, Business Conferences in Brazil or abroad, assinting São Paulo-based entrepreneurs.

Trade Promotion Seminars: Speeches at FIESP, associations, industrial unions, universities and companies, simplifying the export process and presenting CIN's products and services to entrepreneurs.

Rendering Services: List of companies that offer services in the Foreign Trade Area.



Ms Claudia Jarjoura, Mr Ricardo Martins (Managing Director-DECEX), Ms Cristina Talacko, Mr Atila Berardinelli (International Affairs - FIESP)

Education, Innovation and Technology: In Minas Gerais, Academia moves closer to production

In Minas Gerais, creating excellence hubs by cooperation between Universities, Research Centers and the productive sector is becoming a State government priority.
“The goal is to gain competitiveness by aggregating value to production,” says Minas Gerais Science, Technology and Higher Education State Secretary Mr Alberto Duque Portugal: “Innovation has become the government’s motto and will soon be driving the State’s academic sector”.

Of 19 Federal Universities located in Southeastern Brazil, Minas is home to 11, not to mention the Federal Technology Education Center (CEFET) and 2 State Universities. In 2006, the Government created the MG Innovation System (SIMI), through which researchers, entrepreneurs and technicians can discuss and communicate their needs to research centers. In addition, a Technological Innovation Network was developed to foster partnerships with small business support service SEBRAE, FIEMG (MG Federation of Industries) and the IEL Institute.

The coordinator of technological transfer and innovation at the Federal University of Minas Gerais, Professor Ruben Dario Sinisterra Milan, says the economic institution currently has 650 research groups and the largest number of international patents in Brazil: 212 patents registered in Brazil and 71 overseas.

Another Institution that promotes operating side-by-side with local companies is the Fundação Dom Cabral ( Dom Cabral Foundation), with the goal of transferring knowledge to the productive sector. The Foundation operates programs like Partners in Excellence (PAEX) - financed by the Inter-American development Bank – which helps small and micro businesses in Latin America. PAEX trained 5,000 Executives and Managers for 300 companies, spreading to Argentina, Chile, Uruguay and Colombia.

The ABCC has met up with Minas Gerais Science, Technology and Higher Education State Secretary Mr Alberto Duque Portugal to discuss the ABCC participation at INOVATEC 2008 (the International Exhibition on Technology hosted in Belo Horizonte in November 2008) and the creation of the Australia-Brazil Mining Poll of Excellence with the support of the Minas Gerais Government and the Science and Technology Department.

Claudia Jarjoura, Alberto Duque Portugal (Science, Technology and Higher Education State Secretary-MG) and Cristina Talacko

ABCC, São Paulo Chamber of Commerce and ACSP Sign MOU to Reinforce Cooperation

During a visit to the ACSP (Associação Comercial de São Paulo) last March, the ABCC, represented by Ms. Cristina Talacko (President) and Ms. Claudia Jarjoura (Executive Secretary) has signed an MOU with both the ACSP and the São Paulo Chamber of Commerce, represented by Mr. Roberto Mateus Ordine, Mr Luis Roberto Gonçalves (Vice-Presidents) and Mr Sidnei Docal (Foreign Trade Director). The ACSP comprises a group of 40,000 member companies distributed all over the State of São Paulo in various sectors as agriculture, manufacturing and services and organizes a number of events throughout the year, including Exhibitions and International Fairs and Trade Missions liaising with Government and private sector.
The agreement aims to improve the communication amongst members of the 3 entities relating to trade and commercial enquiries. It also intends to foster trade and economic cooperation between entrepreneurs of both countries, support trade visits and trade shows and facilitate the circulation of information related to business opportunities to members.

Claudia Jarjoura, Cristina Talacko, Luis Roberto Gonçalves (Vice-President) and Sidnei Docal (Foreign Trade Director).

Mining and Reforestation: Group Visit to Plantar Siderurgica S. A.

A visit to Plantar Group, one the pioneers in forestry management and in clean production technology of pig iron was marked by the symbolic planting of a tree in honour of the ABCC and COCBA (Camara Oficial de Comercio Brasil-Australia).

Plantar is a national model of charcoal metallurgy, based on the most modern concepts of environmental protection, where the eucalyptus plantations aim to guarantee sustainability to Plantar's metallurgy, for the production of pig iron, utilizing a renewable energy source (charcoal) as well as following the principles of the Kyoto Protocol. The use of renewable biomass eliminates the need for fossil fuel and the consequent emission of greenhouse gases and acid rain. In addition to the liberation of oxygen by the eucalyptus forests, throughout the complete cycle of sustained production, a considerable amount of carbon is removed from the atmosphere, and part of this is fixed into the pig iron produced.

During the visit comprising a group of MPs and government representatives, Mr Helio Marchi (COCBA President), Ms Cristina Talacko (ABCC President), Mr Fabio Marques from Plantar has guided the group to the 3 sites: the eucalyptus plantations, the charcoal production area (blast furnaces) and the siderurgy where the pig iron is manufactured.

Renewable Energy: The charcoal is derived from a renewable raw material - eucalyptus -, which has the power to clean the atmosphere by means of the photosynthetic reaction. The process is simple: during the period of forest growth, the eucalyptus trees capture carbon from the atmosphere and liberate oxygen. An area of forest necessary for the sustained production of 1 ton of pig iron captures, through photosynthesis, more than 19 tons of carbon dioxide and liberates more than 16 tons of oxygen. In the coke process, the carbon necessary for iron reduction is removed from the charcoal where it is fixed as a fossil element. During the process, impurities and polluting elements, such as sulfur, are liberated together with the carbon.
The comparison between the two energy alternatives, translated into numbers, would be: in the industrial coke process, the production of 1 ton of pig iron emits almost 1,900 kg of CO2 into the atmosphere, while the use of charcoal offers a positive balance: 1,100 kg of CO2 are removed from the atmosphere as a final result of the process.

Eucalyptus cloning: As a company at the vanguard in the forestry sector, Plantar has been developing, since 1987, the technology of cloning eucalyptus by means of collecting shoots from a mother-tree. Since reproduction is done by means of macro e micro-estaquia processes, seedlings that are exactly equal to the mother-tree are obtained. With this, it is possible to obtain a high degree of uniformity of the trees and a substantial increase in productivity of the forest. The company also produces seedlings with seeds, since, in addition to allowing for continuous genetic improvement of the species, this allows Plantar to maintain its strong presence in the seedling market. Two nurseries belonging to the company are responsible for the production of the seedlings: one in the city of Curvelo, in the state of Minas Gerais, and the other in the city of Teixeira de Freitas, in the state of Bahia.






Eucalyptus cloning nursery




Mr Helio Marchi (COCBA President) and Cristina Talacko


Group photo


Blast furnaces


Pig Iron stocked




Siderurgy: Ms Claudia Jarjoura, The Hon Glaucia Brandao MP, Cristina Talacko and Paulo Sergio Ribeiro (Sub-secretary for Mines and Energy)

ABCC and COCBA’s Luncheon - Queensland Roar FC visits Belo Horizonte

On 28th March the ABCC and the Minas Gerais-Australia Chamber of Commerce (COCBA-MG) hosted a Luncheon to celebrate the agreement signed by Queensland Roar FC and Atletico Minerio FC.
The Luncheon was attended by the Vice-Governor of MG, the Hon. Antonio Augusto Anastasia, who headed a trade mission to Australia last March, Mr. Lawrence Oudendyk ( Queensland Roar¹s CEO), Mr Ziza Valadares ( Atletico Mineiro¹s President) and other representatives of the Clubs and the Chambers, as well as corporate sponsors as Vale, Samarco and MMX. The Luncheon was followed by a friendly match between Peñarol FC (from Uruguay) and Atletico Mineiro FC at Mineirão Stadium with 50,000 spectators, marked by fireworks and celebrations surrounding the Centenary Anniversary of Atletico Mineiro in Belo Horizonte.
Mr. Oudendyk has expressed his continuing interest in developing further the links between both Clubs, specially in the areas of Youth Football exchange of players.

New Members

The ABCC representatives would like to welcome the following new members and thank you for your support.

Victoria: BHP Billiton Ltd

Western Australia: Econovite Pty Ltd

South Australia: Earth Fabrics Pty Ltd

NSW: Visacorp Pty Ltd

Mining: Mirabela’s project in Brazil

Australian Mirabela Nickel Limited announced 21 February that it has achieved another major milestone in developing its world-class project in Brazil with the follow-up licenses for the Santa Rita project now obtained. As previously announced, the Company was granted the principal development approval (the Installation License which incorporates environmental approval) in October last year.
In addition, the acquisition of all the necessary surface land rights has been completed.
“Construction of the Santa Rita project commenced last November on site infrastructure, but with the follow-up approvals now out of the way we can move to full construction on all fronts to maintain the project on schedule,” said Managing Director Nick Poll. “We have worked hard to explain our intentions and the project’s impact to the local communities. The resulting community support and the need for economic development in the state of Bahia have been strong drivers behind state and federal government support for the project,” he said.
The Company expects to employ about 1500 people directly and indirectly from the populations of Itagiba (17,000 people) and Ipiau (43,000 people) both within 6kms of the project. “We are finding great people who live within15 minutes drive of the project that have a good level of education and plenty of local knowledge,” said Mr Poll.
“The local people will always be an important asset for our project. We are pleased to be developing the local workforce and to be contributing to nearby communities,” he said.
Construction commenced on the project in November 2007 with basic infrastructure such as a bridge, all-weather access roads and site offices. Much of the essential infrastructure was already in place, such as a state highway and an asphalt airstrip within 4km of the project and hydro-electric power within 6km. “In terms of pre-developed local infrastructure, it doesn’t get much better,” said Mr Poll.
Pre-stripping of the mine in both the Northern and Southern zones has been underway since January, as most of the project area is open farm land.
“We have made great progress over the last four months and have not had any problems obtaining heavy machinery for the site works and mine pre-strip,” said Mr Poll. “Brazil has a large industrial base that allows great flexibility for acquiring equipment, because we are not competing so closely with the rest of the mining industry.
For example, the trucking fleet was previously deployed on constructing a hydro-electric power dam. As a result, Brazil’s mining industry is well positioned for growth when it comes to the competitive world of building and operating mining projects,” he said.
Mirabela has deployed an experienced team of Brazilian project engineers led by Raphael Bloise, who previously managed construction of the Sossego project – a 13mtpa copper sulphide project in Brazil. This team is supplemented with extensive nickel processing knowledge from a team originating from Perth and including Narayan Krishnan, who was involved in the commissioning of Mt Keith, and John Knoblauch, who was involved in the commissioning of Sally Malay.
Source

China indicates may pay iron ore freight fee-paper

Chinese steel firms have indicated that they may accept demands from Australian miners BHP Billiton Ltd and Rio Tinto Ltd for a freight premium on iron ore prices, The Australian newspaper said on Monday. The paper said Zou Jian, chairman of the China Metallurgical Mining Association, told an industry gathering in Shanghai that steel firms were considering including the freight fee, based on long-term rates.
BHP and Rio have been pushing for a freight premium on iron ore to China in the latest contract negotiations, arguing that delivery times from Australia to Asia are shorter.
Brazil's Vale, the world's largest iron ore producer, in February agreed to 2008 term iron ore prices with Chinese steel mills that are 65 to 71 percent higher than the previous year. This benchmark is normally followed by Australian miners.
But soaring prices have emboldened Rio and BHP to try for even higher prices based on their freight advantage over Brazil. Shipping costs from Brazil are more than double those of about $30 a tonne from Australia. The paper said Jian told reporters that Chinese buyers would consider the BHP and Rio request for a freight differential, but only for up to half of what the Australian miners could get on spot markets.
Jian also said he was confident that the contract negotiations with the two miners would be completed before the June 30 deadline.
Negotiations between the two miners and Chinese buyers have been tense, with some buyers angry that that the miners were trying to shift cargoes to the spot market, where returns are higher than contract prices.
Source

Energy: Brazil launches new diesel biofuel using sugarcane

A new diesel biofuel derived from sugarcane is to be launched in Brazil after an accidental discovery made while researching malaria cures, the US and Brazilian companies producing it said Wednesday.
John Melo, the head of the US company Amyris involved, explained that one of his bio-engineers stumbled on the process while working on the Artemisia anti-malaria medicine.
Although the technology could make a variety of fuels, Amyris decided to make diesel with Brazilian partner Crystalsev because of demand for that product was "two to three times higher than for petrol."
He asked that the sugarcane diesel not be called "biodiesel" because that term is already applied to a fuel made from grains containing oil.
The two companies are to initially invest 10 million dollars to install offices in Sao Paulo and build a factory that will experiment with the new fuel.
Source

New joint oil find may be largest ever in Brazil

An offshore find by Brazilian state oil company Petrobras in partnership with BG Group and Repsol may be the world's biggest discovery in 30 years, said the head of Brazil's National Petroleum Agency.

Haroldo Lima told reporters the find, known as Carioca, could contain 33 billion barrels of oil equivalent, five times the recent giant Tupi discovery. That would further boost Brazil's prospects as an important world oil province and the source of new crude in the Americas.

"It could be the world's biggest discovery in the past 30 years, and the world's third-biggest currently active field," Lima, head of the government's oil and fuel market regulator, told reporters at an industry event in Rio de Janeiro.

Lima said he obtained the data from Petrobras at an informal level. But the National Petroleum Agency distanced itself from Lima's remarks, saying in a statement that they were "unofficial" and simply repeated information already in the public domain.

"All the data were already in the public domain, having even been published in the February edition of World Oil magazine, in the 'What's new in exploration' column signed by Arthur Berman," the agency said in a statement.

Petrobras also declined to confirm the estimate and said that studies on the find continued.

Still, Petrobras shares soared on the news, finishing 5.63 percent higher at 82.97 reais after gaining more than 7 percent earlier in the session.

Lima would not say whether the preliminary reserve estimate he provided was recoverable or in-place. Recoverable reserves can constitute less than a third of in-place reserves.

Last year Petrobras put Tupi's recoverable reserves at between 5 billion and 8 billion barrels of oil equivalent, most of it light oil.

Petrobras tested one well at Carioca last year and is still drilling another. The company made the Tupi recoverable reserve estimate based on tests from two wells.

Petrobras said in a statement the second well had not yet reached the subsalt level and "more conclusive data on the potential of the block will be known after the evaluation process is finished."

Analysts said the estimate was probably still very preliminary, although it did not contrast with some geologists' forecasts made in the past. Recent reports by UBS and Credit Suisse also said the reserves could surpass those of Tupi.

"It's a very relevant number, basically triples the reserves. But it still seems a little premature to have a precise number while they are drilling a second well," said Felipe Cunha, an analyst with Brascan bank in Rio de Janeiro.

The Carioca area lies west of Tupi in the prolific Santos basin, off the coast of Sao Paulo state. BG has a 30 percent stake in the project and Repsol 25 percent.

"It's subsalt, and we knew there were big expectations for the subsalt cluster in addition to Tupi. But, if this is confirmed, it's really huge," said Sophie Aldebert, associate director with Cambridge Energy Research Association in Brazil.

"With that size, you'd have plenty of gains of scale that could easily offset the subsalt geological challenges," she added. The challenges include shifting salt clusters that require reinforced piping and producing in deep waters from huge depths under the ocean floor.

Geologists had long voiced the theory that Tupi could have an even bigger neighbor containing light oil or natural gas. If the reserves are confirmed, Brazil could jump into the top 10 oil countries by reserves, surpassing nations like Nigeria.

Petrobras also has said previously it sees good prospects for major oil finds in the subsalt areas in the Campos and Espirito Santo basins north of Santos, but it is focusing mainly on Santos at the moment.

Most of Petrobras crude comes from heavy-oil Campos basin fields, but recent subsalt discoveries could make Brazil a major producer of higher quality oil.

The company expects to start an extended production test at Tupi early next year and then crank up a 100,000 barrels per day pilot project there in late 2010 or early 2011. Analysts say, however, the costly subsalt development can take more time than Petrobras expects.
Source

Historic sugar mill’s ethanol plant adds biofuel to the mix

By Ian Thomson

For 130 years, the Rocky Point sugar mill has dominated the landscape around the Woongoolba area near Beenleigh in south-eastern Queensland.

It is one of the oldest mills of its type in Australia and the only one that’s owned privately, coming down through five generations of the Heck family. Obviously there have been many changes to the mill over the years, including the installation of a co-generation plant in 2001.

The Rocky Point Green Power Plant – owned and operated by the progressive merchant banking company Babcock and Brown – uses bagasse, approved wood residue and other biomass materials to generate renewable electricity and steam as well as power the sugar mill and adjacent distillery.

And now it’s the distillery that’s at the centre of attention as the Rocky Point mill enters yet another phase of development. Since 1991, the distillery – just a short walk across a narrow road from the mill itself – has been producing ethanol for industrial, pharmaceutical and food manufacturing markets.

Come August/September, the Rocky Point Distillery will also be producing fuel ethanol – going online before the Dalby plant in Queensland’s Darling Downs to become the first new dry-grain ethanol facility in Australia.

Rocky Point aims to produce more than 35 million litres of fuel ethanol per year, initially using grain sorghum and molasses as duel feedstocks with the further ability to process barley, wheat, waste starch products and waste sugar stream as feedstocks.

The Heck Group’s Executive Director (Ethanol), Murray Heck, says the distillery’s expansion to fuel ethanol production is based on the Brazilian model.

“There is an ideal balance of production and energy use between the co-generation plant, sugar milling and ethanol that gives the greatest return across investments on the whole site,” he said. “The plant upgrade is all about quality, reliability, technology and capacity. We will retain our market share in the pharmaceutical, industrial and food manufacturing sectors, while at the same time produce cost-effective fuel grade ethanol.

“The USA plant design leverages the steam conditions with a medium cook process with high resonance time and greater process flexibility – going away from the superheated jet-cook system which was typical of plants out of the 90s.”

The fuel ethanol will go to the major oil companies, as well as independent operators. The upgraded ethanol facility at the Rocky Point Distillery represents just one of the ongoing projects that shows market leadership and a commitment to the sugar and fuel ethanol industries by the Heck Group.

“The new biomass industry created by the co-generation plant has extended the life of sugar farms in the Woongoolba region and has ensured the viability of the Rocky Point Sugar Mill for an additional 20 years,” Murray Heck says. “Electricity generated by the Rocky Point Green Power Plant helps to displace net greenhouse gas emissions from non-renewable power generation. All by-products generated by the plant are rejuvenated back into the environment, including the ash from the boiler which is used in the manufacture of soil compost.

“Rocky Point Green Power is completely committed to generating power with a clear focus on the environment and the impact it has on it. Now the co-gen plant is an integral part of the expanding ethanol plant. We’re very excited about what the future holds for the production of fuel ethanol in this country.”

Lula to rich nations: 'Stop your hypocrisy,' buy Brazil biofuel

Brazilian President Luiz Inacio Lula da Silva blasted wealthy nations for their punitive agricultural tariffs and urged them Sunday to "stop your hypocrisy" and start buying Brazilian biofuel.
"We have said that if we want to achieve success in the Doha Round (of World Trade Organization negotiations), then rich countries must lower their agricultural tariffs for poor countries' products entering their markets," Lula told Correio do Brasil newspaper in an interview.
"So, stop your hypocrisy and start buying biofuels," he said.
The WTO's Doha round of talks to reduce trade barriers was launched in the Qatari capital in 2001 with the aim of reaching a deal by 2004, but has foundered ever since, principally in disputes between developed and developing countries on agricultural subsidies and industrial tariffs.
Lula also said it was "inconceivable" that wealthy nations have tried to pin the blame on biofuels for the explosive rise in global food prices, which have led to violent riots in some poor countries.
Sugar-based fuel produced in Brazil is being fingered for causing global price surges -- an accusation fiercely rejected by Lula.
Brazil is the world's second largest ethanol producer, after the United States whose ethanol is corn-based.
"The world does not produce biofuels and has 800 million people who go to sleep hungry," he said.
"Those who criticize biofuels have never criticized the price of oil. The developed world imports oil with no tariffs, yet they place an absurd tariff on Brazilian ethanol," Lula said.
Lula said such a situation exists because Brazil's role in international trade has steadily transformed from minor role to major player.
"We are the largest exporter of coffee, orange juice, soy and beef," he said. "We can no longer accept the argument that rich countries want to impose on us."
Lula recognized that the market for sugar-based ethanol would surge if there were greater public support for the production of fuel from biological materials.
In the Brazilian biofuel industry, companies which produce agro-based fuels enjoy major tax breaks.
French lawmakers visiting Brazil last week said they were impressed with the country's biofuel industry, but warned that Europe would have to balance that model against the need to guarantee food supplies.
Former French economy minister and trip leader Jean Arthius warned in Sao Paulo that taxes on biofuels could be one form of regulation, with the need "to ensure food security" remaining a vital concern.
Source

Telecommunications: Brazil's Oi to buy Brasil Telecom for $3.5 bln

Brazil's Oi Participacoes agreed to buy control of local rival Brasil Telecom for 5.86 billion reais ($3.5 billion), forging a home-grown telecoms giant to compete with Spain's Telefonica and Mexico's America Movil.
The total price tag for the takeover may rise to 12.3 billion reais, taking into consideration an offer for Brasil Telecom's minority shareholders, Oi Chief Executive Luiz Eduardo Falco said. Oi has enough cash at hand to pay for the purchase, but it may also tap the capital markets to raise part of the funds, he said.
The deal, widely expected for months, still depends on changes to Brazil's regulatory framework, which forbids one group from holding two separate telecoms concessions.
But Brazil's government has signaled it is in favor of changing the legislation to allow for some consolidation in the country's fiercely competitive telecoms sector,which was opened to private investment a decade ago.
A proposal to overhaul the legislation and allow for the Brasil Telecom takeover is making its way through the Communications Ministry, after which it will be sent to the country's telecoms regulator for final approval.
If the deal is approved, it would create a Brazilian player large enough to compete on a regional basis with the likes of Telefonica and America Movil, both of which have a major presence throughout Latin America.
"This is a company that is born with ambitions that go beyond Brazil," Falco said at a press conference in Rio de Janeiro. "We have international dreams."
Oi expects to compete head on with America Movil, Telefonica and Telecom Italia as the company expands in the Americas, Europe and Africa, he said.
Falco forecast the merged company will have 110 million customers in five years from about 46 million now in broadband, wireless, fixed line and pay-television services. Mobile phone clients are seen surging to 38 million in five years from 20.5 million now, while broadband clients may jump four-fold to 12 million from 3.15 million now.
Oi also expects to have 30 million clients outside of Brazil in five years.
Trading in Oi and Brasil Telecom shares was briefly halted during the session before the announcement was made. After trading resumed in Sao Paulo, Brasil Telecom's preferred shares tumbled 8.49 percent and Oi fell 3.11 percent.
The combined company would control about 70 percent of Brazil's fixed-line market, 18.5 percent of the wireless market and some 40 percent of broadband Internet services. Together, Oi and Brasil Telecom Participacoes had 28.65 billion reais ($17.15 billion) in revenues last year.
The new company will be controlled by local industrial conglomerates Andrade Gutierrez SA and Jereissati Participacoes, both from Oi's controlling shareholder group. Brazil's national development bank, BNDES, and some state-run pension funds will also hold stakes in the merged company.
Oi said it expects to get legal approval for the deal in 120 days. If the legislation isn't changed in 240 days to allow for the takeover, Oi will be required to pay a break-up fee of 490.15 million reais ($293.5 million).
With the deal, U.S.-based Citigroup will cash out of Brasil Telecom after years of acrimonious disputes and lawsuits with some of its local partners in the shareholder group.
Oi, formerly known as Telemar, is based in Rio de Janeiro and is the dominant player in 16 of Brazil's 26 states. Brasil Telecom, based in Brasilia, is the country's third-largest fixed-line operator and is present in 10 states.
($1=1.67 reais)
Source

Forthcoming Exhibitions and Trade Fairs

The Expo Brazil '08

The International Trade Exhibition to be held in November 2008 is all set to present over 10,000 products, equipment and machinery from over 28 countries. Trade visitors from all over South & North American countries are being invited directly and in collaboration with several regional trade bodies in Brazil, Ecuador, Colombia, Argentina, Chile, Venezuela, Bolivia & other North American Countries. Though Brazil by itself is one of the biggest markets in South America, major emphasis is being laid upon attracting traders and importers from neighboring countries. In 2007, imports of the country rose to US$98 billion in 10 months, thus making it a very attractive market for foreign exporters.
more...

Fenasucro - XVI International Sugar and Alcohol industrial Fair

Date: 2 to 5 September 2008
Venue: Zanini Exhibition Center – Sertãozinho / São Paulo / Brazil
Exhibition Area: 130.000 square meters
Number of exhibitors: approximately 450
Estimated number of public visitors: 25.000 visitors
Held by: CEISE: Industry Center of Sertãozinho and Region
Concurrent Events:
International Forum on Ethanol and Alcohol
Brasil Cana Show
STAB’s International Agro-industrial Symposium on Technological Innovations
more...

Agrishow – International Agriculture in Action Trade Fair

(Information about the last edition: 2007 – 14th edition)
Date: 30th April to 5th May, 2008
Venue: Ribeirão Preto (314 km from São Paulo)
Show area: 190,000 m2
Exhibitors: 660
Public: 140,000 visitors
Turnover: R$ 710 million – 42% more than in 2005 (R$ 500 million)
Record turnover: 2004 edition (R$ 1.288 billion)
Working field demonstrations: more than 200
Produced by: Abimaq (Brazilian Association of Machinery and Equipment), Abag (Brazilian Agribusiness Association), Anda (National Fertilizer Publicity Association) and SRB (Brazilian Rural Society).
Press release

Biotech Fair – Bioenergy and Biodiesel Technology International fair.

The BIO Tech Fair - International Fair on Bioenergy and Biodiesel Technology has the objective of showing new technological products and services, offering participants business opportunities and market trends, with respect to the rational use of waste in primary industries.
The search for alternative sources of energy has proven to be a top necessity that needs to be implemented. Some segments offer advantageous and economic options for helping increase energy generation capacity.
Date: June 24th to 27th, 2008
Location: Curitiba, Parana - Brazil - Metropolitan Region
Venue: ExpoTrade Convention & Exhibition Center
more...

SINTEC - International Symposium and Technology Exhibition on the Sugar & Ethanol Industry

From July 1th to 4th, 2008, at the Central Sugar Mill in Piracicaba, São Paulo state, Brazil, the 6th SIMTEC will take place. The event, aimed at the Sugar and Ethanol Agroindustrial market, has the objectives of creating business opportunities and presenting the innovations of the sector.
SIMTEC is directed to businesspeople and technicians of the sugar and alcohol sector and will count on the participation of Machine and Equipment manufacturers, Service Providers and Consultants to the Sugar and Ethanol Industry, as well as Agriculture Machinery and Equipment manufacturers.
During the exhibition, high-level technical seminars will be held by companies and professionals with large experience in the sugar and Ethanol agroindustrial segment.
SIMTEC seeks to present the highest technology in manufacturing machines and equipment to the sugar and alcohol industry; present the region as a source of know-how, research, and development; present researches from the Biofuels National Pole; and increase the commerce of such equipment and machinery to the sugar and Ethanol sector in Brazil and abroad.
The aim is to consolidate an economic, scientific and technological model based on the management of resources and on the production of low environmental impact renewable energy, especially Ethanol and biodiesel.
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Expo Australia 2008, Latin America

Date: 4-6 October
Location: Sao Paulo, Brazil
Expo Australia 2008 will gain maximum exposure for your business by uniting government allies and industry players, including the Council on Australian and Latin American Relations (COALAR), Tourism Australia, Australian Education International and Qantas, under the Brand Australia banner for the largest 100% Australian event in Latin America.
The expo will showcase Australia’s best tourism, food and beverage (with a special emphasis on wine), services, investment and outdoor goods and fashion.
Previously the Australia Festival, the expo generated A$14 million in positive mentions in local media in 2007.
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