But Abiquim warns that sector faces a productivity problem and that it feels high of the entrance of imports
According to the Brazilian Chemical Industry Association (Abiquim), the country’s chemical industry, which has a stake in Cubatão’s Pole, recorded the best third-quarter performance in the last 12 years from July to September.
However, the sector, according to Abiquim itself, has against its recovery the lack of competitiveness in relation to imports, even after the increase in the exchange rate. In one year the dollar rose from R $ 3.25 to R $ 3.73, up 14%.
According to Abiquim, the industrial chemical production index in the third quarter grew 8.44% and that of internal sales 13.89% in comparison to the previous period (April to June). These sharp results should be noted because they were impacted by the May truckers’ strike, which dammed up production and sales.
Compared to the third quarter of last year, the July-September indexes were also positive: production increased 1.45%, making it the best third quarter of the last 12 years. Domestic sales were 1.9% higher.
Domestic apparent consumption (CAN), which measures production plus imports and less exports, also improved in the third quarter, with a result 15.8% higher than in the previous quarter and 4.9% higher than the CAN of the same period last year.
In the accumulated period from January to September of this year, the segment of industrial chemicals showed a growth of 1.84% in the volume of domestic sales over the same period of the previous year. The production index is down 2.62% in the last nine months, compared to the same period last year, according to Abiquim. The installed capacity utilization rate, which reflects the level of idleness, was 77%, from January to September, slightly below the same period in 2017.
The performance of the sector in the third quarter was positive despite the drop in the production index of 5.92% and 7.82% in the domestic sales index in September, in relation to the previous month.
Abiquim’s Economics and Statistics Board, Fátima Giovanna Coviello Ferreira, states that the activity was reduced by occasional stops for maintenance, common in the petrochemical sectors.
However, indices showing a recovery do not indicate that growth has returned. The executive also says that there is a demand weak compared to the previous two months and to a lesser extent by the reduced number of working days of the month, compared to August.
Exchange effect
According to Abiquim, exchange rate volatility, very intense during the elections, has caused difficulties both for the purchase of imported inputs and the export of finished products.
“Traditionally, in the segment of chemical products for industrial use, the months of July to October are the best of the year, due to Christmas orders, parties and disposables for the summer period, which generated a recovery in the accumulated of the year”, she says.
However, she warns that concern remains about the volume of imports. Fatima says that in the third quarter compared to the previous period, the import of chemicals grew 41% – almost five times more than the crazy production.
Performance
13 percent was the increase in sales of chemicals in the domestic market.
8 percent was the expansion of chemical production in the third quarter.
41 percent was the growth of chemical imports in the third quarter.
14 percent was the increase in the price of the dollar in 12 months.
Comment
Paulo Skaf – President of Fiesp
“What really matters to Brazil”
The productive sectors are ready to collaborate with the elected government in what is necessary to guarantee the good of the Country.
Brazil needs to enter on a sustained growth path, capable of generating employment and income for its population. For this, we consider fundamental the approval of a pension reform project with the greatest possible urgency, preferably still in 2018.
The longer the time passes, the worse the pump of the social security deficit worsens. It is also very important that we work hard to pursue tax reform, fiscal adjustment, lower interest rates, reduce bureaucracy and improve the business environment to stimulate new investments. That’s what really matters to Brazil.
The national productive sectors will be on the side of the elected government to work for these points, which concern the whole nation. Regarding names for the composition of the government or the organizational structure of the ministries, we understand that this is a responsibility of the president-elect, Jair Bolsonaro, who has the legitimacy conferred by more than 57 million votes to organize the state administration in the way he considers more efficient. He has our vote of confidence for that.
Reformation includes new relations of revolution
The labor reform, in force since November last year, was an effort to introduce into the legislation of the area the new relations resulting from the current industrial revolution, according to the Federation of Industries of the State of São Paulo (Fiesp) report on the event with the minister of the Superior Labor Court (TST) Maria Cristina Peduzzi.
The minister participated in the meeting of the Superior Council of Labor Relations of Fiesp (Cort), held on Tuesday in the capital. “The fourth industrial revolution requires greater flexibility in labor relations”, he said.
The industrial revolution, also called 4.0, introduced artificial intelligence and internet connectivity into production, resulting in new working relationships.According to the Fiesp meeting, the reform considered valuing the autonomy of the collective and individual will, while at the same time prioritizing a reduction in the number of judicial processes, with alternative means of resolving conflicts and guaranteeing greater legal certainty.
Among the new activities are teleworking, with the functions that allow remote execution of tasks. According to the minister, the TST already recognizes the modality through the now clear rules, giving legal security to the hirings.
Maria Cristina also highlighted the intermittent work (non-continuous activity, with days and hours of work alternation and inactivity), according to Fiesp, noting that the reform made clearer the rules of layoffs in these contracts.
“The reform has faced all the issues that were controversial”, said the minister.
International market
For the board of the Brazilian Chemical Industry Association (Abiquim), Fatima Giovanna Coviello Ferreira, the economic activity presents results that were lower than expected and the main chains that consume chemicals have not performed well, despite the improvement in recent months.
“The segments most exposed to the international market and working with products that can be easily traded with the foreign market, such as the chemical, have not been able to compete”, she says.
“The high cost of Brazil, coupled with the high costs of acquiring raw materials and energy, and also the logistical deficiency, impose a cost on local products, which often not even the depreciation of the real”, he concludes.
Source: A Tribuna Newspaper