Sector also relies on tax reductions in the second half of the year
The approval in the first round of the pension reform in the Chamber of Deputies reversed the skepticism that hung over the Brazilian market and encouraged importers of industrial machinery and equipment.
For Paulo Castelo Branco, president of the association representing the sector, Abimei, the change in scenario has already been noticed by importers and subsidiaries of multinationals operating in Brazil. “Of course there is some time to go, but today everyone believes in the approval [of the pension reform] by the first half of September,” says Castelo Branco. The text of the Constitutional Amendment Proposal (PEC) will still undergo a second vote in the Chamber of Deputies before moving on to the Senate. The congressional recess ends on August 1st.
“But just this approval in the first round has already caused a drop in the exchange rate. The market is sovereign. When the market reacts, it already tells us what we need to do,” adds the president of Abimei.
Another factor encouraging importers of industrial machinery is Ordinance 309/2019, through which the Ministry of Economy reduces the import tax rate on capital goods. Issued on June 24, the measure was suspended until the end of August by the government on July 10 in order to discuss the issue with the parties involved, but the sector remains optimistic.
“Fifteen or 20 days ago, we had an initial meeting in Brasília. We met again a week later and were supposed to deliver some proposals to the government, which will analyze and regulate the ordinance. Just this movement created very high expectations in the market,” says Castelo Branco.
These two factors, combined with a tax reform, could lead the market to envision a “more enduring and optimistic near future,” according to the president of Abimei. “Anyone who wants to invest in Brazil needs incentives, not to be burdened,” he emphasizes.
Abimei must take this optimism to the next edition of Tubotech, an international trade fair for pipes, valves, pumps, fittings, and components, which takes place from October 1 to 3 in São Paulo, organized by Cipa Fiera Milano.
The association will participate as an exhibitor for the first time and will set up an island with technical content lectures and workshops. In addition, it is expected to bring some members to the fair, but the names are still under negotiation.
“We want to show that it is possible to import and bring cutting-edge technology, lasers, and industrial accessories to Brazil,” says Castelo Branco. The pipe sector could be one of the drivers for machinery importers in the Brazilian market, as it encompasses segments ranging from small installations to oil drilling, including the automotive industry and civil construction, for example.
“We believe in this new phase that Brazil is facing, with a very qualified economic team. This brings optimism and an injection of energy to all entrepreneurs and associates, concludes the president of Abimei.
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