Rhodia, a French chemical group, plans to turn its division in Brazil to an export base. However, according to the company’s CEO, Marcos De Marchi, logistics and infrastructure challenges are hampering the company’s foreign sales. The Brazilian division, Rhonda Brasil, earns about US$300 million per annum in exports, representing 30% of the division’s revenue generation.
With the investments plans in high gear, the company expects to increase that figure further. De Marchi said, other than the fact that the 30% figure was impressive; the company would better have it at 30% of a higher amount. He said Brazil still had some considerable logistics inadequacies to overcome for it to become an export base, adding that logistics for successful Brazilian exports are already difficult with regard to distances to foreign markets vis a vis other challenges to transporting products to ports and shipping them out. Subsequently, the whole process is made tedious and expensive.
Additionally, Brazil is currently witnessing an increasingly strong real; therefore, the exchange rate against the dollar has greatly impacted exporter’s profitability. De March noted the impacts of the exchange rate on all industrial sectors, other than the chemical segment. Even so, he was quick to point out that domestic issues play a crucial role apropos the competitiveness of exports.
According to De Marchi, interest rates and the availability of credit are also key factors to the country’s exports. Last year, Rhonda’s subsidiary in Brazil generated about US$1.01 billion, representing 17% of worldwide sales. Out of the total average, emerging areas such as Latin America and Asia, gave the group about 45% of their revenues in 2009. The company’s investments in Brazil are pegged at around US$50 million per annum, with about 70% capacity for expansions to meet the pace of demand growth in the Brazilian market, said the chief executive.
The French stock listed company specializes in chemicals, offering products such as polymers, organic and inorganic chemicals, and formulations. Created in 1998, the company provides solutions to a range of markets, including automotive, electronics, flavors and fragrances, health, personal and home care, consumer goods and industrial, through its six global enterprises: Polyamide, Novecare, Silcea, Energy Services, Acetow and Eco Services. Established in 25 countries worldwide, Rhodia has manufacturing facilities and R&D centers in Europe, North America, Latin America and Asia Pacific. In Latin America, it operates in Argentina, Brazil, Colombia, Chile, Ecuador, Guatemala, Mexico, Peru, Uruguay and Venezuela. It employs 13,600 workers worldwide and had sales of 4.03 billion Euros in 2009.
June 11, 2010.