Pesticides have the highest investment potential,says BNDES

The Brazilian Development Bank (BNDES) is expected to present, as late as September, its study for the diversification of the Brazilian chemical industry.

In May 2013, a consortium was started between Bain & Company consultants and Gas Energy, in which research is showing with preliminary results, the agrochemicals amongst 64 analyzed segments, has the greatest investment opportunities.

"The study aims to turn opportunities into investment initiatives, serving as a tool for managers in decision-making" said the Director of Economics and statistics of the Brazilian Chemical Industry Association (Abiquim), Fatima Ferreira, at an event in Sao Paulo.

According to the engineer of the Chemical Industry Department from BNDES, Martim Francisco, the goal is to retrieve chemical chains that the country lost due to an industry which is increasingly “full of commodities” and which sells basic supplies and purchases higher-value products as well as encouraging the emergence of new chains, in order to reduce the deficit in the trade balance of the sector, which in 2013 reached the record amount of US $32 billion.

Among the 64 chemical segments studied, 32 were prioritized, considering the market size, growth potential and competitive advantages of Brazil. In this context, the pesticides with a market value of US $53 billion, in which the country has 20% participation and imports US $5.4 billion, have the highest investment opportunities. According to the study, potential contributions in this segment may result in an impact of between US $1.1 billion to US $2.5 billion in Brazilian trade balance of chemicals by the year 2030.

Besides the Agrochemical potential, surveys have already been carried out in lubricating oils, Oleochemicals, chemicals for concrete, exploration and production of petroleum and mining. In 15 days, the results of several other segments on the BNDES site are expected to be published. The studies should be completed in the next four months, and will be concluded with a seminar for the presentation of the results to the private sector on June 3rd.