Abifa cautious about Brazilian foundry industry

Reading time: min

BNamericas reported that despite the increase in production levels in Brazil's foundry industry in 2010, national foundry association Abifa's president Mr Devanir Brichesi remains cautious about the sector's short term growth.

Mr Brichesi said that several factors affecting the industry's competitiveness, including taxes and the exchange rate, need to improve to ensure sector development in the long term. He added that "The growth must be structured and each point resolved, including the Brazilian currency's value compared to the dollar."

Foundry output rose 50.3% in January to July 2010 period to 1.82 million tonnes as compared with the same period in 2009. However, production is still 12% lower than it was in January to July 2008 period. For the entire year, Abifa expects output of 3.1 million tonnes as compared with 2.3 million tonnes in 2009 and 3.36 million tonnes in 2008.

Mr Brichesi said exports have also recovered this year from 2009, but are still on average 40% lower than in January to July 2008 period. Foreign sales amounted to 239,818 tonnes in the first 7 months of 2010, up 53.6% from 156,157 tonnes YoY. In value terms, exports totaled USD 631 million in January to July 2010 period as compared to USD 418 million.

Mr Wilson de Francisco Abifa's iron commission director said that "The main buyers of Brazil's foundry products are the US and Europe, both of which still face economic challenges." He added that the outlook for the 2011 domestic market is more favorable due to the strength of the Brazilian economy, as well as investments in infrastructure which will have a positive impact on the industry.

Nevertheless, Abifa is still wary of making precise projections for 2011 as the presidential elections at the end of the year could affect the economic climate.