Brazil is the largest country in South America and the fifth largest in the world, with 8515767 square kilometers and 26 States. With a population of 204 million in 2015, Brazil is the sixth most populous country in the world. As one of the largest emerging markets in the world, Brazil's cement industry has a large scale.
Economy
As one of the BRICS countries (BRICS countries include Brazil, Russia, India, China and South Africa), Brazil's new economy has developed rapidly. In the 2008 global economic crisis, Brazil's economic recession was relatively mild, and only lasted for half a year. GDP began to grow strongly until 2011, when Brazil's "excessive dependence on raw material exports, low production efficiency, high operating costs, high inflation and low investment levels" slowed down its economic development again. In 2014, Brazil's GDP grew by only 0.1% (Figure 1), per capita GDP remained 16100 US dollars, inflation rose from 5.9% in 2013 to 6.3%, and industrial output fell by 1.5% year-on-year.
Figure 1: Trends in cement production, clinker production, GDP growth and inflation in Brazil, 2000-2014
Source: IMF World Economic Outlook Database October 2015, WoHd Data Bank, USGS Mineral Year books
Brazil's economy is largely dependent on commodity exports, including coffee, cars, steel, cement and crops. In 2014, Brazil exported US $243 billion in goods and imported US $242 billion. Brazil employs 111 million people in services, accounting for 71% of the total labor force, 15.7% in agriculture and 13.3% in industry. The unemployment rate fell to 4.8% in 2014 from 5.4% in 2013, while 21.4% of the country's population remained below the poverty line. According to local media reports, corrupt consumption in Brazil amounts to $41 billion a year, and the compliance officer of Siemens Brazil said that "corruption is widespread". "However, Brazilians have a habit of exaggerating the problem. If you don't pay a bribe but acquiesce in it, you can still do business." 69.9% of Brazilian enterprises said that corruption is a big problem in business operations, and they are trying to reduce the impact of corruption in many ways.
Cement industry
The Brazilian cement industry traces its roots to the 19th century, with industrial-scale production beginning in 1926 with the birth of the Companhia Brasileira de Clmento Portland Cement Plant. After nearly 100 years of development, Brazil has 72 integrated cement plants by 2015, with a cement production capacity of 76.53 million tons per year. Cement production and consumption are unevenly distributed across 23 States, with concentrations in the most populous States, such as São Paulo, Minas Gerais, Rio de Janeiro, and Bahia (Table 1, Figures 2-3).
Table 1: Cement production and capacity in some regions of Brazil
Source: IBGE official website, Global Cement Catalog 2016
According to the report of the Brazilian Cement Industry Union (SNIC), preliminary statistics show that in 2014, domestic cement consumption in Brazil increased by 1% to 71.7 million tons, domestic cement sales increased by 1.4% to 10000 tons, imports decreased by 20.4% to 817000 tons, and exports increased by 36.4% to 30000 tons. The main areas of domestic sales growth are the northeast and central and western regions, and the largest decline in sales is in the northern region. In 2014, a large proportion of Brazilian cement sales went to distributors (36.5 million tons), while the rest went to concrete mixing plants (13.6 million tons) and other customers (16.1 million tons), with a small amount of exports (30,000 tons). According to USGS, Brazil's cement production increased from 70 million tons in 2013 to 72 million tons in 2014, and clinker production capacity remained at 60 million tons per year.
The performance of Brazilian cement companies in 2015 was dismal, with domestic cement sales in the first nine months falling by 7.7% year-on-year to 49.2 million tons and exports rising by 10% year-on-year to 22000 tons (Table 2). Sales declined in all regions, with the largest declines in the Midwest and Southwest.
Table 2: Change of cement sales volume in Brazil in the first nine months of 2014 and 2015
Source: SNIC
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