Sustainable Virtual Biz

Press Release: Brazil is often discussed in investment circles as a promising land of opportunity, as it propels itself towards becoming among the top global economic leaders. Having researched Brazil, the analysis by Sustainable Virtual Biz, uncovers large and well-developed agricultural, mining, manufacturing, and service sectors. 

For 2009, Brazil's economy GDP exceeded $2 Trillion, outweighing all other South American countries. Brazil is expanding its presence in world markets with significant gains in the most notably in the banking and energy sectors. 

“For example, the Brazilian ethanol industry is experiencing amazing growth right now. In fact, the President of UNICA, Marcos Jank, thinks it will prove that ethanol and other biofuel energy sources do work as a primary fuel source. It doesn’t have to compete with food crops given advanced biomass and non-edible resources,” said James Rickman, CEO of Sustainable Virtual Biz   http://www.sustainablevirtualbiz.com 

Here are the key facts of Brazilian ethanol production: 

- All fuel sold in Brazil contains a 25% blend of ethanol 

- The unsubsidized ethanol industry offers a fuel that is on average $1 below the price of gas 

- Virtually all 33,000 gas pumps offer E100 

- Just 1% of the 40% of arable land in Brazil is being used to produce sugarcane ethanol 

- 50% of fuel for cars is from sugarcane 

- The food industry is growing faster than the ethanol industry 

- 90% of all new automobiles sold are flex-fuel automobiles 

- 100% of GM vehicles produced in Brazil are flex-fuel 

- 20% of all cars on the road are flex-fuel vehicles today 

- Several other non-edible energy sources such as algae, Jatropha and other biomass programs are rapidly developing including the use of biotechnology enzymes from companies such as Dyadic International 

In fact, According to the Nikkei Business Daily, Japan’s Suzuki Motor Company will begin selling cars that run completely on 100% ethanol in the US and Brazil by 2010. The company will begin the transition by first offering an E25 sedan for sale in Brazil this coming March. 

Currently the most ethanol that a flex-fuel car can run on in the US is E85 — which is an 85% ethanol/15% gasoline blend. Suzuki’s move would mark a huge development in ethanol-powered vehicles, and a huge shift for Suzuki, which hasn’t had any alternative fuel-specific offerings in its lineup to this point. 

In comparison to other countries worldwide, Brazil’s unemployment rate hovers around 7% percent, April of 2010.Since 2003, Brazil has steadily improved macroeconomic stability, building up foreign reserves, reducing its debt profile by shifting its debt burden toward real denominated and domestically held instruments, adhering to an inflation target, and committing to fiscal responsibility. Top Brazil Companies by Industry Breakdown… 

Some Top Brazil Equity Plays to Consider: 

Gerdau (GGB) 

Nucor (NUE) 

CPFL Energia (CPL) 

Consolidated Edison (ED) 

Banco Santander (STD) 

Petroleo Brasileiro (PBR) 

Banco Santander (Brasil) (BSBR) 

Itau Unibanco Banco Multiplo (ITUB) 

Companhia Vale S.A. ADS (VALE) 

Banco Bradesco (BBD) 

BRF-Brazil Foods (PDA) 

Companhia Brasileira de Distribuicao Grupo Pao de Ac (CBD) 

Embraer-Empresa Brasileiras de Aeronautica (ERJ) 

Vivo Participacoes Companhia de Bebidas das Americas (ABV) 

Gafisa (GFA) 

In 2008, Brazil became a net external creditor, Brazil's external debt totaled less than its foreign reserve holdings, and two ratings agencies awarded investment grade status to its debt. After record growth in 2007 and 2008, the onset of the global financial crisis hit Braxil in September 2008. Brazil's currency and its stock market - Bovespa - saw huge swings as foreign investors pulled out of Brazil. Essentially, it experienced two quarters of recession, as global demand for Brazil's commodity-based exports dwindled and external credit dried up. 

The Brazil Challenges Ahead 

Indeed, the clear signs point that growth in demand exceeds that in supply and the country is expanding above potential growth rate potentially leading to inflationary pressures. For example, since December industrial production has been rising at the average rate of 18%, in March it reached 20% and in April 17.4%. Also, in May, inflation went up 5.22% from a year earlier, the fifth consecutive month above the 4.5% central bank target.  Looking further, because of fears of attracting speculative capital, the Central Bank of Brazil Monetary Policy Committee (COPOM) started rising interest rates only in April. Yet, although in June the cost of borrowing was increased again to 10.25%, it may be too late to save Brazilian economy from overheating and possibly having a hard lending. Learn More! 

Long term growth prospects are solid. However, the huge role of the government on the economy is a factor to watch. In fact, government spending accounts for more than 20% of Brazil's GDP. And even though the government workforce was reduced by 150,000 in the 1990s, since then it rose by twice that number. To make things even worst, a lot of last year stimulus money went on employing public sector workers and expanding pension and benefit plans instead of improving the country’s poor infrastructure. And even with rising revenues, the average 8% rise in annual rate of  federal-government spending may not be sustainable in the future without imposing higher taxes and lowering investments. The Central Bank calculates growth of 5% for 2010. 

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