The green wave has not yet reached all sectors, but Brazilians can already, for example, take care of beauty, sketch on paper, feed themselves, clean their homes, wash their hair and even build their homes in a more sustainable manner.

All of this with not much effort on the side of who buys, requiring just a choosing on market shelves, at the bookshop and at the building material shop.

There, products made by established market brands, using less electricity and water, fewer chemical inputs, lighter packages or recycled items may be found. The main companies responsible for these products are large Brazilian organizations.

Eating yogurt, for example, is a common habit for many Brazilians and one in which industry has placed a green finger. This year, multinational Danone created a new version of the Strawberry Danoninho 360 grams – taking into consideration greater environmental and social sustainability.

The yogurt has a package that is 10% lighter, generating fewer residues, whose production consumes 5% less energy and whose milk has gained quality and productivity, providing further revenues for farmers participating in a sector professionalization program developed by the company.

“This effort is the result of solid Danone engagement to reduce carbon emissions by 30% over four years (2008-2012),” said Rodrigo Chaimovich, the marketing manager at Danoninho, regarding the innovation that the company has been adopting with regard to environmental sustainability.

The Danoninho 360 grams should represent, considering consumption at the Walmart chain alone, an annual economy of 3,280 Kwh of energy, 943 kilograms of packaging material, 184.5 liters of fuel and 635.5 kilograms of carbon emissions.

Suzano, in the area of pulp and paper, a sector that normally does not have a very good name in environmental matters, is working to show its green side. The company has Forest Stewardship Council (FSC) certification on all its products, showing correct management of the forests it manages.

It has also issued a new version of four of the papers it produces – Alta Alvura, Paperfect, Symetrique and Report Multiuso – with the Carbon Reduction Label. With the stamp, the company shows consumers the impact of greenhouse gas emissions in production and also its engagement to reduce them.

Carbon Reduction Label is obtained as a result of a company program called Carbon Footstep, issued in 2010, in which Suzano measures the emissions of its entire chain, with the objective of reducing them.

“Suzano is the first Brazilian company to receive the stamp on its products in the country. The company objective is to promote the concept throughout Brazil for other companies also to have their products with a calculated Carbon Footstep,” said the executive manager for the paper sector at Suzano, André De Marco.

In the footsteps of Suzano and Danone there are other Brazilian companies trying to make a smaller mark on the life of the planet with their products. Multinational Reckitt Benckiser issued this year line Veja Perfumes Sensações, in two-liter packages, reducing production in one hour, through use of a new formula, and replacing the bulbs in the industrial unit, among other measures.

Another company, Gerdau, a producer of steel and the largest recycler in Latin America, managed to grant many of the factory’s items greater sustainability. The products received the Falcão Bauer Institute Ecological Quality Stamp.

Natura is another Brazilian company that has become more and more evident due to environmental sustainability. Different from a large part of companies, however, Natura turned to the area even before it became fashion and, according to the Business Unit manager at the company, Penelope Uiehara, all products are made following environmental, social and economic principles.

One of the lines, Ekos, was recently renewed with lower emissions. “The new Ekos line has 17% reduction in carbon emissions as against the previous line,” said Penelope. The products reached consumers this month.

The brand has a series of characteristics that make it environmentally sustainable. There is, for example, the use of thinner packages for shampoos, making it possible to squash the package and use the product right to the end, the use of 50% recycled PET and also green plastic (made from ethanol) in packages and cartons (boxes) that use 50% recycled material. The latter, in fact, are only used when the format of the product makes it hard to pack a great volume of items, as is the case with tubes and perfumes.

“The formulas are made using the minimalist concept, not containing what is unnecessary, being highly green, using products from renewable sources, and seeking the greatest percentage of green products in their formulas,” said Penelope.

She explains that the Ekos line follows the same sustainability principles as the remaining Natura line and its great differential is appreciation of traditional culture. In a nutshell, in that line, the company uses bio diverse ingredients that are part of the culture of communities. It tells consumers the stories of these people – who work with cashew and passion fruit, among others.

Some green product developments were the result of a request by one buyer, Walmart. This year, the retail chain promoted the second edition of its Point to Point Sustainability Program, in which it requested that 13 of its suppliers, most already with successful sustainability programs developed, make products with lower environmental impact.

The result was the release of more sustainable products like Veja Perfume Sensações and Danoninho 360 grams, mentioned above, as well as others like Guaraná Antarctica 2 liters, by Ambev, with a package using recycled raw material, and L’Oreal shampoos, conditioners and creams with 21% lighter packages.

Less Is More

Environmentalists recognize these activities, but believe that the industry still needs greater environmental engagement. “More and more products are being made with less material and energy,” said the coordinator of the Social and Environmental Economics Nucleus at the University of São Paulo (USP), Ricardo Abramovay.

He believes, however, that the sector must go ahead and be responsible for its products. “The food industry is responsible for the high rates of obesity in the United States, and the auto industry is responsible for the difficult mobility in cities,” he said, at the Ethos Conference, in São Paulo.

Abramovay stated that the innovation systems in Brazilian industry are not turned to the reduction of energy and materials. “There is another initiative,” he said, regarding the release of products. According to the economist and professor at the Federal University of Pernambuco (UFPE), Clóvis Cavalcanti, Brazil still has much to progress to become environmentally sustainable in the sectors that command the economy.

“It is necessary to reduce waste, increase energy efficiency, economize resources, stop deforestation, etc. All of this requires understanding the part played by ecology in the economic process,” said Cavalcanti.

Cavalcanti mentions two countries, Switzerland and Germany, as examples of places where consumers take into consideration how green products and services they consume are. In Brazil, this share of the population is still small.

Penelope, from Natura, explains that in France, where the company has a shop, the demand for products in the Ekos line is great due to sustainability. In Brazil, it is different.

“People know that the Ekos line comes from nature, but do not know it has these sustainable characteristics, They may know, but this is not the main reason for buying. The main reasons are the functional benefits,” she says, adding that some layers of society already buy due to these causes.

Marco, from Suzano, also said that calculating the carbon footprint or emissions of pollutants, for example, are new to Brazil, and not to Europe.

“In Europe, this scenery is already more consolidated and there are several certified products. If companies mobilize, Brazilian consumers will also start adopting this attitude in the near future,” said the executive.

Environmentalists and economists specialized in the area state that, despite the creation of more sustainable products, it is necessary to reduce consumption, mainly in developed nations.

Anba

Between November 7 and 8, the Government of the state of Bahia, companies and social movements attended a seminar where the impacts of eucalyptus plantations in the south region and extreme south areas of the state were discussed.

After hearing reports on environmental crimes, the social organizations requested the suspension of the planting of eucalyptus until an economic-environmental zoning of the region is completed.
 
Held in Porto Seguro, the event was organized by the state government. The seminar is a result of claims made by movements that for many years have been reporting abuses of companies that produce cellulose in the region (the Aracruz, Suzano and Veracel companies).
 
About 300 people attended it – most of them representatives from unions, rural settlements and camps, indigenous peoples, descendants of runaway slaves, and members of the Pastoral Land Commission (CPT), the Landless Movement, Cepedes (Research and Development Center of the Extreme South of the state of Bahia), Cimi (Indianist Missionary Council) and other organizations.
 
In the beginning of the event, technical experts from the Environment Secretariat presented data confirming that the companies had been committing irregularities. For example, the companies mention environmental reserves in their documents that do not exist in fact.

The representative of the Federal Prosecutor's Office, Sérgio Mendes, confirmed the reports and said that the MPF (Federal Prosecutor's Office) is already taking measures to prevent these environmental crimes.
 
The eucalyptus plantations were also criticized by the representative of the region's municipalities. The environment secretary of the municipality of Itapebi stressed that the Veracel company built a factory where there was a village. "The companies arrive there making job promises but never make them good," he recalled.
 
Father José Koopmans, who has been researching problems caused by eucalyptus plantation in the region for 20 years, stressed other impacts caused by this monoculture, such as the displacement of traditional communities (indigenous, descendants of runaway slaves, etc.), disappearance of street fairs, drying up of rivers, and diseases caused by pesticides.

In an emotional tone, he demanded a position from the government, which should take the claims of indigenous peoples seriously.
 
In addition to requesting the suspension of eucalyptus planting activities, the 35 social organizations which attended the seminar submitted several claims to the government, such as claims for the demarcation of indigenous lands and of lands of descendants of runaway slaves in the region, land reform, and support to family agriculture.
 
Cimi

Concurrent with this change, Barry Engle becomes president, Ford Mercosur and Ford Brazil. He will report to DiMarco. The changes are effective immediately.

Louise Goeser remains president, Ford of Mexico, and like DiMarco will continue to report to Mark Fields, executive vice president and president, The Americas. William Osborne remains president, Ford of Canada and will report to DiMarco.

Antonio Maciel Neto resigns his position as president of Ford South America to join Suzano Papel e Celulose as its new CEO. His resignation will be effective May 3. Maciel will remain to ensure a smooth transition during the realignment of the region.

"I came to Ford to be part of the most important automotive turnaround in Brazil history and we’ve accomplished that," Maciel said. "We have a great team in place at Ford to continue the success we started. I am now ready to take on a new challenge."

In his new role, DiMarco will oversee diverse business operations in South America including product development, more than 500 dealerships, multiple car and light truck manufacturing plants, and the only wholly owned commercial truck operation in Ford Motor Company.

He assumes leadership of South America to focus on the strategic planning for the region, including developing plans to further increase market share and profitability. In addition, he will oversee operations in the Andina region.

From 1999 to 2005, Ford South America has accomplished one of the most successful business turnarounds in the region. For the past nine quarters, Ford has been the most profitable automotive company in South America.

Previously, DiMarco was executive director, Operations Support and Finance and Strategy for Canada, Mexico and South America. Prior to that assignment, DiMarco was finance director for the North America Labor Negotiations team.

He has also served as chief finance director of International Operations, including New Markets and the Asia-Pacific region. DiMarco joined Ford in 1973 as a financial analyst and also has held significant positions in North American Sales and Service Operations and Manufacturing. In addition, DiMarco previously worked in South America as finance controller for Autolatina in Brazil.

"With Dom’s overall broad experience in international markets, and more recently in Canada, Mexico and South America he will bring a business and leadership perspective that moves Canada and South America forward," said Fields.

In his new position, Engle will be responsible for all Mercosur operations, including Brazil, Argentina, Paraguay and Uruguay, plus the markets of Chile, Bolivia and Peru. Engle returned to Ford Brazil in September 2005, having previously served as the director, Marketing, Sales and Service, Ford Brazil from 2001 to 2003.

Engle’s career has included a variety of international management experiences; prior to his return to Brazil he was director and general manager, Worldwide Direct Market Operations with responsibility for export operations in 116 markets around the world.

Previously, Engle was director, North America Product Strategy and Planning, a position to which he was appointed in December 2004. Prior to that, he had been General Marketing Manager, Ford Customer Service Division. Engle also has first-hand automotive retail experience, having been a dealer himself.

Engle joined Ford in 1992. He held a variety of marketing and sales positions representing Ford Division, Lincoln Mercury, and Mazda in the United States, Mexico and Japan.

"Barry is an innovative leader, which has been reinforced in his short tenure as president, Ford Brazil. I look forward to working with him even more closely to shape the direction of the commercial operations across the region," said DiMarco.

Maciel joined Ford Motor Company in July 1999 as president of Ford Brazil. In October 2003, he was named president of Ford South America Operations.

Maciel was elected a corporate vice president in October 2004. During his tenure he led the successful regional business turnaround and prepared the business for sustained profitability.

"Maciel has made a significant contribution to the Ford Motor Company global business through innovations in product, business and marketing strategies. We wish Maciel well in his new role and thank him for his work at Ford Motor Company," said Fields.

Maciel at Suzano

Suzano Papel e Celulose, one of Latin America’s largest integrated producers of pulp and paper, announced its new CEO. Antonio Maciel Neto, currently president of Ford South America Operations and a Ford Motor Company vice-president, will succeed Murilo Passos as CEO of Suzano Papel e Celulose.

Mr. Passos has been preparing his succession since 2004. With the restructuring of the Company’s organizational model into Business Units since the beginning of this year, and with the launch of the Mucuri pulp plant expansion project, his mission has been completed successfully, and the conditions for him to take over new strategic functions in the Suzano group are in place.

David Feffer, Chairman of the Board of Suzano Papel e Celulose, said: "The process of choosing the successor to Murilo Passos as CEO of Suzano Papel e Celulose is an important step in the organization’s development, and is the direct result of the Company’s professionalization process – in which Mr. Passos played a vitally important role, taking part in the management and development of the group’s pulp and paper operations since 1993.

He built a solid base for the sustainable growth of our business and prepared the Company for the development of new leaders, focused on the market and on transparency. This has been a period of significant increase in the value of our shares, which are now at their highest-ever market price."

In the functions that he held in recent years at Ford, Antonio Maciel Neto was responsible for five plants and more than 500 dealerships around South America. His responsibilities also included strategic planning for the region, and developing plans to increase the market share and profitability of Ford South America Operations.

Previously, he held other important positions, such as Deputy State Secretary of the Brazilian Industry and Trade Ministry, CEO of Cecrisa, and President of the Itamarati Group. He also worked for Petrobras for 10 years.

Suzano Papel e Celulose is one of the largest vertically integrated producers of eucalyptus pulp and paper in Latin America, with pulp production capacity of 1.1 million tons/year and paper production capacity of 820,000 tons/year.

It offers a broad range of pulp and paper products for the domestic and international markets, with leadership positions in key Brazilian markets. It has four product lines: eucalyptus pulp; uncoated woodfree printing and writing paper; coated woodfree printing and writing paper; and paperboard.

Suzano Papel e Celulose indirectly owns 50% of the controlling interest in Ripasa S.A. Celulose e Papel, which produces pulp, printing and writing paper, specialty papers, paperboard and cardboards.

Ripasa’s 2004 net sales were R$ 1.4 billion, from sales of 612,000 tons of products. It has four industrial units in São Paulo State, and forest areas totaling 86,400 hectares.

Ford Motor Company – www.ford.com
Suzano Papel e Celulose – www.suzano.com.br

Brazil’s Bovespa Index fell 42.46 points, or 0.11%. Mexico’s benchmark Bolsa Index dropped 198.20 points, or 1.04%, while Argentina’s Merval Index inched up 3.98 points, or 0.23%.

Brazilian stocks slipped on continued profit taking and worries about rising inflation and interest rates in the U.S. Data released today showed that the U.S. unemployment rate fell to a 5-year low of 4.7% in January, while payrolls logged a robust gain of 193,000, suggesting the economy is on solid footing.

Also, average hourly wages rose more than expected, adding to concerns about mounting inflation. The data fueled concerns that the Federal Reserve may be forced to continue its interest-rate hiking campaign longer than expected in a bid to contain inflation. Higher U.S. interest rates tend to divert investment away from emerging markets like Brazil.

Closer to home, São Paulo’s Fipe research foundation said consumer inflation in São Paulo was 0.5% in January, up from a rate of 0.29% in December but below expectations of a rate between 0.55% and 0.70%.

Meanwhile, Brazilian Central Bank President Henrique Meirelles said Brazilian inflation is moving toward the government’s targets, which should allow the country to reduce interest rates in real terms.

"Overall, prospects for 2006 are excellent. The year 2006 will be one of rising incomes and rising consumption for Brazilians," he said, adding that "inflation rates will tend to converge toward government targets over the next several years."

In corporate news, paper and pulp company Suzano has secured 2.4 billion reais in financing from the government-controlled Brazilian Development Bank (BNDES), for its Mucuri pulp project in southern Bahia state, the BNDES said.

A Brazilian court late yesterday struck down an injunction won by CVRD upholding a decision by antitrust officials in a case involving approval of CVRD’s purchase of several smaller mining companies.

In research, a major investment bank downgraded bank Nossa Caixa to "neutral 2" from "buy 2," citing valuation. "The stock’s recent strong performance has trimmed upside potential to our target price of 55 reais (US$ 24.77)," the bank said.

On the earnings front, meatpacker Perdigão SA reported a fourth-quarter net profit of 109.1 million reais, up from 84.3 million reais a year ago. Results were helped by an increase in exports and higher domestic sales.

In other news, Brasil Telecom Participações said it has cut 12% of its workforce as part of a move to increase efficiency by combining the marketing and the sales force of the fixed-line, mobile and broadband departments.

Elsewhere, Mexico’s bolsa sank, amid heightened concerns about inflation in the U.S. A mixed batch of corporate news was also in focus.

Shares soft drink bottler Arca fell after the company said it plans to enter the processed food business through a stake in Mexican food group Herdez. A brokerage lowered its recommendation on Arca following the news.

An influential investment bank upgraded Banorte to "buy" from "neutral," citing an attractive valuation and a solid earnings outlook. The bank added Banorte to its model Latin American portfolio today.

Argentine issues edged up, as investors digested the latest local inflation data. The national statistics agency reported that Argentine consumer prices rose 1.3% in January from December, in line with expectations.

Thomson Financial – www.thomsonfinancial.com

Brazil’s Bovespa Index added 102.04 points, or 0.27%. Mexico’s benchmark Bolsa Index rose 255.28 points, or 1.35%, while Argentina’s Merval Index dropped 46.82 points, or 2.61%.

Brazilian stocks edged cautiously higher, as investors continued to assess the implications of Tuesday’s (January 31) suggestion by the U.S. Federal Reserve that additional interest-rate hikes may be on tap.

Some investors are concerned that further U.S. rate hikes at a time when Brazilian rates are falling could divert funds away from Brazilian bonds and stocks into U.S. treasuries.

At the same time, however, a number of analysts have been bullish on the market’s prospects this year given expectations of solid local economic growth and further interest-rate cuts.

Adding to optimism about the Brazilian economy, the Ministry of Development, Industry and Foreign Trade said today that Brazil posted a sizeable US$ 2.84 billion trade surplus in January, meeting market estimates, which ranged from US$ 2.6 billion to US$ 3.0 billion.

The result was up from a year-earlier surplus of US$ 2.19 billion but below December’s surplus of $ 4.35 billion. January exports totaled US$ 9.27 billion, while imports totaled US$ 6.43 billion.

On the corporate front, paper and pulp company Suzano said it will invest US$ 690 million in 2006 in its Mucuri pulp project in southern Bahia state.

In earnings news, telecom carrier Tim Participações SA, a unit of the Telecom Italia, reported a fourth-quarter net profit of 145 million reais, up 74% from 83.4 million reais in the year-ago period. Results were helped by a 32.8% increase in its client base and tight cost controls.

Separately, the board of Tim Participações approved the incorporation of Tim Celular as its subsidiary, in a move that will organize all of Telecom Italia’s Brazilian assets under a single structure. Pending completion of the move, the company will operate under the name of Tim Brasil.

Meanwhile, a major investment bank downgraded mining company Caemi to "peer perform" from "outperform," citing a plan by controller Vale do Rio Doce to fully absorb Caemi. "Regulatory approval is still pending, but we do not foresee any issues … We are not aware of any legal basis for Caemi shareholders to block the deal," the bank said.

In other research, an investment bank upgraded utility Eletropaulo to "outperform" from "peer perform," citing an attractive valuation and strong growth prospects.

Elsewhere, Mexico’s bolsa posted solid gains, as investors were emboldened by a rise in U.S. stocks amid a sharp drop in oil prices and stronger-than-expected earnings from U.S. aerospace giant Boeing.

In local corporate news, Mexican mining and railroad company Grupo Mexico SA said it plans to list shares in its transport unit ITM upon receiving antitrust clearance for last year’s rail merger. The company added that it is confident that Mexico’s Federal Competition Commission will approve the merger. Grupo Mexico’s stock rose today, as investors continued to cheer the company’s upbeat earnings news yesterday.

Meanwhile, AeroMexico ordered six new generation B737 planes from Boeing Co. The order, due for delivery in 2007, is valued at US$ 372 million.

Argentine issues dropped, as investors took profits following a five-day run-up in the market. Among the movers, flat steelmaker Siderar tumbled as investors cashed in some of the stock’s recent strong gains ahead of new holding company Ternium’s listing of ADRs in the U.S. Ternium, which is owned by local conglomerate Techint, said late yesterday that its ADRs priced at US$ 20 apiece, above price talk of US$ 16.50 to US$ 18.50.

Also, Petrobras Energia Participaciones dropped after saying it would take a charge of 170 million pesos against its 2005 earnings.

Thomson Financial – www.thomsonfinancial.com

Mexico’s market was supported by strength in mining shares, while upbeat trade data boosted Argentine equities.

Brazil’s Bovespa Index added 140.76 points, or 0.37%. Mexico’s benchmark Bolsa Index rose 57.86 points, or 0.31%, while Argentina’s Merval Index jumped 22.42 points, or 1.27%.

Brazilian stocks ended modestly higher, but enough to guarantee a second day record high, as investors assessed the outcome of the U.S. Federal Open Market Committee’s meeting today.

Trading was choppy after the Federal Reserve raised interest rates by 25 basis points and signaled that further rate hikes may be in the offing.

The FOMC said inflation was low and the outlook remained contained; however, it added that slack in the economy was disappearing, which could add to inflationary pressures.

In addition, it specified that further rate increases "may be needed," backing off a December statement that they would "likely" be needed. It also removed language that further rate hikes would be "measured."

Some investors are concerned that further U.S. rate hikes at a time when Brazilian rates are falling could divert funds away from Brazilian bonds and stocks into U.S. treasuries.

In local economic news, the São Paulo Federation of Industries, or Fiesp, said industrial activity in São Paulo state rose 1.8% in 2005 from the previous year. In December, industrial activity rose a seasonally adjusted 1.4% from November.

On the corporate front, paper and pulp giant Suzano Papel e Celulose reported a fourth-quarter net loss of 2.99 million reais, reversing a year- earlier net profit of 136.3 million reais. Results were hurt in part by continued appreciation of the real against the U.S. dollar in 2005.

The company noted that it remains concerned about the real’s strength. "At current foreign exchange rates, imports (of paper and pulp) into Brazil are viable, putting pressure on the domestic market," the company said.

Meanwhile, a brokerage raised its price target on Vale Do Rio Doce to US$ 55 from US$ 42.

Elsewhere, Mexico’s bolsa posted modest gains, helped by strength in mining issues, as gold and silver prices hit fresh multi-year highs. The National Statistics Institute said Mexico’s silver production rose 11.7% in November from a year earlier, while gold production jumped 75.2%.

In other data, the Finance Ministry estimated that the country’s economy expanded about 3% in the fourth quarter from a year earlier, as growth was limited by damage from Hurricanes Stan and Wilma on the agricultural sector. The Finance Ministry reiterated its full-year GDP forecast of 3.0%.

Separately, the Finance Ministry said late yesterday that Mexico ended 2005 with a fiscal deficit of 7.5 billion pesos, equivalent to 0.09% of gross domestic product, which is down from 0.25% of GDP in 2004.

In corporate news, a major investment bank upgraded Mexican mining company Grupo Mexico SA to "outperform" from "peer perform," saying the company is its "preferred way to invest in Latin American copper."

Argentine issues jumped, extending recent gains, as investors were cheered by upbeat trade data for December. In economic news, Argentina posted a trade surplus of US $1.033 billion in December, up from US$ 854 million a year earlier, on a 19% year-on-year increase in monthly exports. However, the full- year surplus narrowed to US$ 11.321 billion in 2005 from US$ 12.105 billion the prior year, despite improved exports.

Thomson Financial – www.thomsonfinancial.com

Brazil’s Bovespa Index rallied 831.71 points, or 2.93%. Mexico’s benchmark Bolsa Index jumped 82.26 points, or 0.56%, while Argentina’s Merval Index surged 20.42 points, or 1.30%.

Brazilian shares strongly recovered from yesterday’s deluge of losses. Bargain hunters were active, and investors ignored an economic indicator pointing toward higher inflation.

The Brazilian Census Bureau announced that the IPCA-15 rose 0.56% in the September 13 to October 11 period, up from 0.16% in the August 12 to September 12 period. The most recent advance was due to rising fuel prices.

In earnings reports, Brazilian phone firm Brasil Telecom posted a third-quarter net loss of 25.1 million reais, reversing a year-earlier net profit of 85.2 million reais in the corresponding period a year earlier. The most recent result was beneath the average analyst target. Still, net revenues climbed to 2.58 billion reais from 2.36 billion reais.

Meanwhile, paper and pulp producers suffered from the real’s appreciation against the greenback in the third quarter. Suzano’s quarterly profit fell to 153.2 million reais from 262.6 million reais last year. Revenues climbed to 756.3 million from 707.4 million reais.

Separately, Klabin said that its third-quarter net profit tumbled 52% to 64.7 million reais from 135.1 million reais a year ago. Net revenues fell to 650 million reais from 738 million reais, while EBITDA receded to 154 million reais from 282 million reais.

Elsewhere, state-controlled oil firm Petrobras said that it is considering reviving plans to construct a 5 billion reais pipeline to transport crude from the Campos Basin to Sao Paulo state refineries, according to news reports.

Also, the U.S. Department of Commerce eliminated an antidumping tariff brought against hot-rolled coils produced by CSN Steel.

Mexican stocks also shared in today’s regional recovery, thanks to a mix of bargain hunting and upbeat earnings and economic news. Also, Grupo Carso’s building unit Cicsa was active on its first day of trade.

On the economic front, the National Statistics Institute said that retail sales jumped 5.6% in August from a year ago, and climbed 0.63% from July on a seasonally adjusted basis.

Cement titan Cemex said that its third-quarter net profit nearly doubled to US$ 675 million from US$ 361 million a year ago. The most recent result was bolstered by higher sales from acquisitions and financial gains from its derivatives positions. Sales more than doubled to US$ 4.3 billion, while operating profit leapt 56% to US$ 771 million.

Argentina finally reversed three-straight session declines and turned positive ahead of this Sunday’s congressional elections. First Lady Cristina Kirchner is running for a Senate seat in Buenos Aires province, which could strengthen President Kirchner’s mandate.

Thomson Financial Corporate Group – www.thomsonfinancial.com

Meanwhile, Brazil was not alone in pressuring the region, as Mexico and Argentina also tumbled. Brazil’s Bovespa Index plunged 953.03 points, or 3.25%. Mexico’s benchmark Bolsa Index tumbled 290.85 points, or 1.92%, while Argentina’s Merval Index receded 28.90 points, or 1.80%.

In the headlines, Brazil’s Central Bank cut the Selic base interest rate by 50 basis points to 19.0%. In other economic reports, the Getúlio Vargas Foundation said its Brazilian General Price index, or IGP-M, advanced 0.61% through October 20, compared to a decline in prices of 0.54% in the corresponding period last month.

Meanwhile, the IPCA consumer price index rose 0.35% in September, compared to a 0.17% advance in August. The most recent result brought inflation year-to-date to 3.94%, which is below the official 2005 target of 5.1%.

Meanwhile, paper and pulp producer Suzano said that its board authorized the firm’s plans to construct a new US$ 1.3 billion cellulose unit at its Mucuri plant in the northeastern state of Bahia.

The plant is scheduled to start production by the end of 2007 with an initial production capacity of 120,000 tons of cellulose that is anticipated to rise to 1 million tons of cellulose by 2009.

Mexican shares weakened alongside the demise in U.S. shares. U.S. leading indicators disappointed last month, which is not a healthy indicator for Mexico, as the country exports the vast bulk of its goods to its northern neighbor.

In U.S. economic reports, the Philly Fed index showed a rebound in manufacturing activity in the Philadelphia region in October, but also a rise in inflationary pressures. The prices received index, a component of the survey, shot up to 36.2 from 8.6, the highest level in a year.

Also, a gauge of future U.S. economic activity declined in September for the third month in a row, indicating slower growth for the rest of the year, the Conference Board said. Its index of leading economic indicators fell 0.7% in September, as the impact of the hurricanes in the Gulf began to be filter through.

On the earnings front, conglomerate Alfa SA said that asset sales and better operating performance within continuing operations helped boost the firm’s third-quarter net profit to 3.76 billion pesos from 1.14 billion pesos a year earlier.

Sales leapt to 17.4 billion pesos from 15.19 billion pesos, while operating profit was 1.69 billion pesos, compared to 1.39 billion pesos.

Elsewhere, Desc posted a third-quarter net loss of 14.1 million pesos, reversing a year-earlier net profit of 53.7 million pesos, as its sales declined to 5.85 billion pesos from 6.38 billion pesos. Nevertheless, operating profit rose 6.4% to 308 million pesos from 289 million pesos last year.

Meanwhile, Argentine stocks receded alongside the broader market. Investors remain cautious ahead of Sunday’s congressional elections.

In economic headlines, national statistics agency INDEC said that gross domestic product increased 8.9% on the year in August, while edging up 0.9% from July. For the eight months through August, growth was up 8.9%.

Thomson Financial Corporate Group – www.thomsonfinancial.com

Latin American stocks endured a mixed session, although gains from the heavily weighted Brazilian index pushed the broader region more toward the positive side.

A surprise revaluation to China’s currency and numerous financial releases from Brazil and Mexico were also in focus.

Meanwhile, Mexican issues turned lower alongside U.S. market weakness, as investors eyed fresh attacks on London’s transportation system. Argentine shares also declined.

Brazil’s benchmark Bovespa Index rose 137.61 points, or 0.54%, while Mexico’s benchmark Bolsa Index fell 34.17 points, or 0.24%. Argentina’s Merval Index declined 8.82 points, or 0.59%.

Brazilian issues continued to power higher amid a deluge of local and international reports. In the headlines today, investors cheered China’s sudden announcement that it will stop pegging the yuan to the U.S. dollar and will now let it trade within a 0.3% band against a basket of foreign currencies. The change is scheduled to take place tomorrow.

Also supporting local issues was another decline in crude oil prices, as Brazil is a net importer of the commodity. Yesterday, the U.S. Energy Department reported smaller-than-expected declines in inventories.

Also, a strengthening yuan would make Chinese exports more expensive, which could cool down the region’s economic growth. The potential result could be less demand for oil from China, which could pressure crude oil prices further.

In economic headlines, Brazil’s central bank kept the reference Selic rate unchanged at 19.75%, as expected.

Separately, the Brazilian Census Bureau, or IBGE, reported that the official jobless rate plunged to 9.4% in June from 10.2% in May. June’s result also came in below analyst expectations.

Meanwhile, earnings season is well under way. Brasil Telecom posted a 35% jump in its second-quarter net profit to 69 million reais from 51.1 million reais a year ago.

Revenues advanced 16.7% to 2.53 billion from last year, although EBITDA declined 10% to 827.6 million reais from 921.9 million reais due to higher interconnection costs and handset subsidies to compensate for fierce competition. The firm expects revenue growth for the year to be in line with the 14% advance seen in 2004.

Suzano Paper and Pulp said that the local currency appreciation against the greenback helped boost its second-quarter net profit to 258.4 million reais from 88.2 million reais. Still revenues and EBITDA fell modestly from a year ago.

Mexican issues retreated mildly following another set of record high closings on Tuesday and Wednesday. The Chinese yuan revaluation could make it easier for countries like Mexico to compete with China in exporting to the key U.S. market.

On the economic front, the National Statistics Institute, or INEGI, said the unemployment rate in June rose to 3.6% from 3.3% in May.

In earnings headlines, cement titan Cemex said its recent acquisition of RMC bolstered its second-quarter results. The firm said its net profit surged to US$ 733 million from US$ 247 million a year ago, as sales leapt to US$ 4.38 billion from US$ 1.95 billion.

The firm posted EBITDA of US$ 989 million, up 56% from a year ago and also raised its target for 2005 EBITDA to US$ 3.6 billion from US$ 3.5 billion.

Homex, meanwhile, said its second-quarter net profit jumped to 219.6 million pesos from 80 million pesos, as sales advanced to 1.57 billion pesos from 1.05 billion pesos.

Grupo Mexico said that stronger metals prices helped boost its second-quarter net profit to US$261 million from US$197.5 million on sales of US$1.30 billion, a 31% jump from a year ago.

Argentine shares continued to decline amid low volume. The country’s central bank said in its third-quarter inflation report that “the possibilities of achieving the indicated maximum target of 8% projected for this year are diminished.” A resurgence in consumer prices is partly to blame.

Thomson Financial Corporate Group – www.thomsonfinancial.com

Brazilian company Votorantim Celulose e Papel S.A., one of Latin America’s largest producers of pulp and paper, announced today that it has completed acquisition, jointly with Suzano, of a controlling stake in Ripasa S.A. Celulose e Papel.

On November 10, 2004, VCP and Suzano signed an agreement to buy the common and preferred shares in Ripasa directly and indirectly held by Ripasa’s controlling stockholders.

In today’s acquisition, 129,676,966 common shares and 41,050,819 preferred shares in Ripasa, representing 77.59% of the voting stock and 46.06% of the total stock, were transferred, on an equal basis, to VCP and Suzano, for a total amount of US$ 549.15 million.

A purchase option was also signed for the sale of 37,449,084 common shares and 12,388,719 preferred shares, totaling 22.41% of the voting stock and 13.45% of the total stock, to be exercised within six years, for a total amount of US$ 160.31 million.

Suzano and VCP say they will continue to be competitors in the markets in which they operate, preserving the independence of their activities.

Jose Luciano Penido, VCP’s Director-President said: “This transaction represents an important step for VCP’s consolidation in the world pulp and paper market.

“It confirms our leadership position in the domestic market for papers and increases our competitiveness as one of the lowest-cost producers of pulp. We are enthusiastic about this opportunity and certain that it will add value for our stockholders.”

“We are implementing the Company’s sustainable growth strategy, confirming that we are attentive to opportunities both for organic growth and also for growth via mergers and acquisitions, as a focus on VCP’s planning for the year 2020,” Mr. Penido said.

VCP is one of Latin America’s largest companies in the pulp and paper sector, focusing on market pulp, and printing papers. It is listed on the São Paulo and New York Stock Exchanges.

It has implemented an expansion plan which has increased its production capacity: for pulp, to 1.42 million tons, and for paper, to 685,000 tons.

Ripasa, listed at Corporate Government Level I on the São Paulo Stock Exchange (Bovespa), produces pulp, printing papers, writing papers, specialty papers, paper board and cardboard.

It has been operating in the sector for more than 45 years, directly employing more than 2,700 people, and is Brazil’s seventh largest producer of pulp, its fourth largest producer of writing papers, and its second largest producer of cardboard. 

Votorantim Celulose e Papel S/A
www.vcp.com.br

Ripasa S.A Celulose e Papel
www.ripasa.com.br

PRNewswire