Written by Dr. Ricardo M. Castelhano
 

At the end of the first half of 2014, thereover ten years ago, one dollar costed R$ 2.20 (real, the Brazilian currency). Currently cost R$ 4.46.

At the turn off lights on first semester 2024 the US$ 1,00 costed around R$5.65.

So, it let me think about the domestic production could be at a more competitive level if we have policies more in favor of production Made in Brazil. However, with the exchange rate at the current level, it's already enough to put your head above water.

Just on fasteners, the importers sold US$1.053 billion to Brazil in 2022; US$977 million in 2023 and US$533 million in the first half of this year. And since one more dream doesn't hurt, imagine an inversion that leads us to produce, let's say, 20% of that over here.

We can consider the fasteners production overseas has keeping at continuous dynamic because the industrial policies of that countries, especially the Asiatic, work more in favor than against the local producer. And with less hostile taxation, simpler paths to financial access, as well as in the acquisition of new and more modern machines, for example, productivity will make all the difference, in addition to the fact that some players such as China have high production scales, which drastically reduces the configuration.

In any case, the immediate effect of the exchange rate works as a shield to protect local manufacturing, but you can't count on a glass shield, which is therefore of limited resistance. “But that's what we have for today.”

Dr. Ricardo M. Castelhano is the Jomarca Fastener Manufacturer CEO,
a Brazilian company with more than 900 employee and capacity to produce 5,0 thousand ton per month
ricardo@jomarca.com.br