
The impacts of global supply chain disruptions on Brazil

The disruptions of global supply chains due to COVID-19 and Russia’s war in Ukraine are generating strong inflationary pressures as well as business opportunities for Brazil and the rest of Latin America, according to experts.
"Today, all sectors are suffering from disruptions in their supply chains, forcing companies to look for solutions locally. In view of this, we’re looking to invest in companies with the capacity to be part of these local chains, to serve the infrastructure and sanitation sectors," Karla Bertocco, a partner at Brazilian asset management firm Mauá Capital, told BNamericas during the Brazil Investment Forum, held June 14-15.
"This scenario was unthinkable a few years ago, as companies only thought about buying goods directly from Asia," added Bertocco, who is a former head of São Paulo state sanitation firm Sabesp.
The creation of local supply chains will however not be an easy task for some sectors.
"The demand for semiconductors has increased a lot around the world, causing several bottlenecks. Developing a semiconductor industry in Brazil will only be viable through an industrial policy and regulatory changes,” Igor Calvet, president of the Brazilian industrial development agency (ABDI), told BNamericas at the same event. “I don't see a short-term solution for us to develop a chain of local semiconductor suppliers."
The global supply chain problem is also on the radar of key policymakers.
"I think the global economy will get much worse still, because inflationary pressures tend to be persistent and a global economic recession seems to me the most likely scenario. However, if there is a positive side to it, I believe that Brazil and Latin America have a chance to insert themselves more into the global [supply] chains in this new era," Brazilian economy minister Paulo Guedes said at the forum.
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