Investors queuing up to take part in the Brazil boom

04/09/2012

The outstanding economic growth in Brazil has excited investors, adding to a momentum of interest in timber plantations in the region. As unemployment hits record lows, thanks to a stable and committed government, businesses are really thriving in this tropical climate.

A $66 billion stimulus plan was announced by the Brazil government last month to further boost business prospects, ahead of the 2014 World Cup and 2016 Olympics.

Brazil is a rich source of natural resources such as timber. It’s agricultural, mining, manufacturing and service sectors are all going strong and new oil supplies have been discovered off the coast of Rio de Janeiro.

Lisa Best, Project Manager of ethical investment company, Global Forestry Investments, told IFA Magazine that the Brazilian government is committed to building on the momentum of recent years to secure the region’s future.

“Brazil is rolling out the red carpet for business,” she said. “There are plenty of investment opportunities for both Brazilian and overseas investors.

“One of the most attractive investment opportunities for overseas investors is in Brazil’s forestry and renewable energy sectors.”

Government targets include a plan to reduce deforestation by 80 per cent by 2020 and reforest 3 million hectares of land. Sustainable timber plays a large part in the local economy, as Brazilian families seek to upgrade their homes and furniture as their disposable cash increases in line with the economy. Over the past three years, 45 million Brazilians have moved into the middle class, according to IFA Magazine.

“Brazil has also been flourishing in the technology sector with an increasing number of broadband users, mobile phone owners and social media sign ups,” said Ms Best. “This has in part been due to Brazil’s rising middle classes known as “C-ers” as which has opened up a world of consumer opportunity. This ascent has led to rapid consumption with C-ers buying everything from cell phones to refrigerators, and for the first time in their lives a home.”

There will also be a greater demand for timber to build the relevant infrastructure to support the population and the upcoming World Cup and Olympics. Just like London 2012, sustainable timber will be used heavily throughout event structures and local firms will be at the head of the queue to supply that timber.

Big firms are already queuing up to back-up the Brazil boom. Apple are manufacturing the new iPad Mini in Brazil, and you can expect other big firms to follow the tech giant into the region.

“It is estimated that the World Cup and Olympics will drive more than $131billion into the Brazilian economy, leaving behind a lasting legacy of improved infrastructure, tourism and foreign investment,” said Ms Best.

Joining the queue of investors can help you to impressive returns and long-term growth. It’s not just timber to consider, either. As energy prices continue to rise, wood chips become more valuable and investing in sustainable sources for these resources should pay dividends in the future.