Sao Paulo based steel distributor Açovisa's commercial director Mr Andreis Bassi de Melo and marketing manager Mr Marçal dos Santos Junior told BNamericas that high power costs and industrialization slowdown are the strongest complaints coming from Brazil's steel sector, which is also suffering from infrastructure shortcomings and an extended increase in costs of raw materials.

The two said that "To stop deindustrialization we should pass a tax reform to reduce or eliminate cascading taxes, reduce our logistics costs by investing in modal transportation throughout the country, reduce interest rates and increase investment in education, improving employees' productivity quality."

On the power costs issue, the Brazilian industry reportedly pays one of the highest taxes in the world. They said that "The problem goes beyond the tax burden, as we carry the uncertainty that despite the federal government's initiatives, we might still see no solutions for short term investments."

According to the executives, as positive measures, industries are investing in energy efficiency, use of natural gas and power generation from co products of the production process. They said that "We require a permanent evolution of regulatory mechanisms, so that industries are able to pursue continuous innovation."

According to national steel institute IABr's data, Brazil's raw steel production reached a record 35.2 million tonnes in 2011 despite a decline in apparent consumption, as plants grappled with overcapacity and declining domestic prices.

Source - Business News Americas

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