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Apr | 2017 | N° 38
Chinese companies project investments of US$20 billion in Brazil in 201703/20/2017 | 11h30
Chinese companies intend to invest about US$20 billion in purchasing Brazilian assets in 2017, an increase of 68% compared to US$11.9 million invested in 2016, according to the Brazil-China Chamber of Commerce and Industry (CCIBC).
Charles Tang, president of the CCIBC, told daily newspaper Estado de Sao Paulo that there are dozens of Chinese companies now looking to Brazil as a place to invest and that have been analysing the Brazilian market for months.
The list of companies that intend to invest in Brazil, particularly in energy, transport and agribusiness, “there are names as yet unknown to Brazilians, including China Southern Power Grid (http://eng.csg.cn/h5.html), Huaneng (http://www.chng.com.cn/eng/), Huadian (http://eng.chd.com.cn/), Shanghai Electric (http://www.shanghai-electric.com/Pages/Index.aspx#), SPIC (http://eng.spic.com.cn/)and Guodian (http://www.cgdc.com.cn/home.jhtml).”
Although these companies have yet to arrive, others are expanding businesses they already own, most notably China State Grid which in 2016 acquired CPFL, China Three Gorges which hydroelectric plants at auction belonging to state company Companhia Energética de São Paulo and bought the assets of US group Duke Energy.
The China Communications Construction Company (http://en.ccccltd.cn/) acquired construction company Concremat Engenharia e Tecnologia (http://www.concremat.com.br/) and Pengxin (http://www.peng-xin.com.cn/eng/) bought a stake in agricultural companies Fiagril (http://www.fiagril.com.br/) and Belagrícola (http://www.belagricola.com.br/).
China’s capital flow to Brazil has been so strong, Chang said, that Brazil has become the world’s second largest destination for Chinese investments in the infrastructure sector, surpassed only by the United States.
A survey carried out by consulting firms AT Kearney and Dealogic showed that Chinese companies spent US$21 billion buying 21 Brazilian companies since 2015.
In the coming months several deals are due to be concluded, including Shanghai Electric paying 3.3 billion reais for the power transmission projects of Eletrosul Centrais Eléctricas, as well as of SPIC, which plans to buy Hidroelectrica de Santo António and CCCC, which is eyeing several assets ranging from construction companies to railways.