Thu, Mar 28, 2019 - Page 10 News List

Roche latest to add to Brazil’s economic woes


Passengers check in at the counters of airlines Avianca and Azul at Santos Dumont airport in Rio de Janeiro, Brazil, on March 11.

Photo: Reuters

Swiss pharmaceutical company Roche Holding AG on Tuesday said that it would stop producing medicines at its Rio de Janeiro unit in Brazil, a new blow to a country whose economy appears to be in its most sluggish decade in 120 years.

Roche said the move would take place within the next five years because that factory is not financially sustainable.

Several big businesses have shown concerns about the future of the once booming Brazilian economy. The South American nation has hit strong headwinds since 2014, with few encouraging signs of a recovery since Brazilian President Jair Bolsonaro took office on Jan. 1.

Roche said the layoffs in Rio would begin next year. Its medicines in the South American country would be imported once the manufacturing unit is shut down and the company would keep its administrative units in Sao Paulo and Goias states.

The company employs 1,200 people in Brazil, including 440 at the Rio factory. The unit produces drugs like anti-anxiety medicines Lexotan and Valium, tranquilizer Rivotril and sedative Dormonid.

Also on Tuesday, airline Avianca Brasil, which filed for bankruptcy in December last year, announced the shutdown 21 of its routes next month and closure of its office at Rio’s international airport.

Last month, automaker Ford Motor Co closed its truck factory in Sao Bernardo do Campo, outside Sao Paulo.

More than 3,200 people worked in that operation when the announcement was made and most of them are expected to be laid off in November.

Authorities are trying to find a buyer for the plant, but have failed so far.

Workers at the Volkswagen plant in the same city accepted a cut in their benefits just to keep their jobs, a rare move that the local union agreed with.

Several other companies in financial difficulties have suggested they will not make big investments anytime soon, including companies that in 2017 promised to make new hires because of more flexible labor laws approved by the Brazilian Congress.

The Getulio Vargas Foundation think tank on Monday published a study saying the average growth of the Brazilian economy from 2011 to next year could be the worst since it started measuring in 1901, at 0.9 percent a year.

From 2011 to last year, it averaged 0.6 percent growth.

The once-bullish Sao Paulo stock market is now jittery about prospects for a major overhaul of the pension system meant to help the economy improve.

Bolsonaro backs the measure, which would delay or trim benefits for tens of millions of people, but it faces increasing resistance in Congress.

Economist Andre Perfeito said in a research note to clients that “the longer Brazil’s economy remains weak, the more difficult it will be for Bolsonaro to get the reform approved in Congress.”

The Brazilian government has boasted that last month’s job figure is a sign a that recovery could come after all.

More than 173,000 jobs were created, it said, the best figure in five years. Still, almost 13 million Brazilians are unemployed, according to government figures.

The economic crisis is often dramatized in the shape of colossal lines outside job centers in major cities any time new openings appear.

More than 15,000 people showed up at a center in Sao Paulo after 6,000 jobs were announced. The positions offered included telemarketing operator, salesman and supermarket cashier.

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