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.
Photo: Reuters
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.
Thirty-eight-year-old Gerson Alcantara, who has been unemployed for six months, was one of the people in line from the early hours of the day.
He has already worked as a security officer and a driver, but said he would take any job he is offered. He is not hopeful about the future, though.
“The crisis has gotten a lot worse,” Alcantara said.
Asked if the approval of a pension reform by Congress would make the country’s economy recover, he was skeptical.
“That will only improve things for the rich,” Alcantara said.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his