In line with the recovery of the Brazilian economy (GDP is forecast to increase 3.2%), the chemicals sector is expected to grow by more than 3% this year.
Most Brazilian chemicals businesses are highly leveraged, which is also the results of previous expansion activities before the recession started in late 2014.
Payments usually take up to 120 days in the chemicals sector, with payment behaviour influenced by a business' spending capacity and behaviour.
The current economic rebound should help avoid an increase in late payment cases, and business insolvencies in the chemicals sector are expected to decrease this year.
The level of competition in the chemicals sector is high and a concentration process is ongoing – in particular among medium-sized and large players.
Most raw materials have to be imported, and production costs are therefore exposed to foreign exchange rate volatility and the looming threat of trade restrictions.
Trade receivables risk mitigation
Should your debtors fail to meet their payment obligations, Atradius Collections can help by initiating a professional collection process.
We contact debtors verbally and in writing with a proactive and objective approach. Our team of collection specialists carry out the collection process in-house, adhering to federal and state laws and focusing on maintaining the trading relationships between you and your debtors.
If third-party collections do not yield results, we would consider this approach after consulting with you. This entails enforced legal rights, including rules of evidence and rules of Civil Procedure (filing complaints, answers, serving documents on the opposition, and the laws governing that process).
Each state and municipality has its own judicial system where magistrates deal with commercial and other civil cases in the first instance. Decisions from state and municipal courts may be appealed through a federal court.