In the 1950s, Japan helped Brazil establish industries such as steelmaking and initiated key purchases of Brazilian iron ore. Now the Asian nation is seeking to regain influence in Latin America’s largest economy, where China is the No. 1 trading partner.
Japan has signed deals from energy to food and health care during Prime Minister Shinzo Abe’s visit to the country, the first by a Japanese leader in a decade. Abe wants to strengthen ties with Brazil, where about 1.6 million people of Japanese descent live, as he urges his country’s companies to seek more business outside their domestic market.
Top representatives from Toyota Motor Corp., Nippon Steel & Sumitomo Metal Corp. and Sumitomo Mitsui Financial Group Inc. were among the business people accompanying Abe in Brasilia and Sao Paulo, the last destinations of a nine-day tour through Latin American and the Caribbean. Brazil is important for Japan because it has industries such as infrastructure and is a safe jurisdiction, said Yutaka Kase, the chairman of Tokyo-based commodity supplier Sojitz Corp.
“There are the conditions” to invest, he said during an interview in Sao Paulo, where he was part of the business delegation traveling with Abe. “Of course there are so many things to solve, but this is a country with more potential.”
Sojitz, which in 2011 teamed up with Japanese and South Korean steelmakers to buy a 15 percent stake in niobium producer Cia. Brasileira de Metalurgia & Mineracao for $1.95 billion, is now pursuing opportunities in agriculture and logistics in Brazil, Kase said.
Japan has in recent years lost ground in Brazil compared with European and South Korean companies in industries such as carmaking and electronics, said Luiz Fernando Furlan, Brazil’s former trade minister and board member of food processor BRF SA. The four Japanese automakers operating in Brazil combined produce fewer cars than Fiat SpA, Volkswagen AG or General Motors Co., he said.
“Japan not only lost time in relation to China but also others,” he said. “Korean and Chinese companies are leading the electronics markets in the region.”
Abe’s first visit to Brazil coincides with a slowdown of the economy and a deterioration of investors’ confidence. Economists surveyed by Bloomberg forecast the South American nation’s gross domestic product to grow 1.3 percent this year after an expansion of 2.5 percent in 2013. Japan’s economy is expected to increase 1.5 percent. (Bloomberg)
