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Brazil has broken some impressive records in its time. It has been home to the world's oldest person, largest rainforest, 32nd least comprehensible tax system, highest number of plastic surgeons per capita, most overvalued currency, and biggest Japanese community outside Japan. On Wednesday, it broke one more.
Braskem, Brazil’s biggest petrochemical company, announced it had sealed a deal to become the biggest producer of polypropylene in the United States. (Polypropylene is a chemical used to make everything from DVD cases to thermal underwear).
Although this latest feat is unlikely to get many pulses racing -apart from those perhaps of Braskem's shareholders – it marks an important achievement for the Latin American country. Braskem only paid $323m for Dow Chemical's polypropylene unit, including two plants in Texas and two in Germany, giving the company an extra capacity of 2.3bn pounds per year. The acquisition will allow Braskem to both source its raw materials locally and supply new clients based in the US and Europe.
It is the latest in a series of deals whereby Brazilian companies have taken advantage of depressed asset prices to expand abroad, relying not on increased exports but rather on greater production outside Brazil.
In April, state-run Banco do Brasil managed to buy a whole bank in Florida for just $6m. The new outpost in the US will allow the lender to extend it services to Americans as well as Brazilian expats. After living in the shadow of the US for centuries, the Latin American country finally seems to have the upper hand.
However, it is worth remembering that the weak dollar has also played a role here. On Wednesday, Brazil's government unleashed a series of measures to help bring the real down from a 12 year high against the dollar.
Industrial groups have long complained that the strength of the local currency has reduced their competitiveness abroad. But the example of Braskem, an industrial company itself, shows that the strong real also has its benefits.
The real has appreciated 8 percent against the dollar this year or, in other words, Dow Chemical's polypropylene unit would have been 8 per cent more expensive in January.
In pure currency terms, US assets are the cheapest they've been in over a decade for any company generating revenue in reais. Record highs for the real, it seems, by no means spell the end of Brazilian companies' global ambitions.
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