Looking into Brazil’s Past
The years prior to 2012 are referred to as the ‘Golden Years’ for Brazil. “Projects were up and running, and there was a major demand of valves in the new refineries. After the discovery of various government corruption scandals however, the projects that were once running smoothly went bankrupt, which eventually led to the impeachment of former President, Dilma Rousseff, in 2016,” Vitorino recalled. “My country suffered a lot in the last five years. Brazil saw not only its valve market decline, but the rest of its markets as well, which therefore negatively affected the valve market. Often times businessmen are associated with the government, so when the corruption started to be revealed, there was trust lost by the people for the businessmen, and the businessmen for the government.”
On January 1, 2019, Jair Bolsonaro assumed office as the 38th President of Brazil, representing the Social Liberal Party. “This new government and president is bringing hope to the people of Brazil and although it will take some time to see changes, as these transitions take time, I think this is going to be the year of change,” Vitorino commented. “The government has experienced resistance, but this goes to show Brazilians are paying closer to attention to what those in power are doing. Slowly, the businessmen are increasing their trust in the government, and step-by-step, this will start to increase investments again. We can see a new horizon now, not just for the oil and gas market, but for the power market as well.”
Adaptation Shows Resilience
In response to the decline of the valve market throughout the last five years, many local companies needed to adapt. These changes not only affected how business was being done, but also the acquisition of raw material, and finding the best ways to stay within the required budgets. “The companies needed to rethink how business was being done in order to stay open. Some companies had a very vertical process and were doing everything, including the manufacturing and production of the valve bodies,” said Vitorino. “These companies are now buying the valve bodies elsewhere in order to decrease costs and become profitable businesses.”
As there is an anticipation that the next couple of years are going to see a higher demand for various forms of energy, consequently, the demand for valves will also increase due to various processes requiring the use of valves.
“Companies have already received plenty of requests for quotations (RFQs), a significant amount more than last year. This is a clear sign of increased demand. Investments are starting to become a reality again,” Vitorino explained. “Procurement departments will also see this spike in demand, and will be looking through the markets to find companies offering the best quality and prices. Currently, these departments are sending the RFQs to the market in order to prepare for the real, future purchases.” From his perspective, Vitorino described this happening for all on/off valves, maintenance, and new projects. “We should clearly see the increase in demand by the end of the year’s second semester, and need to be prepared for 2020,” he added.
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