www.paintshow.com.br
14
Março 2010
PAINT & PINTURA
Promising measures
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As far as the paint market is concerned, the year has begun with a more than positive growth rate.
Several factors have contributed to such a promising scenario, such as the economic upturn and the
pick-up in business in general, the federal government’s Economic Growth Acceleration Program
(PAC, in Portuguese), the growth in building and construction, and the bright prospects for the
years to come, with general elections, the FIFA World Cup and the Olympic Games. Altogether,
these things spark optimistic expectations for 2010
However, the good news is not limited to the aforementioned factors. In February, suppliers of raw materials
were caught by surprised by a measure of the federal government, which, at the request of Abrafati (short for
Brazilian Association of Paint Manufacturers), reduced the titanium dioxide import tax rate to zero. Titanium
dioxide is used in all kinds of paints and coatings, and, therefore, the main benefit for the market will be a de-
crease in paint prices, further encouraging paint consumption in Brazil. “The tax cut will result in 3-percent
decrease in the total cost of paints and coatings, allowing for manufacturers to reduce their selling prices by
rates that will depend on a combination of the various variables that affect their production and sales pro-
cesses,” says Dílson Ferreira, chief executive officer at Abrafati.
Abrafati and the market as a whole have been pushing for actions which favor the industry and the entire
society, including import tax cuts for some of the raw materials that are used to produce paints. In addition
to the import tax exemption for titanium dioxide, the entity had already secured a tax cut for vinyl acetate
monomers (VAM). “We had solid arguments to advocate that measure, and they did sensitize the government.
On the one hand, the domestic production meets only one third of the demand. On the other hand, the tax
exemption will benefit industries that are key to the country’s development, such as construction and auto-
motive, as well as large infrastructure projects,” Ferreira explains.
Everybody finds measures like these to be extremely welcome. Manufacturers pay less for raw materials, while
society pays less for the end products, or paints in this case. In addition, other attitudes like working in a
more intelligent, environmentally friendly and efficient manner will make the future of the paint industry
even more promising.
Enjoy reading!
Lucélia Monfardini
Editorial
Titanium Dioxide - Import tax cut passed
The titanium dioxide market was caught by surprise
in February by an action of the federal government
that reduced the titanium dioxide import tax rate to
zero. The tax cut was granted thanks to the efforts
of the Brazilian Association of Paint Manufacturers,
known for short as Abrafati, and will benefit the
entire supply chain. “Abrafati, often in conjunction
with other entities representing members of the sup-
ply chain, has been maintaining an intensive coope-
ration and information exchange with the various
levels of government. For the most part, the govern-
ment has been quite receptive to the proposals being
put forward, understanding that they are key to the
development of the industry and provide a major
contribution to the socio-economic development of
the nation. Consistent with this history of interac-
tion and cooperation, the proposed titanium dioxide
import tax cut was very well-accepted when sub-
mitted to the SECEX (Department of Foreign Trade,
part of the Ministry of Development, Industry and
Foreign Trade) in August 2009,” says Dilson Ferreira,
Abrafati’s chief executive officer.
Upon approval by the Ministries of Finance and Fo-
reign Relations in early February 2010, the proposal
moved on to the final stage of review by two inter-mi-
nisterial commissions: the Technical Commission and
the CAMEX (Foreign Trade Chamber), which passed it.