At the end, the product was added to the List of Excep-
tions to the Mercosur TEC (Portuguese for Common
External Tariff). “We exposed solid arguments that
once again sensitized the government, which has, and
I reiterate, shown great interest to receive and review
any proposals that may contribute to the country’s
development. Our arguments were based on two main
points: on the one hand, the domestic production is
not sufficient to meet the demand; on the other hand,
the tax cut will result in reduced paint prices, which
will benefit key industries for the country’s develop-
ment, such as construction and automotive, as well as
large infrastructure projects,” Ferreira remarks.
The new tax rate will take effect following its publi-
cation in the Federal Official Gazette, which should
occur the next few days. “The main consequence that
we expect this measure to have to the Brazilian market
is an increase in paint sales tanks to the fall in price.
Titanium dioxide is an important material that is used
in all types of paints and coatings, and the reduction
of its cost will have a positive impact on the entire su-
pply and distribution chain, as well as industrial users
and end consumers,” says Ferreira, adding that the tax
cut will result in 3-percent decrease in the total cost of
paints and coatings, allowing for manufacturers to re-
duce their selling prices by rates that will depend on a
combination of the various variables that affect their
production and sales processes. “Consumers will bene-
fit from the price reduction both directly, when buying
paints from retailers, and indirectly, when buying
painted products. In addition, society as a whole will
benefit from the lower price on the paints that are
used in a wide variety of construction —particularly
homes— and infrastructure projects.”
Abrafati’s CEO also says that the federal
government’s measure wasn’t taken on account a
temporary situation in the titanium dioxide market.
“The reasons for the action of the federal government
were the fact that the domestic production is insuffi-
cient to meet the demand and the possibility that the
tax cut may reflect in lower paint prices. Currently,
around 70 percent of the titanium dioxide used in
Brazil is imported. In fact, the required annual quota
of 95,000 tons fully satisfies the need for additional
amounts of the product in the paint and other indus-
tries, such as plastic and paper,” says Ferreira.
This has been another action on the part of Abra-
fati towards reducing import taxes on some raw
materials that are important to the industry. “We’d
succeeded in reducing the tax on vinyl acetate mono-
mers (VAM), and now we’ve just had another favo-
rable decision on titanium dioxide. We have strong
arguments to sensitize the government and push the
measure,” Ferreira concludes.
Acrylic Resins - Sustainable generation
The year 2009 was a time of much pressure and
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