MercoPress. South Atlantic News Agency

Brazil is Chile's main direct foreign investment target

Santiago daily La Tercera reported that Brazil has become the top destination for Chilean foreign direct investment in 2007: more than 44% of the Chile's foreign direct investment, 427 million US dollars, was directed towards South America's largest economy.

Investments by large companies like supermarket retailer Cencosud and computer company Sonda, both of which already rank among Brazil's top five largest companies, represented the driving force behind this trend. Cencosud recently disclosed plans to open 10 new stores across Brazil at a cost of more than 102 million US dollars while Sonda recently bought the Brazilian company Procwork, thus increasing its total investments to 200 million. Company officials say that, with 183 million residents, Brazil is currently the most attractive market in the region. Furthermore, they describe Brazil's economic growth as crucial to their success. "With a controlled inflation rate, strong growth, and falling interest rates, the Brazilian economy has proven to be stable. Additionally, the population's income is increasing, and more Brazilians are gaining access to credit," said Cencosud General Manager Laurence Golborne. Both analysts and company officials say that major retailers, together with cellulose companies, should push investment higher in 2008. "Brazil has an enormous market with great potential in its forestry sector with respect to both internal growth and export capabilities. The country has ideal conditions which allow for more rapid tree growth than in Chile. It also has vast tracts of territory that are apt for planting," explained Celulosa Arauco (CELCO) Corporate and Commercial General Manager Charles Kimber. The Santiago Times