Even with the recovery of the economy, which has slowed down the losses of the Brazilian Personal Hygiene, Perfumery and Cosmetics industry (HPPC), heavy taxation on the sector still has a negative impact on results. The industry closed last year with modest growth of 2.75%, ex-factory (net of sales tax).
The small sales reaction is far from offsetting the bad numbers recorded at the height of the country’s recession in 2015 and 2016, when the sector had losses of 6 percent and 9 percent, respectively, from previous years. “This scenario indicates that confidence levels have improved, but still at a low level. It is natural that the numbers stop falling, yet in a slow way, “says João Carlos Basilio, executive president of Abihpec – Brazilian Association of Perfumery and Cosmetics Hygiene Industry.
In the two years of strong recession, when the Brazilian GDP declined 7%, the industry had a strong drop in consumption due to the economic crisis, aggravated by the heavy tax burden on products. “High taxation harms not only the industry, but the population’s access to essential items for maintaining health and well-being,” adds Basilio.
There is a continuous effort of industry-wide to overcome the recession that hit the country. However, the sector is still far from the numbers already registered. By 2015, the personal care, perfumery and cosmetics industry grew above GDP and of the other industry segments. The results of 2017 were not enough to neutralize the losses recorded. “Although the recovery bias is confirmed, we believe we have a long way to go before reaching a positive level, as in previous years,” explains the Association’s chief executive.
This year, however, foreign trade is more favorable. In February, the trade balance of the sector was positive for the second consecutive month, after accumulating deficits in May 2017, according to Abihpec data. The surplus in the month was US $ 8.8 million, driven by the growth in exports of razor blades and preparations.