Lava Jato effect: Odebrecht lays off 50 employees.
Brazil's largest construction company, Odebrecht, whose president has been imprisoned for almost a year and is about to make a plea bargain, has already laid off 50 people since the beginning of Operation Lava Jato; in addition, the company's debt has reached R$ 110 billion, raising alarm bells among its creditors; what preserves the company is its diversification of activities and countries; about 61% of its revenue comes from abroad; as a result, revenue increased from R$ 107 billion in 2014 to R$ 132 billion in 2015.
247 - One of the Reporting by Ricardo BrandtAn article published this Sunday in the Estado de S. Paulo newspaper reveals the impact of Operation Lava Jato, whose president, Marcelo, has been imprisoned for almost a year and may be released after formalizing his plea bargain – which should affect 13 governors and 36 senators.
Since the earthquake began, Odebrecht has already laid off 50 people. Furthermore, the company's debt has reached R$110 billion, raising alarm bells among its creditors.
What preserves the company is its diversification across activities and countries. "Two peculiarities gave the group breathing room: operations in 21 countries and diversification into 15 business areas. About 61% of revenues come from abroad. Two businesses withstood the turmoil: the petrochemical company Braskem and Odebrecht Ambiental, a sanitation company. They compensated for the losses and increased revenue from R$ 107 billion in 2014 to R$ 132 billion in 2015," the report says.
The great challenge, after Marcelo Odebrecht's release from prison, which should occur after the plea bargain is approved, will be to find a new business model, less dependent on the exchange of favors between the public and private sectors.
Furthermore, with the end of corporate campaign financing, public officials will have less incentive to build grandiose projects – which tends to reduce the demand for large-scale engineering services in the country.