Category: Business opportunities

An overview of current business opportunities in Brazil.

GE to build R$60 million plant in Brazil’s Bahia

Reinaldo Garcia   CEO and president of GE Latin America

Reinaldo Garcia CEO and president of GE Latin America

General Electricplans to build a R$60 million plant in the northeastern Brazilian state of Bahia to assemble wind turbines as the market for wind power surges in the South American country, Reinaldo Garcia, head of the company’s operations in Latin America, said Wednesday.

The plant will be built during the next six to 12 months, Garcia told reporters in Rio de Janeiro.

Brazil has seen interest in wind-power projects take off over the past decade, and has been adding about 2,000 megawatts of new wind-power capacity every year as prices for wind power fall below the costs of other sources.

GE reportedly has secured about one-fifth of the supply contracts for those Brazilian wind farms.

American Farmers ‘Amazed’ by Brazilian Agriculture – Farm Futures

After ten days of touring Southern Brazil in early February, 34 U.S. farmers from 10 states came away very impressed with this country’s agricultural potential, despite the drought that withered crops on most of the farms we visited.

via American Farmers ‘Amazed’ by Brazilian Agriculture – Farm Futures.

Brazil highways’ maintenance to the private sector on 10 year contracts — MercoPress

Brazil highways’ maintenance to the private sector on 10 year contracts — MercoPress.

Chinese Car Maker JAC to Build in Brazil – WSJ.com

Chinese Car Maker to Build in Brazil – WSJ.com.

SÃO PAULO—Anhui Jianghuai Automobile Co., the Chinese auto maker known as JAC, and its Brazilian partner said Friday that they decided to go ahead with plans to build a factory in Brazil on hopes that the government will modify a production tax.

SHC, the company that imports JAC automobiles into Brazil, said it would invest 80% of the 900 million Brazilian reals ($509 million) needed to build the factory, with JAC providing the rest. The factory will be built in the northeastern Brazilian state of Bahia, with output set to begin in 2014.

Brazil’s market—the world’s fourth-largest by sales—has attracted heavy investment. Sales are expected to grow 5% this year, slowing from last year’s 12% expansion as the government raised interest rates earlier this year to rein in an overheated economy.

The JAC factory, with initial capacity of 100,000 vehicles, will be in the city of Camacari, an industrial area where Ford Motor Co. has a plant. JAC will assemble and paint the cars locally, with stamping and motor-production capacity set to be built later.

JAC began selling cars in Brazil in March of this year, and through September had sold 17,421 vehicles. With four models sold locally, JAC accounts for 0.9% of all cars sold this year, according to auto dealers association Fenabrave.

SHC and JAC will also build a research center to locally develop parts such as flex-fuel engines–the predominant kind in Brazil, which can run on gasoline, ethanol, or a mixture of the two–as well as a design center and a test track.

The factory plans had been announced in August by SHC president Sergio Habib, although a location had yet to be decided upon. A month later, however, Brazil said it was raising the a tax on autos by 30 percentage points—to a range of 37% to 55%, from 7% to 25%—exempting only cars that used at least 65% locally produced content.

Mr. Habib said last month that the tax would also hurt auto makers that in recent months had begun building factories in Brazil, such as South Korea’s Hyundai Motor Co. and China’s Chery Automobile Co. Mr. Habib later said he may cancel plans to build the factory because it was impossible for any company to begin production with 65% local content.

Brazil’s Trade Ministry said earlier this week that it was considering making the rules more flexible. News reports said the government may consider gradually increasing local content requirements for newly installed factories.

Also Friday, Mr. Habib said Friday that he is in talks with India’s Tata Motors to import the company’s cars. Tata officials weren’t available to comment.

Wind industry is caught in a Brazilian steel-price trap

In Depth: Wind industry is caught in a Brazilian steel-price trap

High domestic steel prices are one of the main barriers to making future wind projects profitable in Brazil.

Developers are facing razor-thin margins after the two power tenders in August saw some projects awarded power-purchase contracts at less than R$100 ($58.30) per MWh.

Wind energy

High domestic steel prices are one of the main barriers to making future wind projects profitable in Brazil.

The price of steel is 50-70% higher in Brazil than on the international market. Belo Horizonte-based Usiminas — a former state-owned company privatised in the 1990s — enjoys a near monopoly on domestic steel plate supply, and the government allows it to set different prices for domestic sales and exports. At the same time, Brazil’s national development bank, BNDES, will not give developers full access to its funding unless at least 60% of a project’s equipment is produced in Brazil. That percentage is determined by weight, and towers can constitute 80% of a wind farm’s mass. Nearly all Brazilian developers depend on the bank’s cheap financing to make their projects viable, and BNDES does not consider foreign steel rolled in Brazil as local content, meaning that companies are generally unable to import from abroad.

Last year, BNDES was considering an exception to its rules for imported steel, but the proposal was shelved in August. Brazil’s steel industry is facing strong competition from imports, putting pressure on margins, so producers fiercely oppose any relaxation of local-content rules. “Clearly, if you want to play in Brazil, you have to get access to BNDES financing, and that exposes you to these steel prices,” says Brian Gaylord, an analyst with MAKE Consulting in Chicago, who specialises in the Brazilian market.

He says the high cost of steel plate makes towers disproportionately expensive in Brazil. Gaylord says some companies experimented with importing Asian steel for about a third of their requirements, but the strategy needs high volumes to create any real price advantage.

Wind turbine manufacturers, developers and industry representatives are highly critical of government policy, and are increasingly looking to concrete towers as an alternative.

“Obviously they [Brazil] want to build a steel industry and they are doing it by artificially raising prices,” Steve Sawyer, secretary-general of the Global Wind Energy Council, tells Recharge. “It’s good for the steel industry, but bad for everyone else.”

“It’s the prerogative of a sovereign state,” says Alstom’s vice-president for wind, Alfonso Faubel. “Steel is used in development, so if you want development to take place you are always going to have certain conditions of local content.”

But Edgard Corrochano, Mercosur director at Gamesa, which was one of the most aggressive bidders in the recent tenders, says he hopes the situation will change, with Usiminas becoming more competitive. “Either [Usiminas] gets with the programme and they have international prices in Brazil, or we are going to see a tendency to go to concrete towers. And as soon as that happens, it’ll be very difficult for it to come back to steel.”

Other manufacturers point out that steel towers, as well as being expensive, are difficult and costly to transport.

Suzlon Brazil chief executive Arthur Lavieri says: “Almost everybody is talking about concrete, and it’s not only because steel prices in Brazil are completely insane, but also because bringing steel tubes of 100-120 metres 3,000km from the biggest factories is simply not possible.”

However, concrete towers need to be made on site, which can be expensive.

“To take advantage of price advantages you need a big project size,” says Gaylord.

Leading local turbine manufacturer Wobben Windpower is experimenting with using mobile concrete plants to build the towers, while Vestas sales director Marcelo Hutschinski says his company can offer concrete towers for wind farms larger than 100MW.

Officials at some turbine manufacturers admit there are drawbacks to concrete, and say they have few alternatives to buying expensive steel.

Source: RECHARGE; Ben Backwell, Rio de Janeiro; Published: Thursday, September 15 2011

LinkedIn looking for Brazil chief executive | Reuters

LinkedIn looking for Brazil chief executive | Reuters.

Fri Sep 9, 2011 3:03pm EDT

* Professional social network looks to open Braziloffice

* Brazil users top 4 million, key growth market

(Reuters) – Professional social network LinkedIn (LNKD.N) said on Friday it was seeking a chief executive in Brazil for its Portugese-language service launched last year.

LinkedIn

LinkedIn opening Brazilian office

“When we find a chief executive for Brazil, he will help us open an office,” said Danielle Restivo, LinkedIn’s communications director for Canada and Brazil, in a telephone interview with Reuters.

Restivo said the move by major Brazilian companies Petrobras (PETR4.SA), Vivo VIVO4.SA and Itau Unibanco (ITUB4.SA) to open pages on the site helped it gain 4 million Brazilian users since April 2010 to reach a total 120 million users globally.

Brazil and Mexico are among LinkedIn’s fastest growing countries, LinkedIn Chief Executive Jeff Weiner wrote in a blog post in March, when the company was growing at a rate of about 1 million new members every week with more than half of its users outside the United States.

Brazil garnering solar power industry attention: pv-magazine

Brazil garnering solar power industry attention: pv-magazine

One country garnering attention, without even being present at the PV-EU International Fair summit in Hamburg, Germany: Brazil!!!

A large number of equipment manufacturers are predicting the rise of the South American country in the photovoltaic industry. With that said, however, it does not mean that China will be playing second fiddle.

 

via Brazil garnering EU PVSEC’s attention: pv-magazine.

Incentive to produce tablet PC’s in Brazil

The House of Representatives on Tuesday approved an interim measure that fits the tablet PC’s in the law of incentives for computers and laptops, giving complete exemption of PIS / Cofins, which is currently 9.25% for the equipment produced in Brazil.

Apple iPAD

Tax incentive for producers of tablet PC's

According to the government, tax breaks derived from the measure will reach $ 6 million a year. The aim of the proposal is to lower the price of tablet PC’s, encouraging its use primarily by students. The Brazilian government also said the proposal aims to raise the rate of investment and innovation, increased productivity and strengthening the productive sector. “This is a measure that dialogues with modernity and with the new reality of the world, and generate jobs,” said House Speaker Marco Maia (PT-RS).

CHANGES

Special credit incentives will be released for tablet computers purchased from companies in the Manaus Free Trade Zone

The deputy also amended to limit the size of the screen called tablets. His intention, he says, is to prevent future cell phones and flat touch-sensitive, too, receive benefits. She set the screen size of at least 140 square inches and a maximum of 600 square centimeters.

PACCAR Selects DAF Brasil Factory Site

August 31, 2011, Bellevue, Washington – PACCAR announced plans to construct its new DAF Brasil assembly facility on a 500-acre site in the city of Ponta Grossa in the state of Paraná.  “PACCAR is pleased to invest $200 million in its DAF facility in the dynamic and progressive state of Paraná,” commented Mark Pigott, chairman and chief executive officer.  “Ponta Grossa has an excellent workforce and proximity to strategic supplier partners and the port of Paranaguá.  We appreciate the outstanding support from the state of Paraná and the city of Ponta Grossa in partnering with PACCAR to bring this major economic investment to the area,” said Pigott.

Construction of the 330,000-square-foot assembly facility is projected to begin in 2011 and be completed in 2013.  The new facility will be designed to assemble the DAF LF, CF and XF models, to meet current and future requirements of the Brasilian transport industry. “This will be one of PACCAR’s most technologically advanced and environmentally friendly facilities,” shared Bob Christensen, executive vice president.  The Brasil truck market over six tons is 170,000 units and is expected to grow in the coming years.  “Over time, as production levels increase, the facility is expected to hire up to five hundred employees.  Additional employment opportunities, which will generate economic benefits to the region, will be created during the construction phase and as our suppliers expand their capacity in the area,” added Christensen.

DAF Brazil Factory Drawing
PACCAR’s 330,000-square-foot DAF assembly facility is scheduled to open in 2013

“The commitment to construct the DAF assembly facility in Brasil marks a strategic milestone and we are pleased to be working closely with the state and local agencies on the planning of the infrastructure for the business,” stated Richard Bangert, PACCAR vice president.  “PACCAR has an excellent record of community involvement at all of the company’s major manufacturing locations.  We look forward to developing close relationships with Ponta Grossa State University, Paraná Federal Technology University and other technical colleges to provide ongoing educational opportunities for our employees,” added Bangert.

PACCAR is a global technology leader in the design, manufacture and customer support of high quality light-, medium-, and heavy-duty trucks under the DAF, Kenworth, and Peterbilt nameplates.  PACCAR also designs and manufactures advanced diesel engines and provides financial services and information technology and distributes truck parts related to its principal business.

PACCAR Inc News Release.

US$ 220.2 billion in opportunities for foreign investment

Brazilian National Development Program prompts US$ 220 billion in opportunities for foreign companies

08/04/2010 11:15 – Portal Brasil

Phase 2 of Growth Acceleration Program opens up great prospects for 2011-2014

BRASILIA (April 7, 2010) – On March 29, Brazil launched the second phase of its national Growth Acceleration Program (PAC 2), opening up US$ 220.2 billion in opportunities for foreign investment in Brazil over the period from 2011 to 2014.  PAC 2 is a four-year US$ 526 billion strategic investment program led by the federal government that combines management initiatives and public works projects. These projects focus on building Brazil’s national infrastructure, with emphasis on improving public transit, drainage, energy, transportation, logistics, roads and civil construction.

“The second phase of the Growth Acceleration Program opens a new range of possibilities for foreign investment in Brazil. This new round of development gives the private sector the predictability needed to evaluate business opportunities in Brazil over the next four years,” said Minister of Planning, Budget and Management Paulo Bernardo during a conference call on April 7 with foreign journalists and investors. Continue reading

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