International emerging markets: Brazil
07 Jun 2007
Brazil is not an easy place to do business. Import duties are high which, with such a price-sensitive market, means the only real way forward is to manufacture in Brazil through a joint venture or some-such arrangement says Dr John L Collins, business development manager, The Manufacturing Technologies Association (MTA).
Every month Engineering Capacity publishes a short breif on international emerging markets from the MTA. This month; Brazil. With a population of nearly 185 million people and the fifth largest land mass in the world, Brazil is considered as a high-growth market alongside China, India and Russia.
But it’s not an easy place to do business; import duties are high which, with such a price-sensitive market, means the only real way forward is to manufacture in Brazil through a joint venture or some-such arrangement says Dr John L Collins, business development manager, The Manufacturing Technologies Association (MTA).
General engineering industry accounts for 35% of the country’s main output, generating more than $300 billion in 2006. More than 40% of production is exported to the USA, Argentina, Mexico, Germany, China and the UK.
As the inventor of bioethanol and biodiesel for domestic and commercial vehicle use (after the first Brazilian oil crisis in the mid-1960’s) the economy thrives on well-applied new technologies. Brazilian industry is constantly modernising itself and is now the 10th largest machinery and equipment manufacturer in the world. Brazil is also the third largest producer of satellites and satellite technology in the world.
In machine tools, the growth in imports was valued at more than £300m in 2006 compared with domestic production of £340m and exports of £110m. These, and the related equipment and services supplied to the sector, are used predominantly by the aerospace industry, with Embraer now the third largest aerospace producer in the world.
Although very wealthy through its food and drink, oil, gas, metals and minerals production, the very uneven distribution of wealth is still a pressing problem for a growing Brazil. Around 80% of all Brazil’s engineering companies are based in Sao Paolo state (about the same size as France), with 4,500 manufacturers producing 4,200 different types of machines.
Brazil’s association of machinery and equipment manufacturers, ABIMAQ, is keen to promote its engineering heritage and export expertise, and can help with the import of high-technology machinery from the UK and the export of Brazil’s machinery all around the world.
ABIMAQ’s ‘We Know How’ campaign of recent years is testament to the Brazilian pride in its engineering capabilities – and they’re still very keen to do more with the UK, because Brazilian companies recognise that we know how, too.
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