Positive changes in Brazil's forecast for economic growth in 2022 are due to stronger monthly indicators, maintaining an upbeat view for 2023. Besides lower taxes, the business climate has been positively impacted by government initiatives in developing technology, implementing work processes, and agile solutions intended to generate innovation and resource efficiency. Brazil’s digital transformation efforts have proven effective, attracting interesting developments. For more industry intel and other tidbits, read on.
Brazil manufacturing PMI was little changed at 54.0 in July 2022 from 54.1 in June. Factory orders and production rose at the weakest pace in three months but remained historically elevated, while the rate of job creation rose to its highest in more than a year.
The Brazilian energy sector keeps expanding with plans to offer the most renewable energy matrix in the world. Renewables compose almost 45% of Brazil's primary energy demand, which makes their energy sector one of the least carbon-intensive in the world. Brazil's national grid is made up of almost 80% from renewable sources, higher than the world average of 38%. Investments worth $1.2 billion have been announced by various companies to build 27 new wind farms and solar energy farms by January 2026.
Chilean pulp and wood panel manufacturer Arauco has signed an agreement to invest around $3 billion to build a new pulp mill in Brazil. The industrial plant, called the Sucuriu Project, will be located in the central-western state of Mato Grosso do Sul and will represent a significant upgrade in the company’s production volume and is scheduled to start operating in early 2028.
Canadian Sigma Lithium Corp. has valued its undeveloped project in Brazil at $5.1 billion, representing the mining operation’s potential to deliver battery-grade lithium for 13 years once it’s built. The project, known as Grota do Cirilo, is expected to produce 531,000 metric tons of lithium per year from two deposits. The company will benefit from a presidential decree issued in early July allowing unrestricted trade of any products containing the battery metal.
Global aerospace business Embraer is teaming up with Toyota to enhance its production operations. The partnership will embrace Toyota Production Systems (TPS) principles and build on Embraer's enterprise efficiency program, which has already delivered significant productivity gains to the Brazil-based airplane maker. This project will be between Embraer and Toyota do Brazil and will focus on generating greater operating efficiency and waste reduction. The initial phase will see TPS specialists immersed in Embraer's daily operations at the main plant in Brazil, located in São José dos Campos, São Paulo. The TPS team will work alongside Embraer staff to evaluate the existing processes and operations to devise improvements to the business, including in the production of the E-Jet and E-Jet E2 family.
French carmaker Renault announced investments of around $377 million in Brazil to produce a new sport utility vehicle and a new 1.0 turbo engine. Production of the new car had been announced in March, but the group was awaiting approval from its parent company for the new investment plan. The investment will be for production at the company's São José dos Pinhais factory, located in Brazil's southern state of Parana, which will get a new Common Module Family-B platform allowing for "potential electrification" in the future.
Brazillian Group Randon announced the acquisition of New Jersey-based Hercules Enterprises LLC, which develops trailer and semi-trailer chassis, for the estimated price of $ 39.5 million.
Brazilian Taurus launches the world's first graphene weapon, marking the beginning of the third generation of pistols. The GX4 Graphene has components injected with graphene and a special coating, an exclusive technology of Taurus, which brings more resistance and durability to the pistol.
BMW has just announced the production of the new BMW 3-series and the all-new BMW X1 as part of the $100 million investment to be made in its Araquari facilities in Santa Catarina state. The new 3-series will be produced beginning September, but the debut date of the new X1 is expected to be announced closer to 2023. Around 10,000 cars are built a year in Araquari, but there is scope to increase this to 30,000.
Agricultural equipment manufacturer AGCO confirms plans to invest $70 million in new technologies and assembly lines in Brazil given the excellent momentum and the growing demand for its harvesters, seeding implements, tractors, and other products.
Volvo confirmed investments of $176 million in its Curitiba facilities to update and intensify automation as well as Industry 4.0 equipment upgrades. EV development is also part of Volvo’s plans for Brazil. The Curitiba plant will receive the largest share of Brazil’s $300 million investment until 2025.
Fiat Betim, Stellantis’ nerve center in the region, produced another alert that the company is locating suppliers and moving as soon as possible with plans for electrification. The path is the localization and nationalization of various components, especially those related to hybrid vehicles, which will be assembled in Stellantis facilities, a point of no return for Fiat and the other brands in the Brazilian market.
Bravo Motors and Rockwell Automation are moving forward with plans for producing EV vehicles in Brazil. The Minas Gerais factory will produce 22,790 cars annually starting in 2024 and expanding capacity until 2029, when the project is concluded. The site will also produce 43,750 lithium batteries a year.
Toyota recently announced plans to produce its newest hybrid SUV model in the Sorocaba manufacturing plant in 2024. Further information on investments and development will be announced shortly.
Caterpillar’s $120 million investment in expanding its Piracicaba facilities is up and running. The company keeps working on upgrading its grader’s assembly line, investing heavily in automation and new robots that will improve the quality of welding processes. That’s part of the five-year investment cycle that started in 2019 and which is expected to complete in 2023.
Mahindra & Mahindra has plans for a new tractor facility in Rio Grande do Sul as part of its global push. The world's largest tractor maker intends to set up an assembly plant in Brazil – the sixth largest tractor market on the planet. The maker sees its volumes doubling in Brazil in the next few years, hence increasing its footprint with a local manufacturing base.
The governments of Brazil and South Korea signed a memorandum of understanding to join efforts to attract a chip and semiconductor manufacturer to Brazil. The negotiations revolve around Samsung, one of the world leaders in the field. The idea would be to build a factory capable of producing parts that can supply the local industry and be exported to countries in Latin America, Europe, and Africa.
For more information, contact Achilles Arbex (aarbex@AMTonline.org).