Brazil: Manufacturing Base

The name of the currency used in Brazil is real and its exchange rate is: reals per US dollar - 2.1761 (2006), 2.4344 (2005), 2.9251 (2004), 3.0771 (2003), 2.9208 (2002). Brazil's currency, the real (R$), was introduced on 1 July 1994. One real equals 100 centavos. There are coins of 1, 5, 10, 25, 50 centavos, and 1 real, and notes of 2, 5, 10, 20, 50, and 100 reals.

Characterized by large and well-developed agricultural, mining, manufacturing, and service sectors, Brazil's economy outweighs that of all other South American countries and is expanding its presence in world markets. The agriculture sector main products are coffee, soybeans, wheat, rice, corn, sugarcane, cocoa, citrus; beef.

Brazil has one of the most diverse industrial sectors in Latin America with industries of textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft, motor vehicles and parts, other machinery and equipment.

It exports transport equipment, iron ore, soybeans, footwear, coffee, autos and imports machinery, electrical and transport equipment, chemical products, oil, automotive parts, electronics. The main commercial partners of Brazil are the USA, Colombia, Germany, Japan, Argentina, China, Canada and United Kingdom.

CHIEF EXPORTS: Manufactures, iron ore, soybeans, footwear, coffee.

CHIEF IMPORTS: Machinery and equipment, chemical products, oil, electricity

Major products in the manufacturing sector are televisions, VCRs, telephones, and computer chips. There are a few national companies that are domestically oriented, such as Consul and Brastemp. There are also companies that are primarily export oriented, such as Nokia, Intel, and Compaq.

State participation in manufacturing occurs in the production of textiles and clothing, footwear, food, and beverages. These industries comprise a large proportion of the manufacturing sector, but there are also new industries that have been developed in the last few decades with government aid. Machinery and transport equipment, construction materials, sugar cane and wood derivatives, and chemicals are important manufacturing industries. Direct government participation is noticed in the oil processing industry and passenger jet aircraft industry through partial ownership of such companies. Indirect government participation is noticed in the textile industry and machinery industry through export subsidies and low interest loans.
Transport Vehicles
Automobiles are the most important manufactured items in Brazil. Brazil's passenger automotive production was approximately 2.45 million passenger car units in 2005. Brazil has manufacturing plants for General Motors, Volkswagen, Ford, Fiat, Honda, and Toyota. Workers are highly unionized, receiving the highest salaries among the manufacturing industries
The national textile industry is responsible for 3 percent of world production. Brazil has the largest textile operating facilities in Latin America. The textile industry is also labor intensive, employing 1.65 million people in 2006. Fibers and leather are used to produce clothing, shoes, and luggage. Brazilian shoes are exported mainly to Europe, where they are famous for their quality.
The Brazilian paper industry was responsible for the production of 8.8 million metric tons and the pulp industry produced 11 million metric tons in 2006. The industry consisted of approximately 200 companies, employing approximately 80,000 people directly in their processing operations and 60,000 people in forestry operations.

The mining sector was protected by the 1988 constitution against foreign majority participation of direct mining companies. This was a setback for the development of the mining sector because domestic investors lacked the capital for extensive mineral exploration. Private Brazilian investors and Brazilian corporations own the majority of the mineral industry. The participation of foreign capital is very limited due to Brazilian mining laws. However, in 1995 the Congress approved an amendment to the constitution allowing private companies (including foreigners) to participate in the mining industry through joint ventures, deregulating investments, and the privatization of state-owned mining plants. Shortly afterwards, the state-owned Companhia Vale do Rio Doce was privatized.

The country is the world's largest producer of bauxite, gemstones, columbium, gold, iron ore, kaolin, manganese, tantalum, and tin. Major exports are iron ore, tin, and aluminum. The states of Minas Gerais, Bahia, and Goiás, located in the midwest of Brazil, have deposits of diamonds and other precious and semiprecious stones.
Financial Services

The government owns most of the financial sector, the largest component of the services industry. The 3 largest banks of Brazil are the Bank of Brazil, Federal Economic Register, and National Bank of Economic and Social Development (BNDES).
The Bank of Brazil is the largest bank in Brazil and the largest financial institution in Latin America. It has 12.9 million customers and agencies in 30 different countries, employing 90,378 people.

The Brazilian Discount Bank (BRADESCO) and Itaú have the largest assets in the private sector.
This sector is responsible for the highest number of employed people in all sectors of the services industry. The bulk of employed people in this sector come from companies that employ less than 500 employees. Combined retail and wholesale sectors were made up of 708,635 retail and wholesale outlets. There are few retail chains in the economy. Most of them are located in the capitals of each state but are not part of the retail context in the less developed economies in rural areas. Food, grocery, and other retail chains are located in the coastal areas whereas small family-owned businesses compose the retail sector in smaller cities. The smaller retail businesses are responsible for employing a large number of people

Miami, Florida, USA
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São Paulo, Brazil
tel 55-11-3022-9991

Rua Itapicura, 52
05463-050 - São Paulo - SP