Brazil Selling Products Overseas For Quality and Not Low Price Alone

The participation of Arab countries as destinations for Brazilian machinery and equipment exports is increasing. According to information released Tuesday, August 2, by the Brazilian Machinery Manufacturers Association (Abimaq), the sector exported the equivalent to US$ 15.6 million to Saudi Arabia in the first semester of the year.

That was a 310% increase in comparison to the US$ 3.8 million in the same period in 2004. The increase in sales to Algeria was even more significant, of over 23 times. The value of shipments went from a low base, of US$ 343,000 in the first six months last year, to almost US$ 8 million in the same period this year.


Saudi Arabia and Algeria classified, respectively, in the 33rd and 46th positions amongst the 50 main markets for Brazilian goods. Another country in the region, the United Arab Emirates, appears in the 34th position in the semester, with imports adding up to US$ 15.4 million. There was, however, a reduction in comparison to the same period last year, when sales yielded US$ 17.5 million.


For the Abimaq president, Newton de Mello, the Arab market is “important” and is being opened thanks to the partnership between the association and the Brazilian Export Promotion Agency (Apex) for promoting the sector’s products abroad.


Yesterday also, Mello and the Apex president, Juan Quirós, signed a new agreement, worth US$ 2.5 million, to promote the participation of 4 Brazilian companies in eight international fairs. One of these events is Saudi Agriculture, trade fair of agriculture implements that will take place in Riyadh, Saudi Arabian capital city, in September.


“The agriculture machines are being exported successfully to Saudi Arabia. With exhausting irrigation techniques, they are stimulating agriculture,” said Mello, adding that the demand for equipment caused surprise at a first moment, given the desert climate of the country.


According to the Abimaq president, as well as agriculture machines, there is in the Arab countries a demand for equipment for irrigation, for water and sewage treatment, for the oil and gas sector, machines for the plastic industry and tooling-machines, such as lathes and planes. “There is great demand for tooling-machines even by technical schools,” he said.


Conquering the First World


In all, the sector’s shipments yielded US$ 4.1 billion in the first semester, against US$ 2.95 billion in the same period last year, an increase of 39%. The main destinations were the United States, Argentina, Mexico, Germany, the United Kingdom, Chile, China, Italy, Venezuela and France.


Having countries such as the United States, Germany and Italy amongst the most important markets is considered a victory for the sector. This is because, according to Mello, in contrast to the Latin American countries, such as Chile and Mexico, which have always seen Brazilian products as being of good quality, the first world markets didn’t share this point of view. “To compete we had to present prices equivalent to the Asian products, with greater quality than theirs,” he said.


For such, the sector has taken advantage of the agreements with the federal government, through the Apex, which even include the marketing of products abroad. “Today, in every place we go to, Brazil is considered a partner,” said Quirós. “We have a good cost-benefit relationship, with added technology and competitive prices,” he added.


Capital goods imports, on the other hand, have increased by 29%, going from US$ 3.12 billion to a little over US$ 4 billion. In the first semester the trade balance in the sector was slightly positive for Brazil, which is a rare event, since that, generally, it is negative. “It is an unprecedented event,” said Mello.


At the same time, the sector’s total revenue, which includes exports and sales in the internal market, reached US$ 11.3 billion, against US$ 8.7 billion in the first six months of 2004, an increase of 29.5%. According to Mello, the internal market takes in 60% of the production. The remainder is exported.


The Brazilian machinery and equipment sector counts on 4,500 companies and produces 4,200 different products. The number of jobs generated reached 212,991 on June 30, against 200,473 at the of June 2004.


Anba – www.anba.com.br

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