The Saudis are discovering Brazil as an investment destination. The statement was made recently by the Brazilian ambassador to Riyadh, Isnard Penha Brasil Jr., after a meeting with leaders at the Arab Brazilian Chamber of Commerce, at the seat of the organization in the southeastern Brazilian city of São Paulo.
This year, business deals were announced involving Brazil and Saudi Arabia. One such deal was the purchase, by Saudi company Cristal, of a United States-based titanium dioxide manufacturing company, Millennium, which owns operations in Brazil. The petrochemical Saudi Basic Industries Corporation (Sabic), in turn, bought General Electric Plastics, which also owns plants in the country.
According to Isnard, the embassy itself has an effort underway in Saudi Arabia to promote Brazil as a place to invest in. "Another thing is the fact that Brazil is a country that has no problems with Saudi and Arab immigrants. Brazil is an open, receptive country, our policy with regard to capital is quite open. All these factors have led them to start looking our way," says the ambassador.
Isnard cited, as sectors in which the Saudis may be interested in investing in, food and equipment production, among others. Sales of machinery, according to the ambassador, may be a good opportunity for Brazilians right now, as the Arab country is investing in industrialization of non-oil sectors.
The Brazilian ambassador stated that an executive at the Saudi Arabian General Investment Authority (Sagia), the agency in charge of investments in Saudi Arabia, contacted him with the intention of promoting a mission to Brazil, in order to check for investment possibilities. The diplomat states that the trend is for Saudi investment in Brazil to increase, and that one of the means for boosting that growth is to promote missions.
"There is a lot of money in Saudi Arabia, and Brazil is a country sympathetic to the Saudis," he says. Besides branches of United States-based companies, the Saudis also own capital in other companies headquartered in Brazil. This is the case with Amitech, a maker of pipes and connections. The Saudi group Amiantit owns a 30% share of the company's capital.
A factor that may leverage even further business between Brazil and Saudi Arabia is the trade agreement under negotiation between the (GCC), to which the Arab country belongs, and the Mercosur, of which Brazil is a member. The two blocs are negotiating the list of products that will have tariff advantages when the agreement is established.
The ambassador believes that by the end of the year a new round of negotiation should take place. The offers will be revised, according to Isnard. One of the reasons for that is the fact that the list of offers by the Mercosur did not include concessions in the sale of petrochemicals, a field that the Saudis, for instance, are interested in.
Besides working for the strengthening of economic and diplomatic ties between the two countries, the Brazilian embassy in Riyadh has also been promoting interaction between the two regions in the cultural and educational fields. In his last visit to Brazil, early this year, Isnard made a series of contacts to enable cooperation between public and private educational institutions in Brazil and their peers in Saudi Arabia.
The idea is for Brazil to become a place for Saudis to complement their education, especially in terms of postgraduate courses in the field of science and technology. Many Saudis are having problems in obtaining visas to the United States and Europe, where they usually went to complement their education.
These possibilities are still under discussion, according to Isnard. Nevertheless, the ambassador says that actions must be carried out quickly, as other countries too are realizing the existence of this market space among the Saudis. The ambassador believes that agreements could be signed directly between teaching institutions.
In addition to being the Brazilian ambassador to Saudi Arabia, Isnard is also a Brazilian ambassador to Yemen and to Oman.
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