Industries place their bets on Ceará to grow in the markets of Brazil’s Northeast

Investments in new factories or in the expansion of existing plants reach R$ 13 billion (US$ 6.5 Bn) bringing many new jobs to 33 municipalities in seven macro-regions

Some 20 companies are engaged in talks with the government of the state of Ceará seeking permits to establish themselves in the state, thereby totaling investments of R$ 13 billion (US$ 6.5 Bn) when their facilities are completely built. Their projects are under consideration by the ‘Conselho Estadual de Desenvolvimento Industrial’ (CEDIN - State Council for Industrial Development). According to the state’s Agency for Economic Development (ADECE), the CEDIN may or may not approve the Protocol of Intent submitted by the entrepreneurs. If approved, the document will ensure for those businesses the tax incentives established by the ‘Fundo de Desenvolvimento Industrial’ (FDI - Industrial Development Fund) which, among its rules, ensures greater tax relief for industries that are located farther from the Metropolitan Region of Fortaleza.

The names of the companies cannot be revealed, either because they belong to publicly traded companies or in view of issues related to their strategies. But we know that the areas in which these investors operate are quite varied and include the construction industry, the installation and operation of wind power plants and fuel, manufacturing of motor vehicles, mining, chemicals, sanitation, consumer goods, food, clothing, shoes and information technology.

In this last segment, incidentally, ADECE President Roberto Smith has disclosed the interest of a foreign group in establishing a data processing center in the region of Praia do Futuro. The project is said to be budgeted at R$ 1 billion (US$ 500 million) and would serve to integrate the communications of North America, Africa and Europe from a base in Fortaleza.

R$ 102.4 million (US$ 51.2 million) in 2011

In 2011, Ceará received a volume of investments by private enterprise of R$ 102.4 million (US$ 51.2 million) considering only the figures for companies that had already established themselves in the state during that period. These new ventures have generated 9,629 jobs. Although the FDI ensures greater tax incentives for companies setting up in regions that are farther from state capital Fortaleza, most investors who established their companies, who are in the process of setting up their businesses or who are still going to begin to establish themselves are requesting permits to set up their operations at locations within the Metropolitan Region of Fortaleza (referred to as RMF - ‘Região Metropolitana de Fortaleza’) which includes: Fortaleza, Itaitinga, Maracanaú, Pacatuba, Pacajus, Horizonte, Aquiraz, and Eusébio.

Beside these locations, the cities of Sobral, Iguatu, Itapajé and Jaguaribe are also sought after. The protocols of intent submitted by the companies, when they are approved, are good for two years according to information provided by Agency for Economic Development of Ceará - ADECE.

As early as 2011, the state of Ceará approved 219 company-submitted petitions related to the Industrial Development Fund (FDI). In these petitions, the companies commit to investing some R$ 3.6 billion (US$ 1.8 Bn) in the installation of new plants or expansion of existing units. The projects, some of which are already being implemented, had their Protocols of Intent accepted by the CEDIN (State Council for Industrial Development) - which indicates that, among these projects, 101 are for new ventures. The remaining projects refer to expansions. The government estimates that, with the arrival of new industries, over 15 thousand direct jobs will be created.

The investments are expected to benefit 33 municipalities in seven geographical macro-regions. According to the State Government of Ceará, the projects that involve a greater amount of funds refer to the segment of alternative energy sources, which will total around R$ 1.7 billion (US$ 850 million). The largest investments will be made by ‘Kroma Investimentos e Participação Ltda.’, which will invest R$ 380 million (US$ 190 million) in its plant in São Gonçalo do Amarante, creating 160 jobs.

Nearby in Caucaia, within the ‘Complexo Industrial e Portuário do Pecém’ (CIPP - Pecém Industrial and Seaport Complex), Aeris Energy is building a factory to manufacture rotor blades for wind-power generators. The protocol approved by the state government states that R$ 80 million (US$ 40 million) will be invested in this plant which is capable of creating 340 new jobs.

With much lower volumes of investment energy projects, but with a greater capacity to create jobs, footwear companies also appear as parties interested in opening new plants in the region. Footwear manufacturer ‘Melbros Indústria e Comércio de Calçados Ltda.’, for example, will invest R$ 40.9 million (US$ 20.45 million) in the installation of a plant in Tauá - a business venture that is expected to recruit 950 new employees. The same will happen with ‘Coopershoes Cooperativa de Calçados e Componentes Joanetense Ltda.,’ - a footwear cooperative - which will create 766 jobs with an investment of R$ 28.6 million (US$ 14.3 million) in its future unit in Morada Nova.

Metal-Mechanical Hub of Sobral

Sobral, with about 200,000 inhabitants, is the state's fourth economy with a Gross State Product (GSP) of R$ 2.34 billion (US$ 1.17 Bn). The city is a leader in the number of formally hired workers in the interior of Ceará and has the fourth highest ICMS (sales tax) revenue in the state, below Fortaleza, Maracanaú and Caucaia, all in the metropolitan area of the state capital. Sobral’s rank is the result of the establishment in the city of a metal-mechanical hub which is developing rapidly. This hub’s flagship is automaker TAC Motors’ factory, which is the result of R$ 200 million (US$ 100 million) in investment by the manufacturer. The company is already discussing the expansion of its factory with the construction of an Off-Road Test Track to be used in improving the design of a 4x4 diesel-powered jeep.

Presently, the TAC Motors plant generates over 120 jobs and produces 60 vehicles per month. The company’s Stark 4x4 Diesel, a model produced in Sobral, has been standing out at the country’s main events such as the São Paulo Automobile Show. The company expects to create 300 direct jobs when it is fully operational.

By the end of the year, five new industrial developments, including a new ‘Poty Votorantim’ Cement Factory in the Aprazível District will join the complex. In addition, Hope brand lingerie and underwear is already setting up a factory in the city.

The new cement plant will have the capacity to produce two million tons of the feedstock per year, with a planned investment of R$ 700 million (US$ 350 million) and will start operating in 2015 supplying to the regional market. The new facility will generate about 1,200 jobs during its construction in addition to 800 jobs, both direct and indirect, when it starts to operate. The venture is part of the company’s project to meet the growing demand for cement due to the decentralization and also the movement of the consumption of cement to the interior of the country.

Sobral stands out furthermore in foreign trade and is the only city in the state which comes close to state capital Fortaleza in the volume of exports, according to the 2010 Census conducted by the ‘Instituto Brasileiro de Geografia e Estatística’ (IBGE - Brazilian Institute of Geography and Statistics).

To attract businesses to the city, Sobral’s ‘Secretária de Tecnologia e Desenvolvimento Econômico’ (STDE - Department of Technology and Economic Development) offers countless benefits and facilities to investors. In addition to incentives, the city government furthermore provides the land with the utilities infrastructure such as water, sewage system, and light & power, giving this to the industry along with warehouses that can be used as the company’s temporary headquarters while its permanent offices are being built.

This model was created in 2001 by the law that established the ‘Programa de Desenvolvimento Econômico de Sobral’ (PRODECOM - Program for the Economic Development of Sobral) and is meant to provide access to the required municipal incentives and financing, tax cuts, construction and industrial assembly. With the development of the ‘hub’, the city gains benefits not only as a result of the creation of jobs and revenue, but also raises the general indices of state performance.