MODERN INDUSTRY AIMS FOR INCREASED BI-LATERAL TRADE

Brazil’s late arrival in industry has been a clear advantage. With low production costs Brazil is pushing hard to expand U.S. market.

With one of the largest and best reserves of iron ore anywhere in the world Brazil is eager to pool resources with the U.S. for the mutual benefit of both countries.

Late to industrialize, first to modernize. In just over a decade, Brazil has become a major player in the global steel market. It is already the 4th largest exporter of steel in the world with annual sales amounting to 9.6 million tons. And there is no end in sight to the dramatic growth of the industry. While China is currently buying most of Brazil’s exported steel the country has given top priority to increasing exports to the U.S. Additionally, the country’s late start allowed for the use of far more modern production facilities than those in older markets, increasing the sector’s competitiveness and reducing its environmental impact. Most of the equipment in operation in the country today was installed after 1970. CEO of Companhia Siderúrgica Nacional (CSN) Mr. Benjamin Steinbruch says, “The steel industry in the U.S. started 200 years ago, whereas in Brazil it began in 1941. Since our sector is so young, it uses new equipment, new logistics, new structures – all of which permit us to be competitive, and an ideal place to invest.”

Moreover Brazil has vast natural resources. It is the world’s second largest tin producer and its third largest iron-ore producer, and possesses significant deposits of gold, bauxite, manganese, and aluminum. “Brazil has the best and the largest reserves of iron ore in the world, and we have reserves for the next 400 years. What we need is to have new markets to sell our iron ore to,” states Mr. Roger Agnelli (INTERVIEW), President of one of the country’s leading steel manufacturers, Companhia Vale do Rio Doce (CVRD). Mr. Agnelli says that a higher degree of cooperation could exist between the U.S. steel industry and the Brazilian sector, through both direct investment and partnerships, utilizing the comparative strengths of both countries for mutual benefit. Consequently, in addition to the company’s alliance with U.S. steel company, Nucor, American investors number among CVRD’s shareholders and the company is listed on the NYSE.

ANTÓNIO ERMÍRIO DE MORAES President of Votorantim

ROGER AGNELLI CEO of Companhia Vale do Rio Doce

The National Confederation of Industry (CNI), which represents more than 700,000 businesses in the country, has been lobbying for advances in the FTAA talks. The organization’s President, Armando Monteiro Neto, says that he is confident that negotiations will move ahead. He states, “The CNI has had an important role in encouraging the current government to continue with the FTAA schedule and to provide an initial list of offers. Maybe the deadlines will not be met exactly on time, but I believe we will move ahead with the negotiations, and that the Brazilian business sector is interested in negotiating.”

Mr. António Ermírio de Moraes, President of Votorantim Group, one of the largest private conglomerates in Brazil, is also aware of the importance of a successful outcome at the FTAA talks. He declares, “The FTAA is a necessity even for America who have reached their maximum production. We offer new markets for them to explore, and it’s much easier to come to South America than to go to Asia.”

The Votorantim Group was founded 85 years ago and following years of phenomenal growth it is now involved in a wide range of market activities including cement, pulp and paper, and mining. The Group is on its way to becoming a world-class corporation and has ambitious growth targets for the future. Its own international expansion began with the acquisition of Canadian cement company, St. Mary’s, in 2001, resulting in a 12% increase in production. In addition, Mr. António Ermírio de Moraes says, “We are currently exporting 60% of our aluminum production, 70% of our nickel production, and around 35% of our zinc production.”