São Paulo – Brazilian exports of high-tech goods, which are characterized by the high value added and technology used for them to operate, have been down since the beginning of the pandemic. “Medium-high and high-tech goods were the only ones whose exports haven’t rebounded in the post-pandemic period. And not only in Brazil but in the world at large,” said National Confederation of Industry (CNI) International Integration Policy manager Fabrizio Panzini (pictured above).
According to Panzini’s forecast, 2022 is expected to be a stagnant year focusing on maintaining the sector, and Brazilian exports are not predicted to grow. This is expected to remain so because of the foreign demand, which has been compromised due to the international arena. “Thus, you end up having a higher global inflation rate, which eats up the purchasing power of several countries,” Panzini says.
Medium-high and high-tech goods
The main high-tech goods manufactured in Brazil include aircrafts, pharmaceuticals, machinery, and special equipment like the robotic equipment used in manufacturing automobiles, computers and weapons.
Despite the decline of almost USD 2 billion in exports from 2019 to 2021, medium and high-tech products are still manufactured to cater to recurring markets.
The United States – a major aerospace hub – is the leading importer of high-tech goods from Brazil, accounting for almost 50% of the demand. The other 50% are divided into countries in Latin America, Europe, and some in Asia. According to Panzini, there’s still room to grow in business with the Arab League states. Out of their 90% and some imports from Brazil, 5.8% are medium-low tech and 3% are medium-high and high-tech goods.
In terms of medium-high tech, with less value added than high-tech goods, Colombia, Chile, Argentina, Mexico and the US are the leading importers of machinery and equipment, vehicles, electrical and chemical products, and medical and hospital equipment.
Declining prior to the pandemic
According to Panzini, despite medium-high and high-tech exports have dropped drastically during the years of the pandemic, Brazil had already been losing ground before that. Exports had been down almost 20% in two decades. “In 2022, we exported USD 52 billion. This was pushed down year after year until it reached a level of USD 39 billion in 2021,” Panzini says.
Despite this, there are ways to boost exports, the CNI’s International Integration Policy manager says. They include cutting the Brazil cost, particularly in tax practice as the higher the value you add to a product, more taxes you pay. He also believes it’s important to improve the innovation infrastructure to attract more international investments in research and more investment in trade and international integration.
Exports from Schalter
Despite manufacturing high-tech products for over 30 years, Schalter started exporting four years ago. From 2016 to 2017, the company prospected clients and invested USD 300,000 in adapting its products to meet the requirements of importers. From 2018 to 2021, it started working with several countries in the Americas like Peru, Chile, Mexico and the US, as well as the Philippines.
The main exports by Schalter are gaming machines and self-checkout terminals.
The company based in Porto Alegre has also been affected by the pandemic, so much so that their exports dropped from USD 908,000 in 2020 to USD 95,000 last year. “In the beginning of 2021, we expected to export 800 equipment, but exports reached only 360. However, we’re resuming business, so this year we expect to export some 200 or 300 self-checkout equipment,” Schalter CEO Valtuir Caetano says.
*Special report by Rebecca Vettore for ANBA
Translated by Guilherme Miranda
