Geovana Pagel
São Paulo – "The Arab markets are becoming more and more important and strategic for the Brazilian machinery and equipment industry. In recent years businessmen from the sector have been participating in fairs in Dubai (Arab Plast) and in Saudi Arabia (Saudi Agriculture) and returned surprised and satisfied with the business possibilities," stated yesterday (01) the president of the Brazilian Machinery Manufacturers Association (Abimaq), Newton de Mello, during the announcement of economic indices of the mechanical capital goods sector in 2004.
The Abimaq figures reveal that the sector reached revenues of US$ 17.5 billion in 2004, in current figures, with growth of 30% over 2003, when the total, also in current figures, was US$ 13.4 billion. "This result represents the best performance since 1995, in terms of revenues and job generation," commemorated Mello. Last year a total of 24,200 jobs were generated by the sector, which employs over 200,000 people.
Brazilian exports broke a historic record in 2004 and brought equilibrium to the trade balance. Foreign sales reached US$ 6.841 billion, which represented a growth of 38.5% over the 2003 result. Imports, in turn, reached US$ 6.836 billion, an increase of 18% when compared to 2003.
The Abimaq president emphasized the efforts that Brazilian producers made to enter the foreign market after the devaluation of the Brazilian real against the US dollar in 1999, contributing to the creation of a good name for Brazil outside the country.
"Another factor that contributed to the elevation of exports was the quotation of the Brazilian real against the US dollar from 2003 to mid 2004, guaranteeing competitiveness to Brazilian machinery in foreign markets where prices are important," he said.
Apart from that, according to Mello, there has been an expansion in industry in the United States and Europe, and an increase in sales to countries in Latin America, among them Mexico and Argentina, which resulted in 77% growth. The sectors that contributed most to the total of exports were the highway equipment, compressors, pumps and mechanical transmission.
According to the president, the main export destinations demonstrate the degree of technological development reached by machinery and equipment produced by the domestic industry. The United States are the main market, with around US$ 1.814 billion, followed by Argentina, with US$ 816 million, Germany, with US$ 486 million, Mexico, with US$ 479 million, and the United Kingdom, US$ 331 million.
The Arab countries, like the United Arab Emirates and Saudi Arabia, are included in the list of new markets and should continue importing Brazilian machinery in 2005. "This year we are going to continue investing in the region as it imports very little from the domestic machinery industry, but there is great potential," he guaranteed.
"In Saudi Arabia, for example, the surprise during participation in Saudi Agriculture was the discovery of modern irrigation systems that permit farming and, consequently, the demand for agricultural machinery," he completed.
Investment
The good sector performance in 2004 motivated the announcement of greater investment. This year investment should total around US$ 3.14 billion, US$ 804 million more than the US$ 2.33 billion of 2004.
The money will be destined mainly to technological modernization, expansion of the industrial capacity, replacement of machinery that has been depreciated and purchase of complementary items, which includes new products, improvements and vehicles.
Worry
Despite the positive result for 2004, the forecast for 2005 is not very optimistic. The great villain is the dollar. The increase of the cost of steel (the raw material used in the machinery industry) and the reduction in the price of agricultural commodities may also affect the sector growth this year, according to the president of the Abimaq.
"The low dollar removes sector competitiveness. If we stick to the same export volume it will already have been a success," he guaranteed. "If the devaluation of the dollar against the real remains, we may even register a drop of around 20% in the second half," he said.
Contact
www.abimaq.com.br
