Isaura Daniel
São Paulo – Marcopolo S.A., one of the largest Brazilian producers of highway, urban, and small bus bodies, may open a factory in the Middle East. The company, which leads the Brazilian market, is studying India, Eastern Europe, and the Middle East for business expansion. "We are checking these markets so as to expand our activities, which may involve the construction of a factory. But we are only at the initial planning phase," explained company corporate and investor relations director Carlos Zignani.
Marcopolo already has strong relations with the Middle East. Last year, export to the region totalled 1,000 vehicles, of a total of 14,362 units produced in Brazil. Taseco, a Saudi transport company, imported 500 Marcopolo units. The other countries in the region that bought from Marcopolo were the United Arab Emirates, Jordan, Kuwait, Oman, Bahrain, and Qatar. The export growth to the Middle East was 26.3% over the 2002 result. The largest sales volume was in highway buses for long distance lines.
The company corporate director stated that opening a commercial office in Dubai helped consolidate Marcopolo sales to the region. The office was opened in 1998 and, includes sales, technical service, and spare parts departments. The European company market loss due to increased production costs caused by a strong euro also provided an impulse to sales in the region.
The greatest Marcopolo sales increase to the Arabs, however, occurred in the last four years, when the company rose from sales of eight units in 2000, to 737 in 2002.
A foot in the foreign market
Marcopolo already has productive operations in seven different countries. Apart from the five factories in the southern states of Rio Grande do Sul, and Paraná, and in southeastern Rio de Janeiro, the company also has units in Argentina, Colombia, Mexico, South Africa, Portugal, and China.
The company is responsible for half the bus body production in Brazil and sells to around 60 countries. Last year, 5,670 bodies, or 38.7% of production, were exported. This year, Marcopolo should trade 6,600 units on the foreign market, out of a total production of 15,500. The forecasted international sales increase is 16%.
With the Arab countries, trade should remain at the same level as 2003. The company is about to close another sales contract to Taseco, but deliveries should only take place next year. According to Zignani, one of the next company objectives in the region is to improve commercial relations with Iraq. For this purpose, however, the company is waiting for regional conflict to drop.
The company registered consolidated net revenues of around US$ 385 million (exchange rate of May 18, 2004) last year. Export represented 49.9% of this value.
Marcopolo S.A – Dubai office
RA 08, BC 05 – Jebel Ali Free Zone
Dubai – United Arab Emirates
Telephone: (+971) 4 883 3680
