South American Standout

Dec. 21, 2004
Diversity is the key to So Paulo's manufacturing success.

No other South American industrial community can claim world-class status as rightfully as So Paulo, the capital city of the state of So Paulo, Brazil. The metropolitan area's 39 communities and 17 million people generate 53% of the industrial output of the state of So Paulo, which in turn generates 49% of Brazil's industrial GDP. The ABCD subregion of the So Paulo -- so named because it's comprised of the cities of Santo Andr, So Bernardo do Campo, So Caetano do Sul, and Diadema-alone produces 11% of Brazil's industrial GDP. Strategically positioned near highways that connect the city of So Paulo with Santos, Brazil's largest port, the subregion is home to some 5,000 manufacturing companies, including such automotive-industry giants as Volkswagen AG, Ford Motor Co., and General Motors Corp. Despite the concentration of automakers and the often-gridlocked traffic that leaves the impression that cars must be its only product, metropolitan So Paulo has an industrial base that is, in fact, diverse. In addition to metalworking, the area is home to textile producers, electronics manufacturers, and petrochemical companies. It continues to attract new investment, from both local and international companies. In 1999, for example, Germany's BASF AG invested US$3.7 million in new and upgraded facilities in the ABCD subregion. Petroqumica Unio, a local company, invested $100 million in its chemical facility. The city of So Paulo is populated by 152 commercial banks and 16 development and investment banks. Such large local financial institutions as Banco Bradesco and Banco Ita compete with such global banks as Bank Boston, Citi-bank, Credit Lyonnnais, and Dresdner Bank. And the Netherlands' ABN Amro Bank and Hong Kong's HSBC are two of the foreign firms that have recently acquired local banks and financial firms. South America's premier consumer market, So Paulo is the Brazilian headquarters for providers of goods and services ranging from Nestl SA to PricewaterhouseCoopers. So Paulo also hosts BioAmazon, an organization that will act as a liaison between the government of Brazil's proposed Amazon Biotechnology Center and Brazilian industry. The Biotechnology Center will be housed in a state-of-the-art laboratory in Manaus, some 4,500 km northwest of So Paulo. "The city of So Paulo may be slowly losing some steam as a manufacturing center and [becoming] more of a service center," admits Maurice Costin, CEO of Dormer Tools SA and deputy director of international relations and foreign trade at Fiesp/Ciesp, an influential local industry association. "However, if you take into account the flexible adjustment of the ABCD and other subregions, you can say the metro area of So Paulo will hold its world-class status [for the next] 10 to 15 years."

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