State of Play in the State of Pernambuco: Main Projects and Future Perspectives

By
Rachel Glickhouse

Geraldo Júlio de Mello, secretary of economic development of Pernambuco, and João Batista do Carmo Aquino, corporate director of the Abreu e Lima Refinery, discussed Pernambuco’s economic expansion, the state of current infrastructure projects in the northeast, and current and upcoming projects in the state.

Speakers:

Geraldo Júlio de Mello, Secretary of Economic Development, Pernambuco
Access Geraldo Júlio de Mello’s presentation (EN).
João Batista do Carmo Aquino, Corporate Director, Refinaria Abreu Lima
Access João Batista do Carmo Aquino’s presentation (EN).

Júlio de Mello highlighted some of the reasons behind this upsurge in growth in Brazil’s northeast, and cited lower crime, economic and political stability, a growing domestic market, expansion of access to credit, and infrastructure investments.

He focused on the state of Pernambuco’s economics, which as of 2010 had a GDP of $50 billion and GDP per capita of $5,700. He also commented on the state’s falling unemployment.

The secretary said Pernambuco holds a number of advantages for investors, including strategic location, attractive state and municipal tax incentives, available human capital, and healthy state finances. He discussed the diversity of industries establishing themselves or already operating in the state, including agricultural, apparel, automotive, beverage, information technology, oil and gas, and wind energy. About 130,000 hectares of land are available for fruit and wine production, and the garment industry employs 150,000 people. Porto Digital, Recife’s technology hub, encompasses 200 companies which employ 6,000 people. Coca Cola has a plant near Recife, with 95 percent of its suppliers coming from local businesses; Microsoft and Walmart also operate in Pernambuco.

He also mentioned the state government’s commitment to training and education. Around 1,200 top performing students in the state will win scholarships to participate in exchange programs in Canada, New Zealand, and the United States.

He then outlined the major projects currently taking place in Pernambuco, including the Transnordestina Railway, with over $3 billion in investments, and Suape, the massive port and industrial complex just outside of Recife, which has received over $20 billion in investments. The São Francisco transposition will aim to supply 12 million people with water, and the city of Goiana, an industrial center, will host several major companies, including automaker Fiat and Hemobras, a biotechnology company. This will create over 13,000 jobs. In addition, the Metropolitan Arch, a $1 billion urban-mobility project, will connect Recife with the Suape industrial complex, reducing traffic congestion in the city. Furthermore, Pernambuco will become the first state in the country with functioning wind power plants and wind tower factories.

Júlio de Mello closed by urging potential investors to take advantage of Pernambuco’s success. “Come to do business, come to make money, come for serious, responsible, and committed government.”

Access Júlio de Mello’s presentation and watch the video of his speech.

Batista discussed the Suape industrial complex’s strategic advantage: Its accessibility to global markets. It lies close to West Africa, the United States, and Europe, and can easily supply Brazil’s northeastern fuel market.

The Abreu e Lima refinery in the Suape complex will be located near a new petrochemical plant, the Atlantico Sul shipyard, and easily will be readily accessible via railways and roads. Slated to open June 2013, the refinery will have the capacity to process 230,000 barrels per day. The total investment encompasses around $14 billion, as well as $4 billion for ships and platforms and $2.5 billion for the petrochemical plant. Environmental protection is a top priority, since the refinery is located in an area with extensive ecological preservation and is also near Porto de Galinhas, a beach resort town. Proper disposal of wastes, as well as the capture of rainwater, are part of the sustainability plan.

Batista also commented on the size of the Suape port; akin to that of a city. Moreover, thousands commute to the complex every day, requiring internal infrastructure needs similar to those of a urban center.

Access Batista’s presentation and watch a video of his speech.

Rachel Glickhouse is the editorial associate at AS/COA Online.