Apple and its manufacturer Foxconn will commence production of the iPad in Brazil, in a project that will receive $12bn in funding.
The announcement of the deal – which would be one of the largest foreign investment deals ever made in Brazil by a foreign company if it goes ahead – was issued by science and technology minister Aloizio Mercadante during the ongoing trade mission to China led by president Dilma Rousseff.
The proposal – which has not been set in stone yet – was made by Foxconn’s president, Terry Gou, who met president Rousseff in Beijing yesterday.
Apple’s third-party manufacturer is looking to build a new factory in Brazil to make the gadgets and the investment will be made over a five-year period, supposedly generating 100,000 direct job vacancies – both investment and job creation figures were received with skeptical remarks by analysts in Brazil and abroad, who deem the numbers too unrealistic.
The Brazilian government will also invest in the project and tax advantages are currently being discussed.
“The maturation of the exchange [between Brazil and China] will bring enormous mutual benefits, especially in that it incorporates intermediate products, technology, know-how and capital goods, contributing to the improvement of distribution channels, both Brazil and China. It contributes to income generation, employment and joint development, as well as the fight against social and regional inequalities in our countries,” president Rousseff said during a speech in the Chinese capital yesterday.
Meanwhile, the Brazilian Telecommunications Agency (Anatel) has authorized the sales of the iPad 2 last week, over a month after the product was launched in the US and Europe. Even though the device has now gone through Anatel’s bureaucracy, there is still no release date for it in Brazil.
The first version of the iPad was released in Brazil almost a year after it started being sold in the US. Due to extremely high taxes, the cheapest version of the iPad in Brazil retails for about $800, versus the $400 that it costs in US retailers.
Foxconn started operations in Brazil in 2005, with units in Manaus, the capital of Amazonas, the state where the Amazonian rainforest is located, as well as the states of Minas Gerais and São Paulo. It is understood that the new site will be based in the city of Jundiai, in the metropolitan region of São Paulo. The company currently produces mobile phones in Brazil and employs more than 4,000 employees.
Image by Johan Larsson licensed under Creative Commons.