Brazil 4 Business

Alagoas

 

The GDP of Alagoas is the 20th in the country, totalling approximately R$ 35 billion, less than 1% of the country. The revenues are derived from services (~ 56%) and industry (~ 37%). According to data from the Secretary of State for Planning and Economic Development of Alagoas (SEPLAN), the Alagoas GDP grew substantially more than the national average in the last decade.

Among the three smaller states of Brazil, its area is equivalent to half of Holland however in terms of population occupies the 17th place.

Currently, Alagoas is in a momentum of heavy investments in infrastructure and logistics, bottleneck production in the country that range from basic sanitation and irrigation canals to airports, railways, ports.

The capital is Maceió with 1 million inhabitants, thus being among the 20 largest cities in the country. Among other things, the city has great tourism potential.

The main reasons for investments in Alagoas are:

  • The Backland Channel already has inaugurated openings, taking water from the São Francisco River to drier areas and providing development opportunities in the region with reduced costs;
  • Availability of resources such as natural gas reserves;
  • Suitable climate and unique to obtain good productivity of certain foods (especially fruits);
  • Privileged position in the Northeast for the distribution of food and beverages;
  • Professional qualification system developing rapidly, from a partnership formed in 2009 between the government and the Industry System.

Current investments in infrastructure works, together with the granting of incentives to decentralize the industry in the state, are the main factors pulling the developing in Alagoas.

Food and Beverages: This sector finds the situation favourable in the region for two basic factors: obtaining particular raw materials in the Northeast and a privileged position for production flow. Particularly, the tropical climate favours the production of various fruits. In turn, the state’s location ensures logistic potential for circulation of the products generated

Rubber and Plastic products: Established in the Marechal Deodoro area, the petrochemical complex has specialized in the production of chlorinated resins (PVC). This type of resource is widely used in the production of materials for construction, such as pipes and water tanks. The Northeastern region generally still has a deficiency in factors such as sanitation, which gives a guaranteed demand for the sector;

Cement: The Northeastern region presents a shortage of this raw material. Aiming to overcome every demand of the state and region because of the works scheduled for the coming years, Alagoas offers incentive programs to cement industries’ producers and there are already some examples of beneficiary companies.

Metal mechanic: Powered by the industry's rapid development in the region, especially surrounding the petrochemical complex of Marechal Deodoro, the sector has great potential due to the lack of suppliers able to meet big demands.

Chemical products: Seeking to strengthen the supply chain of chemicals and plastics, the government of Alagoas is in the process of installing a chemical technological centre of plastics and materials in Tabuleiro dos Martins. In addition, it is providing tax, locational and credit incentives for the strengthening of this industry.

Textiles: Collaborating to develop more remote areas of the capital, the government has established a textile pole involving 20 municipalities, offering structure preparation, workmanship formation, incentives and procurement of suppliers.

Equipment for energy production: The sugarcane industry is very representative, given the fact that the state is the 5th largest sugar cane producer in the country. With the improvement of production techniques, the Alagoas production is growing, with clear space for processing the product. The government recognizes and encourages industries capable to introduce a higher degree of technology in the production of biofuels.

Established in 2000, the Integrated Development Program of the State of Alagoas (Prodesin) composes a series of tax incentives, credit and locational. For being a small state, the negotiations are done quickly and efficiently.

In the fiscal sector, the main benefit is the reduction of ICMS. In locational parameters, companies even receive areas from 20 thousand to 100 thousand square meters for the installation of its plants. Common and established practice, the size of the incentive varies according to the size of the investment and number of jobs forecasted. The investor submits a technical proposal and the Secretaries of Planning and Finance evaluates in accordance with the state's interest.