Brazil 4 Business

Pernambuco

The GDP of Pernambuco is the 2nd largest in the Northeast region, totalling approximately R$ 120 billion, or 2.5% of the country in 2013. The service sector has a 70% share and the industry 23% in revenues. With territory equivalent to the area of Portugal, it is only the 19th state in size, but in terms of population it is placed 7th.
 
With R$ 7.5 billion of investment foreseen, Transnordestina railroad has almost 1/3 of its extension in Pernambuco. The relevance of this route is the future importance as a source of transporting the national grain production, arriving at the Port of Suape, an important entrance and exit in the Northeast.
 
The capital is Recife with 1.6 million inhabitants, thus being among the 10 largest cities in the country. Also considering the metropolitan region, there is a concentration of approximately 4 million people, or 2% of the national total.
 
The Recife Airport has regular international flights to the United States and Europe. Both routes have an average duration of 7 hours. A great attraction like São Paulo - Miami and Sao Paulo - Paris last about 9 hours and 11 hours, respectively.
 
The main reasons for investments in Pernambuco are:
 

  • Prospect of a good logistics structure in the short term, driven by Transnordestina;
  • Solid growth surrounding the Industrial Complex of Suape, composed of the port, petrochemical, steel mill and automobile;
  • Continuation of the São Francisco river transposition construction, bringing progress to cities in the north-eastern interior;
  • Largest shipyard in the southern hemisphere, moving the marine industry;
  • Well-established policies of tax incentives;
  • Investments in urbanization, facilitating the adaptation of foreigners, especially near Suape and Recife.

Industrial production is concentrated on the coast. However, it is government's desire to develop the economy in the interior, especially motivated by the works of Transnordestina and transposition of the São Francisco River.
 
Food and Beverages: currently corresponds to 48% of the formal job positions in the state. Policy incentives on exports and the favourable climate for the cultivation of various fruits, favour the production of juices. In addition, there is already infrastructure production and the flowing of sparkling drinks and processed foods.
 
Leather Goods and Shoes: The region of Petrolina is historically a pole in the generation of raw materials and production of leather goods. This activity is part of people's culture, which means that there is a large supply of skilled labour in the management of the material. It is considered that there is enough potential for the exporting of products due to quality and workmanship.
 
Manufacturing of steel and derivatives: The presence of the largest shipyard in the southern hemisphere in Suape promoted this sector. Demand for production of steel and similar increases every year, given the fact that there is a waiting list for ships and platforms. With the installation of a large steel mill in the abovementioned region, there are constant opportunities in the processing of this steel, so the government prioritizes the metal mechanics sector.
 
Construction: Motivated by the works of Transnordestina railroad and transposition of the São Francisco River, the demand for this sector is constant. In addition, the Growth Acceleration Program (PAC) has a strong presence in the state, with investments in utilities, housing and urbanization.
 
Rubber and Plastic products: Driven by oil extraction, it is a well-established industry in the region, especially near Suape. The presence of a large refinery generates resources for the petrochemical industry, which is a differential in the category cost of raw material for processing rubber and plastic articles.
 
Furniture and Products of Various Industries: The João Alfredo region is located in one of the most important furniture manufacturering poles of the country. The state government works on the development of the region to explore the increasing demand for furniture in the Northeast, given the fact that the market is still strongly attended by South and Southeast companies.
 
Textile: The rural Pernambuco owns the second largest textile pole in Brazil and has growth prospects, especially with government incentives such as creating a business incubator. A good differential in the region is that the pole is rich in the diversity of produced fabrics, ranging from natural and synthetic fibres.

The state relies on PRODEPE - Development Program of the State of Pernambuco developed to attract and promote investments. The granting of incentives is differentiated, according to the nature of the activity, product type, the project location, etc.

Priority incentives are considered to the following sectors: agro-industry (except sugar and ethanol), metal mechanics, electrical engineering, Pharmacology, beverages, plastics, textiles and furniture.

As noted, the location of the project is relevant and the more distant from the coast, the greater the incentives for the investor.