Brazil 4 Business

Rio de Janeiro

The city of Rio de Janeiro has 6.4 million inhabitants, thus being the second largest in Brazil and the third largest in Latin America. When one takes into account the metropolitan area, the numbers are even more representative: 12.0 million. In other words, approximately 6% of the national population.

The GDP of Rio de Janeiro is the second largest in the country, with 11.2% of the total, or R$ 543 billion. Revenues come from services (~ 55%) and industry (~ 25%). With equivalent territory to that of Denmark, is amongst the five smaller states in Brazil, but in terms of population it is in 3rd place with 16.5 million people, or 8% of the national total.

The state finds itself in a scenario driven by conducting two global events: World Cup 2014 and Olympics 2016. Investments in safety and infrastructure (roads and public transport) will be reverted into welfare and industrial development. In addition, services such as construction and tourism have undergone strong acceleration.

Currently, industrial investments are concentrated in oil and gas (motivated by pre-salt), Mining, Steel and Petrochemical. Between 2014 and 2016, we intend to invest R$ 230 billion, linked to those described sectors and mega events.

The main reasons for investments in Rio de Janeiro are:

  • Good logistics structure, with three national and two international airports (Rio de Janeiro / Galeão and Campos);
  • It has the third longest coastline in the country (635km). Thus, home to seven ports, each having different specialties (oil, iron ore, general cargo, etc.);
  • 50% of the market capitalization of BOVESPA are companies based in Rio;
  • 5 of 9 universities with top marks in the MEC ranking are in the state;
  • City linked to quality of life, with more than 90km of beaches. It stands first in the ranking of foreign residents in Brazil, with nearly 46% of work visas granted in the country.

Industry sectors are quite polarized geographically. On the coast, oil and gas extraction is a highlight. In the interior, the automobile industry starts to grow. And the city of Rio de Janeiro has huge tourism potential.

Oil refining and coke: With 44 fields it is the largest oil producer in Brazil (64% of national production). The sector finds itself rapidly developing from the pre-salt announcement. This also involves investment in refineries, given the fact that Brazil still imports fuel and other derivatives. The state has three of the top petroleum and gas engineering courses in the country.

Machinery and Equipment: exploring the opportunities of the chains in the oil and automobile, machinery and equipment industry has ample opportunities in the region, concentrating on the interior, near Resende and cities with high potential for oil exploration, as in Campos.

Iron ore: Biggest entrance of national iron ore flow, the ports of Itaguai region concentrates the largest exporters of this commodity in the country. This requires a solid network of maintenance parts suppliers.

Machines, tools and Electrical Materials: In conjunction with the development of the industry, Rio will concentrate large part of the media and broadcasting centres for the games in 2016. All this generates a request for investments in the sector and training of professionals. In addition, the city of Rio de Janeiro has the most modern urban monitoring operations centre in the world which demands constant evolution and maintenance systems.

Automobile: In the region of Resende, close to the borders with Minas Gerais and São Paulo, you will find the automobile pole of Rio, with the presence of three automobile manufacturers. Together, knowing that logistics costs are very relevant in Brazil, there are supplier development opportunities in the surrounding factories.

Construction: The demand for investment in the sector is not only linked to the achievement of the 2016 Olympics. Certainly the construction of arenas for games has a direct impact, but beyond that, the whole hotel infrastructure needs to be amplified. In the same line, several works of urban mobility are under development and strategic planning includes investments until 2020 at least

Metal products (except machinery and equipment): Drawn by the demand of the oil industry, shipbuilding is under demand. Understanding the situation, the state government provides tax incentives for the development of the industry. Currently, the yards are concentrated between the city of the Rio de Janeiro and Campos.

The Economic and Social Development Fund - FUNDES covers all sectors of the economy, aiming to finance the working capital of new ventures, as well as the existing businesses in Rio de Janeiro territory. Assistance in amortization of loans, intended for fixed investments, granted by other agencies and financial institutions.

The Government has a number of programs (RIOPORTOS, RIOLOG, RIOINVEST, RIOINFRA, etc.) with particulars for each sector, involving the direct reduction of ICMS and other incentives.