CNH plans to invest US$ 1 billion in Brazil until 2014
Valor Econômico
One of the largest manufacturers of agricultural machinery and equipment for construction in the world, the Italian CNH plans to invest R$ 1.7 billion (US$ 1 billion) in Brazil over the next four years to expand production capacity of its four factories in the country. The budget is part of the four-year plan of the company and exceeds in 30% the investment of R$ 1.3 billion (US$ 764.7 million) carried out in the Brazilian market between 2007 and 2010.
Controlled by the Fiat group and owner of the Case and New Holland brands, CNH closed 2010 with global earnings of US$ 3.75 billion, of which 19% in Latin America. In Brazil, which represents most of the Latin American market, the company is a leader in harvesters, with 47% share in the 4,544 units sold last year, and is ranked the second largest of tractors with 24% in a total of 56,397 units.
According to the plans outlined, the company hopes, until the end of 2014, increasing in 30% its production capacity of agricultural machinery (tractors and harvesters) and the construction equipment in 50%. The units installed in Piracicaba (SP), Contagem (MG) and Curitiba (PR), and even the newly inaugurated factory in Sorocaba (SP), should take extra breath for the production. "We must expand our manufacturing capacity to keep up with the pace of growth of the market and not to lose share in both segments", said to Valor Valentino Rizzioli, vice chairman of Fiat and president of CNH to Latin America.
The Minas Gerais unit of CNH concentrates the production of construction equipment - excavators, hydraulic excavators, bulldozers, wheel loaders and motor graders. Regarding the Curitiba unit tractors and grain harvesters are manufactured, while in Piracicaba the production of sugar cane and coffee harvesters, besides agricultural implements, is concentrated. In Sorocaba, unit inaugurated little less than a year ago after investments of R$ 1 billion (US$ 588.2 million), harvesters and components that supply other units, are also manufactured.
The focus of the Italian company to produce more and new machines is due to the potential of the two sectors in which it operates. According to Rizzioli, the Brazilian market for construction machinery moves, per year, about 21 thousand units. He compares the market with the American, which, even in crisis, sold 99 thousand units last year. The executive considers that the proportion of sales in Brazil - 65% of agricultural machinery and 35% of construction - should be maintained, since there is the expectation of growth for both areas. The main competitors, however, are not stopped. Mindful of the growth potential of Brazil, AGCO announced in October last year investment of R$ 25 million (US$ 14.7 million) in its unit of harvesters in Rio Grande do Sul. John Deere reported an investment of R$ 60 million (US$ 35.3 million) in its factory in Catalão (GO) to enlarge the structure and start manufacturing agricultural sprayers, besides the sugar cane harvesters.