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Brazilian Apple manufacturing linked to Foxconn expansion

updated 01:45 pm EDT, Tue April 12, 2011

Local iPad production slated for November

Apple's Brazilian plans are likely linked to an expansion by manufacturing partner Foxconn, a Reuters report suggests. Currently situated in Taiwan and China, Foxconn is "proposing a partnership" with Brazil worth $12 billion over the course of five to six years, according to the country's president, Dilma Rousseff. "We've been talking to them [Foxconn] for three months," adds science and technology minister Aloizio Mercadente.

"The negotiations are far from complete but I'm confident," Mercadente continues. Many topics are reportedly on the table, including taxes, financing, locations, logistics and broadband infrastructure. The Brazilian government is said to be handing out tax exemptions to companies willing to build tablet-style devices, which -- given the dominance of the iPad -- may be a strategy to lure Apple in particular.

While Rousseff claims that the $12 billion is related to monitors, iPad assembly also appears to be in the works. Mercadente says that Foxconn is planning to start building iPads in Brazil by the end of November.

Beyond taxes, other motivations for expanding to Brazil may be cheap workers and the need to keep up with Apple, which is often straining both production and supply capacities in Asia.


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  1. ricardogf

    Fresh-Faced Recruit

    Joined: Jan 2003

    0

    Excellent news

    As discussed in other similar threads, this represents EXCELLENT news for both Apple and Brazil for the following reasons:

    - This is gonna provide Apple with a MUCH stabler environment in terms of governance, workforce and overall environment, along with way lower shipping costs (after all, Brazil is the second-biggest Western democracy in the world, not an Asian sweatshop);

    - Lower prices will finally allow Apple to tap into that gigantic market, with a majority of middle-class consumers as well as one of the most demanding upscale societies;

    - Brazil is gonna benefit from positive spillovers in terms of a skilled workforce cluster and much lower costs for Apple devices in the country - Brazil is, today, the place where you'll find the MOST expensive Macs, iPods and iPhones in the world due to high import taxes;

    Now to correct some a silly presumption contained in the article:

    - Brazil does NOT have cheap labor as in Asia, so please correct the article in this regard - in fact, the country is already the world's 7th economy and among the MOST EXPENSIVE in the globe in terms of overall labor AND living costs (due to extensive social security obligations and a booming economy), especially in the rich area of São Paulo. This is definitely NOT a reason for Apple to have a plant there.

    Finally, the family name of the Brazilian Minister of Technology is "Mercadante", not "Mercadente".

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