Brazil has a very strong history of steel industry. The history of the Brazilian steel industry dates back to the mid-twentieth century, when the steel factories in Brazil were heavily backed by the Brazilian government to support the growth of the industry, as steel was considered as one of the most important materials that would promote the overall economic growth of Brazil.
Business analysts in the coming years are expecting the crude steel industry to grow double-fold over its current installed capacity. The steel industry is expected to grow from its current output of about 36 million tons to about 72 million tons in the next five years.
As per the 2005 survey standings, Brazil produced about 31.6 million tons of steel and since then it has grown considerably. Today, Brazil ranks amongst the top 10 steel producing countries in the world. Brazil accounts for about 2.8% of the total world’s steel exports.
The significant growth in the Brazilian steel industry is backed by the use of the most modern and state-of-the-art production technologies. Most of these technologies used by the Brazilian steel companies are imported.
Though the steel industry in Brazil has experienced an unprecedented growth in the past few years, the industry still has great scope for development and attracting new investments.
Investors investing in the Brazilian steel industry stand a great chance to multiply their revenue mainly because of the fact that the costs of production for steel in Brazil are highly competitive. Production cost of steel in Brazil is way less than other steel producing countries of the world. The steel production cost in Brazil is less mainly because of the close proximity between the mines and the steel plants. This results in reduced transportation cost.
Apart from this, some of the other striking advantageous features of investing in the Brazilian steel industry include:
1) There is a continuous and abundant supply of essential raw materials required for production of steel – iron ore, coke, coal and other renewable energy sources.
2) Investors can also get an easy and plentiful supply of skilled labors and a highly qualified workforce. Labor is quite cheap in Brazil as compared to other countries.
3) Investors can also have access to the innovative technology for producing steel.
4) The Brazilian currency is always stable. The currency of Brazil has been one of the best performing currencies over the past few years.
5) The government has ambitious plans for making Brazil a country with excellent infrastructure amenities. Building amenities requires steel and thus there is a great opportunity for investors to invest in the sector and reap valuable gains.
6) Brazil is one of the leading countries in the world in production of submarines and commercial aircraft. This also requires huge amounts of steel, and investors can make use of this opportunity to their fullest advantage.
7) The government set-up in Brazil is proactive and it presents a very conducive environment to invest in. The government encourages investment in the country.
8) The Brazilian government has very liberal investment policies. The government doesn’t impose any restriction on foreign investors investing in the country. There is no restriction on disinvestment of capital by an investor. The investor can enter and exit the market as per his/her will.
Investors can take full advantage of these advantages and reap tremendous returns on their investment by investing in the steel sector of Brazil.