Plants Under Construction

John Deere has been active in Brazil for 34 years but almost exclusively in the agriculture segment. However, the brand recently announced it would ">enter the construction market by simultaneously installing two plants in Indaiatuba. A $180-million investment, the plants are expected to come on line at the end of 2013. Two-thirds of the cost will be paid by John Deere and the rest by the Japanese company Hitachi, Deere's global excavator partner.

South Korea-based Doosan has decided to come to Brazil because it sees stability and potential for growth. For these reasons, it is building a Brazilian plant, an investment of about $98.2 million (R$200 million), according to Dong Hoon Lee, CEO of the company for South America. Expected to be completed by the end of this year, the 50,000-sq-m plant is being built in Americana on a 160,000-sq-m piece of land.

"If we take macroeconomic factors into consideration, Brazil is one of the most important and strategic markets for any company. Within this scenario, Doosan sees construction, infrastructure and, more recently, mining as the most promising segments for investments," Lee explains.

Korean Hyundai and Chinese Zoomlion are working with their distributor, BMC, to build their own plants, as well. Other new brands with production units operating in Brazil are U.S.-based Manitowoc and China-based Sany. XCMG, also from China, and Ammann, from Switzerland, have announced similar plans to lay brick and mortar in the region.

The explosion of manufacturing capacity signals gradual growth in this sector rather than a sudden sales boom of full-line machines, says Brian Nicholson, Sobratema's research coordinator. Initially, manufacturers will produce items tailored specially to the Brazilian market. "The idea is to make room," he says.