Brazil offshoring and outsourcing contract manufacturing activities can be attractive for companies wanting to move their manufacturing operations.
Brazil offers a good location for companies targeting the South American product markets but the government tax and tariff arrangements are not very competitive.
Therefore, some companies wanting to establish Brazil as their contract manufacturing destination source may find it difficult to do so.
Meanwhile, as Brazil’s market for consumer products continues to develop, OEM companies serving the consumer product markets (and other product markets) considering engagements with contract manufacturers with facilities in Brazil could likely benefit from cost savings and reductions based partly on Brazil’s domestic consumer products consumption trend.
The Brazilian Information Technology Law (2001) allows computer products partial tax benefits. Some regional taxi incentives also exist such as in Manaus, an industrial center which has offered electronics manufacturing companies some tax benefits for a while.
Foreign manufacturers continue to view Brazil with interest. Part of this is driven by the country having privatized a good portion of its economy in the last ten to fifteen years.
In 2004, Brazil attracted over $18 billion in foreign direct investment (FDI). Some OEM companies manufacturing electronics products in Brazil include Kodak and Lucent.
A few contract manufacturers with operations in Brazil include Benchmark Electronics; Sanmina-SCI, Foxconn, Flextronics, Jabil Circuit, and Elcoteq.
VentureOutsource.com, 2007
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