It’s official, Apple and Foxconn will make iPads in Brazil from November. So says Brazilian minister of Science and Technology Mercadante who just reported about details of a meeting in Beijing between Brazialian’s President Dilma Roussef and Hon Hai Precision’s founder Terry Gou. Reuters gave the report a much-needed credibility by noting that Foxconn is considering investing $12 billion in manufacturing facilities in the country:
iPhone maker Foxconn Technology Group is considering investing $12 billion in Brazil to assemble monitors, Brazil’s president said on Tuesday, in a sign the company may be ready to accelerate its move away from its main China manufacturing base.
The news that Foxconn would set up operations to build Apple products near São Paulo, Brazil broke three weeks ago, although first reports date back to April of last year, when Apple was said to be looking into such a possibility for cost saving reasons.
Foxconn already operates three factories in Brazil that assemble notebooks, digital cameras, motherboards and gadgets for HP, Dell, Sony Ericsson and Sony. They opened their first plant in Manaus back in 2005 to assemble cellphones. The remaining two plants are located in Jundiai and Indaiatuba in Sao Paulo. It would be cheaper for Apple to manufacture its gadgets for the Brazilian market in the country because the government offers tax breaks on component imports, which encourages final product assembly inside Brazil. The country’s tech minister was reportedly involved in negotiations with Foxconn for more than three months.
If Foxconn opens facilities inside the country, they could employ a whopping 100,000 workers – 20,000 of which would be engineers. The $12 billion investment would be spread throughout the next five years. This is machine-translated from the Global Economia newspaper:
The Ministry of Development, Industry and Foreign Trade held until Friday (15) public consultation on the conditions for the inclusion of tablet computers (laptop computers with no keyboard and touch screen) in the Basic Productive Process (PPB), which would allow tax reduction equipment. The Communications Ministry, who requested the consultation, estimates that with the inclusion in PPB, the tablets will be reduced by up to 31% in price compared to imported ones, since the IPI would drop from 15% to 3% and VAT, if production is in Sao Paulo, from 18% to 7%.