Brazil: Regional Investment Opportunities in Brazilian Midwest

Interview with Marcelo Dourado, Director of SUDECO

What are the investment opportunities in the Federal District? What is the legislation? What are the problems associated with investing in the Midwest of Brazil?

I would say that the Midwest region of Brazil is feeding the world right now with its production of grain and meat. So, this area, mainly the three states – Mato Grosso do Sul, Mato Grosso and Goiás – with the production of grain, and exports to the four corners of the planet, plays a very important role in feeding the population all over Brazil and the world. In the Midwest part of the country, we have three very important advantages for the production of food and industrial production: water, the land and the sunlight, as well as technology.

The region is also specialized to finance investors; it offers great opportunities for investors from all over the world who want to invest in one of the regions of the country that grows at twice the pace of the growth of the country itself. The public money that the governor of Brazil has to stimulate investors coming to Brazil, especially to the Midwest part of the country, creates very strong appeal for investors, along with the three things I mentioned. That is what we want to do; to open new doors to investors from Europe, India, China and Italy. The governor of China has come to Brazil to talk about investments.

When they ask what is the number one problem of investing in this region, how do you respond to them?

I would say none, because we’ve got credit, water, money, sustainable standards that offer them optimum conditions for investment, the local government has special credits as related to fees and rates at very good standards to attract investors. I would say we have no problem for them. It’s a policy of our agency and the government that the four states should be very aggressive in attracting companies that would like to invest in Brazil.

You have to agree that there is a certain set of challenges – a complicated tax system, for example.

Maybe the bureaucracy is sometimes very heavy. I would say that this could be a little problem sometimes, but we are trying to overcome that. The legislation is sometimes very bureaucratic, but the process for the fund that I am the president of – the Midwest fund or FCO – is very quick in letting the investor have the money; sometimes in 45 days or two months at the most, the credit of the money is available to the investors.

Of course, apart from agriculture, there are other investment opportunities, such as infrastructure and sanitation – water projects. What else can the Midwest offer to investors?

I would say that the opportunities are very good, but in terms of limitations – infrastructure and logistics are the challenges we have right now, especially regarding railroads. We have to build new railroads because production is growing so fast that the infrastructure we have is an obstacle to making exporting easier and sometimes we have problems with increasing the price of freight and with time. So, the export of the commodities and goods in the Midwest has to go through the ports of the southern part of the country instead of the north because we don’t have an adequate railway structure to make this way shorter and cheaper. I, myself, have put a lot of effort into improving this issue and SUDECO is helping building railroads for grain, not only for exporting goods but also mass transportation as well.

This is particularly crucial because the heart of Brazil is hosting two of the most important sporting events in the world: the Olympic Games, which is happening in Rio de Janeiro but the soccer games will be here in Brasilia, and the World Soccer Cup that the Midwest is hosting. So, it’s a map of opportunities and we are trying to make the infrastructure for tourism better. We have invested a lot in hotels, gastronomy, and mobility.