Industry in Northeast Brazil: Alagoas Industrial Sector

Interview with José Carlos Lyra de Andrade, President of FIEA (Alagoas State Federation of Industries)

Can you tell us how business people view the state of Alagoas?

The state of Alagoas is the smallest state in Brazil after Sergipe. Alagoas stands out for its natural beauty and its beaches. The state is also known for some famous Republican figures for example Floriano Peixoto, writers like Graciliano Ramos and singers like Djavan. These personalities have in a way represented Alagoas to the outside world. However I think the highlight of Alagoas is its natural beauty. If you talk to people here they will tell you that they have an excellent quality of life. As the capital city is not so big it means there are short distances to travel and people can have lunch at home simple but important things which can’t be done in bigger capital cities.

Alagoas stands out for its teaching standards. The SENAI, the National Service for Industrial Training is one of the top 5 in the country. In the knowledge Olympiad the SENAI of Alagoas came third behind São Paulo and Minas Gerais. The 27 SENAI compete and we came third. Students compete in various domains for example, computing, instrumentation, lathing etc. all the skills that are covered by the SENAI. The students are classified and given medals. The SENAI is very respected all over Brazil.

On what scale does the industrial sector in Alagoas contribute to the economy?

The industrial sector makes up about 21% to 25% of the economy. Sugar is still a very important part of the state’s economy. Traditionally Alagoas was the second highest producer of sugar in Brazil, now it is the 4th producer behind São Paulo, Minas Gerais, and Paraná. The plastics industry is very promising due to the state’s rock salt mineral reserves. We have had the installation of Braskem which today is the largest PVC plant in Latin America, and now we are beginning to see the companies that deal with 2nd and 3rd generation plastics. Therefore I would say that Alagoas’ second sector is the plastics industry, we also have a civil construction sector that is growing, as is the metal industry. In the interior of Alagoas the dairy industry is very important, employing many people.

What would you say are the industries that the state wants to encourage?

We are working hard to develop the textile industry. It is an industry that we can bring to the interior of the state and the unions are working to do this. We are working in various cities in the interior such as Murici, Marechal Deodoro and Santana do Ipanema. We have created partnerships with the government; we have bought equipment, more than 2000 sewing machines. The SENAI is training the workforce. The industry is diversifying and generating income.

Another industry that is growing and becoming more complex is the wooden furniture industry. We now have some cities that are developing this sector. This is also happening with partnerships between the public sector, the Federation of Industries and the wood unions. We are also seeing the firework industry develop but it is much more localised.

Today we are trying to attract investment in the naval sector and shipyards. We have two factories set up already that are to build ship components. One is already installed and the other is soon to be installed in the port of Maceió, they are Tomé Engenharia and Jaraguá Naval. We were beginning a project with Eisa concerning shipyards but due to environmental issues with the IMA, the Environmental Institute, the plans were not approved. Environmental issues are a problem for growing industry here in Alagoas. It is changing and we hope to be able to start the construction of the shipyard in the coming year as it is a huge investment for us. In Coruripe the SENAI set up a training institution for the shipyard workers who are currently working in Pernambuco in the Recife shipyard. We are working hard to build up the shipyard industry here; we have very good draughts that are perfect to set up excellent shipyards. We are also promoting the plastics industry, the largest number of companies that have come here to Alagoas are in the plastics industry.

What sectors would you like to encourage to foreign businesses to invest in, the naval industry or the plastics industry?

Both and also the energy sector. We have bio energy plants, we have natural gas and we have sugarcane bagasse. We have some industries that are beginning to use sugarcane bagasse. It is also possible to find partnerships in the energy sector.

What are the goals for developing Alagoas and what results would you like to see?

The goal is to attract more industry. The Federation of Industries offers to train the workforce to encourage industry as it is one of the largest issues or difficulties for any business that is setting up in any state or city.

In the plastics sector we have a plastics technology centre that is the best in the North and the Northeast, comparable to São Paulo and Rio Grande do Sul. We have a training school in the industrial district of Luiz Cavalcante in Maceió that is capable of training the workforce in all the skills necessary for any aspect of the plastics sector. If you think of all the machines that you use in the plastics industry then you will see that this is a great advantage and this helps us to attract business. We have some of the largest players in the plastics sector in Alagoas, such as Corr Plastik and Krona and all their workforce is being trained by the SENAI of Alagoas. So the Federation of Industries hopes to attract businesses in all sectors and the advantage or plus that we offer is that we guarantee an effective training of their workforce.

Could you repeat the results Alagoas achieved in the knowledge Olympiads?

For the last 4 years we have been in the top 5, we have won 5th, 4th and 3rd place. The Olympiads were held in Brasilia, São Paulo and Minas Gerais and now in São Paulo again.

We are building new SENAI schools some in partnership with the city councils. We have built a school in Coruripe, we have two in Maceió and we are doing another in a neighbourhood in Maceió which has 250,000 inhabitants. We have approved these projects and they are beginning to be implemented. We have schools in various cities, in micro regions. The school in Arapiraca is focused on the rural sector; the school in São Miguel is focused on the forest area, linked to the sugar sector. We carry out studies for each city, to identify the potential sectors in each region and then we can focus on creating a school and training the workforce in that area. We are also working closely with the government looking for incentives in the so called fiscal war whereby the states in the north have to look for fiscal incentives to encourage companies to set up businesses here rather than in the south. Obviously the southern states do not want fiscal war to be allowed but in order to stop it the federal government has to improve the infrastructure here in the north. This issue is currently being discussed in congress, however I believe there will still be ways to give incentives to open businesses in less developed areas.

What are the greatest challenges for Alagoas?

I would say it is improving our infrastructure. We are improving our ports and we have a first class airport now. We have to do highway maintenance. In essence we have to improve the whole infrastructure of the state including the water system, sanitation, energy etc. In terms of energy we are constantly improving, for example Arapiraca has a new energy substation. We are trying to improve the infrastructure according to the needs of each region.

Finally to conclude the interview, what is your message to foreign investors looking at Latin America for business opportunities?

I would say come to Alagoas, the government here is keen to develop. The Governor personally welcomes all new businessmen who want to set up business in Alagoas or who would like to know more about doing so. The Secretary of Development will work directly with all new businesses. I believe that the welcome the government and the Federation of Industries give to new businesses is different and better to that of other states. Some businessmen have said that they chose Alagoas as the location for their business because no other state welcomed them as well as here in Alagoas. It makes a huge difference.