Investments in Santa Catarina: Exclusive Interview with Governor Raimundo Colombo

Interview with João Raimundo Colombo, Governor of Santa Catarina

Let’s start with a brief introduction of Santa Catarina. Can you tell us a bit about the ways in which the State of Santa Catarina stands out from the other Brazilian States?

People outside Brazil know São Paulo very well because of its dynamic economy and they know Rio de Janeiro because of its natural beauty and bustling tourism. Santa Catarina has both. We have a very strong industry and economy, that is just as dynamic as São Paulo´s; and we have the natural beauty of Rio de Janeiro. So Santa Catarina is a mix of a very beautiful and a very productive region, with important industries that were born here, in garages and backyards. It received very intense European immigration, from Germany, Italy, Poland, and Portugal. And driven by a strong entrepreneurial vocation, the State became an industrial powerhouse. For instance, we are the biggest producers of meat – pork and poultry. Very large industries were born here. We have a very strong metal-works sector. The clothing industry is the biggest in Latin America. So, even though Santa Catarina has only 1,1 percent of the territory and 6.4 million inhabitants, it has the sixth or fifth highest GDP in Brazil.

As a Governor, which were the main policies that you wanted to implement in the State? What was the main focus?

We follow two very important guidelines. The first one is to sensitize, to humanize the public administration machine so that it can overcome all the bureaucracy obstacles and address people’s problems quickly, efficiently and in a caring way. This humanistic guideline is very important. We show the day to day stories of simple people through videos telling the story of Santa Catarina’s anonymous characters. We do this to sensitize the entire public service structure.

On the other hand, we are faced with great challenges in terms of infrastructure. We are dealing with some rather difficult hindrances and obstacles, which will require an investment of around 4 billion dollars in the next 3 years. We will be investing in energy, in sanitation, in roadways – a major investment there – in hospitals, in education and in public safety. These resources are already secured in and are being contracted.

We will be widening the roads with the most traffic, especially those leading to maritime ports – Santa Catarina has 5 maritime ports, which are very dynamic and are growing a lot each year. So, basically, we will be increasing the efficiency of logistics, and by doing so, we will be reducing costs and increasing competitiveness.

We have a very strong calling for entrepreneurship. Santa Catarina is a State focused on work.

Some of the businessmen we interviewed also brought up the problem with infrastructures. Can you tell us a bit about the Pact for Santa Catarina? What is it about?

The Pact was a program that we developed here in Santa Catarina, which concentrates and defines our priorities. In order to avoid false priorities, which sometimes will only benefit a few, and to focus our energy and our resources in works that are real priorities, that we consider to be crucial. They are a part of a government program for investment an improvement of services. For example, we will be reinforcing hospitals at a regional level, so that people won’t have to travel to get medical care. Regarding road networks, we conducted a study to find out exactly where the biggest traffic flow is, where the highest number of accidents occur and what kind of actions we need to take. This study was concluded; it has been approved, and is now in the execution stage.

There is also great demand for qualification of the workforce. There are a large number of jobs available in the technological innovation sector. So we are now preparing, qualifying and training our youths, and creating the mechanisms to address this. We have realized that there are a large number of small companies in Santa Catarina. So the government has developed a program in which we make the resources available for these companies without interest, in order to invigorate them. Besides providing interest-free financing for these companies, we also have a technical group made available to them, in collaboration with Sebrae, to provide all the support in matters of administration, management, competitiveness, product quality – in order to energize this sector, which is very big in Santa Catarina, and that is a part of the state’s history. Our largest companies started out very small, in backyards, run by family members, and then grew to become huge corporations. We have hundreds of companies here that tell these extraordinary tales.

We have just interviewed the president of Portobello, which is an example.

Yes, and also WEG, for instance – WEG was created by a group of three friends, two of them of German origins, who knew how to build machines. Their company’s only asset was an old Volkswagen Beetle. They sold that asset and gained a little capital. Nowadays, they are a very large and solid company. Sadia is another example – Its founder was in Italian immigrant with little resources. He had tried to open a factory three other times before and had failed. And today, he owns a big company in Concórdia, in the heart of Santa Catarina. So there are hundreds of companies like this, each with a different story, but all sharing a common origin.

There are a few agreements being made with some companies to have them set up production centers here in Santa Catarina, like BMW, some companies from China, etc. What policies does the government have in place to attract this sort of investment?

Well, we have seen a great amount of foreign investment being made here. These are automotive companies, aircraft manufacturers who are looking for technology, a significant number of companies in the agricultural sector, etc. In technology, for instance, we have Siemens, who has just opened a production center in Joinville, to manufacture tomography and MRI machines; others are also looking to establish themselves here, like Yudo, from Korea, Sinotruck, a Chinese truck manufacturer, and yes, BMW, who are already at the final stage of evaluation. And we have, of course, our local companies; just this morning I was speaking with people from Brazil Foods, who are planning to make a large investment in the interior of the State.

We are the only State in Brazil who is free from foot-and-mouth disease, without vaccination, which is a great requirement by the more qualified markets, such as the European, American and even Asian. So Santa Catarina has characteristics and an atmosphere that are very favorable for business, very adequate infrastructures, and it the best in the country in terms of logistics.

According to official data, we have the best indicators in terms of education, healthcare, and public safety. So, our State is very dynamic, and, apart from all these benefits for business, we also have a differentiating policy of tax incentives.

We have 5 maritime ports. Two of them are private and the other three are public: one is run by the federal government, another by the State Government and the other one by municipal authorities. They compete with each other in terms of efficiency.

So the environment is very favorable for business. Last year our State imported about $18 billion, and also exported around $18 billion. That means that ships that come in with cargo leave with cargo. This reduces transportation costs and increases the ports’ efficiency – all of these characteristics make our State undoubtedly one of the most attractive in Brazil

What does the government do to attract these foreign investments? Do you go abroad yourself?

The State is very proactive. We have an international relations office, and, for instance, we were just recently in Japan and we are going back there on the 7th and 8th of November to conclude the negotiations regarding pork exports. We have been to Korea; we have been to Europe and to many other countries. So we have very intense international relations, because our products are of great quality and we have a very specialized workforce. This relationship is historic; it dates back to a long time ago. So Santa Catarina is rather well known abroad. Of course there is always room for improvement, and for expansion, and this is one of the goals we are striving to achieve. We try to make our environment as welcoming as possible, consolidating these relationships with legal protection, with a policy of clarity in proposals, and a commitment to fulfill all and any agreements made.

There are currently many companies setting up factories here to build boats and yachts; There are several Italian companies establishing themselves here, because this is a sector that will grow a great deal. It is a very economically dynamic area. Brazil has had a tremendous internal economic growth, incomes have become more distributed, and people’s lives have gotten better. This increased purchasing power, which obviously caused an impact on many sectors – the nautical industry is one of them.

What are the State’s biggest challenges at the moment?

Our greatest challenge is to improve logistics. It is to get past all these stages of Brazilian bureaucracy, to get projects out of the paper and turn them into practical actions, with a beginning, a middle and an end. We need deadlines to get these works started and to get them finished. Because there is a problem with mobility in Santa Catarina. Ten years ago, the state of Santa Catarina had 1.5 million vehicles. Currently, there are 4 million vehicles. This number has tripled, so now we have problems on our roads and on our city streets. These are the investments that need to be made, and they are currently our primary goal. This is why we have created the Pact. It is a project that intends to prioritize investment in areas that are crucial to society.

How would you ideally like to see Santa Catarina in the next 2 to 3 years?

Well, we need to move forward in this new economy, in terms of technological innovation; in the strengthening of our industry, expanding the development process in important sectors, improve our competitiveness and our efficiency, and to create increasingly better job opportunities for our youths. This is characteristic of Santa Catarina: we are already a reference in technological innovation.

Because we are a small State, we need to import grain. The agriculture sector is very strong but it lacks competitiveness. We are very big in the textile sector, but nowadays, we have to import because there is a lot of international competition, which creates some operational problems here. So we need to create new economic alternatives, and make the best of our strength in technology.

Do you have a final message for your constituents, and for possible national or foreign investors that might be interested in South America, Brazil, or Santa Catarina?

If you take a look at the data about Brazil and about Santa Catarina, you will see very clearly that the State has every condition to attract business. This is already a reality. We are a very viable State; we are a reference in Brazil. So what’s important is that we are able to establish an initial contact, to present our State, its achievements and its future prospects, and people will realize that the environment here is very favorable for business, and that there are vast possibilities for growth. And I am sure that whoever does an in-depth study of our current reality will certainly choose Santa Catarina to live and to work. I am absolutely certain of this.