Hello everyone, and welcome back to Denmark Brazil.com
It is a pleasure to keep on writing this incredible series of articles about the Brazilian states.
I have been a absent due to a trip I have done to Brazil with two projects related to Brazilian and Danish businesses.
The first project is for a lighting Danish Design business which has very good positives all over the world and now, they want to get started in Brazil. Soon I will share with you the main challenges we are facing.
The other project I have been working is in partnership with some Breweries in Denmark. I am the responsible for the development of the brand of some Danish breweries. If you follow my Instagram at carlosdkbrazil you have probably seen me talking about the “Danish Craft Beer Revolution” that is coming to Brazil.
“The Danish Craft Beer Revolution” is a project with Danish 4 breweries, my own business and a Brazilian company.
The goal of the “beer project” is to make that the best Danish craft beer arrives in the Brazilian supermarket shelves and other premium outlets. Ultimately and most importantly, promote the Danish beers in the Brazilian market. Soon, I’m back with more information about this project as well. Both projects are related to the fast moving consumer goods. However in this is a subject that I’ll keep it for a next post.
Our subject today is the state of Minas Gerais, an important Brazilian state, given the size of it’s economy, the role the state plays in the country. and given cultural aspects.
I hope that after this “quick” introduction you will forgive me for being absent. If you want to know more about what is going on you can always follow on twitter @carlito.monteiro , or Instagram on carlosdkbrazil, or facebook, or Linkedin
Let the game begin…
The State Of Minas Gerais…
Minas Gerais is one of the 27 Brazilian states. Minas in territorial extension is the fourth largest state of Brazil, and the second most highly populated.
Minas Gerais has a territorial extension of 588.383 km2. Just so you can understand quickly these numbers, the territorial extension of Minas Gerais is equivalent to France, Sweden or Spain
Minas Gerais makes boarders in the South with São Paulo in the west with Mato Grosso do Sul, in the Northeast with Goias and the Federal District, in the north it boarders with Bahia, in the east it boarders with Espírito Santo and finally in the Southeast with Rio de Janeiro.
Due to the proximity of several other important Brazilian states several opportunities arises for the state of Minas Gerais.Additionally 853 municipalities comprise the state. Just for the sake of curiosity Minas is the state with the largest number of municipalities in Brazil.
Minas Gerais, has a population of 20, 6 million inhabitants. This represents 10,97% of the Brazilian population. Minas Gerais has the third largest economy of Brazil, having a GDP of 386,2 Billion USD and a revenue per capita of roughly 8.000 USD on average.
In terms of exports, Minas Gerais is the second largest exporter of Brazil, having a contribution of 13,8% of all the overall exported material untill 2013. Revenues from the exports in 2013 were 34 Billion USD
In Minas Gerais a high level of informality in the economy still remains. Around 38,66% of workers until 2011 were informal workers. This is an important index to analyse as it represents (to a certain extent) the proportion of workers with social rights granted by the formalization of jobs.Also, this index can give a clue of the quality of the jobs created by one economy. The informality in Minas is still high, but over the past years it has been fallen considerably.
This is a movement which isn’t happening exclusively in Minas Gerais, but all over Brazil, as the population becomes more educated. The Brazilian government in partnership with organizations such as SEBRAE and other initiatives as Endeavor for instance, are doing huge effort support businesses to quit the informal condition, and support them to become formal.
To give you an idea, the level of informality in Minas Gerais in 2009 was around 42,98% of the total jobs generated in the country and the overall level of informality in Brazil was 44,6%. By 2011 the level of informality in Minas Gerais had fallen to 38,66% and the overall Brazilian level of informality felt 40,32%. As you can see, not only Minas Gerais, but Brazil as a whole had a sharp fall in it’s level of informality , meaning that more businesses started to pay taxes and therefore contribute to the social security and ultimately to the Brazilian economy. There is still a long way to go, but there a change happening in all layers of the Brazilian society.
Minas Gerais Profile
Minas Gerais Industries at a Glance:
Minas Gerais hass the third largest Brazilian industrial park, staying behind São Paulo and Rio de Janeiro respectively. The main industries of the state are as it follows in the infographic below:
Metal & Steel,
The Extractive Industry in Minas Gerais
The production of the extractive industry in Minas Gerais by the end of 2013 had decreased slightly when compared to the levels of 2011 and 2012. One of the main reasons for the fall is due to the the formation of stock in the main non metallic sector, thus, civil construction.
But Where are the Minerals extracted in Minas Gerais?
Barão de Cocais
Fortaleza de Minas
Säo Goncalo do Rio Abaixo
Main minerals existent in Brazil
IRON and it’s variations
Metal and Steel Industry in Minas Gerais
Metal and Steel industry is an important industry for the economy and development of Minas Gerais. In fact the metal and steel sector is the one with largest share in the transformation industry in Minas Gerais.
3/4 of the industries in Minas Gerais correspond to transformation industries. It is also important to emphasize that the metal and steel industry in the state responds for 1/3 of the total production in Brazil. Companies such as Gerdau, Usiminas, Arcellor Mittal, Anglo GoldAhanti are all installed in the state. The metal exports had a fall in 2013 as the sector is highly dependent of exports.
The regions where metal and steel industries are located are:
- Três Marias
- Ouro Branco
- João Monlevade
The main companies installed are
V&M do Brasil
Votarantim Metais Zinco
Nova Era Silicon
Cia Setelagoana de Siderurgia
Nether Iron Sid
(You’re welcome, just saved at least two hours of research for you :D)
All right, next industry…
Automotive Industry in Minas Gerais
Minas accounts for the second largest Brazilian automotive park. Around 24% of the national production happens in Minas. In 2011 roughly 3,6 million units were produced including cars, trucks, light vehicles and busses.
The first automotive industry installed was FIAT, producing light vehicles. Today, IVECO (which is also part of Fiat) is in Minas as well as Mercedez Benz, who is also producing trucks in Juiz de Fora. Due to these industries, there are several industries and auto parts companies in the surroundings of the cities where the automotive industries are installed.
The food industry in Minas Gerais is a relevant sector for the state as it accounts for 13% of the industrial activities of the state. The sector employs 151.500 people and there are nearly 14.700 players within this sector .
Minas has a consolidated industrial food park, which includes the BR Foods cold stores, in Uberlândia, and Pif Paf Alimentos with unities spread out in several locations of the state. In the municipality of Extrema right in the southern region the Swiss company, Barry Callebaut the largest producer of gross chocolate of the world decided to install their factory in Minas Gerais. This factory is responsible for supplying all South American region. Still in the state of Minas Gerais companies such as Ferrero Rocher, Bauducco, Coca Cola, and Ambev (the owner of Brands such as Budweiser,Stella Artois,Brahama,etc)
Soy, Grains and Agribusiness
The soy production in Minas Gerais until 2012 has reached roughly 3,1 million tons in a planted area of roughly 1,0 million hectares.
Corn and soy are the main grains for the state and they represent 89% of the volume produced all over the state, or in numeric numbers something close to 10,7 million of tons.
The exports of the agribusiness as a whole represented 23,5% of the total exports of Minas Gerais
Did I miss out on something?
Please let me know.
I hope you have enjoyerd this article. If you want to discuss more about the economy of Minas, or if you want to know about an indutry that isn’t in the text, just put in the discussion thread.