Is Taiwan’s Foxconn going to expand its iPad and iPhone manufacturing capacity by building a new facility in Brazil? The oft-rumoured expansion gained some legs on the weekend, with local paper Folha de São Paulo reporting that Foxconn had a few requirements should they make the move to Brazil.
Since they’re looking to invest approximately $12 billion in Brazil over the next five years, the demands seem pretty reasonable to me. According to the paper, the government of Brazil has allowed itself 8 months to two years to work out the deal, which seems like a long time, but if you know how governments work, it’s probably realistic.
Here is what Folha de São Paulo is reporting Foxconn wants:
1. Large property to house more than one division of Foxconn.
2. High speed wi-fi. (This is humorous, don’t you think Foxconn could provide themselves with a few routers for Wi-Fi?)
3. Export priority shipping at São Paulo (and other unnamed) airports.
4. Financial support from the Brazilian National Development Bank, BNDES.
5. Government help in finding minority investors. (Eike Batista, Brazilian billionaire, might be interested.)
6. Transportation and logistics that permit quick delivery of goods to and from Foxconn facilities.
7. Office wired 100% with fiber optic cables.
Foxconn is already in São Paulo, manufacturing motherboards and other hardware for Dell and Sony, among others. The expansion would be directly aimed at manufacturing Apple devices. It’s not clear how Brazilian manufactured iPads and iPhones would impact the local pricing structure, although it’s likely that the prices would drop since there would no longer be any import duties imposed on the devices. Currently Brazilians pay prices three to four times higher than what smartphones and tablets go for in the United States.
Brazil, for its part, would like to see Foxconn hire primarily Brazilian labor, include a transfer of technology, and respect Brazilian labor law, which includes a so-called “13th salary” where employees get paid for a 13th month, every year.
If Foxconn were to expand to Brazil, it would be Apple’s largest (and only?) iPad and iPhone manufacturing facility in the Americas. Let’s see if Brazil can deliver on Foxconn’s laundry list before its two years is up.
Article Via Forbes