The South American nations have recorded an average GDP growth of more than 6% in recent years, notes the Swedish industrial group Trelleborg. While the continent has not been immune to the global economic slowdown, its economy is expected to expand in the short term.
The automotive industry
A cornerstone of the South American economy is the Brazilian automotive industry, which despite a couple of weak months at the end of 2008, reported strong figures for the year. Production has grown to 3.2 million cars from 2.6 million in 2006, while domestic sales have risen 48% in the past two years.
“2008 was a record year for the industry,” says Renato Simon, President of Trelleborg Automotive in Brasil. “It’s difficult to predict next year’s figures, but we’re looking at up to 5% growth. That’s OK when you consider what’s happening elsewhere.”
The reason for this relative optimism is the considerable potential that remains for selling cars in Brazil.
“While the average in Europe and the US is one car to every two citizens, in Brazil, there is one car to every seven or eight. There is a large potential market,” says Simon.
Approximately 50% of the cars currently on Brazilian roads are fuelled by ethanol produced from sugarcane, and the country is now the world’s second largest producer of ethanol and the number one exporter. Brazil’s seven million-plus hectares already under sugarcane are projected to double by 2020.
Argentina
In Argentina, a US$3.9 billion economic stimulus plan was announced in the autumn of 2008 in a bid to soften the effects of the global economic downturn. Measures included low-cost loans to farmers, industry in general and auto makers.
Offshore
Brazil has been a 'top three' region for Trelleborg Offshore, part of Trelleborg Engineered Systems, in terms of activity and sales potential for many years. Although the market has changed as technology has moved on, Brazil’s deepwater projects remain technically demanding and offer opportunities for Trelleborg Offshore to supply various products. These include such items as Uraduct™ cable and flowline protection as well as distributed and drill riser buoyancy modules.
Aerospace
There has been rapid expansion in South American aerospace manufacturing and maintenance repair and overhaul operations (MROs). The presence of many top companies, such as Embraer, the leader in regional aircraft manufacturing, has led to dramatically increased production of small civil and business aircraft and an accelerated surge in the light jet market.
In addition, Brazil is home to the largest helicopter market in the world, with São Paulo being dubbed the 'City of Helicopters.'
Added to this are the large numbers of US and European original equipment manufacturers (OEMs) that have begun moving into Brazil to support the demand created by these new businesses.
