Brazil looks outward: the United States is one of Brazil's prime targets for exporting machine tools

Brazil offers more than just futbol and Carnaval. That's the message machine tool builders showing their wares at the recent FEIMAFE show in Sao Paulo hoped would be instilled in show attendees. Modern Machine Shop was honored to be the only U.S. trade publication invited by ABIMAQ, the Brazilian machine tool builders association, to attend the tenth edition of this biennial show held in the third-largest city in the world.

The ABIMAQ group is a collection of various metalworking and fabrication equipment makers. Newton de Mello, president of Mello grinders, heads the association. Henry Goffaux, president of ThyssenKruypp Metalcutting Brazil, leads the association's chamber of machine tools, which is comprised solely by machine tool builders.

Brazil, which ranks 13th worldwide in machine tool production, started this year on a positive note. First quarter 2005 numbers show a 19.3 percent increase for overall machine tool sales in Brazil and a 177 percent increase in exports. According to ABIMAQ, the United States and Germany top the list in terms of export destinations, followed by Mexico, Spain and China. The automotive industry is currently one of the strongest sectors in terms of machine tool purchases. More than 63,000 attendees from 42 countries walked the aisles of the Anhembi Park Exhibition Hall during the show (both of these statistics are higher than the 2003 show edition). Many of the 1,342 exhibitors were the Latin-American arms of the top international metalworking companies. While the country is focusing on increasing exports, the importing of equipment continues to be an issue of dispute between the government and foreign machine tool builders wishing to sell to the Brazilian market. Importers are faced with what some consider exceedingly high tariffs, which were put in place to boost sales of Brazilian machine tools to the domestic market. Some Brazilians involved in metalworking think this is ultimately a tax on productive investment. In fact, one foreign machine tool builder went so far as to post a sign in protest of the high tariffs.

Most of the large Brazilian machine tool builders have their own sales offices in the United States. Many smaller companies sell through distributors. Some, including Mello Grinders, would like to sell into the United States, but say they have had difficulties locating a distributor that can serve the entire country, rather than just a single region.