The trade missions may be going to Europe and Asia, but one of South America’s recovering economies is fast becoming an unsung hero of the Georgia foreign investment scene.
While always having a stronger influence than meets the eye, Brazil has seemed to awaken to Georgia in a new way over the past two years, particularly in the agriculture-heavy southern part of the state, where Brazilian companies have made key acquisitions and opened new headquarters.
Brazilian manufacturing announcements have also been forthcoming at a time when the state has culled its China investment recruitment efforts and focused more heavily on Korea and Europe.
The most recent evidence of this trend is a $96 million investment Gov. Brian Kemp announced this week by the Guidoni Group, which will put a factory in McRae-Helena in Telfair County, just south of Dublin. Operations are slated to begin in the fall of 2020, with 455 jobs to be created when the facility is at full strength.
Guidoni is a global stone producer and exporter based in the coastal state of Espirito Santo, which borders Rio de Janeiro state. The granite leader operates 40 quarries and 1.3 million square feet of stone warehousing and industrial space around the world and recently launched a new focus on engineered quartz. The Georgia plant will join newly opened factories in Spain and Brazil designed for cutting and polishing the material known for its durability and aesthetic versatility.
Global CEO Rafael Dallas Guidoni will oversee the project and a new subsidiary, Guidoni USA, Inc., which will serve as the North American headquarters for the group, according to the governor’s office.
Guidoni joins the likes of Taurus S.A., the pistol manufacturer that recently inaugurated a $22.5 million plant in Bainbridge, as well as CZW Foundation, a construction equipment maker with a new headquarters near Brunswick, in betting on the southern part of Georgia.
The moves come as Brazil recovers from a period of political instability brought on by corruption investigations into contracts awarded by state-owned oil giant Petrobras. Operation Car Wash, as it became known, netted some top Brazilian executives and politicians in 2016-17 and plunged the country into a recession from which it emerged last year, posting GDP growth around 1 percent. Brazil expects about that same rate this year.
The country elected conservative President Jair Bolsonaro in October 2018 on his promises to tackle corruption and crime while reforming the notoriously protectionist economy and opening it to outside investment.
Mr. Bolsonaro, whose rhetoric and style have been compared to U.S. President Donald Trump, has sought to deepen engagement with his American counterpart. Dialogues so far have resulted in the removal of visa restrictions for business travelers and tourists on both sides, a step toward increasing investment.
The U.S. Commerce Department this week hosted a U.S.-Brazil CEO Forum meeting in Washington, where 20 top executives from both countries advised Commerce Secretary Wilbur Ross and Brazilian economy Minister Paulo Guedes on measures to remove further hurdles.
They pushed for trade harmonization, a double-taxation treaty and membership in the OECD for Brazil. They also proposed a joint framework for certifying transparency in infrastructure projects in Brazil to attract American investors, along with efforts to enhance space research and defense collaboration, launch new workforce and education collaborations and open the U.S. Department of Homeland Security’s Global Entry trusted traveler program to Brazilians.
Why Georgia, Why Now?
Still, these are relatively recent moves that should pay off in the future. What is driving the Brazilian interest in Georgia now?
Paulo Wenceslau, an international business consultant who works with the Latin American Co. in Atlanta and serves on the board for the Brazilian-American Chamber, said a big part of it is the awareness fostered through the state’s trade office in Sao Paulo. Brazilian delegations have also been steady visitors at stone and poultry shows in Atlanta, giving them a glimpse beyond their normal horizon: Florida.
It all comes at an opportune moment.
“Brazilian industries are investing, developing cutting-edge technologies and evolving,” Mr. Wenceslau said. “They are becoming more competitive in the international scenario, and the domestic market is not enough for them. In order to maximize their potential they are looking overseas, and the U.S. is always top priority for Brazilians.”
Georgia, meanwhile, has done a good job creating an attractive business environment, and Brazilian executives have been positively surprised by the cost structures and local governments’ appetite for collaboration, especially outside of metro Atlanta, he said. It’s more than tax incentives; the benefits of oft-rated No. 1 state for business extend to land, building costs, and workforce.
But what has already come to Georgia could be just the tip of the iceberg, and the state should double down on the positive momentum of its Brazil office, Mr. Wenceslau added.
“They should use that even more, doing some events and missions to some Brazilian cities, because it is generating very positive awareness,” said the Atlanta resident and former Coca-Cola Co. marketing director for northern Brazil. “Georgia is not being ‘sold’ properly. We have a lot of room to do business here; we need to sell it.”
The Georgia Department of Economic Development‘s head of international investment, Nico Wijnberg, could not be reached immediately for comment.
Indeed, the attention paid to Brazil by investment recruiters has been light, relative to other countries. Former Gov. Nathan Deal did make a quick trip to Brazil in 2015 to win the headquarters of Merchant E-Solutions, a payments company that was looking to move its U.S. headquarters out of California.
Most Brazil-focused activity from Atlanta and Georgia economic developers has been related to collaborations in financial technology, the focus of an Atlanta mission to Sao Paulo Tech Week this week. Atlanta’s Brazilian-American Chamber of Commerce Southeast is helping with the mission, which aims to put the city on the map for Brazilian entrepreneurs and economic agencies. Chamber President Lucia Jennings also took part in a forum of the Brazilian Foreign Trade Association in Rio de Janeiro on Nov. 21-22.
In an email from Brazil, she praised the state’s office in Sao Paulo and pointed to the team effort it takes to position the state for further Brazilian engagement.
“The process to get a company to open a factory in our state takes years and involves several competent stakeholders. The bottom line is that we have very competent people attracting business and helping establish these business in our state,” Ms. Jennings wrote.
Of course, Brazilian investment in the U.S. is by no means new, having flowed steadily for the last decade. According to the Brazil-U.S. Business Council, it grew 356 percent to a stock of $42.8 billion between 2008-17, edging ahead of Mexico as the No. 16 investor nation overall.
Brazilian subsidiaries operating here sold more than $48.3 billion of goods in 2017, and Brazilian firms held more than $102.2 billion in assets as of 2015 and employed 74,200 Americans, according to the council.