News / Brazil takes a bite of the Apple

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Despite odd, buoyant pockets of hope (one UK forwarder reports an exceptionally strong October), most players seem to think this will be a flat season, with little expectation of even a hillock, let alone a peak.

There is also depressing news concerning some commodities – fashion out of Asia in particular is facing a modal shift, according to those information-hungry sources at Seabury.

But there is a bright light shining on the air cargo industry. According to various research organisations, the global market for tablets is expected to see some 275 million units shipped annually from 2015.

The demand for new high-tech goods could keep you all in hot lunches for some time to come. Of course, the majority of those continue to emanate from China, which accounted for 88% of all air freighted laptops last year. (There are many more interesting stats on this, all from Seabury, which you can find in the next issue of Airline Cargo Management. A truly worthwhile read.)

But there is a shift. It’s not only China that is enjoying the fruits of Foxconn’s labour. The Taiwanese company which makes Apple products, no doubt affected by rising wages in China, is set to invest some $12 billion in Brazil, following the South American country’s decision to give tax breaks to computer manufacturers. Although the talks between Foxconn and the government have reportedly hit a few snags, the government is confident that the problems can be ironed out.

If so, Foxconn is set to start rolling out iPads in December and iPhones soon after at its Jundiai plant in Sao Paulo. The Brazilian government is also in talks with the manufacturer to produce touchscreens, currently made in only four countries in the world.

The chairman of the Sao Paulo government agency said six million units would be produced in three to four years, when the factory is at capacity, with up to 5,000 employees.

Although the tax breaks are designed to make tablets cheaper for the local market, tech companies are likely to invest for export production too.

Foxconn is not the only one biting. Samsung, Motorola, Positivo Informatica, ZTE and Huawei Technologies are all reported to be looking at developing in Brazil, with Sao Paulo the preferred destination.

Already, high-tech accounts for some 6% of the total air freight market. New figures suggest it will take up even more of the capacity.

Argentina too is said to be offering tax breaks, to develop its vision of a consumer manufacturing hub in Tierra del Fuego. Whether this is a step too far for global exporters, however, remains to be seen.

Either way, it could be time to get all those shiny new 747-8Fs off to South America.