GE shall have a research centre in Brazil

Five cities in the states of Minas Gerais, São Paulo and Rio de Janeiro are competing for the installation of the research and development centre of General Electric. The American multinational, founded by the inventor of the electric lamp bulb, Thomas Edison, registers an average of two thousand patents per year and shall next month make the choice between the cities of Belo Horizonte (MG), Rio de Janeiro (RJ), São Paulo (SP), Campinas (SP) and São José dos Campos (SP) for the location of the company’s fifth such centre. GE already has nuclei of this type in China, India, Germany and the United States. The expected investment volume is US$ 150 million over 18 months, with the hiring of 300 new professional people.

Last year, Brazil generated a total sales income of US$ 2.5 billion for GE, a figure which is 30% less than the figure released by the company as having been obtained in 2008, before the global economic crisis. The Brazilian unit rivals the Mexican unit in Latin America, where GE made a total of US$ 7.3 billion, which is more than the income of the units in China and India, in the words of the company’s institutional relations manager, Alexandre Alfredo. In global terms, the income from the Brazilian operation is still quite small – only 1.6% of the total US$ 156 billion obtained in 2009. However, GE counts on the economic expansion which can be brought through investments such as the field prospection of pre-salt.

To install the research centre, the tax issue shall not be a relevant factor. The decisive element in this case shall be the negotiation with state universities. The company wishes to make sure of property of the patents developed in their centers and is therefore studying to see which is the city with greatest potential for qualification of labor in the company’s areas of interest: energy, petrol and gas, transport, and the hospital industry.

Depending on which city is chosen, the research centre shall have a specific vocation. If the city chosen is Campinas (SP), the focus shall be on energy. If the choice is Rio de Janeiro, then the focus shall be on petrol and gas. In the case of Belo Horizonte and São Paulo, this vector shall be aimed at transport and health.

The instability in activities of institutions such as USP, which have been stopped by strikes for at least one month in the year since 2004, does not worry the multinational. This is not a factor that we consider as being of risk, says Alfredo. The Brazilian centre should receive a sizeable chunk of the international investments made by GE in the technology segment, which currently stands at the level of US$ 6 billion.

The installation of the new centre has been discussed ever since January, when the world president, Jeffrey Immelt, was in Brazil. In the beginning, the installation of the centre in Porto Alegre and Recife was also considered.

The choice of the new research centre could coincide with the opening of the factory to produce image examination equipment, of the GE Group, in Contagem, in Greater Belo Horizonte. The factory, whose construction started in 2008, was an investment of US$ 50 million, and shall produce equipment such as tomography and mammography equipment and also magnetic resonance apparatus. In the beginning, the production shall be concentrated on X-ray equipment. This shall not be the first equipment factory of the city in Greater Belo Horizonte, there being a Philips unit for production of tomography units in the city of Lagoa Santa (MG).