fromzebutotattoos - fdi intelligence · in uberaba, and mr angottiiscom-mitted to providing local...

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Unlike inmost agricultural cit-ies, life in Uberaba is not gov-erned by the seasons. Right at

the centre of one of Brazil’s bread-baskets – the Triângulo Mineiro inthe south-eastern region of MinasGerais – the city of 330,000 peopleis a powerhouse for crops such assugarcane, soy and corn, and isknown as the key region of the zebu,

a breed of cattle particularly suited to produc-ingmeat andmilk in tropical environments,which has attracted global names in the fieldof animal genetics such as Canada’s AltaGenetics and the US’s ABS.

Yet Uberaba hasmanaged to leverage itsagribusiness tradition and strategic location tobecome a diversified economywith a history ofentrepreneurship and innovation.Major domes-tic and foreign investors including Stanley Black&Decker (industrial tools andhousehold hard-ware), Valmont (irrigation) and local start-upsensation Electric Ink (tattoo equipment) havemade the city the heart of their Brazilian opera-tions. Additionally, Uberaba’s chemical belt hasbecome one of themain centres for the produc-tion of fertilisers and crop protection productsin thewhole of Latin America.

Anewstart?Brazil’s economic and political crisis did notspare Uberaba, yet its resilient agribusinesssector kept the economy afloat, and the localgovernment is nowwilling to look beyond itstraditional strengths with amore business-friendly approach. It is hoped that thisapproach will put the city in a position tomake themost of an economic recovery that isexpected to gain newmomentum at a nationallevel after October elections, when Brazilians

will be called to pick a new president and stategovernors, and renew the Congress.

“We are a business-friendly government.We want to address the need of companies tounleash the potential of private initiatives,”says José Renato Gomes, secretary of economicdevelopment and tourism of Uberaba’s munic-ipal government. “For this, we created a law tostreamline all the paperwork related to localoperations and investment by private compa-nies, thus strengthening the collaborationbetween the private and public sectors.”

The development of a new export-process-ing zone is central to the vision of mayor PauloPiau’s administration (see interview on page51). The upgrade of existing transport andlogistics infrastructure and a proposed newinternational airport will give additional rea-sons for businesses to bring their operations tothe city and surrounding areas. The aim is toput the city in a position to fulfil its entrepre-neurial and investment potential, which theadministration says are both complementedby Uberaba’s relatively high quality of life.

Traffic jams, so typical of other Brazilian cit-ies such as São Paulo, are nowhere to be seen inthe city, allowing private and public transportto run smoothly throughout the day. Uberabahas awide range of primary and secondaryschools, as well as hospitals, tourist hotspotssuch as thememorial to Chico Xavier, the fatherof Brazilian Spiritism, a palaeontological parkand a growing supply of restaurants andmalls.

Uberabamay look like just another town inthe Brazilian agricultural provinces, but it hasalready shown it is capable of big things inagribusiness, andmore than capable of think-ing outside the box to compete in other areasthat few urban locations lying within themoreremote parts of Brazil attempt to conquer. ■

City on the up: Uberaba is an agribusiness powerhouse and attracted global names in animal genetics

Uberababreaksfromtheherd

August/September 2018 www.fDiIntelligence.com

LOCATED IN AT THE HEART OFTHE BRAZILIAN AGRICULTURALPROVINCES, UBERABA HASALSO DEVELOPED A NUMBEROF SIDE-INDUSTRIES WITHNATIONAL RELEVANCE, ASJACOPO DETTONI DISCOVERS

Photo: Andre Santos, Uberaba City Government

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UBERABA’S EARLY ZEBU BREEDERS SET BRAZIL ON THE PATH TO BECOMING A GLOBAL POWERHOUSE INMEAT AND MILK PRODUCTION. THEIR SPIRIT LIVES ON IN THE LATEST GENERATION OF ENTREPRENEURS,WHO ARE ESTABLISHING NICHE MARKETS BEYOND AGRICULTURE, AS JACOPO DETTONI DISCOVERS

Fromzebutotattoos

Some of the first Brazilianpioneers that set off for Indiato find cattle that could thrive

at tropical temperatures came fromUberaba. Over the years, the zebuthey brought back made the for-tunes of both Uberaba and the wholecountry, turning Brazil into a globalpowerhouse in meat and milk pro-duction despite its warm climate.

Today, Uberaba is the capitalof zebu genetics, housing theheadquarters of the BrazilianAssociation of Zebu Breeders(ABCZ) and numerous industryevents throughout the year, whichattract hundreds of thousands ofpeople from across the world.

The pioneering spirit of thoseearly entrepreneurs lives on in theminds of local businesspeople thathave gained national, if not global,exposure through their ideas andtalent, which goes well beyond cattlebreeding and genetics. Companiessuch as Electric Ink (tattoo equip-ment) and Ubyfol (crop nutrients)have become established domesticand international players in theirrespective fields. Meanwhile, a newgeneration of entrepreneurs is ris-

ing, led by start-ups such as GrãoDireto, which has leveraged thelocal base of knowledge in the agri-business sector to launch an app thathas caught the attention of industrybehemoth Monsanto.

Zebu landThanks to the work of those earlypioneers, and the success of zebubreeds they raised, Uberaba hasbecome a touchstone in the fieldof zebu genetics. Initially, about6800 zebu cattle were importedinto Brazil from India, and some3000 frozen embryos, against some1.5 million European cattle. Despitethe initial disparity in that geneticendowment, today 80% of Brazil’s220 million cattle come from thezebu root, with the remaining 20%coming from the European root.

“This tells much about thezebu’s ability to adapt in thisweather,” says Arnaldo de Souza,president of the ABCZ. The associa-tion brings together some 20,000zebu breeders from across the coun-try and keeps a genetic registry ofBrazil’s different zebu breeds.

“Nowadays Brazil is one of the big-

gest meat exporters in the worldbecause we have quantity, quality andlow costs – we mostly keep our ani-mals grazing pasture. Uberaba devel-oped around the work that we havebeen doing at ABCZ, which made thecity the most important centre ofzebu breeding in the country, ifnot in the world,” says Mr de Souza.

ABCZ organises major events thatbring zebu breeders to Uberaba fromall over the world, while generatingdirect and indirect business for thecity’s hospitality sector. Expozebu2018 alone generated business wortha total of 176m reais ($47.5m) in lessthan 10 days, bringing in thousandsof foreign visitors from 36 countries.

In the genesUberaba’s leadership in the zebumarket has worked as a powerfulinvestment catalyst for companiesin the sector. “Uberaba is leader inthe genetics of zebu, with two ofthe world’s three largest animalgenetics firms active in the area,”says Mr de Souza.

Wisconsin-based ABS Global hasbeen operating a zebu semen pro-duction centre in the city for more

Tattoo you: Uberaba-based Electric Ink has a portfolio of 1200 products that export to 27 countries

www.fDiIntelligence.com August/September 2018

Photo: Andre Santos, Uberaba City Government

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SPECIAL REPORTUBERABA

than 40 years, whereas Alberta-based Alta opened its centre in 2005.Together they produce about half ofthe 14 million units of semen sold inthe Brazilian market every year, com-bining high genetics with a moreempirical understanding of the fac-tors that determine animal welfareand production.

“ABCZ is a magic place for usin Uberaba, because of the incrediblemovement of people that its eventsgenerate,” says Guilherme Marquezde Rezende, managing director forthe milk division of Alta Brazil.Among other things, Alta produceda cow able to break the milk produc-tion record previously held by Cuba’sfamed ‘ubre blanca’ (white udder),with more than 110 kilograms injust one day.

Uberaba is not only a centre forthe zebu genetics industry, but alsofor those skills that companies suchas Alta and ABS require in order toflourish. This again can be tracedback to the work of the ABCZ.

“When ABCZ was created [itinherited the legacy of a previousassociation in 1967], it had to pro-duce people who understood zebu

breeding. So it created Fazu, a com-munity college for agronomy andzootechnics, which it still backstoday. Overall, in our area of interestwe can find technical skills in threecity universities, and we have ourpartnerships with the same universi-ties [16 in total between public andprivate colleges] and training pro-grammes,” says Mr Marquez.

Local championsThe Uberaba municipal governmentis now committed to acting as a facili-tator to protect and support thegrowth of local entrepreneurs, as wellas attracting new external capital.

Electric Ink, for example, aims tomake Uberaba the Brazilian capitalof tattoo equipment. Founded by tat-too artist Paulo Fernando Angotti toproduce equipment for the localmarket (so that local tattoo artistswould not have to import every-thing), the company has grown toturn over about 60m reais in Brazilalone, and has a portfolio of 1200products that export to 27 countries.

“I worry about quality, [it] is myfirst goal. I don’t care about money,my goal is the overall quality of

NOWADAYS BRAZIL IS ONE OF THEBIGGEST MEAT EXPORTERS IN THEWORLD BECAUSE WE HAVE QUANTITY,QUALITY AND LOW COSTS


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the products we produce,” says MrAngotti. “In Brazil we still have goodmanufacturing and competitivelabour costs. And our products andprocesses are better than those ofour Chinese competitors.

“The government of the city isvery open, [giving] us great supportin terms of easing the paperwork wehave had to deal with over the years.It does everything as fast as it canbecause it knows we are hiring peo-ple and bringing income to the city,and it does that with any industry[a bill proposing to streamline invest-ment-related red tape and decisionprocess is now under assessment andexpected to be put in place in the sec-ond half of 2018].”

Electric Ink employs 262 peoplein Uberaba, and Mr Angotti is com-mitted to providing local opportuni-ties. “What would be the meaning ofall this if I don’t build a legacy forthe local community to continue?”he says.

One of Electric Ink’s neighbours,Ubyfol, has also grown from a localto an international company withUberaba-based talent and ideas todevelop its production of crop nutri-ents, and today employs almost 200people. “Uberaba has a big potentialin human resources,” says executivedirector Fabrício Simões. “There arebig companies in the area and it’snot difficult to find management-level resources at all. Besides, themajor university faculties bringmuch talent to the job market.”

Astart-up cultureWhile local companies such asElectric Ink are building on theirsuccess in the domestic market togrow the global footprint of theirbusinesses, a new generation of

entrepreneurs is emerging on theUberaba start-up scene. AlexandreBorges is a founder of Grão Direto,a start-up offering smartphone tech-nology that provides a modern mar-ketplace for grain producers to selltheir crops more efficiently. “Afterstudying in other cities, we chose tocome back to Uberaba because it’s astrategic hub with plenty of farmersand good logistics,” he says.

The city came sixth in a nationalranking of the Brazilian cities withthe most conducive environmentfor start-ups, and second in thestate of Minas Gerais, accordingto 2017 research by ABStartyps andAccenture. However, in the report itsposition fell to 17th overall in termsof start-up density, highlighting theneed for the city and local entrepre-neurs to better capitalise on the localbusiness-friendly environment.

The municipality is thus workingto give new momentum to an exist-ing technological park that couldbecome an aggregator for start-upssuch as Grão Direto, or Trackage,a provider of IT solutions for busi-nesses across the board. It could evenhost some functions of the majorindustries scattered across the city’sindustrial districts. US fertiliser pro-ducer Mosaic, which acquired a mas-sive phosphate plant fertiliser inUberaba from state firm Vale in2016, announced it will set up ashared services centre in the area.

‘Zebu Valley’, as Uberaba’s start-up scene is colloquially known, isthus continuing a tradition for inno-vation and entrepreneurship thatbegan with the first pioneers sailingto India, as a new wave of business-men and women follow in their foot-steps to the benefit of the city – andthe rest of Brazil. ■

Plant food: Ubyfol used local talent and ideas to develop its offering of crop nutrients

WECHOSEUBERABABECAUSE IT’S ASTRATEGICHUBWITH PLENTYOFFARMERS ANDGOOD LOGISTICS



Photo:An

dreSantos,Uberaba

CityGovernm

ent

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UBERABA HAS BECOME A GATEWAY FOR COMPANIES SERVING THE CERRADO AGRICULTURE REGION. NOTSATISFIED WITH THE ROAD LINKS AND DRY PORT, THE CITY GOVERNMENT NOWWANTS TO OPEN THE LOCALTRANSPORT AND LOGISTICS INFRASTRUCTURE TO INTERNATIONAL INVESTORS. JACOPO DETTONI REPORTS

Routestogrow

Uberaba has over the yearsmade itself the gateway tothe Cerrado region, an agri-

culture-dominated area that hasboomed in the past few decades.Local authorities leveraged thecity’s position and strategic trans-port infrastructure to attract produc-ers serving the region’s agriculturaland consumermarkets that typicallyrely on imported rawmaterials. Theyalsomanaged tomake it a two-wayrelationship by paving the way forprivate operators to open up interna-tional markets to a narrow but grow-ing base of local exporters. But thecity’s trade balance is still heavilyskewed towards imports, and themunicipal government is now bet-ting on the development of anexport processing zone (EPZ) to fur-ther deepen Uberaba’s connectionwith the international markets andthe global footprint of its companies.

“The EPZ can become a fertilearea for producers willing to addvalue along the whole value chainof grain and cattle production,

although it could be used by produc-ers across the sectors to conquershares of the global market,” saysJosé Renato Gomes, secretary of eco-nomic development and tourism atthe city’s government.

Beyond the customs benefitstypical of EPZs, Uberaba’s will offerinvestors fiscal incentives both at amunicipal and state level to facilitatethe operations of companies locatedwithin its 2.6 square kilometres andexporting at least 80% of their pro-duction. The benefits are guaranteedfor at least 20 years.

HelpwantedThe city government is nowlooking for private input on the EPZ.“We are looking for a private partnerto develop and run the EPZ. As citygovernment, we want to be share-holders, but it’s not our job to runit,” says Mr Gomes. “We have a prod-uct that is a raw diamond. Nowweare looking for somebody able to cutit.” While waiting for a developer totake over the EPZ, the city govern-

ment is already talking to Austriancompany Lenzig tomove in aplanned $1bn investment in a cellu-lose factory under a joint venturewith Brazilian wooden panel pro-ducer Duratex.

Indeed, the EPZ has furtheraugmented Uberaba’s cost attractive-ness vis-a-vis Brazil’s major industrialcentres, which has already promptedproducers with a global footprint toset up shop in the area.

“Wemoved here in 1996 fromSão Paulo to reduce productioncosts,” says Fernando CésarBortolozzo, managing director ofindustrial operations at the localfacility of US industrial tools andhousehold hardware group StanleyBlack & Decker. “Labour is 35% to40%more expensive in the SãoPaulo region, and unions there aremuch stronger too. We wanted to befar from big industrial centres, andmake themost of the incentivesoffered us by state and city authori-ties in Uberaba. Besides, the city is500 kilometres away from Brasilia

Metal work: US toolmaker Stanley Black & Decker is one of the largest employers in the Uberaba area, with a workforce of 1100 at its facility


to the north, Belo Horizonte tothe east and São Paulo to the south,whichmakes it a strategic placefromwhich to serve thesemajor cit-ies, and that was also an importantelement in our decision tomove.”The Stanley Black & Decker facilityis one of the largest employers inthe area, with a workforce of 1100.

Legal boostThe local administration, led bymayor Paulo Piau, has renewedan existing law to further boostthe city’s investment propositionby facilitating, among other things,land acquisition and offering newfiscal incentives to support theinvestment phase of new projects.The administration’s pro-businessattitude has already borne fruit withrelation to the investment decisionsof major local investors.

“We are a company fromUberaba and we already have a cer-tain human capital in the area. Itwould have been difficult to relocateoutside the region,” says FabrícioSimões, executive director of Ubyfol,a producer of crop nutrients thatstarted life in Uberaba in 1985 andtoday employs 191 people. He isreferring to investment in a new pro-duction facility that the companyundertook a few years ago, whenmanagement was considering alter-native sites outside the city.

“The municipal incentive lawallowed us to get a space for the newfacility [in the city’s industrial dis-trict] at favourable condition,” saysMr Simões. “That law differentiatesUberaba from other municipalities,where the governance of industrialdistricts is still in the hands ofhigher levels of government, put-ting them in a position to offerautonomy and speed in theprocess related to these areas”.

Ubyfol eventually invested 30m

reais ($8m) in the construction ofits currentmanufacturing facility.Uberaba became the first city in thewhole state of Minas Gerais to gainautonomy in the governance of itsthree industrial parks and intro-duced special incentives for theiroccupiers in a process that wrappedup in early 2018.

Strengthening linksAdditionally, the EPZ is furtherstrengthening Uberaba’s links withinternational markets. These linkshave received amajor boost in recentyears with the development of a dryport operated by local private firmPorto Seco do Triângulo, which isable to handle customs clearanceprocedures for goods proceedingto and from Santos, Brazil’s largestport. This saves local importers and

exporters time and expense ontheir customs operations. Morerecently, the city has also seen thedevelopment of a transhipment ter-minal for bulk agriculture productsby Brazilian logistics powerhouseVLI Logistica.

“We are in a strategic place tocapture loads from the states ofGoiás, Mato Grosso andMinas Geraisand bound to the Santos port andonto foreignmarkets,” says Douglasde CarvalhoMarques, managingdirector of the transhipment termi-nal. The terminal opened its doorsin 2014 after VLI Logistica invested160m reais in its development. It isable to tranship 700 trucks loadedwith grain and another 200 withsugar on to trains bound for the com-pany’s terminal in Santos every day,making it the largest terminal of itskind in the whole of Latin America.

The only weak link in the overallinfrastructure offer of Uberaba is thelack of an international airport. Thecity airport has only scarce connec-tions with other cities in Brazil andcannot be expanded, as it is locatedin themiddle of the city. The citygovernment is now leading talks tobuild an international airport forpassengers and freight betweenUberaba and Uberlandia, the secondlargest city in Minas Gerais, 100 kilo-metres north of Uberaba, and henceupgrade the area’s logistics offeringeven further.■

WEHAVE A PRODUCT THAT IS ARAWDIAMOND.WE ARE LOOKINGFOR SOMEBODYABLE TOCUT IT



On track: VLI Logistica invested 160m reais in the development of a transhipment terminal

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Photo:NetoTalmeli,U

beraba

CityGovernm

ent

THE MAYOR OF UBERABA TELLS JACOPO DETTONI THAT LOGISTICS, EXPORTS,TECH AND TOURISM CAN LEAD THE CITY TO A PROSPEROUS FUTURE

The four pillars of success

QWhat is your vision for the eco-nomic development of the city

of UUQ

eraba?

AUberaba has an established agri-business sector, but also indus-

tries and services. The first pillar inour vision for the future develop-ment of the city is logistics. Thecity has road, train and airport infra-structure, although we don’t have abigger airport within 500 kilome-tres. Therefore we are leading theproposal for a new internationalairport for passengers and freightbetween Uberaba and Uberlandia.We already have goods bound forthe international markets with lowvolumes but high added value, suchas those produced by [tattoo special-ist] Electric Ink, or flowers exports.VLI Logistica has already broughtmajor railway logistics to the city,and the airport project will com-plete our logistics offering.

QWhen do you expect theppQ roject to get beyond the

drawing board?

A The project will depend onthe national economy, but the

Brazilian economy is stuck at themoment and nobody is going toinvest in the current circumstances.It’s not a project for the short term,but it has already drawn much inter-est from domestic as well as foreigninvestors. A feasibility study is cur-rently being drafted.

QWhat are the other develop-ment pillars?

A TTQ

he second one is exports. Wewant to add value to our produc-

tions through an export processingzone [EPZ]. Electric Ink is alreadythinking of having a facility withinthe EPZ. It’s the only one in MinasGerais, and one of the 22 establishedin Brazil. It’s a new project, andagain the timeline for its develop-ment will depend on the economiccycle at a national level. We hope tokick-start its development in 2019.

The third pillar concerns tech-

nology-driven companies. We haveuniversities in the city that do muchR&D, and their activity providesmuch support to the technologicalpark we have.

Uberaba is already the sixthbest environment for start-ups in thewhole country, and second in MinasGerais. The technological park isgoing to [encourage] innovative start-ups and incorporate new companies.

Last but not least is tourism.The city has one of the 10 best waterand sanitation infrastructures inthe country and boasts a big tour-ism potential, beginning with amajor palaeontological site andmuseum. Besides that, dozens ofevents unfold around the zebuindustry all year long, attractinghundreds of thousands of visitorsfrom all over the world.

Overall, we have three thingsthat other cities don’t. The paleon-tological site, the zebu industryand the memorial to Chico Xavier,the head of Brazilian Spiritism, whowas also voted the greatest Brazilianof all time [on a 2012 TV show], andthis all backs our strategy of attract-ing major investment in the hospi-tality industry.

QThe scandals of the past fewyears have tarnished the image

of Brazil and its public governance.What are you doing to re-establishtrust in public institutions, at leasta local level?

A In Uberaba, we launched a ‘zeropaper’ project to digitalise pro-

cesses and documents to diminishthe chance that processes get manip-ulated and corrupted. We got a com-mendation from the state govern-ment of Minas Gerais for transpar-ency. But the real problem in Brazilis governance efficiency. Here we hadconsultants from the Getulio VargasFoundation to come up with a seriesof recommendations over two yearsto improve governance by focusingon three key issues: planning, projectquality control and monitoring. ■

UBERABA IS ALREADY THESIXTH BEST ENVIRONMENTFOR START-UPS IN THEWHOLE COUNTRY

Q&A: PAULO PIAU

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2012UberabaMayorPreviouslyMinas Gerais state, congressman;Federal Assembley, representative

CURRICULUMVITAEPAULO PIAU

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UBERABA’S ACCESS TO LARGE AREAS OF AGRICULTURE HAS PROMPTED FERTILISERS ANDCROP PROTECTION COMPANIES TO ESTABLISH PRODUCTION IN THE CITY’S CHEMICALDISTRICT, DRAWING IN MAJOR INVESTMENT, AS JACOPO DETTONI REPORTS

The rightchemistry

Uberaba’s growingimportance as amajorcentre for agribusiness in

Brazil’s TriânguloMinero regionhas increased its investment appealalong the whole value chain of theindustry, including chemicals. Thecity now hosts the largest phosphatefertiliser plant in Latin America,and has developed a whole chemicaldistrict around it. A chemical belt isnow taking shape (though not with-out its hiccups), luring firms to setup shop locally and thus avoid othersaturated urban areas.

“This is a district exclusively forchemical industries – residentialareas are 25 kilometres away fromhere,” says Andrea Cristina MujaliRibeiro, head of industrial opera-tions at Ourofino, a Brazilian com-pany producing crop protectionproducts in Uberaba. “This givescompanies a chance to operate insafety. Should any accident occur,we don’t have any resident around.”

In splendid isolationThe district gives companies locatedin the area preferential access to theCerrado agriculture region, which isamajor buyer of crop fertilisers andcrop defenders. “Our competitorsproducing elsewhere have to go pastour facilities to access the region,”says MsMujali.

Its isolation from the rest ofUberaba, which has to be respectedby law, makes the district an appeal-ing proposition compared withsites in denser urban areas suchas São Paulo and Rio de Janeiro.Communities there have grownaround the chemical industriesthat first located in Brazil decadesago, creating problems for localauthorities given the hazardousnature of the industry.

The environmental safetyof the Uberaba site is now beingboosted by a new local ‘zero land-fill’ incinerator able to process theresidual waste proceeding from allthe chemical productions in thedistrict. Established a couple of

years ago, the facility was developedby Neotech, a local company thatcarried out an initial investment of42m reias ($11.2m) and is about toinvest another 55m reais to expandit in 2019.

“We have here 10 chemical com-panies in this belt. We have four cus-tomers now, we will get everybodyon board by the end of the year,” saysNeotechmanaging director JoséAffonso dos Reis Júnior.

Big namesThe district has grown over theyears around a phosphate fertiliserplant with a capacity of 120,000tonnes per year, the largest of itskind in Latin America, inaugu-rated in 2014 by troubled statemining behemoth Vale. The plantis now undergoing a transition asVale sold its fertiliser unit amid

great financial difficulties to USgroup Mosaic, which currentlyemploys 2000 people in the facility.

“Uberaba’s infrastructureand strategic location are keyto the success of operations inthis city,” says Jeffry Golwitzer,Mosaic’s vice-president of opera-tions. “Mosaic’s complex is locatedclose to Rio Grande, which providesready access to water critical to itsoperation. The site also has thefavourable logistics to receive rawmaterials and ship finished prod-ucts to the intended destinations.”

Another troubled behemoth,Petrobras, had to abandon thedevelopment of an ammonia plantafter investing $1bn in the site. Theplant is now up for sale, althoughthe financial feasibility of the pro-ject in current market conditionsremains questionable. ■

Fertile ground: US group Mosaic recently bought a facility in Uberaba


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