The agricultural and construction equipment sectors in Brazil are poised for significant growth in coming years, according to data compiled by Anfavea (National Association of Automotive Vehicle Manufacturers) in conjunction with the IBGE (Brazilian Institute of Geography and Statistics).
A comprehensive survey identified 5.1 million agricultural establishments nationwide, of which 14.5% possessed tractors and 2.4% had harvesters, indicating substantial potential for expansion provided farmers have access to both public and private financing avenues for equipment acquisition.
Ana Helena Andrade, Vice President of Anfavea, emphasized the vast scope for mechanization in the country, underlining that the adoption of machinery would lead to enhanced productivity among farmers.
Likewise, the Construction Equipment sector forecasts promising prospects, primarily driven by infrastructure developments, particularly in basic sanitation initiatives. In 2022, only 62.5% of households in Brazil had access to sewage collection, highlighting the pressing need for expansion to serve an additional 27.1 million homes.
The federal government’s announcement of the PAC (Growth Acceleration Program), valued at US$ 260 billion, serves as a significant catalyst for advancing infrastructure projects, with US$ 70 billion earmarked for the development of efficient and sustainable transportation systems. This initiative encompasses 665 projects encompassing highways, railways, ports, airports, and waterways.
Initiatives like “Water for All,” backed by a budget of US$ 6 billion, will demand machinery for project execution. Additionally, the refurbishing of existing road networks across the country presents another avenue for equipment demand, with the potential to pave up to 1.4 million kilometers of highways. Presently, Brazil’s paved road network spans a mere 12%, totaling 1.6 million kilometers, lagging behind counterparts such as China and the United States, which have paved 84% and 73% of their respective road networks.
Source: AutoData Read The Article
PSR Analysis: The Anfavea published study matches the Power Systems Research long term perspectives for these segments in Brazil. Growth of planted area and productivity in Agribusiness and the pent up demand for infrastructure projects in Brazil are key drivers for these segments, ones that will generate important opportunities for suppliers in these supply chains. PSR
Fabio Ferraresi is Director, Business Development-South America, for Power Systems Research
