Brazil already accounts for approximately 40 percent of GE’s South American revenue — $7.5 billion in 2009 — and this year marked the 90th anniversary of GE’s presence in the country. It also coincided with GE’s recent announcement that it plans to locate its fifth Global Research Center in the country, joining the ranks of GE’s other labs in China, Germany, India and the U.S. The centers are the technology development hubs for all of GE’s businesses.

The new Healthcare plant will be one of the immediate beneficiaries of the new Global Research Center, as beginning in 2013 the lab will help initiate development of products geared specifically to meet local market needs. It’s part of GE’s “reverse innovation” strategy, currently active in countries such as China and India, in which products are developed in local markets and tailored for local market needs.

Thinking big: The Brazilian healthcare market is currently worth $600 million and the entire Latin America region is worth $2 billion. Both markets are growing at a rate of 8 percent a year. The inauguration press conference is pictured above.

As GE Chairman and CEO Jeff Immelt wrote in a recent op-ed, published in Brasil Econômico: “From regional jets and autos to mobile phones and food and beverage, Brazil has tremendous capacity to become a leading global supplier of inputs, components, and finished goods…. Indeed, right now GE is working with BNDES [The Brazilian Development Bank] on opportunities to enhance Brazil’s competitiveness in manufacturing and services in areas such as wind power and aviation.”

Poised to expand: The plant will manufacture the DF-R x-ray system, one of GE’s healthymagination-certified products. In addition, the facility has manufacturing capabilities for mammography and remanufacturing of a number of diagnostic imaging products. In the future, the plant will expand manufacturing to include Positron Emission Tomography (PET), Computed Tomography (CT), Magnetic Resonance Imaging (MRI) and Monitoring Systems.

Echoing the surge of optimism about Brazil’s growth, The Economist magazine observed earlier this year that “new skyscrapers are going up along Avenida Faria Lima in the business district of São Paulo. Sales of computers and cars are booming, while a glut of passengers has clogged the main airports. Brazil created 962,000 new formal-sector jobs between January and April — the highest figure for these months since records began in 1992. Everything indicates that over the past six months the economy has grown at an annualized pace of over 10 percent. Even allowing for an expected slackening, many analysts forecast that growth in 2010 will be 7 percent — the highest rate since 1986.” The boom has also caught the attention of Chinese investment dollars, with The Washington Post reporting that “in the first half of this year, China’s investment in Brazil topped $20 billion, more than 10 times all of China’s previous investment in the country. That puts China on track to be Brazil’s No. 1 investor for 2010, compared with 29th in 2009.”

Training hub: Another important initiative at the plant planned for 2011 will be the launch of the first training center for GE Healthcare engineers in Brazil and Latin America. This training center will focus on the transfer of knowledge, training of local service employees and the qualification of suppliers in GE’s environmental and work safety standards.

In the video clip below, Claudia Goulart, president and CEO of GE Healthcare for Latin America, talks about the new plant’s focus on local needs in Brazil and the region.

Learn more in these GE Reports stories:
* “Boosting GE’s ‘company to country’ approach in Brazil”
* “Taking a look at GE in Brazil during WEF Latin America”
* “Keeping growth on the fast track: WEF Latin America”
* “Switching smart grids from ‘demo’ to ‘deploy’ at WEF”
* “Brazil’s turbines sweetly hum with sugar-based ethanol”
* “The sugar-land express: Brazil orders 50 locomotives”
* “Brazil’s new Azul airline inks $1B services deal with GE”
* “GE wins $250 million offshore drilling contract in Brazil”
* “Brazil boosts clean gas in the Amazon; wind in the East”

* Read an English version of Jeff Immelt’s op-ed in Brasil Econômico
* Read the announcement about the new plant

Joao Geraldo Ferreira

GE has been an industrial partner in Brazil for 90 years, playing an increasingly crucial role in helping propel the country’s economic, infrastructure, and energy growth. We’ve been excited to watch GE Brazil grow at an average rate of 12 percent for the last five years, and the opportunities are expanding by the minute. And now Brazil will be host to GE’s fifth Global Research Center, which will offer local research and development services for our major Brazilian industry partners, including Petrobras, the fourth largest energy company in the world; Embraer, the main jet engine manufacturer in Brazil; VALE, the country’s largest mining company and the second largest mining company in the world; and countless other partners throughout Latin America. Locating our next Global Research Center in Brazil is not only about creating jobs and bringing more investments into Brazil. It’s a major part of our “company to country” initiative.

GE is making global efforts to provide more local decision-making, products, and investment opportunities within the countries it serves, and Brazil is a prime example. Later this year, we’ll be opening our first healthcare plant in South America in the city of Contagem, Minas Gerais, where we already have lighting and transportation plants. The plant will initially produce X-ray and mammography equipment, working first to address local demands, then Central and South American needs, and also further export needs as demand and supply capabilities grow.

On the right track: In an op-ed published today in Brasil Econômico, the main business paper in Brazil, Jeff Immelt said, “I am very optimistic about the partnerships that the U.S. and Brazil are building as Brazil assumes its place on the global stage.” GE’s presence in Brazil stretches back to 1919 — and it was GE that helped light Brazil’s famous “Christ the Redeemer” statute in the 1930s. Pictured above is the GE Transportation plant in Contagem.

Believe it or not, we’re also gearing up for the 2016 Summer Olympics, which will be held in Rio de Janeiro. We hope to bring our expertise to the Games in a highly localized way. We were sponsors of the Olympic Games in Beijing two years ago and are sponsoring the Games in London in 2012. While we’ll certainly bring our experience from those two partnerships to bear in Brazil, we hope to develop a partnership in Rio de Janeiro that is inherently Brazilian. Our idea is to create a “Sustainable City,” where we work with government here on the state and federal levels to provide clean technology solutions for energy, water, and healthcare. We’re already meeting with government officials in Rio on a weekly basis to talk about how we can bring sustainable solutions to the Olympics and leave a legacy for the city when the Games are over.

Brazil is one of the countries (Saudi Arabia and Indonesia, for example, are others) where we are pursuing this “company to country” approach. GE may be a global company with global reach, but we also want to be local for the local people. Brazil, which accounts for some 40 percent of our Latin American revenue, is going to be a major proving ground for that initiative.

* Read more stories about Brazil on GE Reports
* Read more Global Research stories on GE Reports
* Read an English version of Jeff Immelt’s op-ed in Brasil Econômico
* Read Jeff’s op-ed in Brasil Econômico

A rebroadcast of the opening session is available above. Nani’s remarks begin at the 46-minute mark. You can advance to that time by hitting the play button and then clicking the time bar running along the bottom of the video screen.

“One that is difficult to put in place as it is a long-term effort is education,” Nani stressed to the business and government leaders gathered in Cartagena, Colombia. “I travel to many countries and see many places. I can tell you that the places that flourish are the ones that have the two E’s: The ‘E’ of Energy – and I’m not talking about oil or gas – I’m talking about the ability of lighting bulbs. And Education. You see the countries that have energy but no education go nowhere. And countries that have education but no energy don’t go anywhere. The countries you see prospering are the ones that have both of these, heavily invested.”

Praising the major infrastructure projects currently underway in the region – including Colombia’s current roadway construction projects, Nani said, “We see great investments in infrastructure…. I think there are still big needs of power, big needs of water, for electricity, big needs for roads, for airports. These need to happen in order to bring these economies to the level where they belong and where they can prosper.”

Nani observed that between 1981 and 2007, the world experienced a phenomenal type of growth that had not been seen before, driven by the introduction of new technologies and the phenomenon of globalization. With hundreds of millions of people entering a new way of life in places such as China and India, the need for commodities exploded and Latin America was one of the regions that benefited as immense wealth was created in the process.

But now is the time, he said, to diversify. Pointing to the Middle East as an example, he noted how the economies there are rapidly diversifying away from oil and into a range of other industries. Nani also underscored the need to ensure that old threats do not emerge, such as those of political and democratic instability, he said. “Another mistake is the return to protectionism, a return to high import duties, and a return to a taxation system that does not conform to taxation systems in other parts of the world,” he said. “Tell me an economy in history that has prospered with big import duties or taxation.”

To a round of applause, Nani said “one other important point is the absolute elimination of corruption. Corruption is always a threat to development. Corruption leads to uncompetitive environments…. I am appealing to governments to really fight this enemy. It is the enemy for economic development. Following up on corruption is the concept of governance: clean, well-constructed illuminated governments is very important.”

Learn more in these GE Reports stories:
* “Taking a look at GE in Brazil during WEF Latin America”
* “Putting flare gas on the firing line at the WEF in Davos”
* “Switching smart grids from ‘demo’ to ‘deploy’ at WEF”
* “Brazil’s turbines sweetly hum with sugar-based ethanol”
* “The sugar-land express: Brazil orders 50 locomotives”
* “Brazil’s new Azul airline inks $1B services deal with GE”
* “GE wins $250 million offshore drilling contract in Brazil”
* “Brazil boosts clean gas in the Amazon; wind in the East”

High flying: Ninety years ago, GE established a product distribution center in Brazil, which at the time had almost no modern factories. Donkeys transported the new products. Nowadays, it’s high-tech, such as the jet engines that are serviced in GE Celma’s aviation plant in Petrópolis, Brazil — a small town near Rio de Janeiro — seen above.

Happy Birthday: GE is responsible for many of Brazil’s “firsts” — from refrigerators in 1952 to its first digital mammography and cardiac disease scanners in 2003. GE’s locomotive plant is above.

 
Ferreira noted that because Brazil’s exports account for a relatively modest 14 percent of GDP – compared to China’s 40 percent — the country only needs to absorb a much smaller share of the surplus goods it produces during years of economic downturn.

“In a frozen global market, that’s significant,” he said. “Brazil may not be growing like India or China with 9, 10, 11 percent GDP growth every year, but we have very diversified growth. And that is critically important.”

In addition to aviation and locomotives, there are immense opportunities for GE in water, healthcare and wind energy, Ferreira said. For example, the Brazilian government recently held its first “wind auction,” and Ferreira said GE captured close to 30 percent of the market.

“When you think about diversifying the energy matrix in Brazil, and then when you think of the products that GE has, it makes a lot of sense for us to be offering those solutions,” he said.

Local heroes: Zaqueu Sérvulo de Alcantara, a 20-year veteran of GE Transportation in Contagem, told us. “In May 2008 I received a crystal-made miniature locomotive directly from the hands of the President of Brazil, Luiz Inácio Lula da Silva. At that time, I told him ‘Your Excellency, you remember when you said that you would not buy new locomotives, because they were too expensive to import? No need to worry, because GE makes them here in Brazil now!’”

The subject of how Latin America can achieve a sustainable recovery following the economic crisis is precisely what the 400 business, government and thought leaders assembled at the 3-day WEF summit in Cartagena, Colombia are tackling this week. Ferdinando “Nani” Beccalli-Falco, President & CEO of GE International, will be on tomorrow’s panel — which will be webcast live — that is addressing the short-term reforms and policies needed in the region to promote a strong economic recovery. Rogerio Patrus, GE’s CEO for Latin America, will be moderating a closed session on Development of Infrastructure across Latin America at the summit.

* Watch the live webcast at 3:15 p.m. ET (2:15 p.m. Colombia) on April 7

It’s a gas: GE began its oil and gas operations in Brazil in 1989. Just last year the company won a $250 million contract to supply Petrobras of Brazil with 250 of GE’s advanced VectroGray subsea wellheads for deep-sea drilling. The VectroGray wellheads are manufactured in the GE Oil & Gas Jandira plant in Sao Paulo, Brazil. “Overall, oil and gas is one of the major opportunities we have in Brazil,” Ferreira said.

Learn more about GE in Brazil in these GE Reports stories:
* “Brazil’s turbines sweetly hum with sugar-based ethanol”
* “The sugar-land express: Brazil orders 50 locomotives”
* “Brazil’s new Azul airline inks $1B services deal with GE”
* “GE wins $250 million offshore drilling contract in Brazil”
* “Brazil boosts clean gas in the Amazon; wind in the East”

* Learn more about GE’s citizenship efforts at our aviation facility in Brazil

Going with the flow: The natural gas will be delivered by a new pipeline connecting the oil and gas fields of Urucu in the north with Manaus, northern Brazil’s second-largest city, pictured above. The goal of the Amazon project is to create a more reliable energy source for the country’s northern regions while at the same time helping Brazil to reach its goal of reducing greenhouse gas emissions by between 36.1 and 38.9 percent from projected amounts in 2020.

Breitener Energética will install 46 of GE’s low-emission Jenbacher gas engine generator sets — 23 units at each plant site. The power company cited GE’s expanded gas engine manufacturing center in Jenbach, Austria, for having the engine production capacity needed to meet the power company’s delivery and construction schedules — which call for the units to arrive in April.

Meanwhile, in the Brazilian states of Rio Grande do Norte and Bahia, both near the country’s northeastern coast, commitments have just been made to use GE’s wind turbines — marking the ecomagination technology’s debut in the country.

Big fans of Brazil: Both energy developers, DESA and Renova, chose GE’s 1.5 megawatt class of wind turbines – of which more than 13,500 are installed globally. They’re expected to be in commercial operation by July of 2012. “This is Renova’s first move into the wind business and we were concerned about reliability and efficiency in our choice of technology,” said Vasco Barcellos, CEO of Renova Energia. “GE understood our needs and brought its technical teams to work close with us in the final steps of development of our projects.” Added Lindolfo Zimmer, CEO of DESA, “Wind farms are relatively new to the Brazilian energy market. We built a partnership with GE focused on getting the best technology matched with our technical needs.”

Brazil has relied heavily on hydropower for its electricity supply. But the country has vast, untapped wind resources, thanks in large part to strong wind conditions along the country’s 4,600-mile coastline.

Meanwhile, further north, Mexico City is also jumping into cleaner energy in a big way by using GE’s gas turbine technology, which is also part of the ecomagination portfolio, to convert a conventional power plant into the first large-scale cogeneration plant in Mexico. Cogeneration is the simultaneous production of electricity and heat using a single fuel such as natural gas. The process harnesses heat that would otherwise be wasted – and it also results in what’s known as higher thermal efficiency, which in turn allows carbon dioxide emissions to be substantially reduced.

Cleaner and meaner: GE Energy will supply two Frame 7FA gas turbines to a plant in the state of Tabasco, Mexico. The latest version of the turbine is pictured above. In addition, GE has signed a 20-year Contractual Service Agreement to provide a full range of plant services.

The Mexico City operation will not only offer increased efficiency, but will supply process steam to one of the country’s most important natural gas complexes. In 2008, the Mexican Congress passed legislation that calls for reducing its greenhouse gas emissions by 50 percent below 2002 levels by the year 2050.

The government is promoting combined heat and power, or cogeneration, as an energy efficient option to help meet the country’s energy goals.

* Read the Amazon power project announcement
* Read the Brazil wind turbine announcement
* Read the Mexico cogeneration plant announcement
* Read “GE Helps Brazilian Amazon Go Green” in Forbes

Learn more about GE in Brazil in these GE Reports stories:
* “Brazil’s turbines sweetly hum with sugar-based ethanol”
* “The sugar-land express: Brazil orders 50 locomotives”
* “Brazil’s new Azul airline inks $1B services deal with GE”
* “GE wins $250 million offshore drilling contract in Brazil”

Sweet spot: The Juiz de Fora Power Plant is located about 110 miles north of Rio de Janeiro. The sugar-based ethanol it uses is one of Brazil most efficient biofuels in terms of energy balance and carbon emissions.

In late 2009, Petrobras announced an agreement with GE to convert and test an LM6000 gas turbine system at its Juiz de Fora power plant for sugarcane-based ethanol operation. Demonstration of the newly developed GE conversion kit began in December 2009 and was divided into three phases — the first evaluating engine performance, the second examining reduction of environmental impact and the third investigating impact on the equipment, which had been running on natural gas. This project marks the first time that sugarcane-based ethanol has been used to generate electricity.

There will be five months of demonstration runs to validate the use of ethanol as an alternative fuel, as well as to ensure that emissions are within the expected limits. GE is providing the conversion technology, engineering and field support during conversion and commissioning.

As the world’s second largest producer of ethanol and the world’s largest exporter, Brazil is eager to benefit from incorporating ethanol into its energy profile because it’s so abundant. The country produced about 7.3 billion gallons of ethanol in 2008, according to data provided by Brazil’s government.

Between now and 2013, Petrobras intends to invest heavily in renewable energies and biofuels, with the goal to increase its use of renewable fuels for power generation and demonstrate the feasibility of these fuels, while also increasing fuel supply assurance.

* Read today’s announcement
* Read “The sugar-land express: Brazil orders 50 locomotives” on GE Reports
* Read about GE Aviation’s recent deal with Brazil’s Azul airline
* Read about GE’s other gas turbine technologies on GE Reports

How sweet it is! In 2009, sugar output in Brazil’s Center South, the world’s biggest-producing area, more than doubled versus last year, according to the region’s sugar association. Photo: Bloomberg/Getty Images.

Delivery of the 50 new AC44i models — which are AC heavy-haul, diesel-electric locomotives for freight transport — will start in 2010. Cosan, which is one of the largest ethanol producers in the world, will use the new locomotives to haul sugar from its processing plants to port on the rail infrastructure provided by its partner, America Latina Logistica.

The locomotives feature GE’s unique traction-control technology that enables them to haul heavier loads by significantly reducing slippage on start-ups, inclines and poor track conditions. They’re also equipped with advanced braking systems that provide smoother handling when hauling heavier loads.

GE Transportation South America has built diesel electric locomotives in Brazil since 1967 — and has produced more than 1,000 locomotives that are operating in more than 15 countries around the world. Approximately 17,000 GE locomotives are in use in more than 50 countries around the world.

* Read today’s announcement
* Read about GE Aviation’s recent deal with Brazil’s Azul airline

Learn more about GE Transportation in these GE Reports stories:
* “China deals span coal, high-speed rail & locomotives”
* “From Erie to Mongolia: GE’s Evo locomotive arrives”
* “Battle of Britain: 1st PowerHaul locomotives ship to UK”
* “GE’s new Evo locomotive: From Russia, with love”
* “GE’s fuel ‘autopilot’ software set for 200 locomotives”
* “GE & Kazakhstan ink major rail service & plant deals”
* “GE’s Evo locomotive wins in fuel efficiency competition”
* “All aboard! Seattle’s light rail starts rolling with GE

GE’s service samba: Services will be performed at GE’s Celma facility, located in Petrópolis, Brazil — a small town near Rio de Janeiro — that provides engine services to airline customers in Latin America, the US and Europe. GE initially invested in Celma as a minority shareholder and subsequently purchased the company, making it an integral member of GE’s global aircraft engine maintenance, repair and overhaul system. In the photo above, GE Celma technicians are working on GE’s line of CF6 engines.

The deal with GE covers the GE Aviation-made CF34-10E engines — which are assembled at GE’s Durham, North Carolina facility and power Azul’s fleet of Embraer 190/195 planes. The company, formally known in Brazil as Azul Linhas Aéreas Brasileiras, has orders for 76 jets, with 36 firm orders, plus 20 options and 20 purchase rights. Azul expects to have 14 planes in service by year-end with seven additional ones scheduled for delivery in 2010

Brazil is ranked as the fifth largest aviation segment in the world with more than 190 million potential passengers, but only five percent of the population travels by plane. The country has about one commercial jet for every one million people, while the US has about one jet aircraft for every 50,000 people. Azul has entered the market at a critical time. Brazil’s domestic aviation segment grew more than 25 percent in July compared to the previous year and domestic revenue passenger kilometers has seen a compounded annual growth rate of 14 percent in the past five years.

GE’s services will be delivered by its OnPoint solutions group, which customizes service agreements to meet the specific needs of each airline — no mater how big their fleet is. The agreements are designed to help lower an airline’s cost of ownership and maximize the use of their planes. Backed by GE’s global support network, OnPoint services may include overhaul, on wing support, new and used-serviceable parts, component repair, technology upgrades, engine leasing, integrated systems support and diagnostics. In emergency situations, GE’s On-Wing service specialists can be dispatched on short notice anywhere around the world to repair an engine while it’s still mounted on a jet’s wing.

Blue skies: As The Journal noted in its story on Azul, “Many Brazilians travel hours, or even days, on long-distance buses from the big urban centers to visit homes in smaller cities or rural areas, while people in second- and third-tier cities use airlines little because of the lack of reasonably priced flights. Azul and other small airlines are targeting these potential passengers.”

* Read today’s announcement
* Read “Brazil’s Budget Airlines Gain Share” in The Wall Street Journal (subscription required)
* Read about the best practices GE has instituted at it Celma facility
* Read Azul founder David Neeleman’s advice on business in Business Management Daily
* Read “Mubadala to service the GEnx under new partnership” on GE Reports
* Read “Etihad Airways inks GE contracts worth over $4.5B” on GE Reports
* Watch our video series on how the new GEnx engine was developed
* Watch videos shot at the Oshkosh Air Show
* Read “GE lands $8 billion in orders at Paris Air Show”

GE sells subsea wellheads by the Brazilian seashore: With this contract, GE Oil & Gas continues to expand its presence across Latin America’s oil and gas sector, with more than 1,000 gas turbines and compressors installed throughout the region. In addition, the company has inspected more than 50,000 kilometers of oil, gas, water and refined product pipelines in Latin America.

As offshore drilling pushes past 10,000-foot water depths and 30,000-foot wells, pressure increases exponentially – and not only below the surface. The extreme operating conditions create extreme technological pressures too, which is why the subsea wellhead system must be reliable if the operation is to succeed. GE’s wellhead system – which is what today’s deal is for — is used to suspend so-called “casing strings,” which are the long sections of connected pipes used in the drilling. The wellheads also help seal the oil wells. Taken as a whole, the wellhead system effectively is the upper ending point of the well and provides a mounting position for the equipment that controls the flow of oil up to the surface.

The advanced wellheads will be manufactured in the GE Oil & Gas Jandira plant in the state of Sao Paulo, Brazil, with the first unit due for delivery in July 2009.

We know the drill: Following the acquisition and integration of VetcoGray and Hydril Pressure Control, GE Oil & Gas now has key regional offices in Argentina, Bolivia, Brazil, Ecuador, Peru, Mexico and Venezuela, providing customers with local manufacturing, sales and services capabilities.

“This agreement reinforces our strong presence in Brazil, where more than 1,200 of our subsea wellhead systems and 180 of our subsea trees have been produced and installed over the past 30 years,” said Fernando Martins, vice president, Latin America Region, GE Oil & Gas.

GE is currently negotiating with Petrobras, which is also known as Petroleo Brasileiro S.A., for a separate contract to provide services for the equipment. Based in Rio de Janeiro, Petrobras is one of the largest companies in Latin America and controls significant oil and energy assets in 18 countries worldwide. GE’s systems are part of Petrobras’ drilling campaign to reach 3.3 million barrels of oil equivalent per day by 2013.

GE Oil & Gas, which had 2008 revenue of $7.8 billion, employs more than 12,000 people worldwide and operates in over 70 countries.


* Watch a video with GE’s Fernando Martins
* Read the announcement
* View a downloadable fact sheet about GE Oil & Gas
* View a downloadable fact sheet about our wellhead systems
* Learn more about GE Oil & Gas on our website
* Read GE Reports’ story about our pipeline inspection technology
* Watch a video about inspecting “unpiggable” pipes
* Read about our work on China’s massive West-to-East pipeline