EU-BRAZIL Investment Dialogue

Italian capital in Brazil targets R$ 90 billion contribution by 2029

Brazil is no longer seen by Italian investors merely as an export destination, but has taken a central position in the expansion plans of their companies throughout Latin America. According to an assessment by Graziano Messana, president of the Italian-Brazilian Chamber of Commerce, Industry and Agriculture (Italcam), Italian projects already underway in the country total around 70 billion reais, an amount that could reach 90 billion reais over the next three years, considering the commitments already announced by different groups.

Until recently, the predominant strategy of Italian companies consisted of creating subsidiaries aimed at serving multinationals from their own country already established on Brazilian soil, as is the case with names like Enel, Pirelli, Luxottica, Ferrero, Fiat, and the more than 1,100 other Italian companies present in Brazil. This model has been replaced, over the last two and a half years, by direct acquisition movements of local operations. Examples include Almaviva, which took control of TIVIT and part of Magna Sistemas, becoming one of the largest technology companies in the country by revenue, as well as Zucchetti, which carried out about ten acquisitions in Brazil; Lynx, responsible for the largest international purchase in its history by acquiring Impar; and the consulting firm BIP, which expanded its operations in artificial intelligence after buying BITKA Analytics. Messana attributes part of this movement to the entry into force of the tariff phase of the Mercosur-European Union agreement, which reduced taxes on automation machinery and equipment without equivalent production in Brazil.

The pace of these investments is also driven by the dispute for artificial intelligence infrastructure in the country, favored by the clean Brazilian energy matrix and the Reidi program, aimed at tax exemptions for data center equipment, currently undergoing legislative processing after the original Provisional Measure lost its validity. The topic is expected to gain new momentum with the business mission of Confindustria, the Italian entity equivalent to CNI, which will bring around a hundred companies to Brazil on September 9 and 10, with the presence of Deputy Prime Minister Antonio Tajani, prioritizing sectors such as agri-food, pharmaceuticals, energy, and information technology, areas strongly interconnected with the data center and rare earths supply chain.

Read more at: https://veja.abril.com.br/coluna/radar-economico/de-olho-no-mercado-empresas-italianas-preveem-investir-r-90-bi-no-brasil/