Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics maker, has finalized an investment project to set up a production complex in Jundial in the state of Sao Paolo, a Brazilian government official said on Friday.
Brazilian Minister for Science and Technology Aloizio Mercadante said Hon Hai, which sells its products under the Foxconn brand, will use the facilities in Sao Paolo to assemble iPads and iPhones for Apple.
While the official did not elaborate on Hon Hai’s investment project, media reports said the company is expected to pour as much as US$12 billion into the new production base over the next five years.
According to sources from Jundial, the new complex is expected to be built near the Anhanguera highway and is scheduled to start operations in July to meet demand from Apple to put its products on store shelves by the end of this year.
In addition to producing iPads and iPhones, Hon Hai’s investment will also include a “smart city” where the company will churn out computer monitors and semiconductors, but details were not immediately available.
Local media reports said Hon Hai and the Brazilian government had been in talks about the investment for more than three months.
During the negotiations Hon Hai chairman Terry Gou (郭台銘) requested that Brazil’s government support the project by improving the country’s infrastructure, in particular its high-speed Wi-Fi connections and transportation and distribution systems, the reports said.
Hon Hai has also sought financial aid for the project.
The Brazilian government meanwhile asked the Taiwanese group to protect the rights and benefits of its Brazilian employees, the reports added.
Earlier this week, the government came up with incentives to encourage investments in tablet computer production and the new measures are expected to save investors a minimum of 30 percent in production costs.
Meanwhile, authorities in Jundial are planning to set up an industrial park and grant preferential tax status to investors in the park. In addition to Hon Hai, Acer Inc (宏碁), Taiwan’s leading PC vendor, has announced plans to invest US$30 million to expand its operations in Brazil, where the company first started assembling notebook and netbook computers in 2009.