China’s Huawei to invest $800 million in new Brazil factory

SAO PAULO (Reuters) – Huawei Technologies Co Ltd plans to construct an $800 million plant in Brazil’s Sao Paulo state over the subsequent three years, the governor stated, because the Chinese tech large ramps up its Latin American presence in opposition to U.S. objections.

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FILE PHOTO: People take a look at merchandise on the Huawei stall on the International Consumer Electronics Expo in Beijing, China August 2, 2019. REUTERS/Thomas Peter

On a visit to China on Friday, Sao Paulo Governor João Doria, accompanied by Huawei executives, stated the corporate was gearing up to construct the plant to meet anticipated demand following Brazil’s first 5G spectrum public sale, scheduled for March 2020.

The new factory is probably going to produce smartphones, the corporate instructed Reuters in an electronic mail. “Depending on the performance of the smartphone operation in the local market, Huawei will consider building a plant in Sao Paulo in the near future,” it stated in an announcement.

Production could be for home and international markets, in accordance to the Sao Paulo authorities.

Huawei, which has been working in Brazil for 21 years, already has one factory producing tools for telecoms infrastructure in Sao Paulo state, with 2,000 workers.

The location of the new plant, which in accordance to Doria will make use of 1,000 folks, can be determined in the approaching months and the $800 million can be invested over a three-year interval following the upcoming 5G public sale.

In April, Reuters reported that the Chinese firm was making a second try at cracking the Brazilian smartphone market with the launch of two high-end handsets and native hires to handle the enterprise.

Huawei, the world’s third-largest smartphone producer, imports handsets from China for the Brazilian market and has mulled native manufacturing.

U.S. President Donald Trump has urged governments worldwide to shun Huawei, arguing its tools might be weak to Chinese eavesdropping.

So far, few have heeded the warnings, however limitations in the U.S. market have pressured Huawei to strengthen its footing elsewhere.

Trump raised the Huawei problem throughout a go to by Brazilian President Jair Bolsonaro to the White House in March. But Vice President Hamilton Mourão stated in June that Brazil had no plans to bar Huawei from its 5G community.

U.S. diplomats didn’t instantly reply to a request for remark.

Sweden’s Ericsson and Finland’s Nokia Oyj even have factories in Sao Paulo state and are racing to lead 5G deployment in Brazil.

Ericsson and Nokia haven’t responded to a request for touch upon Huawei’s push into area.

Reporting by Gabriela Mello; Additional reporting by Eduardo Simões in Sao Paulo; Editing by Brad Haynes, Steve Orlofsky, Dan Grebler and Richard Chang

Our Standards:The Thomson Reuters Trust Principles.

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