Brazil: Speaking to Valor Econômico, Bernard Peille, Alstom’s managing director for Latin America, said the company is requesting that localisation clauses be included in procurement processes, along with measures to ensure that taxes on domestically produced trains are not higher than those applied to imports.
“Sometimes we feel the competition isn’t fair”, Peille said. “If you look at what the Chinese have done, out of the 112 trains they’ve won in the past two or three years, very few will be produced locally. Most will be imported. We wonder whether the government truly wants to support local industry”.
Alstom has been present in Brazil for more than 17 years and opened its Taubaté plant in 2015. According to Peille, around half of the components used in production are supplied by local manufacturers. The plant is currently operating at full capacity, delivering four projects. One of them for the São Paulo metro, involving the supply of 22 trains. The other projects are for Bucharest, Taiwan, and Chile. Peille warns that without a sustainable local order book, Alstom’s long-term strategy in Brazil might be reviewed.
His comments come ahead of the forthcoming procurement of 34 new EMUs for the São Paulo network, for which a consortium involving CRRC has expressed interest. Earlier this year, Brazil’s railway industry association ABIFER and automotive and rail suppliers’ union SIMEFRE both voiced opposition to China’s growing presence in the local market. Both organisations include Alstom among their members and are largely composed of major global rail engineering players.
In response, São Paulo’s secretary of partnerships in investments, Rafael Benini, told Valor Econômico that introducing local content requirements is not currently under consideration. He stressed that the state government remains focused on reducing public spending.
Benini also noted that CRRC is already establishing a manufacturing presence in Brazil, following an announcement made earlier this year. He added that accessing financing from Brazil’s National Bank for Economic and Social Development BNDES would compel the Chinese company to comply gradually with localisation requirements.
