Foxconn looking into $12 billion Brazil investment

Foxconn, the company that builds gadgets for Apple and other electronics heavyweights, is said to be in negotiations with the Brazilian government to set up facilities there.

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Foxconn Technology Group, the company responsible for the manufacturing of Apple's iPod, iPhone, and iPad, is said to be in talks with Brazil to invest $12 billion over the next five to six years for building new manufacturing facilities within its borders.

The plans, reported by Reuters today, were unveiled by Brazilian President Dilma Rousseff while on a visit to Beijing. Rousseff told reporters there that Foxconn was looking to "invest" in the country in the form of new manufacturing facilities, creating jobs, and providing the Brazilian government with additional tax revenue.

The details of those plans, including where the facilities would be and what kind of taxation Foxconn will be subject to, is still being negotiated, the report said.

The benefits for Foxconn of moving into South America are two-fold. On one side, products that are produced and set for North America can travel a shorter distance to their final destination compared with similar products from Foxconn's facility in Shenzhen, China. The other side of the equation is bringing tax and import tariff savings to the operations, as Reuters points out, where deep cuts can be granted to companies that set up shop there.

While reporting on trial prototypes of the iPhone 5 being in production last month, the China Times made mention that Foxconn planned to expand its operations into Brazil with facilities that would be ready by 2013.

According to Brazil's science and technology minister, who spoke with Reuters, the talks between Foxconn and Brazil have taken place over the past three months. If those negotiations end up going well, Foxconn could begin assembling iPad units at a new South American factory as soon as November, the news outlet was told, a move that could ease supply demands for future device launches.

Foxconn's Shenzhen facility has come under fire in the past year after a string of worker suicides that some blamed on harsh working conditions there. Foxconn has since given workers raises and Apple has worked to make employees aware of worker rights, labor laws, and safety, among other topics.

Updated at 4:10 p.m. PT with clarification on benefits of shipping.

 

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