Bahia Investment Opportunities

Bahia Basics facts

Predictability, good regulation and respect for contracts.

BAHIA | AN OVERVIEWBAHIA | AN OVERVIEW

1st in the Northeast and 4st in Brazil (2011) Population:14 million

6th economy in Brazil (2010) | 4.2% GDP (2011):

US$ 93 billion

World Trade (2011) - Exports + Imports = US$ 18.7 billion - 47% of Northeast and

4% of Brazil

Investment Opportunities in Investment Opportunities in

BahiaBahia

Economic OutlookEconomic Outlook

Source: SEI

GreaterSalvador

GDP (Industry) – US$ million0 – 40

40 (average)40 – 140

140 – 240240 – 340340 – 3400

INDUSTRIAL PROFILEINDUSTRIAL PROFILE | 2011 | 2011

BAHIA | AN OVERVIEWBAHIA | AN OVERVIEW

Source: SDE/SICM

Investments | 2007-2011 | US$ 7 billionInvestments | 2007-2011 | US$ 7 billion

Total Investments (2007 - 2015) | US$ 43 Total Investments (2007 - 2015) | US$ 43

billionbillion

** Metal products, Wood products, Metallurgy, Machinery, Electrical Appliances, Shoes and Leather, Textiles etc.

460industries

US$ 36 bln

investments

60,000jobs

PRIVATE INDUSTRIAL INVESTMENTS | 2012 - 2015PRIVATE INDUSTRIAL INVESTMENTS | 2012 - 2015

BAHIA | AN OVERVIEWBAHIA | AN OVERVIEW

Fonte: SEI

• Economic Activities • Spatial Distribution

• Five Biomes in one stateFive Biomes in one state

Fifth GDP among Brazilian States.Major investment alternative in Brazil. Some dynamic sectors in Bahia

Fifth GDP among Brazilian States.

Major investment alternative in Brazil.

Agribusiness

Oil/Gas/Petrochem Mining

Automotive

Renewable Energy

MAJOR INDUSTRIAL MAJOR INDUSTRIAL SECTORSSECTORS

BAHIA | AN OVERVIEWBAHIA | AN OVERVIEW

Enseada do Paraguaçu

Shipyard

Private Consortium: Odebrecht/

OAS /UTC / Kawasaki

Area of 120 ha

US$ 1.25 billion investment

In operation: Jan/2014

FPSO and drilling rigs

Large cargo and container

ships

Petrobras will keep building

modules for oil rigs at its

existing facilities

OIL / GAS / PETROCHEMICALSOIL / GAS / PETROCHEMICALS

RENEWABLE ENERGY | WINDRENEWABLE ENERGY | WIND

Potential at 70m – 15,000 MW

10% of Brazil and 19,3% of Northeast

Projects being implemented

2009 – 390 MW;

2010 – 587 MW;

2011 – 414 MW (1st auction)

Investments of US$ 3.4 billion

Proposed projects

1,500 MW awaiting 2nd auction in 2011

20,000 MW under development

Wind power industry

Manufacturers in Bahia:

ALSTOM

GAMESA

GENERAL ELECTRIC

Other 3 world players under negotiation

Greatest potential in Brazil

25,000 photovoltaic systems installed

Incentives to solar energy Residential consumer (up to 50 kWp)

will be allowed to sell energy to the

concessionary Roof of the football stadium covered

photovoltaic panels. Excess energy being

sold to the energy concessionary.

RENEWABLE ENERGY | SOLARRENEWABLE ENERGY | SOLAR

5th largest car producer (6.5%) in Brazil | 2010

6th largest exporter of vehicles and car parts in Brazil | 2010

FORD Camaçari

250,000 vehicles/year

> 8,700 employees (> 1,000 engineers in production/design)

31 suppliers in Bahia (26 on FORD’s site)

One of 5 major FORD RD&I facilities – Designing new ECOSPORT

US$ 3 billion new investment - 300,000 cars/year

76% parts produced in Bahia (95% in Brazil)

One of the most efficient FORD facilities worldwide

JAC Motors

120,000 cars/year + car design and test track

42% of all tire production in Brazil

3 factories (Bridgestone, Pirelli and Continental)

3 motorcycle factories being installed

AUTOMOTIVEAUTOMOTIVE

Bahia has one of the greatest mining potentials in Brazil

Major projects

Mirabela (in operation)207,000 t/year of nickel concentrate

BAMIN (under implementation)25 million t/year of iron ore concentrate

340 mining companies

generated revenues of:

US$ 0,7 billion (2009)

US$ 1,0 billion (2010)

Most important minerals

Iron; Gold; Copper;

Chromium; Nickel;

Gems; and many more…

MININGMINING

Greatest unexplored mining potentials in Brazil

•Espatial (RMS)

•Sectorial (Petrochemical)

•Capital Owners

Fonte: SEI

Triple Economic Concentration

RMS

Logistic and transports

Infrastructure, railway lines, Ports, and roads is positively correlated with investments foreign entry

INFRASTRUCTURE |INFRASTRUCTURE |

Energy | PORTSEnergy | PORTS

INFRASTRUCTURE | HIGHWAYS AND RAILWAYSINFRASTRUCTURE | HIGHWAYS AND RAILWAYS

Bahia de Todos os Santos

Investments | US$ 7.8 billion

Port of Salvador | US$ 430 million Expansion and modernization| US$ 130 million (under construction) New pier - 375m | US$ 300 million (to be procured)

Port of Aratu | US$ 5.1 billion Braskem Consortium | US$ 1.2 billion (under design) Bahia Terminals | US$ 3.5 billion (under design) Federal Government Investments | US$ 400 million (to be procured)

Porto Sul Logistics Complex | US$ 2,27 billion Bamin Private Port | US$ 540 million (under design) Public Port (PPP) | US$ 1.2 billion (to be procured) Export Free Zone and Logistics Support Area | U$ 420 million (to be

procured) New Ilhéus Airport | US$ 160 million (to be procured)

INFRASTRUCTURE | PORTSINFRASTRUCTURE | PORTS

Bahia has an important IT complex

(Ilhéus)

52 companies

1.800 jobs

15% of Brazilian production of computers,

boards, memories, monitors etc.

Tablets already being produced in Bahia

by Semp Toshiba

Technology Park to include IT companies,

such as IBM and Portugal Telecom

ELECTRONICS & ITELECTRONICS & IT

9 Universities and Colleges, offering undergraduate and graduate (MSc and DSc) in several areas

51 undergraduate courses in engineering and technology, 44 MSc, 6 DSc and 44 MBA

Expansion of the Federal University system in Bahia:

Bahia West Federal University (UFOBA)

Bahia South University (UFSBA).

Expansion of Bahia Federal University (UFBA)to Camaçari

Expansion of Recôncavo Baiano Federal University to Feira de Santana

Nine new Federal Technology Colleges (IFET) being setup in cities around the state

CETIND e CIMATEC - State of the art technology centers

for development of RD&I projects as well as technical, undergraduate and graduate formation

EDUCATION AND TECHNOLOGYEDUCATION AND TECHNOLOGY

WORKFORCE

•Bahia houses 9 universities and17 colleges, which offer undergraduateand graduate courses (MBA, MSc, Ph.D.)in several areas of knowledge;

•Ten of these institutions are dedicated to industry and engineering, and offer51 undergraduate courses, 44 MBA’s,10 MSc. and 2 Ph.D. courses;

•There are also 3 technical colleges,offering 30 courses in industryrelated subjects;

•CETIND and CIMATEC – State of the art facilities for technological R&D and technical workforce formation.

Infrastructure Areas for industrial facilities at prices below market value

Availability of water, electricity, gas and telecommunications, as well as road access, at the plant gate

Taxes Exemption or reduction of the state tax (12% or 17%)

75% reduction on income tax (Federal Government)

Reduction of city taxes

Financing DESENBAHIA (State financing agency) - subsidized interest rates for

working capital and for investments up to US$ 50 million;

Brazil Northeast Bank – BNB - subsidized interest rates for larger projects. State Government sets priorities for usage of federal funds

BENEFITS AND INCENTIVESBENEFITS AND INCENTIVES

Search and sale of the area for the project

Negotiations of tax incentives and relationship with other

government areas – Memorandum of Understanding (MOU)

Contacts with Desenbahia and BNB on financing

Contacts with utilities suppliers (water, electricity, natural

gas, IT etc.)

Contacts with the Industry and Trade Associations

Support through the environmental licensing process

GOVERNMENT SERVICESGOVERNMENT SERVICES

ChinaAgribusiness, Automotive, Mining

SpainRenewable Energy

FranceRenewable Energy,Chemicals

USAAgribusiness, Renewable Energy, Chemicals, Automotive, Cosmetics

ItalyMetal-mechanic, Renewable Energy, Chemicals, Automotive, Furniture, LeatherPortugalTextiles, Chemicals, Construction

AlemanhaRenewable Energy, Automotive

MexicoAgribusiness, Chemicals

NetherlandsAgribusiness, Chemicals

BelgiumRenewable Energy, Chemicals

AustraliaMining

SwitzerlandAgro-industry,Renewable Energy

PRIVATE INDUSTRIAL INVESTMENTS | COUNTRY OF ORIGINPRIVATE INDUSTRIAL INVESTMENTS | COUNTRY OF ORIGIN

BAHIA | AN OVERVIEWBAHIA | AN OVERVIEW

PRIVATE INDUSTRIAL INVESTMENTS | COMPANIESPRIVATE INDUSTRIAL INVESTMENTS | COMPANIES

BAHIA | AN OVERVIEWBAHIA | AN OVERVIEW

Japan Investments in Brazil

Japão maiores investimentos no BrasilJapan Investments in Brazil – Top Ten

In Analysis:– Metro System

• Investment expected: US$ 1,6 billion;• .Government payment expected per year 40 million• Government payment expected per year: US$ 35

million for 30 years• the concession contract includes:construction of 28

km of subway line; purchase of vehiclesand maintenance and operation of the system

NEW PROJECTS

LAPALAPA

PÓLVORA

PÓLVORA

BROTASBROTAS

BONOCÔBONOCÔ

ACESSO NORTEACESSO NORTE

RODOVIÁRI

RODOVIÁRIAA

PERNAMBUÉS

PERNAMBUÉS

IMBUÍIMBUÍ

CABCAB

PITUAÇU

PITUAÇUFLAMBOYANT

FLAMBOYANT

TAMBORUGY

TAMBORUGY

PAZPAZMUSSURUNGA

MUSSURUNGA

São Cristóvão

São Cristóvão

TRANSBORDO NO

TRANSBORDO NO

AEROPORTO

AEROPORTO

LAURO DE FREITAS

LAURO DE FREITAS

DETRANDETRAN

RETIRORETIRO

JUÁJUÁ

PIRAJÁPIRAJÁ

Line 1, part 1

line 1, part 2

line 2

Suburban Train

Line 1, part 1

line 1, part 2

line 2

Suburban Train

Aeroporto

Aeroporto

Arena Fonte NovaArena Fonte Nova

Estádio PituaçuEstádio Pituaçu

MAPPING AND METRO STATIONS

Line 1, part 1 is finished

- Prison system with focus on rehabilitation of the prisoner;

-PFI of Couto Maia Hospital - a new contagious infectious disease hospital with 165 beds

- A diagnostic center

Range of activities:– Building facilities & buying/leasing equipment– Maintaining facilities and equipment– Delivering diagnostic services– Dialysis, radiotherapy, and physical rehabilitation

centers

NEW PROJECTS

Source: International Trade Statistics-2011

Bahia is a new growth engine

www.seplan.ba.gov.br

Jose Sergio Gabrielli de AzevedoGoverno do Estado da Bahia

Thank you