Tendências de investimentos industriais en Brasil para 2025

Ximena Juárez (00:16):
Welcome. I am Ximena Juárez, speaking here from the Córdoba office in Argentina. I've been part of Industrial Info for 14 years, specializing in research in the pharmaceutical and biotechnology industries in Latin America. For those who regularly follow our discussions on market outlooks, you may have noticed that we have a new, more natural format compared to previous market assessments. Today we are broadcasting the discussion from our new media platform. We changed the format precisely to focus on analyzing the trends and market developments that are at the center of everyone's attention.
Today we will address some of the main topics and trends taking place in the most relevant industrial markets in Brazil. And for that, I am pleased to have Lidia Lozano joining us. She has been with Industrial Info for over 13 years and is our specialist in the food and beverage sectors, as well as in pulp and paper. And Leonor Caminos, with more than 17 years of experience at Industrial Info, is our specialist for the oil refining industry.
Before we begin our discussion, I would like to extend my sincere thanks to our sponsor, Trane, a brand of the Trane Technologies Group, an innovator in global climate solutions and a specialist in climate control. Trane creates comfortable and energy-efficient indoor environments through a broad portfolio of systems, controls, services, parts and components for air conditioning, heating and ventilation. For more information, visit Trane.com.
And now, as we mentioned earlier, this session on industrial investment trends in Brazil for 2025 is the space where we discuss the main transformations and trends in the industrial market, focusing on the changes that Brazil is facing in 2025.
In last year's edition, we started with Lidia talking about investment prospects, such as the International Monetary Fund's premise predicting Brazil as the eighth largest economy in the world. However, last month, another organization, the World Bank, predicted that the Brazilian economy would grow by 1.8%, which would represent a sharp slowdown compared to last year's 3.4% expansion. So how are these forecasts today, Lidia? Can we consider that these forecasts are still heading in that direction?

Lidia Lozano Caro (03:11):
Well, actually, the World Bank predicts a more pessimistic economic growth for Brazil than the International Monetary Fund and the Brazilian government. This outlook reflects a more challenging global scenario than in 2024, marked by greater trade fragmentation and uncertainties, mainly due to protectionism from the United States, which is an important partner for Brazil.
In addition, internal factors such as the expectation of high inflation, a significantly high fiscal deficit, and the increase in public debt reinforce the possibility of a slowdown in the projected economic growth. However, when analyzing the scenario of industrial investments in the country, we found that the annual trends remain the same. And perhaps this is a characteristic of Brazilian government management, thus sustaining the policies that have already been implemented.

Ximena Juárez (04:16):
Today, we chose to start discussing these main pillars that are shaping Brazil, where we found that sustainability, energy — or more specifically, clean energy — automation and government actions cut across all the industrial sectors we monitor at Industrial Info, from power generation, industrial manufacturing, pulp and paper, chemical processing, to metals and minerals, among the main sectors. So to start, let's dive a little deeper into the industrial investment landscape in Brazil with Leonor.

Leonor Caminos (04:53):
Exactly. This is quite a significant moment for Brazilian industry. We are seeing substantial investments across a wide range of major industry sectors. And in addition to the sectors you've already mentioned, Ximena, today we'll also cover the oil and gas sector, oil refining, alternative fuels, pharmaceuticals and biotechnology, and food and beverages.
So from our perspective, we see that the sectors with the largest investments are energy, manufacturing, and pulp and paper. These three industries account for more than 65% of the nearly $3 billion set to be initiated or approved this year. And this distribution of investments is not a coincidence. Why? Because everything is closely tied to energy, which needs to have a solid foundation to support this growth. Robotics, digitalization and automation are also revolutionizing the industry. But for all these advances to happen effectively, it is necessary to ensure an energy matrix that is secure, efficient and increasingly clean.

Ximena Juárez (06:10):
Well, I also believe there is legislation expected by the end of the year regarding transmission and transformation, right?

Leonor Caminos (06:14):
Yes, there is already an auction scheduled for the end of the year with more than $1 billion in investments and over a thousand — yes, 1,000 km of new lines and an increase in transformation capacity. This is essential for the expansion of renewables.

Ximena Juárez (06:34):
Well, yes, absolutely, Leonor. Currently we can't — so we can't forget that sustainability is no longer a secondary priority. It has become an essential part of growth strategies. I imagine that this necessarily implies more efforts to generate increasingly cleaner energy, Lidia.

Lidia Lozano Caro (07:00):
Yes, absolutely. Brazil is, in fact, making significant progress in areas such as biofuels, green hydrogen, and also the use of waste for energy generation. But it's very important to highlight that these innovations don't just affect the energy sector — they're also spreading to other sectors such as transportation, the food industry, aviation, and even heavy industry. We're experiencing a real transformation, and investments and public policies are well aligned to drive all these changes in a coordinated way.

Ximena Juárez (07:40):
Exactly, Lidia. And regarding what you mentioned, a point of great interest is in the electricity sector — it's the capacity auction that we really highlighted last year, right? And it's finally going to happen, I think, in July of this year. I understand that we already have more than 70GW of registered projects, with a special emphasis on natural gas thermal plants, right?

Leonor Caminos (08:07):
Yes. But there are also expansions of existing hydroelectric plants. This is an interesting development, because 12 plants can be expanded without the need for new projects from scratch, which reduces environmental impact and increases efficiency. In addition, the first battery auction, which has been highly anticipated, is scheduled for July, and this will be crucial to support solar and wind generation, especially during periods of low production. And on the other hand, in the offshore sector, investments are moving forward with the new legislation and the bidding process scheduled for 2026.

Ximena Juárez (08:52):
Well, then the diversification of the energy matrix is a reality. But it's important to remember that gas and oil still play a crucial role in this scenario — Leonor will soon talk more about this topic. Yes, I'd also like to ask now how these developments are being observed in other sectors we've already highlighted, such as manufacturing.

Leonor Caminos (09:13):
Yes, as we noted at the beginning of our conversation, the manufacturing industry stands out as the second largest in terms of investments to be initiated or approved this year, with more than $24 billion in industrial projects. The hottest sectors are transportation, data centers, the automotive sector and heavy manufacturing. So we're seeing a significant expansion of industrial plants, modernization efforts, and also the creation of new factories.

Ximena Juárez (09:54):
Well, Leonor, you mentioned data centers, which are certainly a global trend. I imagine something similar must be happening in this highly populated country.

Leonor Caminos (10:04):
Thank you for pointing that out, Ximena. Because, yes, this sector in Brazil is undergoing transformations, such as advances in digitalization and the spread of AI, which is now so present in everyone's lives. So Brazil is positioning itself as a regional hub, and by 2029, an annual growth rate of 10% is projected. But here I would like to mention that the challenges are quite clear — electricity supply, once again energy, and infrastructure. But yes, the possibilities are immense.

Ximena Juárez (10:45):
Interesting. And we see how energy once again spreads out to the rest of the industries. But what about the other subsectors of the manufacturing industry? Because it is certainly a colossal sector, right?

Leonor Caminos (10:59):
Yes, certainly limitless. In the transportation sector, for example, the railways are undergoing significant modernization, with a focus on electrification and new signaling lines. This will help reduce logistics costs and also improve the competitiveness of exports. In addition, the automotive sector is increasingly adopting hybrid and electric vehicles, supported by government incentives and also by the accelerated adaptation of factories. Toyota, Volkswagen and General Motors are the main protagonists of these investments to be carried out this year.

Ximena Juárez (11:45):
Well, and I think this is a significant point, Leonor, because it's precisely this energy transition that will allow for the entire industry to be supported efficiently, sustainably. And with all this in mind, it would be interesting to know what the outlook is regarding alternative fuels, Lidia.

Lidia Lozano Caro (12:04):
So certainly the Future Fuels Program, for example, aims to expand the use of biofuels, ethanol, biomethane, SAF. But one point of concern, however, is the tension with the United States regarding tariffs on ethanol, which could create challenges in international trade. However, companies like Raízen, BP, Atvos, São Martinho are investing heavily in this sector. The idea is to use raw materials such as sugarcane, corn, and waste to produce clean energy — in addition to initiatives like using biomethane from landfills.

Ximena Juárez (12:52):
Well, and that's a noteworthy point and certainly gives me an opening to return to the topic of oil and gas with you, Leonor. We mentioned at the beginning that we would expand on this topic.

Leonor Caminos (13:05):
Yes. In the oil and gas sector, although the focus is on the energy transition, it continues to make significant investments. Petrobras is moving forward with new floating production, storage and offloading units, FPSOs by their English acronym, in the pre-salt fields. Efficiency and emission reduction have been priorities in the new FPSOs — they are designed with power generation systems and a closed system to minimize gas flaring. In 2025, five new floating units will be operational, while another five will begin construction, and five more will also be approved this year.

Ximena Juárez (13:59):
Now, in the offshore sector, I think it's becoming increasingly expensive and competitive due to the growing global demand for shipyards and specialized vessels.

Leonor Caminos (14:05):
This, without a doubt, has implications for project timelines and costs. But despite this, Brazil continues to position itself as a global offshore oil powerhouse, mainly through Petrobras, and is gradually being joined by other independent local operators — like PRIO and Brava Energia. And given the political and regulatory framework, major international companies such as Shell, TotalEnergies and Equinor are also showing increasing interest in the region.

Ximena Juárez (14:52):
Well, at this point, I'd like to ask about Petrobras and how the state-owned company is behaving in relation to the refining industry, since I understand they've recently announced their strategy for the 2025 to 2029 period, right?

Leonor Caminos (15:05):
Yes. Petrobras is working to achieve low-emissions targets by 2050. But in this period you've already mentioned, 2025 to 2029, this includes — for example, the Refit program, which is making steady progress. And to mention just a few of the main points announced here in this announcement — SAF, sustainable aviation fuel, was included as a main objective, and we are already seeing SAF projects at refineries in Brazil, such as REPAR, Rio Grande, among others.

Ximena Juárez (15:52):
That's an interesting contribution, Leonor. Now, shifting the focus a bit from industries more closely tied to energy, to other industries related to the process area, I'd like to ask what is happening, for example, in the chemical processing industry, Lidia.

Lidia Lozano Caro (16:11):
Well, without a doubt, in the region's chemical processing industry, Brazil is the leader in investments, where the demand for fertilizers and herbicides continues to grow. On one hand, São Paulo continues to lead in the number of projects, especially in agrochemicals. And on the other hand, Ceará has stood out in investments in green hydrogen, with major power-to-X projects from companies like Fortescue, for example, or EnergeX. And regarding sustainability, these projects are not only helping to reduce carbon emissions, but also creating new business opportunities, especially in the production of sustainable fertilizers.

Ximena Juárez (16:59):
Well, that's significant, and I believe that in other sectors, we will also continue to see a focus on these trends. For example, in the pharmaceutical industry — in fact, researchers are continuing to add projects, mainly related to solar panels and electrical equipment dedicated to reducing resource usage. Furthermore, and now expanding a bit more on the issue of government actions, we are seeing a combination of public policies that encourage local production, while at the same time some multinational pharmaceutical companies are shutting down their operations in Brazil. This has, in fact, opened up space for new Brazilian companies to gain market share and expand their operations. One example is Mega Labs, which is acquiring factories throughout the region and planning new investments. Also, as a result of the new industrialization policy, with a strong focus on this industry, we have the new factory for hemophilia medications by Hemobrás, the expansion of Novo Nordisk, and the mega vaccine complex by Bio-Manguinhos.
So having mentioned that, and returning to the issue of past investments, I would like to know how the other industries — such as one I consider crucial, the metals and minerals industry — are developing in these areas.

Leonor Caminos (18:22):
Well, in the metals and minerals industry, we are seeing a growing demand for critical minerals like lithium, nickel and copper, which are so essential for the energy transition we've been talking so much about. Brazil has large reserves of these critical minerals, but still faces challenges regarding local processing capacity. This, without a doubt, requires technological advances as well as an environmental control policy.

Ximena Juárez (18:53):
Well, and what is the outlook regarding the exploration of rare earth elements? Because I understand that Brazil may hold one of the largest reserves in the world.

Leonor Caminos (19:00):
Yes, but the lack of advanced studies and the need for developing processing technology for a sector that is highly polluting and expensive — this represents a challenge. Meanwhile, iron ore mining continues to position itself as the dominant area for investments through next year, followed by the steel industry. And here I want to say something — the steel industry is facing uncertainties due to global political factors, such as the tariffs imposed by the current governments of the United States and China. And what happens? China is an important commercial partner for Brazil.

Ximena Juárez (19:53):
Well, actually, that's a current and significant point. Now, going back to the pulp and paper industry — at the beginning of our conversation, we highlighted this sector among those that will receive the most investment this year. So I'd like to hand it over to you, Lidia, so you can share your insights with us.

Lidia Lozano Caro (20:13):
Of course. So in the pulp and paper industry, I can highlight Suzano in Mato Grosso do Sul, which already has a megaproject, Arauco Brazil, and Klabin, that together will add up to almost 9 million tonnes of pulp per year by 2027 and 2028. This positions Brazil as a global leader in the forest-based sector.

Ximena Juárez (20:47):
Well, and I'd like to know what is the outlook in the food and beverage sector? There must be a lot happening there, right?

Lidia Lozano Caro (20:53):
Yes, without a doubt. The food sector in Brazil has solid fundamentals, with agribusiness playing a strategic role. I'd like to highlight the advancement of alternative crops, such as macaúba, as a source for the production of sustainable oils and bio-products. In addition, there is strong growth potential in grain processing, especially soybeans, and the beverage sector is maintaining a dynamic pace. We have, for example, the new Heineken plant in Passos, Minas Gerais.
And on the other hand, I can also point out that ESG practices have been gaining importance, with a highlight, for example, on the adoption of solar energy in many production units. This will help to increase operational efficiency and attractiveness for investors, with a focus on sustainability.

Ximena Juárez (22:07):
Well, and what about what happened with plant-based? Last year you mentioned this trend as one of the most prominent, so I imagine that this year it must be gaining a lot of momentum.

Lidia Lozano Caro (22:20):
Well, actually, no. The plant-based and alternative protein market, which was once promising, as you mentioned, is now showing a marked slowdown, perhaps due to high prices and still facing competition from traditional products. Adoption remains slow, requiring caution and a very strategic focus.

Ximena Juárez (22:47):
Well, you surprise me with that perspective — truly an unexpected change. And on one point, I'd like to address something that's developing right now — the BRICS. This year Brazil is presiding, and we're already witnessing discussions about it, right, Leonor?

Leonor Caminos (23:07):
Yes. We've been constantly mentioning the topic of ESG, we've also been talking about decarbonization. So it's important to highlight that at the last meeting, which I think was last month in Rio de Janeiro, we noticed that industry was addressed as the main topic on the agenda, especially in areas like cooperation in trade, finance, and sustainable development. So this focus on sustainability, but also its implications for other areas of governance and the industry as a whole, was highlighted at the recent BRICS meetings.

Ximena Juárez (23:46):
Great, Leonor. So to sum up, everything is interconnected — as you also mentioned about BRICS, industry, energy, sustainability and governance are all areas that are evolving together, with investments, public policies and companies working in an integrated way. The challenge now is to maintain this pace of growth, overcome bottlenecks, and ensure that development is truly sustainable in the long term.
While we're coming to the end, if any of you have questions about any of the topics we covered today, please get in touch with us using the contact information provided here. And what I'd really like to do is give a final thank you to our sponsor, Trane — feel free to visit their website if you have any questions about the services they offer. So with that, we thank you for being with us, and we hope we've contributed and helped you navigate this constantly changing landscape. Thank you for participating.