Decision Rio 2010 2012 Final

RIO 2010.2012

DIGITAL INFORMATION The complete contents of the Decision: Rio 2010-2012 and the exclusive mapping of all the investments via Google Earth software, including instructions as to installation and use, are available within the digital information package regarding Decision: Rio 2010-2012. Further information about the FIRJAN System and the partners in the study is also provided.

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Decision: Rio |

FIRJAN System

Rio de Janeiro State Federation of Industries Chairman: Eduardo Eugenio Gouvêa Vieira Corporate Infrastructure Council Chairman: Mauro Ribeiro Viegas Filho General Corporate Board Director: Augusto Franco Alencar Economic Development Board Director: Luciana Costa M. de Sá International Business Center Director: Amaury Temporal Document produced by the Infrastructure and New Investment Division Manager: Cristiano Prado M. Barbosa Technical Team: Arabela de Paula Ferreira Pinto Daniela Brayner dos Santos Flávia Almeida Costa Barros Nadia Maria Ribeiro Guedes Riley Rodrigues de Oliveira Tatiana Lauria Vieira da Silva Trainees: Letícia Baierl Melo Natália de Souza Salomão Rogério Falcão Pereira Vinícius Gomes Dominato Ferreira Contact: www.firjan.org.br/decisionrio [email protected] Av. Graça Aranha, nº 1 – 10º floor – CEP: 20030-002 Rio de Janeiro – RJ Tel: + 55 (21) 2563-4196 Fax: + 55 (21) 2563-4061 The printed English version of this document is available at the above address and the digital version can be downloaded from the site. Versions in other languages may also be available. This document was produced based on information available up to July, 2009.

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CONTENTS Presentation

05 07 09 13 19 27 61

Introduction

Executive Summary Rio de Janeiro: four axes for development and a clear vision of the future Investments Announced for the Period 2010-2012 in Rio de Janeiro

Description of Investments and Opportunities

Potential Investments and Future Opportunities Partners

67 Attachments

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Picture: Getty Images.

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Decision: Rio | Presentation FIRJAN System

Apresentação

PRESENTATION GOOD NEWS AND NEW BUSINESs! Fair stands the wind towards the State of Rio de Janeiro, bringing with it good news and new business. Good news because through optimism, hard work and positive results our vocation for growth has overcome the recent global economic turbulence. And new business because we are at an auspicious moment of public and private investments that will involve announced amounts of US$ 60.3 billion over the next three years. This is the assurance provided by the diversified economy of the state of Rio, second ranked in GDP in Brazil, which has lost none of its robustness as it has faced the economic uncertainties. We believe in the feasibility of the revitalization of the cycle of sustained development, thanks, above all, to our industrial muscle that points the way towards solid projects here in Rio de Janeiro. Reflecting this belief in our future the FIRJAN System presents the study entitled Decision: Rio – Investments 2010-2012, charting the forecast investments for the State and looking to guide businesspersons and investors on course towards economic and social growth. This is one more contribution to the productive sector and provides an effective instrument in the identification of new business and opportunities. As well as this the FIRJAN System is ready to help existing and future investors and businesspersons in the State of Rio de Janeiro. To this end FIRJAN offers an extensive learning and professional qualification network, technological centers and technical guidance services, as well as promoting the planning of government initiatives that will benefit sustainable development and improved quality of life for the population. FIRJAN is proud to foster business competition, education and the quality of life for both the working population and society overall, contributing in this way to the sustainable development of the State of Rio de Janeiro. May the winds of prosperity bring good business to all.

Eduardo Eugenio Gouvêa Vieira President of the FIRJAN System

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Decision: Rio | Introduction FIRJAN System

Picture given by ThyssenKrupp CSA Siderúrgica do Atlântico.

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Aerial view of the ThyssenKrupp CSA Siderúrgica do Atlântico port, already completed, with the steel mill construction works in the background.

Introdução

INTRODUCTION The Infrastructure and New Investments division of the FIRJAN System undertakes an annual research study, entitled Decision: Rio, into the investment intentions of private and public sector investors, over the coming three years. The objective is to show investment tendencies and proffer business opportunities to decision makers in both these sectors. The actual edition reveals investment amounts to the order of US$60 billion for the more than 100 projects announced up to the month of July, 2009. The study shows a State, that at a moment of world crisis, has maintained outstandingly high levels of investment decisions, thus becoming a safe haven for businessperson in search of deals and opportunities in the rough seas of today’s world economy. Decision: Rio 2010-2012 includes a new approach to analysis: the study reveals a clear future vision for the State of Rio de Janeiro, reinforced by the detailed information herein. It presents the investments in full detail and provides additional information arising from the technical studies developed by the FIRJAN System, the result being a dramatic increase in public knowledge of the impacts and opportunities that the investments will create. The study also augments FIRJAN’s previous investment mapping, via Google Earth software, through the addition of updated photographs and videos regarding current and future investments in progress in the State. This innovative approach, a first in businesses terms, enables the investor to readily grasp investments potential by locations and current status. Finally, an entirely new section presents details of Decision: Rio partners such as the bank Caixa Econômica Federal, the civil construction company RJZ Construtora e Empreendimentos Imobiliários Ltda and the law firm Veirano Advogados. In addition to being FIRJAN’s partners, these reputable companies are also available to offer assistance to local and international businesses who wish to invest in the state of Rio de Janeiro. The FIRJAN System is confident that by undertaking this mapping and having offered it to the public and to investors it is contributing to the economic development of Rio de Janeiro and to the attraction of new investments to the State. With this tool Rio de Janeiro will no longer be just another option, but will become a definite Decision.

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Decision: Rio | Executive Summary FIRJAN System

Picture given by Eletronuclear.

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The nuclear power plant Angra 3 construction site in the foreground with Angra 1 and 2 in the background.

Sumário Executivo

EXECUTIVE SUMMARY Decision: Rio 2010-2012 heralds a dynamic Rio de Janeiro, with declared investments in the period to the amount of US$ 60.3 billion. The study enables one to observe that in spite of the worldwide financial crisis having affected some investment decisions the biggest projects that were already underway have been maintained, and new investment decisions have been announced for the coming two years. It is noteworthy that within the State four large developmental axes are becoming established: to the North, anchored by the Port Complex of Açu and oil exploration investments; to the East with the Rio de Janeiro Petrochemical Complex (Comperj) lead by Petrobras; the Sepetiba axis, arising from the logistical competitiveness of the region through the docking, highway and industrial activities; and the Southern axis where the principal driving force will be a re-start to the construction of the Angra 3 nuclear power station.

Sectorial Analysis The US$ 60.3 billion of forecast investments in the State are distributed amongst the activities shown by sector in the graph that follows:

Graph 1 ∎ Investments by Sector Others Transformation Industry

US$ 0.2 billion

US$ 9.7 billion

Infrastructure US$ 13.6 billion

Petrobras US$ 36.8 billion

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Decision: Rio | Summary Executive FIRJAN System

∎ Manufacturing Industries: the petrochemical sector accounts for 74.9% of the total investments forecast for this sector with pride of place being held by the Comperj petrochemical installation. The shipbuilding industry is also noteworthy for the investments being made in new shipping and the expansion and modernization of shipyards, and accounts for 18% of this sector’s investments. Apart from the petrochemical and shipbuilding industries, steel mills are also of great importance to the manufacturing sector. The steel manufacturing industry, although only representing 2.7% of the investments, has several large projects that are in the finalization stage. ThyssenKrupp CSA Siderurgica do Atlantico is constructing a steel mill in Santa Cruz, in the west side of Rio de Janeiro city, and Votorantim is also biulding in Resende, a municipality to the south of the state. The Port Complex of Açu in São João da Barra in the north of the State provides investment potential for the installation of substantial steel industry investments, thanks to the logistical benefits offered by the port for new projects implanted in its retro-area. ∎ Infrastructure: the logistics sector will receive investments of US$5 billion. The State of Rio de Janeiro’s port and docking sector is of the highest importance. Included are: the dredging of the port at Itaguai; the logistical investments of the CSN steel company; and the Açu Port Complex with start-up forecast for the second semester of 2011. The highlight of the highway sector is the road works that have already begun for the Rio de Janeiro Metropolitan Ring Road, an investment of huge importance to the logistics of the state and the country. Other important investments are: the modernization of the Tom Jobim International Airport plus its possible concession to the private sector and; the duplication of the BR101 North highway. Finally, it is worth observing the existence of potentially important investments that while not booked within the US$ 60.3 billion, merit investor tracking, such as the possible construction of the Bullet Train that will connect the cities of Rio de Janeiro and São Paulo. . ∎ Petrobras Investments: the Petrobras investments are of great importance to the State of Rio de Janeiro and are equivalent to some 61% of the total investments forecast for the State. Completed projects in the State cover several differing areas of activity such as petrochemicals, oil exploration, oil production, biofuels, and others.

Summary Executive

Regional Distribution An increase in investments in non-metropolitan region can be observed. The east of the State accounts for 12.3% of the total and includes sectors of importance, such as the petrochemical and shipbuilding industries. To the north, investment in logistical infrastructure, steel manufacturing, energy and the shipbuilding industry provide the region with a significantly important 10.3% share of the total for the State. The south of the State of Rio de Janeiro receives 3.9% of the forecast investments, above all in steel milling and energy. Finally the municipality of Rio de Janeiro will receive 4.2% of the forecast total, principally destined for the shipbuilding industry, steel manufacturing and logistical infrastructure but also including urban development and, most importantly, the urbanization of the slum settlements. It is worth noting that 62% of the investments will benefit several regions, hence evidencing the decentralization impact.

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Decision: Rio | Axes of Development FIRJAN System

Picture given by LLX.

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Açu Port under construction.

Eixos de Desenvolvimento

RIO DE JANEIRO: four axes for development and a clear vision of the future

Supported by an extremely vigorous and diversified economy the State of Rio de Janeiro has experienced over the last few years a period of dynamic growth. The economy, second in GDP in the country, topped US$139 billion in 2006 – equivalent to the Chilean GDP – equal to 11.6% of the nation’s production. The rich diversity of the topography and the almost 15 million inhabitants, spread over a territory of 43.696 km² demonstrate good social, school and health indicators. With 50% of national productivity located within a radius of 500 km of the Capital, the State delivers the highest national urbanization index, a well diversified industrial structure and one of the lowest unemployment rates in the country. Rio de Janeiro is still the “Logistical State” of Brazil as its natural features provide it with a privileged situation in comparison to other of the federation’s states: centrality and multi-purpose. In Rio de Janeiro there are, in fact, five ports of differing profiles accounting for 13.5% of Brazil’s total exports. Two of the ports, Itaguaí and Rio de Janeiro itself, are the principal harbors for incoming and outgoing merchandise produced by or destined for the States of Rio de Janeiro and Minas Gerais1. Other States are also serviced by these ports. Itaguaí, situated in Sepetiba bay, has the potential to become a hub port thanks to its retro-area and deep natural draft. Three major airports are also part of Rio de Janeiro’s logistical capability: the Tom Jobim International Airport – Brazil’s second biggest – that receives some 10 million passengers/year with capacity for another 15 million; the Cabo Frio International Airport, gateway to an important tourist region, known as the Blue Coast, and Santos Dumont Airport located in the center of the state capital. Finally, roads and rail connect the ports and airports to the other Brazilian states, thus allowing for easy access to the major national and international markets. Even when taking into account the scope of the whole of Brazil, Rio de Janeiro’s outstanding characteristics have attracted many investments to the State in recent years. The dimension of these investments and their impact on the local and national economies have created authentic axes of development that will guide the State’s development over the coming years: the North, South, East, and Sepetiba axes. The South axis has as its driving force the re-start of the construction of Brazil’s third nuclear power station. After 25 years, Angra 3, located in Angra dos Reis beside the Angra 1 and 2 power stations has obtained all the required licenses, and construction should start in 2009. This high value (US$3.9 billion) investment will not only activate the productive chain – in particular that of the metal-metallurgical sector – but will also

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Minas Gerais is the third biggest state of Brazil.

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Decision: Rio | Axes of Development FIRJAN System

bring about an urban transformation in the region, just as occurred at the time the first two power stations were built. The investment in Angra 3 represents not only an enormous set of opportunities for the supply of products and services but also a chance to improve the quality of life and the development of the locale. The relatively long construction horizon (forecast to require 66 months) will allow for the adequate planning construction of public infrastructure. When ready the three power stations will produce over 80% of the State’s energy demands and hence further improve the confidence factor in the southeast region’s energy supply. The Sepetiba axis arises from the logistical competitiveness of the region thanks to the combination of port facilities, highways, and industry. In terms of the ports the privileged geographical location and the natural features of Sepetiba Bay are factors that make such substantial differences that they have attracted the interest of several groups that have constructed new ports in the region, even in an atmosphere marked by the retraction of new projects due to the international crisis. In fact demand was so strong that of the eight projects proposed in 2008 the five considered to have the biggest economic and social impacts, and the smallest environmental impact, were given the go ahead to establish themselves over the coming years. Together with the new port facilities two new shipbuilding yards will be built; one for the construction of ships and support vessels and the other for the Brazilian Navy. These new shipyards will set in motion a substantial amount of investment resources and will generate in the region an equally substantial demand for labor. With regard to the highways the building of the Metropolitan Ring Road, in particular the new section of 72km, and the doubling of the south part of the BR101 highway, that is located in Rio de Janeiro, will complete the highway access to the port of Itaguai. This will allow cargoes coming from the North, Northeast, and Centre-East of Brazil to arrive at the port without having to go through the metropolitan region of Rio de Janeiro. Studies ordered by FIRJAN System from Coppead and Tendência Consultoria2 point to the logistical impact of these investments, and show that their effect will extend to seven Brazilian states by the reduction in transport costs to and from the port, and will even reach as far as the frontier with Bolivia. However these impacts will be felt far more intensely by the southeastern states, and in particular the region of the “Paraiba Valley” – the Brazilian economy’s major artery, since it joins the two largest economic powerhouses in the country – Rio de Janeiro and São Paulo. The greater part of the Brazilian GDP flows around this region and will benefit from transport cost reductions of between 10% and possibly 20%3. These advantages are even further geared up when taking into account the construction of the 72 km of the Metropolitan Ring Road in a region of low population density. This means that there are large free areas available for the installation of new industries and distribution centers. It is therefore hoped that in 2011, when the ring road is ready, a large number of companies and inhabitants will locate themselves alongside the highway. The challenges of such a movement are already being analyzed by the State Government and a master plan for the occupation of the region is being developed jointly with the Inter-American Development Bank. Two of Brazil’s most important consultancy companies. For more details see the study entitled “Evaluation of the Logistical and Social Economic Impacts of the Construction of the Rio de Janeiro Metropolitan Ring Road” available at the site www.firjan.org.br/decisionrio or on the Google Earth version of Decision: Rio 2010-2012. 2 3

Axesfor of Development Axes

The competitive gains offered by the already existing logistics within the sphere of influence of Sepetiba Bay, even before the conclusion of the ring road, have already been enough to attract significant investments to the region. And, to complete the tripod that sustains this development axis, there is the ThuyssenKrupp CSA investment currently in progress, the largest private enterprise under construction in Brazil (more than 18,000 workers have been hired simultaneously for the building phase). This, together with the declared intentions of investments around the port (such as the CSN steelworks Logistical Center) and the possible future installation of support bases referring to the exploration for the pre-salt oil fields off the Rio de Janeiro coast, make the future prospects for economic development, short and long term, look very positive. The northern development axis will rapidly transform the current economic and social reality of the north of Rio de Janeiro. The economy of this region, historically concentrated in the cultivation of sugar cane, underwent a huge change towards the end of the nineties with the start of oil exploration in the Campos Basin. The expectation is that this exploration will intensify, as announced by Petrobras in its most recent business plan, and as a result of the exploration of new blocks by companies such as OGX, Maersk Oil, Andarko, Starfish, BG, Chevron and Repsol. The improvement work to the BR-101 (north), the highway that connects the region to Rio de Janeiro, together with the volume and diversity of the investments forecast for the Açu Port Complex, will attract new companies and simultaneously create demand for local labor and infrastructure. The Açu Port Complex looks to build a deep water port facility capable of handling large vessels, a telemetric power station, a pelletizing plant and, furthermore, there is a projected high capacity industrial park that has been planned for the retro-area of the port. All this will take place in a town with a low population density of only 30 thousand inhabitants. This axis will therefore produce important challenges in terms of orderly economic growth and, if properly handled, should produce a substantial improvement in the economic and social development of the State. Finally, the eastern axis is founded on the construction of the Rio de Janeiro Petrochemical Complex (Comperj). Located in the municipality of Itaboraí this is the largest investment currently in progress in Brazil and totals some US$8.4 billion. The refinery under construction will meet international standards, will apply innovative technology, will be capable of refining the heavy oil produced by the Campos Basin and, further, will create by-products with high added value. According to the study made by the FIRJAN System and by the consultancy company FGV – “Comperj: Potential Productive Development”4 the investment will induce development that will not be restricted only to the installation of plastic sector industries but will further generate the setting up of a wide spectrum of companies providing support services during the construction period and once the complex is operational. Opportunities will also be created for tertiary sector (commerce and services) and civil construction companies. In economic terms the impact of the complex could spread to 23 municipalities and by 2015 create added value of US$7.2 billion, equivalent to approximately 39% of the GDP of these municipalities.

For further details see the study Comperj: Potential Productive Development available on the site www.firjan.org.br/decisionrio or on the Google Earth version of Decision: Rio 2010-2012 4

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Decision: Rio | Axes of Development FIRJAN System

In view of this scenario and at a moment of international crisis it is noteworthy that Rio de Janeiro manages to stand out with such a range of huge ongoing undertakings, and with such positive future prospects, at a time when the whole world is debating losses and experiencing economic slow down. The answer to the question, however, can be found in the basic features that differentiate Rio de Janeiro from the other States. Firstly, Rio de Janeiro is the country’s largest oil and natural gas producer, accounting for respectively 81% and 53% of national production. Deep-water oil extraction has grown at an annual average rate of 19.6% and has reached the 1.7 million barrels per day mark. This places Rio de Janeiro amongst the world’s biggest oil producers, larger even than some of the OPEC member countries such as Algeria and Nigeria. This production has generated the distribution of significant royalty payments to the State and producer municipalities, and represents important additional income at both government levels. It is true to say that the sharp drop in oil prices has reduced temporarily this natural advantage but the recent discovery of vast reserves under the salt layer (known as pre-salt) in a zone some 800 km from the Brazilian seaboard, and concentrated in front of the Rio de Janeiro coast, will inevitably require the construction of additional infrastructure for exploration in other municipalities in the State. According to studies made by Petrobras and other entities, the quality of the oil that has been found and the size of the reserves make exploration feasible even with the price of oil at US$35 /barrel. So, as of now, and over the next two decades, oil will generate enormous development for Rio de Janeiro. Secondly, the industrial structure of Rio de Janeiro is diversified, with production aimed at the internal market5 plus the important participation of companies producing non-durable consumer goods, which, together with the important weight of the services sector, all make the State less vulnerable to the international crisis than other Brazilian states. Thirdly, Rio de Janeiro possesses a strong economic vocation for tourism. Not only do the natural beauties of the State attract domestic and foreign tourists but future important events will also agitate the economy. After the successful Pan-American games, the tourism industry can look forward to two certain events and one possible: in 2011 the 5th Military Games; the World Cup in 2014; the Olympic Games in 2016, for which Rio de Janeiro is a candidate. Going further, Brazil may become the first country in the Americas to join the select group of nations to operate bullet trains. The forecast is that the high-speed railway will cover 403 km, and in a journey of just over one hour will connect Rio de Janeiro to the Luz Train Station in São Paulo, hence integrating Rio de Janeiro even more closely with the country’s largest metropolis. Fourthly the so called “creative industry” has a high profile and an expressive presence in the State, notably in the fashion and TV sectors. The traditional “Fashion Rio” event, hosted by the FIRJAN System, is the highpoint of an industry that does not stop growing. The productive capacity of the fashion industry in the State of Rio de Janeiro includes centers such as Petropolis (some 800 industries) and fashionable underwear produced in the municipality Nova Friburgo, generating some 20 thousand jobs and producing 25% of all

According to the FIRJAN index of Exported Production (IFPE) in 2008 the State of Rio de Janeiro destined for export about 10% of production, aproximately half the national average of 21.9%. 5

Axes of Development

lingerie consumed in Brazil. The television sector, in turn, includes the presence of big broadcasters and producers, allowing Rio de Janeiro to be entitled the capital city of domestic tele-drama (soap operas). According to studies produced by the FIRJAN System the “creative” industrial chain represents 18% of Rio de Janeiro’s GDP, and stimulates several other sectors of the economy. Fifthly, the State of Rio de Janeiro at present can count on an extremely favorable political situation, where for the first time in many years the Federal, State and Municipal governments are in alignment. The material result of this alignment shows itself in the creation of an environment that is favorable to pro-market business, plus the recovery of the State’s investment capacity obtained through an improved program in the quality of public sector spending. The result has been the bringing about of initiatives linked to the interests and needs of the people of Rio de Janeiro, such as the Accelerated Growth Program, developed together with three federative entities, encompassing a significant volume of investment in several areas. The future of Rio de Janeiro is, therefore, being defined through the combination of the developmental axes with the features of the State. Although the crisis has affected this movement, as it has throughout the world, the impacts were surprisingly limited in terms of investment intentions in the State, as will be shown. The crisis has not changed the perceived future for the coming years, based on the State’s four development axes. These axes, the investments that accompany them and the opportunities that will be created by them are detailed in the pages that follow.

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Decision: Rio | Investments 2010-2012 FIRJAN System

Picture: Guilherme Paranhos.

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BR-101 South (Rio – Santos) construction of duplicated lanes underway, and showing in the foreground the interchange where connection with the Metropolitan ring road will be made.

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Investimentos 2010-2012

Investments Announced for the Period 2010-2012 in Rio de Janeiro

Investments of US$ 60.3 billion have been announced for the State of Rio de Janeiro over the years 2010 to 2012. This amount is made up of investments by the public and private sectors and from either domestic or international sources. 75.6% of the projects are destined for new industrial plants, while 20.2% will go for expansion and/or modernization, and 4.2% for maritime shipping.

Graph 2 ∎ Destination of the forecast investments Shipbuilding 4.2% Growth/Modernization 20.2%

Start-Up 75.6%

Of the US$ 60.3 billion forecast for the State, 77% (US$ 46.5 billion) refers to industrial investments, including US$ 9.7 billion by manufacturing industry and US$ 36.8 billion by Petrobras. Forecast infrastructure investments total US$ 13.6 billion and investments by other sectors total US$ 0.2 billion. The 20 largest forecast investments during the period are listed in Table 2.

Table 1 ∎ Investment by sector of activity Sector

Investment Amounts (US$ billion)

%

Petrobras

36.8

61.1

Infrastructure

13.6

22.6

Manufacturing Industries

9.7

16.0

Others

0.2

0.3

Total

60.3

100

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Decision: Rio | Investments 2010-2012 FIRJAN System

Table 2 ∎ Twenty largest investments forecast for the period 2010-2012 Investment Amounts (US$ billion)

Investment

Sector

Municipality

Objective

Comperj

Petrochemical

Itaboraí

Start-Up

7.0

Chevron

Energy

Campos

Start-Up

2.1

Porto do Açu Thermoelectric Energy Power Station

São João da Barra Start-Up

2.0

Angra 3

Angra dos Reis

Start-Up

1.9

CSN – Plataforma Logística Transport/Logistics em Itaguaí

Itaguaí

Growth/Modernization

1.8

Açu Port

Transport/Logistics

São João da Barra Start-Up

1.0

OGX

Energy

Campos

Start-Up

0.7

Eisa

Shipbuilding

Rio de Janeiro

Start-Up

0.6

Grupo Fisher

Shipbuilding

Several

Growth/Modernization

0.6

Governo Federal

Urban Development

Several

Growth/Modernization

0.5

Sudeste Port

Transport/Logistics

Itaguaí

Start-Up

0.5

Light S/A – UHE Itaocara

Energy

Several

Start-Up

0.3

Gerdau – Terminal Portuário Transport/Logistics

Itaguaí

Start-Up

0.3

Metrô – Linha 1A

Transport/Logistics

Rio de Janeiro

Growth/Modernization

0.2

Tom Jobim Airport

Transport/Logistics

Rio de Janeiro

Growth/Modernization

0.2

Porto Maravilha

Urban Development

Rio de Janeiro

Growth/Modernization

0.2

MRS Logística

Transport/Logistics

Several

Growth/Modernization

0.2

STX Europe

Shipbuilding

Niterói

Start-Up

0.2

Coquepar – Companhia de Coque Calcinado de Petróleo

Petrochemical

Seropédica

Start-Up

0.2

Michelin

Rubber

Itatiaia

Start-Up

0.2

Energy

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Investments 2010-2012

Manufacturing Industry Investment by the petrochemical industry, Comperj, is the preponderant item amongst the investments for the manufacturing industry, and amounts to US$ 7 billion out of a total of the US$ 7.2 billion forecast up to 2012. The Comperj project is the largest current investment not only in Rio de Janeiro but in the whole of Brazil. The shipbuilding industry is another important sector. It is worth mentioning not only the ships being built for Transpetro at the Maua and Eisa shipyards, but also the order books at the STX Europe and Renave shipyards. Further expansion and modernization investments are being made by the Rio de Janeiro shipyards so as to meet growing demand for the construction of new ships and the repair of existing vessels.

Table 3 ∎ Investments forecast for the manufacturing industry in Rio de Janeiro Sector

Investment 2010-2012 (US$ billion)

%

Petrochemical

7.2

74.9

Shipbuilding

1.8

18.2

Steel

0.4

3.9

Others

0.3

3.0

Total

9.7

100.0

The steel industry is also worthy of note in that, despite the crisis, considerable investments are reaching the finishing stages: ThyssenKrupp CSA Siderúrgica do Atlântico of the German ThyssenKrupp group, with the participation of the Brazilian company Vale near to the port of Itaguai to the west of Rio de Janeiro, and that of the Votorantim Group in Resende to the south of Rio de Janeiro. Sectors such as drinks, food, chemical, pharmaceutical also show forecast investments during the period, and these are included in the item Others.

Table 4 ∎ Largest investments – manufacturing industry Investment Amounts (US$ billion)

Investment

Sector

Municipality

Comperj

Petrochemical

Itaboraí

7.0

Eisa

Shipbuilding

Rio de Janeiro

0.6

Grupo Fisher

Shipbuilding

Several

0.6

STX Europe

Shipbuilding

Niterói

0.2

Seropédica

0.2

Coquepar – Companhia de Coque Calcinado Petrochemical de Petróleo

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Decision: Rio | Investments 2010-2012 FIRJAN System

Petrobras The total investments forecast by Petrobras for the State of Rio de Janeiro amount to US$ 36.8 billion over the period 2010-2012. These investments refer to projects undertaken by Petrobras and its partners in the development of oil and natural gas production in the Campos, Santos and Pre-Salt basins; other non-specified but forecast investments will be made. Investments such as Comperj, the São Tomé Lighthouse airfield, Reduc expansion, amongst others, are detailed in the document but are not included in the mentioned amount (US$ 36.8).

Infrastructure The State of Rio de Janeiro will receive a substantial amount of infrastructure investment between 2010 and 2012. This totals US$13.6 billion of which US$5 billion is destined for logistics (investment in ports, airports, railroads and highways). The Rio de Janeiro ports sector will receive 73% of the forecast total for logistics. Worth mentioning are the investments in the Sepetiba Bay region, in Itaguaí, including investments in the Sudeste Port by the EBX Group and the CSN investment targeted for the expansion of the Container and Cargo terminals (Tecon and Tecar), plus the installation of a private port and a Center for Logistical Support. To the north of the State the feature is the Açu Port Complex, under construction in São João da Barra, the effects of which will be highly positive for the region, in particular in the creation of jobs and income. New investment should also be attracted to the port’s retro-area that will have the properties of an industrial condominium. The LLX project, in the amount of US$1.5 billion was started in 2007 and will be completed by the end of 2012, and operations should start in the first semester of 2012. Graph 3 ∎ Investments in infrastructure in Rio de Janeiro Urban Development US$ 1.0 billion (7%)

Transport/Logistics US$ 5.0 billion (37%)

Basic Sanitation US$ 0.2 billion (1%)

Energy US$ 7.4 billion (55%)

Other than the investments in ports, mention should also be made of the US$ 0.6 billion investment in the Rio de Janeiro Metropolitan Ring Road, on which work has already begun. The highway will skirt the metropolitan region and connect two important development axes: the eastern axis, where Comperj will be constructed; and the Sepetiba axis where the port of Itaguaí is located. Mention should be made, when looking at the infrastructure investments, of the modernization and refurbishment of the Tom Jobim International Airport and of some of the State’s important highways, such

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Investments 2010-2012

as the duplication of the BR101 North. Important within the energy area is the re-start of construction of the Angra 3 nuclear power station, for which environmental licenses have already been obtained with a construction start date forecast for 2009, and finally the Thermoelectric Power Station of Açu, to be built in the retro-area of the port. Mention must also be made of the building of small hydroelectric stations in several regions of the State and the first wind-energy park to be built in São Francisco de Itabapoana in the north of the State.

Tourism Investments in the tourism sector over the period 2010-2012 total US$ 147 million. Apart from tourist projects in the Costa do Sol, particularly in the town of Cabo Frio emphasis must be given to the projected investments that will be made within the ambit of the Tourism Development Program (Prodetur) in several municipalities: Petropolis, Niteroi, Cabo Frio, Novo Friburgo, plus municipalities in the “Valé do Café” as well the State capital. All the municipalities will receive tourist signposting and training for the qualification of professionals in the tourist sector6.

By Region The regional distribution of the investments indicate a “expansion” tendency towards other areas of the state besides the capital. The greater part of the investments were classified as having an impact on several regions in the State, like post of the Petrobras investments, and in infrastructure roadworks. The east of the State, where Comperj will be installed, will receive most of the forecast investments, 12.3%, followed by the north of the State which will receive 10.3% of the amount thanks to the installation of the Açu Port Complex, in the municipality of São João da Barra. The Baixada (lowlands) – Area 1 appears in third place with 4.9% of the investments. The table that follows shows the regional distribution of the investments forecast for the State between 2010 and 2012. Table 5 ∎ Investments forecast by region for thr State Region

Investment (US$ billion)

%

East

7.4

12.3

North

6.2

10.3

Baixada I

3.0

4.9

Municipality of Rio de Janeiro

2.5

4.2

South

2.4

3.9

Others

0.9

1.5

Several

37.9

62.9

Total

60.3

100

Several: investments that are not restricted to a single region, like the Metropolitan Ring Road, highway duplication, Petrobras investments. Others: Baixada II, Noroeste, Serrana, Centro-Norte as well investments with as yet undefined localization. Definitions of municipalities can be found in attachment 2 at the end of this document.

With regard to the latest edition of Decision: Rio (2008-2010) the absence of the investment in the Fazenda São Bento da Lagoa may be noted. Environmental difficulties effectively blocked the investment. This Project is being re-evaluated and there is a possibility that it will be undertaken, but on a smaller scale.

6

24

Decision: Rio | Investments 2010-2012 FIRJAN System

Table 6 ∎ Major investments in the eastern region of the State Investment Amounts (US$ billion)

Investor

Sector

Municipality

Objective

Comperj

Petrochemical

Itaboraí

Start-Up

7.0

STX Europe

Shipbuilding

Niterói

Shipbuilding

0.2

Mauá

Shipbuilding

Niterói

Shipbuilding

0.1

Several

Growth/Modernization

0.1

Governo Federal Urban Development

Table 7 ∎ Major investments in the municipality of Rio de Janeiro Investment Amounts (US$ billion)

Investor

Sector

Municipality

Objective

Eisa

Shipbuilding

Rio de Janeiro

Shipbuilding

0.6

Wtorre

Urban Development

Rio de Janeiro

Start-Up

0.3

Governo Federal

Urban Development

Rio de Janeiro

Growth/Modernization

0.2

Metrô – Linha 1A

Transport/Logistics

Rio de Janeiro

Growth/Modernization

0.2

Tom Jobim Airport

Transport/Logistics

Rio de Janeiro

Growth/Modernization

0.2

Porto Maravilha

Urban Development

Rio de Janeiro

Growth/Modernization

0.2

Porto do Rio – Século XXI

Transport/Logistics

Rio de Janeiro

Growth/Modernization

0.1

EBX – Hotel Glória

Hotels

Rio de Janeiro

Growth/Modernization

0.1

Super Via

Transport/Logistics

Rio de Janeiro

Growth/Modernization

0.1

Canal do Fundão e Canal do Cunha

Basic Sanitation

Rio de Janeiro

Growth/Modernization

0.1

Table 8 ∎ Major investments in the Lowlands – Area I Investment Amounts (US$ billion)

Investor

Sector

Municipality Objective

CSN – Plataforma Logística em Itaguai

Transport/Logistics

Itaguaí

Growth/Modernization

1.8

Sudeste Port

Transport/Logistics

Itaguaí

Start-Up

0.5

Gerdau – Terminal Portuário

Transport/Logistics

Itaguaí

Start-Up

0.3

Coquepar

Petrochemical

Seropédica

Start-Up

0.2

Governo Federal

Urban Development

Several

Growth/Modernization

0.1

Metropolitan Ring Road

Transport/Logistics

Several

Start-Up

*

*The total investment in the brand new stretch of the Metropolitan Ring Road is US$ 343 million and will be made both in the Lownland areas 1 and 2.

Table 9 ∎ Major investments in the Lowlands – Area II Investme Amounts (US$ billion)

Investor

Sector

Municipality

Objective

Reduc

Petrochemical

Duque de Caxias

Growth/Modernization

0.11

Governo Federal

Urban Development

Several

Growth/Modernization

0.09

Bayer

Pharmaceutical

Belford Roxo

Growth/Modernization

0.02

Several

Start-Up

Metropolitan Ring Road Transport/Logistics

*

*The total investment in the brand new stretch of the Metropolitan Ring Road is US$ 343 million and will be made both in the Lownland areas 1 and 2.

25

Investments 2010-2012

Table 10 ∎ Major investments in the Rio de Janeiro northern region Investment Amounts (US$ billion)

Investor

Sector

Municipality

Objective

Chevron

Energy

Campos

Start-Up

2.1

Porto do Açu Thermoelectric Power Station

Energy

São João da Barra

Start-Up

2.0

Açu Port

Transport/Logistics

São João da Barra

Start-Up

1.0

OGX – Exploração de Petróleo

Energy

Campos

Start-Up

0.7

Farol de São Tomé Airport

Transport/Logistics

Campos

Start-Up

0.1

Centro Logístico de Barra do Furado

Shipbuilding

Quissamã

Start-Up

0.1

Table 11 ∎ Major investments in the Rio de Janeiro northeast region Investment Amounts (US$ billion)

Investor

Sector

Municipality

Objective

Light S/A – Itaocara

Energy

Several

Start-Up

0.294

Governo Federal

Urban Development

Several

Growth/Modernization

0.004

Godiva Alimentos – GODAM

Food

São José de Ubá

Start-Up

0.004

Table 12 ∎ Major investments in the southern region Investor

Sector

Municipality

Objective

Investment Amounts (US$ billion)

Angra 3

Energy

Angra dos Reis

Start-Up

1.89

Michelin

Rubber

Itatiaia

Start-Up

0.15

CSN – Aços Longos

Metallurgy/Steel

Volta Redonda

Start-Up

0.11

BR 393

Transport/Logistics

Several

Growth/Modernization

0.05

Table 13 ∎ Major investments in the Serrana (highlands) region Investment Amounts (US$ billion)

Investor

Sector

Municipality

Objective

AES Rio PCH Ltda – Complexo Piabanha

Energy

Several

Start-Up

0.13

UHE Simplício

Energy

Sapucaia

Start-Up

0.08

Latapack Ball

Steel

Três Rios

Start-Up

0.04

MRS Logística – Oficina de Locomotivas

Transport/Logistics

Paraíba do Sul

Start-Up

0.03

Table 14 ∎ Major investments in the centre-north region Objective

Investment Amounts (US$ billion)

Investor

Sector

Municipality

Energisa Geração Rio Grande

Energy

São Sebastião do Alto Start-Up

0.048

Governo Federal

Urban Development

Several

Growth/Modernization

0.013

Lafarge

Minerais Não-Metálicos

Cantagalo

Growth/Modernization

0.008

Mega Embalagens

Plastic

Bom Jardim

Start-Up

0.004

Decision: Rio | Description of Investments and Opportunities FIRJAN System

Picture given by Agência Petrobras de Notícias.

26

Comperj earthworks.

Descrição dos Investimentos e Oportunidades

Description of Investments and Opportunities

In the following pages condensed information showing the data below can be found in respect of the principal investments compiled in this study: ∎ Industrial segment ∎ Physical location ∎ Companies ∎ Project description and investment amount ∎ Potential market ∎ Total Amount of the Investment ∎ Timetable and actual situation (first semester of 2009)7 ∎ Business Opportunities At the end of this section can be found potential investments that are not included in the total for the period 2010-2012, either because of difficulties caused by the crisis or because of technical or economic doubts as to their implementation or, further, because they depend on the finalization of other investments before completion can be forecast. Nevertheless knowledge of these opportunities as well as the tracking of the progress of the projects are of extreme importance and will give investors looking for new opportunities a relative advantage in terms of timing. Finally, more detailed information regarding the described investments or business opportunities can be obtained through the FIRJAN System at the address [email protected]. Both the Infrastructure and New Investment Management and the International Business Center (CIN) are able to provide the necessary support for potential domestic or international investors that wish to locate themselves here or do business with Rio de Janeiro industries. Please also remember that the charting of the investments is available for use via the Google Earth software.

7 It should be emphasised that in Brazil the big investments require environmental licences. This process starts with the preparation of an Environmental Impact Study and the presentation of an Environmental Impact Report with which the investor should receive an advance licence. After holding public meetings at the affected localities investors may need to make project adjustments so as to obtain the construction licence which allows for the start of work. Once the construction is finished the operating licence is issued and this authorizes operations to start.

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

Industry Petrochemical The State of Rio de Janeiro is Brazil’s biggest oil producer. The Campos Basin supplies 81% of local production, creating substantial oil industry activity there and in neighboring areas in the State. Those already established include the Petrobras’ Duque de Caxias Refinery (Reduc), operating in Rio de Janeiro, and of great domestic importance in the production of derivatives, and the Duque de Caxias gas and chemical industrial park where first, second and third generation companies in the petrochemical chain are located, notably Riopol – Rio Polimeros S.A. Projected investments for the 2010-2012 period, particularly the Comperj project in Itaboraí, will tend to enhance even further Rio de Janeiro’s natural calling, and attract a significant number of third generation companies looking to obtain ease of access to raw materials and hence a competitive edge. This sector will therefore become one of Rio de Janeiro’s economic driving force over the next few years, creating jobs, income, and opportunities for the local population and businesses. Chart 1 ∎ Petrochemical industry chain: Comperj example A description follows of the major petrochemical industry investments for the coming years.

Supply Chain Human Resources / Training Engineering

Construction

Construction and Set-up

Operational

Maintenance

Project Systems Others

Cementing Electrical Lighting Refrigeration Motors Painting Others

Boilers Pumps Valves Turbines Pipelines Tooling Others

Automation instrumentation Hotel Trasport and logistics Machinery Others

Conservation services Sealing Varied instrumentation Others

Inputs / Infrastructure

Comperj

Production Chain Marlim 150,000 bpd Ethane Styrene

Propane Polypropylene

Benzene Polypropylene Plastic Industry

Complexo Petroquímico do

Butadine Glycol Ethylene

PET

P-Xilene

First Generation

PTA

Second Generation Third Generation

Description of Investments and Opportunities

The Rio de Janeiro Petrochemical Complex (Comperj)

The Comperj study – Comperj: Potential Productive Development – ∎ Segment: Petrochemical is available for for download at http://www.firjan.org.br/decisionrio or ∎ Location: Itaboraí on the Google Earth version of Decision: Rio 2010-2012. The ∎ Investors: Petrobras, through the company Comperj study includes all the details Participações S.A., made up of Comperj Petroquímicos Básicos referring to theimpact of S.A, Comperj PET S.A., Comperj Estirênicos S.A., Comperj MEG this major investment. S.A. and Comperj Poliofinas S.A.. ∎ Project Description: Comperj will be installed in an area of 20 million m² and will include in the same industrial plant area a first generation refining unit known as the Basic Petrochemicals Unit (UPB); a group of second generation units, known as Associated Petrochemical Units (UPA’s); and a Utility Center (UTIL) that will answer for the supply the water, vapor and electric energy required by the complex when operational. The UPB will account for at least 50% of the total invested and will be responsible for the production of the following basic petrochemicals: a) Ethylene – 1.3 million tons/year; b) Propane – 880 thousand tons/ year; c) Benzene – 600 thousand tons/year, and d) Paraxylene – 700 thousand tons/year. The UPA’s will transform these basic products into petrochemical products such as: Styrene - 500 thousand tons/year; Ethylene glycol – 600 thousand tons/year; Polyethylenes – 800 thousand tons/year; Polypropylene – 850 thousand tons/year, and PTA/PET – 500/600 thousand tons/year. Comperj will start with new technology, developed by the Petrobras Research Center (Cenpes) and based on a differential that assures an advantage compared to other refineries: heavy oil, exported by Brazil, will be the operation’s raw material. The project also foresees the construction of a Center for the Distribution of Liquid Products and an Integration Center, both to be situated in the municipality of São Gonçalo. The Distribution Center will look to optimize movement between Itaboraí and the port loading terminals in Guanabara Bay. Construction costs are budgeted at US$201 million. The Integration Center has as its objective the professional training of labor for Comperj. The FIRJAN System, through SENAI-RJ, is a partner in this labor qualification process. ∎ Market Potential: Comperj production will be destined for the domestic market and in particular for companies that consume basic petrochemical inputs, thermoplastic resins and for any other consumers of intermediary plastic products. In a study undertaken by the FIRJAN System as to the productive potential of Comperj it is estimated that within a conservative scenario – considering that only 13% of the production will be absorbed by the Rio de Janeiro market – more than 350 new plastic industries will be attracted to the State, generating investments to the order of US$429 million. Within an optimistic scenario – 27% of the production to be absorbed by the Rio de Janeiro market – the study indicates that more than 720 new plastic industries could be attracted to the State, generating investments to the order of US$850 million. It should be noted, when looking at the current state of the Brazilian plastic industry, that over 90% of the

29

30

Decision: Rio | Description of Investments and Opportunities FIRJAN System

companies to be installed may be micro and small companies (up to 99 employees), 8% will be medium sized companies and only 1% will be large companies. ∎ Total Amount of the Investment: US$ 8.4 billion, of which US$7 forecast for the period 2010-2012. ∎ Construction timetable and current situation: the project has both the advance and construction licenses and work is at the earth shifting stage. The next phase, construction and assembly, is forecast to start in late 2009 and finish by 2012, when production of the first basic petrochemical batch should begin. In 2013 the second generation units should start up and the investment is forecast to be fully operational by 2014. ∎ Opportunities: Comperj is historically the biggest investment ever made by Petrobras and is currently the biggest industrial investment under way in Brazil. The enterprise will cause major impacts to Rio de Janeiro’s eastern and center-north regions, in particular to the municipalities of Cachoeiras de Macacu, Guapimirim, Itaboraí, Magé, Rio Bonito, São Gonçalo and Tanguá, hence positively influencing Rio de Janeiro’s economy. During the construction, opportunities can be found in engineering services and in the supply of products, especially for large equipment. There will also be demand for living quarters, commerce, services and education/qualification, due to the very large contingent of workers required by the project. Once production starts the opportunities will be related to the growth of the plastics industry as the availability of raw material for industries of this sector will attract new investors. Amongst the businesses that could clearly be attracted by Comperj are consumer industries for basic petrochemical inputs, produced by the UPB, and for thermoplastic resins produced by the UPAs, as well as the intermediary consumer industries for plastic products, and finally the attraction of businesses linked to the income effect (salaries, profits, taxes etc.) generated by the economic activity. It is worth highlighting that service companies do not necessarily have to have their operational locations restricted to those of the industrial companies, and this creates the possibility of new businesses setting up throughout the State of Rio de Janeiro, even amongst those townships with a low calling for the attraction of industries. This effect could be an important instrument in the appropriation of the benefits arising from Comperj by municipalities with a competitive edge, even though they may not create industrial employment.

For further details contact: [email protected]

Description of Investments and Opportunities

Companhia de Coque Calcinado de Petróleo S.A. (Coquepar) ∎ Segment: Petrochemical. ∎ Location: Seropédica. ∎ Investors: Petroquisa, Unimetal e Brazil Energy. ∎ Project Description: the Coquepar project aims to build a petroleum calcination unit for green coke from anode grade petroleum (CVP), on a scale of 250 thousand tons/year. The operation will commercialize the calcinated petroleum coke (CCP) plus 35 MW of clean electric energy resulting from the heat arising from the calcination process. ∎ Market Potential: the CCP production is aimed at the primary aluminum market and 85% will be destined for export. ∎ Valor total do investimento: US$250 million, of which US$ 166 million is expected to be invested over 2010-2012. ∎ Construction timetable and current situation: the original project included two green coke calcination units, to be completed by 2009 through 2010. But difficulties created by the international crisis caused the project and construction timetable be altered. The company has already purchased the site and is now going through the environmental licensing process. As soon as the licenses are granted construction will start. This should occur at the start of 2010. ∎ Opportunities: civil construction, the supply of technology, machinery, equipment and inputs required by the operational units. The project will also increase the offer of the calcinated oil coke raw material to the aluminum market.

For further details contact: [email protected]

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

Steel Industry Investments During the period 2010-2012 Rio de Janeiro will receive significant investments in the steel sector and this will result in the State becoming one of Brazil’s major steel production centers. The investments are not only important due to their magnitude but also because of the economic impact they will have in the State, thanks to the extensive productive chain typical of the steel sector. The chart that follows shows clearly the range of industries that could benefit from this enterprise.

Chart 2 ∎ Steel Industry Thyssenkrupp CSA Chain

Supply Chain Civil Engineering

Electrical Material

Brickwork Cement and concrete Roofing and finishing Hydraulic systems Glass Wood

Electric wiring Cables Systems Ilumination

MetalMechanical

Extraction

Human Resources

Boilers Machines Steel wires Equipments Metals Bars Connections

Iron Zinc Tin Aluminum Chrome

Engineers Managers Technicians

Steel-production

Production Chain MetalMechanical

Transport Auto Rail Maritime

Bars Laminates Machinery Equipments

Eletrodomestics Light and heavy packages Elevators Scrap

Civil Engineering Rods Wires Tubes Bars

Description of Investments and Opportunities

ThyssenKrupp CSA Siderúrgica do Atlântico (TKCSA) ∎ Segment: Steel works. ∎ Location: Rio de Janeiro. ∎ Investors: ThyssenKrupp Steel (73, 13%) e Vale S/A (26, 87%). ∎ Project Description: construction of an industrial steel complex including a mill, a thermoelectric unit, a coke plant and a port docking terminal. The production capacity is forecast for 5 million tons∕year of steel plate destined for the international market, and 1.4 million tons of coke. The ThyssenKrupp CSA Siderúrgica do Atlántico construction is the major investment by ThyssenKrupp Steel in Brazil and during the civil construction stage has created some 18,000 direct jobs. It is forecast that once operations start 3.5 thousand direct and 15 thousand indirect employment opportunities will be created. ∎ Market Potential: in spite of the international crisis, the fall in commodity prices and the contraction of the world market the ThyssenKrupp CSA Siderúrgica do Atlântico production will be entirely assigned to the international market. The company estimates that 2 million tons will be exported to its German operations and other European countries. The remaining 3 million tons will supply North American markets, and in particular the USA. ∎ Total Amount of the Investment: the total investment amounts to US$ 6.3 billion. ∎ Construction timetable and current situation: work was started at the end of 2006 and is now at the finishing stages. Construction of the sea port was concluded in the first quarter of 2009 and the forecast is that the steel manufacturing complex should start operations by December 2009, but, allowing for completion delays, start-up could move to the first semester of 2010. ∎ Opportunities: the installation of metal-mechanical companies around the new enterprise offering post start-up products and services; installation of commercial and service businesses plus residential construction to meet the demand that will arise in the Santa Cruz and surrounding districts. According to the study ordered by the FIRJAN System favorable business activities for micro and small companies were identified in sectors referring to services, supply of mechanical, electrical, hydraulic and automation inputs followed by the civil construction, administration and environmental sectors.

For further details contact: [email protected]

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

Votorantim This investment will finish in 2009 ∎ Segment: Steel works.

and so is not included in the US$ 60.3 billion, but has been

∎ Location: Resende – southern region of the State of

included in this study given

Rio de Janeiro

the possible opportunities

∎ Investors: Votorantim Group

that may be created.

∎ Project Description: construction of a new steel mill with capacity for the production of 1 million tons of steel wire and steel rods. It is estimated that 4.3 thousand direct and indirect labor opportunities will be created after start up. The mill is being built on 4.3 million m² industrial site, and is located 50 km from Siderúrgica Barra Mansa, the group’s other steel mill. ∎ Market Potential: production is destined for the domestic market for long steel products, as used by the civil construction sector and thus less affected by the international crisis. ∎ Total Amount of the Investment: the total investment amounts to US$ 571 million. ∎ Construction timetable and current situation: the project was started in 2007 and is now at the completion stage. Operations are forecast to start by the end of 2009. ∎ Opportunities: the installation of metal-mechanical companies around the new enterprise offering post start-up products and services; the installation of commercial and service companies to meet the needs of the expanding local population; installation, close to the new mill, of industries that use the products as an input in their production with logistical cost benefits; suppliers to the engineering companies constructing the mill.

For further details contact: [email protected]

Description of Investments and Opportunities

Shipbuilding As from 2000 the Brazilian shipbuilding industry – practically inactive since the mid 90s – started to grow again. The shipyards were stimulated on the one hand by the renovation and construction of Petrobras platforms and Transpetro ships, and, on the other hand, by orders for support vessels for deep water exploration and production. This trend has specially benefited Rio de Janeiro, which historically has always hosted a significant number of shipyards and a large contingent of specialized labor. Over recent years some 20 shipyards were re-opened in the State, signifying the creation of thousands of jobs for the sector and the creation of opportunities in the supply chain for the shipbuilding industry. In spite of the world crisis the potential for continuing growth in this industry, either through the growth in Brazil’s coastal shipping activity or intensified oil exploration over the coming years, will both allow for particularly positive prospects for this sector of the Rio de Janeiro economy. A description follows of the shipbuilding industry investments:

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

Estaleiro Mauá ∎ Segment: Shipbuilding ∎ Location: Niterói. ∎ Investors: Estaleiro Mauá e Transpetro. ∎ Project Description: the construction of four tankers for the transport of oil derived products. ∎ Total Amount of the Investment: US$300 million of which US$ 128.2 million to be invested over the period 2010-2012. ∎ Construction timetable and current situation: the construction of the tankers is included in the Transpetro Fleet Modernization and Expansion Program with an overall completion date of 2015, and a construction period of 16 to 20 months. The ships being built by the Mauá shipyard will be delivered to Transpetro by 2015. Construction contracts were signed in 2007 and became effective in January 2009. At present steel purchasing is underway so that the first stages of construction, steel plate cutting, can begin. ∎ Opportunities: supply of machinery and equipment to the shipyards; supplies by marine parts manufacturers. A domestic content of 65% has been required of the ships to be built.

For further details contact: [email protected]

Description of Investments and Opportunities

STX Europe ∎ Segment: Shipbuilding. ∎ Location: Niterói. ∎ Investors: STX Europe, Dofcon Navegação e GEO Navegação e Pesquisa. ∎ Project Description: the building of five vessels (PRO 23, PRO 24, PRO 25, PRO 26 e PRO 27) of the classes of Offshore Support and Construction Vessel (OSCV) and Remotely Operated Vehicle Vessel (ROV). The vessels are being built for the Norwegian ship owners Dofcon Navegação and GEO Navegação e Pesquisa. ∎ Total Amount of the Investment: US$320 million ∎ Construction timetable and current situation: the construction of the PRO 23 and PRO 24 vessels began in 2006 and completion is forecast for 2009 and 2010 respectively. Construction of the remaining vessels began in 2008 and delivery is forecast for 2011. ∎ Opportunities: supply of machinery and equipment by the marine parts industry.

For further details contact: [email protected]

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

EISA ∎ Segment: Shipbuilding ∎ Location: City of Rio de Janeiro. ProjeCT 1 ∎ Investors: PDV Marina – a subsidiary of Petróleos de Venezuela (PDVSA) – e EISA. ∎ Project Description: the building of 10 ships for the Venezuelan PDVSA; of these eight will be Panamax type ships with an individual capacity of 70 thousand tons (DWT) and two will be for the transport of oil derivates with an individual capacity of 47 thousand tons (DWT). ∎ Total Amount of the Investment: US$ 700 million ∎ Construction timetable and current situation: ship construction began in 2007 and the first will be delivered in 2010. The remaining ships will have their delivery dates interspersed with those of container ships for Log-In (see below). ∎ Opportunities: supply of machinery and equipment by the marine parts industry. ProjeCT 2 ∎ Investors: Log-In e EISA. ∎ Project Description: the building of five container ships for Log-In, the Vale S/A logistics company. ∎ Total Amount of the Investment: US$ 334 million. ∎ Construction timetable and current situation: construction of the first two container ships will begin after delivery of the second of the PDVSA ship in 2010. The remainder will have their delivery dates interspersed with those of the PDVSA ships. ∎ Opportunities: supply of machinery and equipment by the marine parts industry. ProjeCT 3 ∎ Investors: Transpetro. ∎ Project Description: the building of four Panamax type ships, transferred from the Rio Naval consortium. ∎ Total Amount of the Investment: US$ 470 million. ∎ Construction timetable and current situation: construction began in 2009 and should be completed by 2015. ∎ Opportunities: supply of machinery and equipment by the marine parts industry.

For further details contact: [email protected]

Description of Investments and Opportunities

Infrastructure and Logistics Investments Over the period 2010-2012 Rio de Janeiro will receive substantial public and private sector investments in infrastructure and logistics. These investments are essential for the development of the State and, as they include public sector funds and are related to local competitiveness and not to domestic or international demand, they are less vulnerable to the economic crisis. These investments will, notably, create opportunities in public tender opportunities, and also through the presentation of projects and the supply of products and services to the construction companies that have won the tenders. The investments shown below all have the common feature of generating substantial impacts in the regions where they will take place, producing opportunities for the installation of commercial and service companies. Details follow of the major investments in this category.

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

Rio de Janeiro Metropolitan Ring Road The study “Evaluation of the logistical and ∎ Segment: Logistical infrastructure (Highways). ∎ Location: the municipalities through which the ring road will pass are: Itaboraí, Guapimirim, Magé, Duque de

social economic impacts arising from the construction of the Ring Road of Metropolitan Rio de Janeiro” can

Caxias, Nova Iguaçu, Japeri, Seropédica and Itaguaí.

be obtained at the site www. firjan.org.br/decisionrio or at

∎ Investors: Federal and State of Rio de Janeiro governments. ∎ Project description: the Metropolitan Ring Road of the State of Rio

the Google Earth version of Decision: Rio 2010-2012

de Janeiro is a highway bypass that will encircle the metropolitan region and allow for the adequate access of cargoes to the port of Itaguaí. These cargoes are transported on the national highway network, made up of the five large highway axes that converge on Rio de Janeiro, that will be connected to the new ring road. The ring road will be of approximately 145km, subdivided into four stretches, three already in existence – Rio-Teresópolis, between Santa Guilhermina and Saracuruna; the Rio-Santos (BR 101 south) highway, between Santa Cruz and Itaguaí, and the BR493, between Santa Guilhermina and Itaboraí (the last two stretches will undergo renovation) – and a new stretch of 72 km, yet to be constructed. This project foresees the building of nine bridges, five viaducts, three underpasses and three footbridges, as well as dual carriageways. This will be a long distance highway with an estimated average speed of 100 km/h. It will also connect the two larges projects in the State, ThyssenKrupp CSA Siderúrgica do Atlántico and Comperj, and will border the Duque de Caxias gas and chemical complex. The FIRJAN System study shows the ring road to have the potential of becoming a developmental corridor with positive logistical and socio-economic gains not only for Rio de Janeiro, but also for other states. The logistical impacts will extend to seven states thanks to the cost reductions in the transport of cargoes to the port of Itaguaí. At the start of 2007 the ring road was included in the Federal Government’s “Growth Accelerated Program” (PAC). This program, considered of extreme relevance to the development of Brazil, includes energy, education and infrastructure. The program foresees that the funds for this project will not be subject to contingencies and therefore it has a real likelihood of reaching completion. ∎ Total amount of the investment: the tendered value for the new stretch amounts to US$380 million, and that of the duplication and renovation to US$116 million. The public tender for conservation work on the BR-493 has yet to take place and so the value is not yet officially known, but the total project is estimated at US$572 million.

Description of Investments and Opportunities

∎ Construction timetable and current situation: the public tender for the work on the new stretch was published in the first semester of 2008, as was the tender for the Rio-Santos works. Current works include the doubling of 26 km of the carriageway between Santa Cruz and Itaguaí with a 30 month construction forecast and completion expected in the second semester of 2010. The brand new stretch, divided into four sections, was authorized for startup in the second quarter of 2009. The forecast is that 25 km of earthworks in the four sections will be completed by the end of 2009. Completion for the whole of the new stretch is expected by the end of 2010. The Rio – Teresopolis works – between Santa Guilhermina and Saracuruna – have been completed, and the highway is in a good state of repair. It is operated under concession to the private sector and there is no forecast for significant roadworks. However work on the BR-493 has not yet started and this highway is not so well maintained. The Eia/Rima (official environmental study and report) was presented at the end of 2008 for the duplication and conservation works and the license was given in the second quarter of 2009. However startup now depends on the publication of the tender. The current forecast is that all the ring road works be completed by the end of 2010 but the rhythm at which work is progressing indicates that this completion date may be pushed forward to 2011. ∎ Opportunities: the impact of the construction of the ring road will be felt directly by the economy. Over the short term heavy construction companies will be involved in the road works, as will, indirectly, the supply chain of companies providing materials for the heavy construction companies. Over the long term notable impacts will be perceived in the rearrangement of urban space, including the possibility of population growth, and population agglomeration alongside the new motorway axis, hence creating an increased demand for basic infrastructure needs. According to the FIRJAN System study as to the logistical impacts of the ring road it should also be noted that once the motorway is completed the reduction in transport costs will produce positive effects on foreign trade and subsequently on GDP, tax revenues and employment. Further still, the ring road will pass near to important State projects for the State such as ThyssenKrupp CSA Siderúrgica do Atlántico, the Comperj complex, and the Duque de Caxias gas and chemical complex. All this and the proximity to the port will generate great opportunities for the installation of industries, commerce and logistical centers along the new stretch of motorway.

For further details contact: [email protected]

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

OHL Brasil – Autopista Fluminense ∎ Segment: Logistical infrastructure (highways). ∎ Location: BR-101 north (Rio-Niterói Bridge – State border RJ/ES). ∎ Investors: Obrascon Huarte Lain Brasil S.A. (OHL Brasil). ∎ Project Description: concession to manage and maintain the BR-101 north (Niteroi to Campos dos Goytacazes stretch) for the next 25 years. Granted by auction held by the National Agency for Land Transport (ANTT) at the end of 2007 within the 2nd Stage of the Federal Concession Program. Apart from emergency works, the concessionary must undertake recovery works and maintain the highway until the end of the concession. ∎ Total amount of the investment: US$1.1 billion will be invested along the 25 years of the concession. ∎ Construction timetable and current situation: the investments started in 2008 and will be made along the life of the concession, which terminates in 2033. In 2008 the concessionary made several services available to users, such as emergency telephones, rescue ambulances, towing capacity and traffic controllers. In the first quarter of 2009 one of the toll stations began operations. Currently emergency work is being undertaken as well as the construction of remaining toll stations. The timetable forecasts completion of improvement works by 2011 and the duplication of the highway by the end of the concession. ∎ Opportunities: the supply of services by heavy engineering companies.

For further details contact: [email protected]

Description of Investments and Opportunities

Acciona – BR-393 ∎ Segment: Logistical infrastructure (highways) ∎ Location: BR-393 (State border RJ/MG – trunk road to BR-116). ∎ Investors: Consórcio Acciona. ∎ Project Description: 25 year concession to manage and maintain the BR-393, (Lucio Meira Highway) for the 200.4km stretch between the State border RJ/MG and the trunk road to the BR-116 (Dutra Highway). Apart from emergency works the concessionary must undertake widening and improvement works. ∎ Total amount of the investment: US$ 663 million is foreseen in the concession contract. Of this amount US$256 million is the amount earmarked for maintenance and amplification. ∎ Construction timetable and current situation: the emergency works begun in 2008 and were finished in the first semester of 2009. The rest of the forecast investment will take place during the life of the concession. ∎ Opportunities: the supply of services by heavy engineering companies.

For further details contact: [email protected]

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

Via Light ∎ Segment: Logistical infrastructure (highways) ∎ Location: the highway (entitled Via Light) starts in Nova Iguaçu and passes through the municipalities of Mesquita, Nilópolis, São João de Meriti and Rio de Janeiro. ∎ Investors: the Municipal and State Governments and the concessionary Light S/A, by way of a technical cooperation agreement. ∎ Project Description: amplification of the Via Light from the present 11 km to 19.5 km. The flow of 15 thousand vehicles/day will grow to 35 thousand vehicles/day by the end of the road works. With the expansion of another 3.5 km the highway will reach the Avenida Brasil, and from there, with 5 more kilometers, arrive at the center of Madureira, and crossing the neighborhoods of Acari, Guadalupe, Honório Gurgel, Rocha Miranda and Cascadura. The Via Light will then connect two of the most important commercial regions in the State, Nova Iguaçu and Madureira. The construction of two tunnels is also forecast and will require environmental licensing. ∎ Total amount of the investment: budgeted for US$ 114.4 million. ∎ Construction timetable and current situation: currently the environmental reports are being elaborated for the granting of environmental licenses. Work can only start once these licenses are obtained and the public tender consummated. The road works are forecast to be finished 12 months after the public tender. ∎ Opportunities: participation in the public tender; opportunities for heavy engineering companies.

For further details contact: [email protected]

Description of Investments and Opportunities

Porto Maravilha ∎ Segment: Infrastructure (Urban development). ∎ Location: City of Rio de Janeiro (surrounds of the city docklands). ∎ Investors: Municipal. State and Federal Governments. ∎ Project Description: the first phase of the project foresees the complete reurbanization of Mauá Square (Praça Mauá), and the most important roads around the Avenida Rodrigues Alves (as far as Warehouse nº 6), of the Rua Sacadura Cabral, of the Morro de Conceição and of the Mauá Pier. The forecasts show construction of a new public space in the area, an underground parking lot for 1,000 vehicles, the recovery of little-used old properties to create some 500 residences, the installation of the Rio Art Gallery in the Dom João VI building and the installation of The Museum of Tomorrow in Warehouses 5 and 6 in the docks. ∎ Total amount of the investment: a total of US$ 178.3 million will be invested, of which US$ 69.1 million in reurbanization, US$21.4 million in the underground parking lot, US$ 16.2 million for new residences, US$12 million for the Art Gallery, and US$ 59.6 million for the Museum of Tomorrow. ∎ Construction timetable and current situation: the investments will take place during the 20102012 period. On June 23rd, 2009 the following documentation was signed: (1) protocol of cooperation between the Federal, State and Municipal Governments to define the management model and accompany the joint long term execution; (2) protocol to release the tender publications for the reurbanization of Mauá Square and the roads surrounding Mauá Pier; decree expropriating the Dom João VI building for the Rio Art Gallery; (6) Cooperation Agreement between the Rio de Janeiro City Hall and the Federal Savings Bank for the recuperation of the underused old properties; (6) delivery of a PRODETUR enquiry document from the Mayor and Governor to the Tourism Minister, Luiz Barreto, to include Porto Maravilha in this program; (7) a covenant signed between the Roberto Marinho Foundation and the Municipality of Rio de Janeiro in respect of the execution of the Museum of Tomorrow and the Rio Art Gallery projects. ∎ Opportunities: participation in the public tenders; construction of new real estate projects in the area and its environs; installation of new commercial enterprises in the area and environs, and the installation of new businesses in the region.

For further details contact: [email protected]

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

The Açu Port Complex

The Açu Port Complex is one of Brazil’s biggest investments in private sector port terminals.

∎ Segment: Logistical infrastructure (Ports).

Near to the Campos, Santos and Espírito

∎ Location: São João da Barra.

Santo oil fields, and with easy access to the country’s more developed regions the

∎ Investors: LLX Logística S.A. (LLX), through subsidiaries,

project will generate major interest and

LLX Porto do Açu Ltda (LLX Açu) and LLX Minas-Rio

draw new companies to the region,

Logística Ltda (LLX Minas Rio).

simultaneously

∎ Project Description: the Açu Port Complex is a project

generating

new

demands for local labor and urban

that foresees the construction of a docking terminal in São

infrastructure.

João da Barra, a pelletizing mill, offshore piers with access

This

movement

will produce a rapid economic

through a 21m deep channel with the capacity to receive very

transformation in the north of

large ships, and with specialized and dedicated docking berths for each differing family of products. This complex is an integrated part of a greater project, known as the Minas-Rio System, belonging to the MMX Company, which is owned by the EBX Group and Anglo-American.

the State, and to turn these economic

changes

into

social benefits will require immediate groundwork.

The project includes the construction of an iron ore mine located in the municipality of Alvorada, in Minas Gerais, with an estimated annual capacity of 26.5 million tons of sinter feed pellets and a 525 km ore duct to be used in the transport of iron ore slush to the Açu Port terminal. The Minas-Rio System will make feasible an efficient export corridor from the Center-West/Southeast regions and with a strong impact on the growth of the Rio de Janeiro economy. As from 2012 LLX will extend the docking activities with the start-up of operations at the remaining piers that will handle other types of non-ore cargo. Açu Port will have the capacity to handle 11.5 million tons of coal, hence meeting the requirements of the steel companies located within the area of influence, as well as providing for a thermoelectric station that will be part of the port complex. The port will further include a general cargo terminal with the capability of handling containers, granite and steel products. A bulk liquid terminal has also been planned and this will initially meet the handling needs of ethanol, oil derivates, and liquid natural gas (LNG), with 4 million m³ annual capacity. Two specialized docking berths are to be destined for offshore logistic requirements, with an annual capacity for some 1.2 thousand docking operations and 90 thousand tons of cargo handling. A drilling fluid warehouse will also be constructed. The complex will cover 6.9 thousand hectares (approx. 17 acres) of retro-area, in which the start-up of differing economic activities is projected. The Açu Port Complex was granted, by a São João da Barra municipal law, the status of an Industrial District, resulting in the establishment of favorable conditions for industrial installations and developments, including steel plants, telemetric stations, gasification units, the automobile industry, metal-mechanical zone, logistics and warehousing, amongst others.

Description of Investments and Opportunities

∎ Potential Market: the Minas-Rio System estimates an annual production of up to 26.6 million tons of iron ore. Of this total 19.0 million tons will be exported as pellet feed and 7.6 million tons will be used in the production of 7 million tons of iron ore pellets produced by the iron ore processing plant to be located at the port. ∎ Total Amount of the Investment: US$ 1.6 billion of which US$ 968 million will be invested in the 2010-2012 period. ∎ Construction timetable and current situation: in 2007 structural work began on the building of the iron ore port, and currently work is being undertaken on the channel dredging operation and pillar construction for the access bridge. Environmental impact studies are underway with regard to the building of the logistics yards. The forecast is that work will be completely finished by the end of 2012, although iron ore operations will start in the first semester of 2012. ∎ Opportunities: opportunities for the supply of engineering and heavy construction services during the building works phase, plus the supply of all types of machinery and equipment. During construction the large workforce will require commercial and service companies around the site and in the town. The latter, according to official data, had only some 28 thousand inhabitants. An increase in the demand for housing in the region will also occur during the construction period and this will enable the development of the civil construction sector. The Açu Port could also be used as a support base for companies involved in oil exploration in the Campos Basin. The immense retro-area, plus the availability of energy, raw material and logistic advantages will permit the installation of a range of industrial plants such as the automobile and steel industries and others. These possibilities are detailed in the potential opportunities shown at the end of this section.

For further details contact: [email protected]

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

The Sudeste Port ∎ Segment: Logistical infrastructure (Ports). ∎ Location: Itaguaí. ∎ Investors: LLX Logística. ∎ Project Description: situated beside the port of Itaguaí the Southeast Port project foresees the construction of a port with a depth of 18.5 meters and designed to receive Capesize vessels. The port will be dedicated to the export of iron ore to be brought in through the MRS Logística rail network from the MMX mine in the Serra Azul region, located in the southwest of Belo Horizonte, and to the import of dry bulk, especially coal. The project includes the construction of stockyards in which iron ore and other dry bulk materials will be stocked and handled. The port will also include docking berths. The total area will be of 51.2 hectares. Warehousing capacity will be to the order of 25 million tons of iron ore per year. The port will have the use of existing land and maritime infrastructure. 3,000 job opportunities will be created during the construction phase and another 450 once the port is operational. ∎ Potential Market: the Southeast Port will look to meet the needs of the mining regions of Minas Gerais, plus the industrial sector’s demand for coal, thanks to the integration of the port with the MRS railway system. ∎ Total Amount of the Investment: US$ 740 million, of which US$ 503.2 million in the 2010-2012 period. ∎ Construction timetable and current situation: the project has received the “go-ahead” from the State Government, thus giving continuity to the environmental licensing process, including public hearings. Work should begin once the construction license is obtained and this should occur by the first quarter of 2010. Operational start-up is forecast for the first semester of 2011. ∎ Opportunities: the supply of engineering and heavy construction services plus the supply of machinery and equipment. This project together with the other investments forecast for the maritime port sector in the region of Sepetiba Bay, and the interconnection of these projects to the Metropolitan Ring Road will cause great changes to the local economy. The possible attraction of new industries to the region, due to the logistics facilities soon to be delivered, will require the installation of new commercial and service enterprises.

For further details contact: [email protected]

Description of Investments and Opportunities

Itaguaí Port In 2008 the port of Itaguaí handled ∎ Segment: Infrastructure

100.8 million tons of cargo. The

∎ Location: Itaguaí.

expectation is that the handling capacity will increase by 50%

∎ Investors: Federal Government. ∎ Project Description: In May 2008 the Docas de Rio de Janeiro

once the dredging works are completed.

Company signed the first contract for the execution of works in the Brazilian ports sector, within the Federal Government’s Accelerated Growth Program (PAC). The contract envisages the completion of dredging works in the port of Itaguaí, to be divided in two stages. The first, undertaken by the winner of the public tender, Ster Engenharia, started in July 2008 with completion expected in the first semester of 2009. This stage will provide the port with a depth of 20 meters compared to the existing 17.5 meters, hence easing shipping movement in the port. The second dredging stage will increase the length of the docking canal to ThyssenKrupp CSA Siderúrgica do Atlântico. This company has its own docking facilities but access to the port will require passage through the Itaguaí canal. ∎ Potential Market: the investment will permit a considerable increase in the port’s capacity to meet cargo shipping demands. ∎ Total Amount of the Investment: the first stage involved investments of US$ 30.5 million and a further US$41 million will be destined to the second dredging stage. ∎ Construction timetable and current situation: the first stage works started in 2008 and were completed in the first semester of 2009. The second stage of the project is at the environmental licensing phase. The prior license has been obtained and the public hearing stage of the licensing process is currently underway. Simultaneously the public tender process is also underway, having started in the first quarter of 2009. The second stage works should be completed by 2010. ∎ Opportunities: the supply of engineering and heavy construction services plus the supply of machinery and equipment.

For further details contact: [email protected]

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

CSN – Logistics Platform in Itaguaí ∎ Segment: Infrastructure. ∎ Location: Itaguaí. ∎ Investors: CSN (Companhia Siderúrgica Nacional). ∎ Project Description: Project 1 – Expansion of Sepetiba Tecon (Container terminal) – adaption of two continuous quayside berths (Equalization of Berth 301 and Adaption of Berths 302 and 303). Project 2 – Expansion of Tecar (Cargo terminal): berths and storage yards. The investment aims to increase the Tecar iron ore capacity to 100 million tons∕year (Mtpa) and the coal handling capacity to 8 Mtpa. Project 3 – Construction of the Logistics Support Center, covering container warehousing and dedicated warehouses for steel products, coffee, cotton, sugar and chemicals. Vehicle, auto parts, and accessory service distribution centers will be constructed as well as “built to suit” modules. The Logistics Support Center will have the capacity to warehouse and handle 900 thousand TEUs (twenty foot equivalent units) per year. Project 4 – Construction of the private port of Lago da Pedra and retro-area. The port will have two piers. Pier 1 will handle general cargoes, steel products, and containers. Pier 2 will handle coal and iron ore. The handling capacity of the two piers will 60 Mpta for iron ore, 12 Mtpa of coal and other cargoes, 11 Mtpa of general cargo and steel products and one million TEUs per year. The port retro-area will include stockyards of 1.2 million m² and for the support functions an institutional building, warehouse, administrative building, and restaurant will all be built. ∎ Potential Market: the investment will enable a significant increase capacity to meet the demand for cargo transport in the State of Rio de Janeiro and the entire Southeast region. The following sectors will be catered for: containers, steel products, project cargoes, the import and export of bulk dry products, and the handling of iron ore and coal. ∎ Total Amount of the Investment: US$2.2 billion will be invested in four projects as follows Project 1 – US$166 million in two continuous quay berths. The first berth will require some US$ 63 million of which US$ 38 million for the continuous quays and US$ 25 million for equipment. The second berth will receive investments of US$ 103 million: US$ 47 million for the quays and retro-area and US$ 56 million for the equipment. Project 2 – the investments will total US$ 790 million. Project 3 – US$ 202 million. Project 4 – Piers: US$ 791 million; Retro-area: US$ 283 million

Description of Investments and Opportunities

∎ Construction timetable and current situation: Project 1 – work on the equalization of Berth 301 is currently underway. The adaptation project for Berths 302/303 is in the environmental licensing stage and the forecast is that work will begin in the second semester of 2009 with completion by the first semester of 2011. Project 2 – the Tecar expansion started in 2007 and at present the purchase of machinery and equipment and the contracting of civil works for the stockyards are being undertaken. This stage of the project will increase the Tecar capacity to 55 Mtpa. Basic engineering works referring to the second stage, to raise capacity to 100 Mtpa, are in progress, with a completion date forecast for 2012. Project 3 – the project and environmental licensing requests are currently under preparation and work should start in the first semester of 2010 and finish in 2012. Project 4 – the project and environmental licensing requests are currently under preparation and work should start in the first semester of 2010 and finish in 2013. This port will probably be developed together with Gerdau and Petrobras. See further information on page 54. ∎ Opportunities: the supply of engineering and heavy construction services plus the supply of machinery and equipment.

For further details contact: [email protected]

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

MRS Logística The MRS track is the only rail access to ∎ Segment: Transport∕Logistical Infrastructure

the Itaguaí region. The start-up of

(Railways). ∎ Location: the full extent of the MRS rail network in

new ports in Sepetiba bay and the dredging of the port of Itaguaí will

Rio de Janeiro

cause a significant increase in

∎ Investors: MRS Logística.

cargo traffic on the railway, principally in iron ore.

∎ Project Description: investments are concentrated on track development (expansion and adaption of the yards), the maintenance, expansion and infrastructure of the permanent tracks, improvements to workshops, signaling and fixed installations along the rail network. Included in the investments are the following works: duplication of access to the port of Itaguaí, meeting the expansion project requirements for the CSN ore terminals in the same port, increasing the Barra do Pirai yard to better provide support to increased traffic circulation, re-design the Barra Mansa tracks, improvement to railway access at the Rio de Janeiro port, adaptation of the tracks within the port of Rio de Janeiro, substitution of the signaling and communication systems of all the MRS rail network (Project SIACO), the construction of viaducts and pedestrian ways along the railway’s right of way. A locomotive workshop will be constructed in the municipality of Paraíba do Sul. ∎ Total amount of the investment: US$208.2 in the rail network and US$ 33.4 in the new engine yard. ∎ Construction timetable and current situation: the investments began in 2009 and will go on until to 2011. ∎ Opportunities: supply of services and equipment by segments of the metal-mechanical.

For further details contact: [email protected]

Description of Investments and Opportunities

Nuclear Power Station Angra 3 ∎ Segment: Infrastructure (electric power generation). ∎ Location: Angra dos Reis. ∎ Investors: Electronuclear. ∎ Project Description: the construction of the Angra 3 nuclear power station with a gross output of 1,350 Mw and the capability of generating 10.9 million Mwh per year, equivalent to one third of consumption of the State of Rio de Janeiro. The power station will occupy an area of 1,250 hectares and will have a useful life of 40 years. The power station will increase confidence in the supply reliability of the Southeast region power system as, together with Angra 1 and Angra 2, both already in operation, more than 80% of the State’s electricity needs will be met by these power stations. ∎ Potential Market: electric energy market of the Southeast and Center-West regions. ∎ Total amount of the investment: US$ 3.5 billion, of which US$ 1.9 billion for the 2010-2012 period. ∎ Construction timetable and current situation: the project has obtained all the environmental licenses required for start-up and this should occur still in 2009. The licenses are valid for a period of six years, and are conceded subject to 6 general conditions and 45 specific requirements as detailed in the prior license. One of these conditions requires that the company presents a timetable showing how nuclear waste with a long term radiation life will be handled and a further timetable for the handling of tailings with medium to low radiation levels. A total of 66 months (five and a half years) are forecast to start up. This period covers civil construction, electromechanical assembly, commissioning of the system and operational testing. The building period starts with the concreting work for the reactor building foundations. ∎ Opportunities: participation in the public tender for the supply of engineering services, machinery, equipment and a range of products.

For further details contact: [email protected]

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

Simplício Hydroelectric Complex

The Simplício hydroelectric station will supply on average some 190 MW and the reservoir area, including part of the Anta reservoir will total

∎Segment: Infrastructure (electric power generation)

only 15.83 km². This signifies an output to

∎ Locality: the hydroelectric project will be constructed

flooded area proportion of no more than 10

on the lower half of the Paraíba do Sul River, some 150

MW/km², hence helping to minimize the

km from Rio de Janeiro and between the municipalities of Três Rios and Sapucaia.

environmental impacts on the inundated areas. This relationship of output to

∎ Investors: FURNAS Centrais Elétricas S.A..

flooded area is found in only the most modern power stations, such

∎ Project Description: the Simplício hydroelectric complex is made up of the power stations Simplício and Anta, constructed between the states of Rio de Janeiro and Minas Gerais. The Simplício plant will have three Francis turbines with an output of 101.9 MW each, while

as Itaipu Binacional, the largest hydroelectric

plant

in

the

country built in partnership with Paraguay.

the Anta plant will have two Kaplan turbines of 14 MW output each, making a total installed power output of 333.7 MW. Work will also include a hydro circuit made up of a sequence of canals, tunnels, and barrages joining the two reservoirs. This hydroelectric complex will make a substantial contribution to the country’s energy supply. ∎ Total amount of the investment: US$763 million, of which US$ 77.3 million during the period 2010-2012. ∎ Construction timetable and current situation: work on the Simplício station is underway and some 62% of the civil construction work is completed. The forecast is that units 1 and 2 will be ready by 2010 and unit 3 by 2011. Work at the Anta station includes barrage concreting operations, construction of the spillway and assembly of the floodgates. ∎Opportunities: contracting of machinery, equipment, electrical material, and heavy engineering.

For further details contact: [email protected]

Description of Investments and Opportunities

Porto do Açu Thermoelectric Power Station ∎ Segment: Infrastructure (electric power generation). ∎ Locality: São João da Barra (Açu Port). ∎ Investors: MPX Mineração e Energia S.A. and quota holders in the power station’s production. ∎ Project Description: the Açu electric energy station, an MPX Mineração e Energia project, is located to the north of the State of Rio de Janeiro and looks to supply the energy markets of the Southeast. The station will be installed in the retro-area of the port. Installed power capacity will be of 2,100 MW, made up of three coal-fired generators. So as to minimize environmental impacts, sustainable use technology will be used in the plant and treatment processes will be installed to manage gas, liquid, solids and oil-based effluents. The mechanical refrigeration tower will use water from the water table and from the ore duct pertaining to the Sistema Minas-Rio of MMX Mineração e Metálicos Coal supplies will be imported and will have the logistical support of LLX Logística S.A. The coal will be unloaded on a nearby offshore pier and taken by conveyor belt to the power station. Connection to the Interconnected National Grid will be made via the substation at Campos, belonging to FURNAS Centrais Elétricas, through the construction of some 35 km of power lines. ∎ Potential Market: the energy to be generated by the Açu power station will be supplied through “Free Energy Agreements” (unregulated market) to quota holders, and to consumers representing 30% of Brazil’s electric energy market. . ∎ Total amount of the investment: US$4 billion of which US$2 billion to be invested during the 20102012 period. ∎ Construction timetable and current situation: the initial timetable foresees start-up by the second semester of 2012, with 700 MW for supply to the open energy market. Prior environmental licenses have been obtained however problems with the sale of energy to the open market have delayed the startup of investments which was planned for the end of 2008. Thus a new timeline is required as well as a review of the project, which will be published as soon as the energy sale is complete. ∎ Opportunities: the supply of engineering and heavy construction services, during the construction stage, as well as the supply of varied machinery and equipment. Electric energy will be commercialized in an integrated process starting with the management of the requirements of the power station’s quota holders and the guarantee of the total supply of electric energy to meet their production power needs.

For further details contact: [email protected]

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

Light – PCH Lajes ∎ Segment: Infrastructure (electric power generation). ∎ Locality: Municipalities of Piraí, Barra do Piraí and Rio Claro – Rio de Janeiro southern region. ∎ Investors: Light Energia S.A., part of the Light Group. ∎ Project Description: the increase of the generating capacity of the Lajes Hydroelectric Complex, with the extension of the tunnel carrying water to the complex and the construction of the Lajes plant. The plant will have installed power capacity of 17 MW and will be constructed within the power station of Fontes Velha. The project looks to increase the complex’s guaranteed energy generation capacity. ∎ Total amount of the investment: US$ 34.7 million, of which US$ 29.4 in the 2010-2012 period. ∎ Construction timetable and current situation: the engineering project has been completed and construction companies are now being contracted. The project has received the construction license and work should start in the second semester of 2009. The forecast is for operations to start during the second semester of 2012. ∎ Opportunities: supply of steel plate, piping, basic engineering services, hydraulic turbines, electric material, transformers, generators, conductors, and other components required for power generation and transmission.

For further details contact: [email protected]

Description of Investments and Opportunities

Tourism Sector The tourism sector has an ample productive value chain, as shown below, and investments have had a major positive impact on the economy. Businessperson elected tourism as being an ‘anchor sector’ for state economy, as shown on the Rio de Janeiro Development Map published by the FIRJAN System in August of 2006. Tourism businessperson of Rio de Janeiro would like a scenario for Rio de Janeiro whereby, in 2015, the State receives the same annual number of tourists as New York. The investments shown as follows are part of the process of making this wished for scenario become a reality.

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Decision: Rio | Description of Investments and Opportunities FIRJAN System

Events Promotion

Hotels Auberges Motels B&B’s Holiday camps

Seminars Congresses Fairs Conventions Expositions

Entertainment Amusement parksv Clubs Stadiums Gymnasiums

Tourist agencies Tour Operators

Sectors Leaders

Food and Drink

Marinas

Cinema Theatre Arts, crafts and local produce Cruises Commercial centers and Art galleries

Related Industries

Discos Shows

Transport Air Land Sea Vehicle rental Architecture and urbanism Food supply Laundries Communication and IT services Publicity Exchange services

Infrastructure Hospital equipment First aid Hospitals Clinics Maternites

Furniture makers Food and beverages Textiles Electrical Material Civil Engineering Hygiene and cleaning Non-metallic minerals Clothing Footwear Electro-electronics Editorial and graphic Gems and Jewels

Physical infrastructure

Security sysrems

Roads

Police stations

Airports Bus terminals

Highway police stations

Rail terminals

Fire-stations

Sea terminals

Lifeguard services

Basic sanitation

Specialized consultants

Support

Hospitality

Related Services

Chart 3 ∎ Tourist Industry Chain

Project preparation

Electrical energy Urbam services

Telecoms

Cleaning Signposting Restoration of public buildings and mounuments

Training

Official banks Private banks National and international investors

Credit

Education in Tourism Universities and schools Professional training centers

Description of Investments and Opportunities

Club Med – Reserva do Peró The Club Med Hotel will be the first hotel to ∎ Segment: Tourism ∎ Locality: Cabo Frio (Peró beach)

be built at the Peró beach, in Cabo Frio. The hotel will be part of the Peró Reserve Project covering the installation of a

∎ Investors: Club Med.

hotel complex, public parks, residen-

∎ Project Description: construction of a 40 hectare resort on a private property fronting a 4 km long beach in the Peró Reserve Project. ∎ Potential Market: local and foreign tourists, and growth in demand created by the expansion of tourism in this region due to the

tial condominiums, restaurants and convention centers, all detailed in the Potential Investments and Future Opportunities section of this document.

Cabo Frio International Airport. ∎ Total amount of the investment: US$ 45.3 million. ∎ Construction timetable and current situation: required environmental licenses have been obtained and construction will start in 2009. Inauguration of the hotel is forecast for 2010. ∎ Opportunities: the construction stage will create inumerous demands for civil construction, environmental consultancy (the hotel is located in an environmental reserve) and decoration. After the start of operations the tourist activity should create opportunities for the commercial and services sectors.

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Decision: Rio | Potencial Investments FIRJAN System

Picture given by LLX.

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Digital mockup of the Hotel Gloria façade after reconstruction; work already in progress.

Investimentos Potenciais

Potential Investments and Future Opportunities

Further to the investments charted in the study Decision: Rio 2010-2012 it is worth mentioning additional investments that are potentially feasible although not included in the US$ 60.3 billion investment forecast, either due to investment amounts not having been defined by the closing date of this study, or because although announced there is still uncertainty as to their realization. Nevertheless the impact that such investments could make on the Rio de Janeiro economy, and the opportunities that they could create, make it important that they be visible on investors radar screens and those of other business executives. For this reason they are included in this document.

∎ The development of pre-salt exploration in Rio de Janeiro In November 2007 Petrobras officially informed the National Oil Agency (ANP) of the commercial feasibility of the Tupi oil field. Located beneath the Brazilian pre-salt layer – a deep water layer, some 200 km wide by 800 km long, and 300 km from the coastline – the Tupi field together with further subsequent discoveries (Carioca, Pão de Açúcar, Iara and Caramba, amongst others) can be seen as a new frontier for oil exploration. The great distance from the coast, the more than 7 thousand meter depth (5 thousand meters to the rock formation and another 2 thousand meters to get through it) and the elevated temperatures of the oil fields are some of the technical challenges that will have to be overcome to make their exploration viable. In parallel, the drop in the international price of oil and the slowdown of the world economy are also factors that could make exploration more difficult. Nevertheless studies show that even with international prices at about US$35/barrel the quality of the oil and the vastness of the reserves would guarantee the financial feasibility of the extraction. If the oil potential of these blocks is confirmed Brazil will move from the 17th ranking to the 8th or 9th in the league of countries with biggest reserves, thanks to the addition of 65 billion barrels to them. The Extended Well Test (EWT) that will reveal even more detailed data regarding the size and quality of the reserves have already started in the Tupi field, and will be extended during 2010 and 2011. Prospects are that commercial exploration will begin between 2013 and 2015. It is important to highlight that the Tupi field, as well as most of the other pre-salt fields announced to date are located in the Santos Basin in the Rio de Janeiro cartographic projection. This means that the Rio de Janeiro coastline, and in particular the southern region of the State covering the southern and Sepetiba developmental axes, is the nearest to the fields that will be explored. This gives Rio de Janeiro a comparative advantage over other states in terms of the installation of new exploration bases as well as the

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already existing Macaé base in the north of the State. Finally the start of exploration, expected for 2015, will generate the payment of royalties to many more Rio de Janeiro municipalities, and these, in turn, will have the responsibility of applying the funds in the building of the required infrastructure to guarantee the adequate economic and social development of the region. The location of the Rio de Janeiro pre-salt fields, and additional details, can be seen in the Decision: Rio 2010-2012 Google Earth version, an integral part of this document.

∎ The new ports forecast for the Sepetiba development axis During 2008 eight companies affirmed their intention of constructing ports in the south of the State. Of these, five would be built in Sepetiba Bay. The majority of the projects have iron ore export as their objective, but also include general cargo operations, and were presented to a work group created by the State Government. This group, in turn, prepared and presented to the government a matrix containing the economic, tourist, environmental and social impacts of all the projects. Based on this the State Government gave the five projects the required permission to allow for continuity in the environmental license process. Of the five projects, the only three to have publicly announced details – the LLX Sudeste Port; the CSN Lago da Pedra port; the Gerdau port – were included in the US$ 5 billion of logistics investments compiled in this document. The remaining two projects – the Usiminas port and the Petrobras port – are still at project stage and have not yet started the environmental license process. But these projects are worth monitoring by investors as they are situated in the Sepetiba development axis and will total significant investment amounts once started. In particular the Petrobras port, apart from the handling of petrochemical products, may also become an operational base for the exploration of the pre-salt oil fields of the Santos Basin. The governmental work group also recommended that the ports be integrated, and this could cause changes to the original projects. There is always the possibility, should the international crisis ease and the prices and demand for commodities improve, that ThyssenKrupp CSA Siderúrgica do Atlântico will increase its port terminal capacity over the next few years. It is also the intention of the Companhia Docas, a state company responsible for public ports, to tender for a new terminal within the established area of the Itaguaí port, destined for the handling of bulk cargoes. But successive postponements cast doubt on the probability of the execution of the project by this public sector company, within the term of this study. The locations of the potential ports and further project details can be seen on the Google Earth version of Decision: Rio 20102012 and are an integral part of this document.

∎ Occupation of the Ring Road Surroundings As shown throughout this document the ring road is one of the pillars of the Sepetiba development axis, and the logistics benefits that will be created will attract a large number of companies and inhabitants to settle in the surrounding area. The State Government, aware of this probability, joined with the Inter-American development Bank (IDB) and contracted, by public tender, the Tecnosolo/Arcadis Tetraplan consultancy

Potencial Investments

company to develop a Sustainable Development Plan for the surroundings of the Metropolitan Ring Road of Rio de Janeiro. The project, registered under IDB Code BR-T1053, foresees a total value of US$ 1.3 million of which US$ 253 thousand will be of the State Governments responsibility and the balance that of the IDB. The study, with completion expected for year end 2009 and for publication at the start of 2010, will indicate occupation alternatives for the brand new stretch of roadway and will provide guidelines as to the development of the region. Potential investments can therefore be clearly envisaged not just for new companies, but also for the construction of the infrastructure required for the development of the region.

∎ New Shipyards in the State The historical vocation for shipbuilding in the State of Rio, the ongoing shipping purchase program by Transpetro and Petrobras, as well as the need for marine repairs and maintenance create opportunities in this sector. The construction of a Brazilian Navy dockyard by the port of Itaguaí, initially designed for repairs but which could, eventually, build the first Brazilian nuclear submarine, is foreseen in the 2008 agreement signed between France and Brazil. In 2010 tenders will be invited for the construction of a shipyard in a 1.4 million m² area also in Itaguaí. This project is moving forward and the approved use of the site, previously defined as being that of a Logistics Support Zone within the Itaguaí port Development and Zoning Plan, has been changed to allow for the new use. This will only be effected once a new public tender has been published by Companhia Docas do Rio de Janeiro. Finally it can be noted that several shipyards companies are acquiring areas in the municipality of Quissamã, in the northern development axis. The localization of such shipyards, and additional details, can be seen in the Decision: Rio 2010-2012 Google Earth version, an integral part of this document.

∎ Postponed steel mill investments and the opportunities generated in the retro-area of the port of Açu, in the northern development axis In mid 2008 two large international steel companies, Techint and Nucor, announced that they were near to closing agreement for the construction of a new unit in the retro-area of the port of Açu, an area equivalent in size to the island of Manhattan. However the international crisis affected this process and both projects were postponed, with, to date, no definition of new dates. But at the beginning of 2009 LLX published a material fact announcing the start of negotiations with the Chinese steel mill Wuhan Iron and Steel Co. (WISCO) for the construction of a steel plant with a production capacity of 5 million tons∕year. In spite of the postponement for cyclical reasons of the first two projects the WISCO negotiation confirms the structural benefits in terms of logistic competitiveness of the Aço port retro-area. This, as well as the dozens of current negotiations with other companies, indicate the importance of investors keeping their radars constantly tuned into the development of the Açu Complex so that the inevitable future opportunities can be tapped. The localization of Açu port retro-area and additional details, can be seen in the Decision: Rio 2010-2012 Google Earth version, an integral part of this document.

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∎ The Peró Reserve Project The Peró Reserve Project consists of an area equivalent in size to Copacabana, with more than 4.5 million m² including a 4 km stretch of beach. The project is located in the municipality of Cabo Frio and development will be undertaken by the companies Peró Empreendimentos Imobiliários Ltda, Agenco Engenharia and Lakpar Emp. Marketing and Part. Ltda. The total estimated amount of US$286 million to be invested in the coming years foresees the building of a tourism complex, in partnership with international hotel chains, in which Club Med, whose investment was previously mentioned, was the first to participate. The proximity of the Cabo Frio International Airport, the natural beauties of the region, the as yet incomplete negotiation for the construction of a hotel by the Starwood group plus the intention of a group of investors to build the infrastructure needed to attract more enterprises, all justify the inclusion of the project as a real potential opportunity. The localization of the Peró Reserve, and additional details, can be seen in the Decision: Rio 2010-2012 Google Earth version, an integral part of this document.

∎ The construction of subway lines 3 and 4 The Rio de Janeiro metro network is relatively limited in terms of the size of population of the State. It is concentrated in the capital where the large population density and movement needs put a lot of strain on public transport. The State Government has announced two expansion projects that stand out as being essential for the development and connection of the capital with the metropolitan region of Rio de Janeiro. However existing doubts as to its actual realization justify inclusion as a potential rather than effective project. The complete line 3 project foresaw initially the connection of the city of Rio de Janeiro to city of Niteroi by tunnel under Guanabara Bay as well as the construction of stations in the cities of São Gonçalo and Niteroi. This is essential for the integration of the eastern development axis, and therefore Comperj, to the capital. The high cost of the underground connection obliged the modification of the project to plan only the Niteroi – Itaborai connection. The Rio de Janeiro – Niteroi stretch would be covered by integration with the ferry boats that are already in operation. The licensing process has been completed with the publication of the EIA/RIMA environmental license and authorization for the construction of the work site. However the lack of funding destined for the project by the State and Federal Governments (only US$16.7 million have been earmarked out of a total cost of US$572 million) and the fact that the project is not covered by the Accelerated Growth Program (PAC) because it is not formally recognized by the Federal Government as being a priority project, plus the jointly announced intention of the Sate and Municipal Governments to give priority to the development of line 4 make doubtful the effective undertaking of this project within the period covered by this study. Line 4 foresees the integration of the Barra da Tijuca region (the city of Rio de Janeiro’s real estate construction frontier) to downtown Rio de Janeiro, and aims to relieve the suffocated traffic movement of the Lagoa Barra highway. The original project, tendered for in 1998 and under the responsibility of the companies

Potencial Investments

Construtora Queiroz Galvão S/A, Constran S/A Construções e Comércio and Trans Sistemas de Transportes S/A. has never been implemented, due to lack of funding and the high projected tariff cost. Both municipal and state governments have recently announced their intention of altering the project and this decision will create even more difficulties in the execution of the project by requiring the need for more resources, the need for judicial adjustments to the process, and agreement between the winners of the tender with the two levels of government and the Company Metro Rio that operates the subway. The multiple challenge of putting together a new project that satisfies the interests of the investors and the public, plus sourcing the required funds, all justify considering the project as potential rather than effective. The possible localization of the line 3 and 4, and additional details, can be seen in the Decision: Rio 2010-2012 Google Earth version, an integral part of this document.

∎ The Rio de Janeiro – São Paulo Bullet Train Brazil’s first bullet train project is included in the PAC and will involve funding to the order of some US$16 billion over a construction period of about five years. The first project, presented by Italplan Engineering Environment & Transports S.A., forecast a demand for some 32 million passengers/year by 2013. The Federal Government and private sector considered this forecast to be over-estimated making clear the need for a new evaluation. The National Bank for Economic and Social Development (BNDES), with the support of the IDB (Project BR-T1087) contracted via tender the Halcrow, Sinergia, and Balman consulting companies to undertake the economic and technical studies in February 2008, with a first delivery date of the report by the end of 2008. However the complexity of the project caused a delay in the document which was only completed in May 2009, and put out for public consultation in July 2009. According to the most recent PAC report the forecast is that the public tender will be made before the end of 2009. However the dimension of the project, the eventual negative impact of the international crisis, and the intention of the Federal Government to create a public sector company to manage the overall process, may all cause difficulties in the execution of the project in spite of the interest in having it concluded. In view of the high degree of uncertainty still present with regard to the details of the project, but in recognition of the large impact it could produce in terms of economic development and opportunity creation, it was opted to classify the project as a potential investment. The possible localization of the track, and additional details, can be seen in the Decision: Rio 2010-2012 Google Earth version, an integral part of this document.

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Picture: Getty Images.

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Decision: Rio | Partners FIRJAN System

Parceiros

PARTNERS The businessman who wishes to invest in the opportunities that will arise in Rio de Janeiro currently and in the coming years will have to count on partners that can offer the needed services and assistance. With this in mind the FIRJAN System looked to identify, in the market, companies that could contribute to the search for opportunities and the realization of new deals in the State. The Caixa Economica Federal, which offers banking services, the law office of Veirano Advogados and the real estate company RJZ Cyrela, focused on building and commercialization, all became partners of Decision: Rio 2010-2012. In the following pages can be found the services they offer as partners in the search for opportunities.

All the information contained in the follwing topics are the responsibility of the partners in the Decision: Rio 2010-2012 project.

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CAIXA ECONÔMICA FEDERAL (Federal Savings Bank)

Apart from providing banking services the Caixa Econômica Federal (CAIXA – the National Savings Bank) plays an important role in the execution of the Federal Government’s public policies, in particular in the fields of urban infrastructure and the transfer of benefits to the population. ∎ Where to find the CAIXA? The CAIXA plays an intrinsic part in the life of millions of Brazilians. As a financial and social organization the company has established close links with the population by meeting fundamental social needs. The CAIXA was created on January 12, 1861 and is today one of Latin America’s biggest public sector banks, with 28 million clients. The branch network covers 5,554 Brazilian municipalities. The CAIXA is a major development agent for state and municipal governments through the offer of a complete line of products and services relevant to the modernization of public sector management. The CAIXA also manages the Federal Lottery, the income from which is not only paid out to winning ticket holders but also provides funding towards official and non-governmental initiatives relating to social integration. Since 2004 Brazilians that are resident overseas can use the CAIXA International to make their remittances to Brazil. Representative offices are present in the USA and Japan, in line with international market tendencies.. ∎ What services can the CAIXA offer investors? The CAIXA has a well rounded portfolio of products and services for both private individuals and corporate clients. For the latter, to exemplify, the CAIXA offers: PROGER Urbano – long term credit with funding provided by the Fundo de Amparo ao Trabalhador – FAT (Workers Assistance Fund). The credit is available for the financing of fixed asset investments with linked working capital loans, or stand-alone working capital financing. The credit line is directed towards companies with annual revenues of up to US$2.4 million. Trade Receivables – this credit is available for the discounting of company trade receivables and third party checks, in support of working capital needs. BNDES Automático – long term credit, funded by the BNDES, and destined to the financing of fixed asset investments with or without associated working capital financing. Microcredit – credit for the finance of productive businesses and conceded through micro financial institutions duly accredited by the CAIXA. This credit is also available for entrepreneurs operating in the formal or informal segments of the economy, with at least one year’s activity and who are unable to meet the requirements of traditional banking institutions. Look for all the products and services offered by the CAIXA at http://www.caixa.gov.br/

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Picture given by Caixa.

Partners

Contact | ASSIMP – Press Advisory Services | [email protected] | Tel.: +55 (61) 3206-9120

Decision: Rio | Partners FIRJAN System

RJZ Cyrela Construtora e Empreendimentos Imobiliários Ltda

RJZ Cyrela operates in the real estate market, through the building and management of residential and commercial property. RJZ and Cyrela, before joining forces, were market leaders in Rio de Janeiro and São Paulo, respectively, and, after consolidation, became nationwide leaders. But, more than this, the company is also recognized and admired in the real estate market for the aesthetic quality of its ventures, its technology and building quality, and for the permanent search for client satisfaction. Between residential and commercial projects and property development RJZ Cyrela has made more than two million square meters of floor space available on the market. Success for each project is no more than the sum of a modern business philosophy, an innovative vision of the future and the competence of a highly professional, motivated and committed team. All this has been reflected in the winning of some of the country’s most important real estate awards, amongst them “A empresa do ano” (“Company of the Year”) awarded by the Association of Real Estate Company Leaders (Associação de Dirigentes de Empresas do Mercado Imobiliário – ADEMI) in 2001, 2006 and 2007, and the “Top de Marketing” (“Marketing Leader”) awarded by the ADVB (Sales and Marketing Managers Association). For four consecutive years RJZ Cyrela was featured as one of the most admired companies in Brazil according to surveys undertaken by the Carta Capital publication. The RJZ Cyrela trajectory is founded on ethical and moral principals, as well as the awareness of its social and environmental commitment, with no effort or investment being spared in the implementation of new programs and technologies focused on sustainability and collective wellbeing. Finally, as well as building dreams, the company is absolutely aware that the world is our home and would be a better place to live in if all of us thought and acted in a better planned and humanitarian way. ∎ Where to find RJZ Cyrela? RJZ Cyrela represents Cyrela Brazil Realty in Rio de Janeiro and is present throughout the State. RJZ Cyrela has several joint-ventures and local partnerships throughout Brazil and is also present in Argentina. ∎ What services can RJZ Cyrela offer to investors? RJZ Cyrela is operational in the top and middle markets but, through the group company Living, is also present at the low and very low-end markets Some examples: Residencial Barra da Tijuca – Le Parc, Riserva Uno, Bairro Cidade Jardim Residencial Zona Sul – Les Palais Residencial Zona Norte – Norte Privilege Comercial Barra da Tijuca – Le Monde Comercial Zona Norte – Torre Norte Shopping Contact | Rogério Jonas Zylbersztajn | [email protected] | Tel.: +55 (21) 3206-9506

Picture given by RJZ Cyrela.

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Veirano Advogados

Veirano Advogados is a full-service law office providing legal assistance to corporate clients in the domestic and international markets. The office was founded in 1972 and for over 37 years has acted in all legal aspects of corporate business. Major areas of activity are: administrative, anti-trust, arbitrage and mediation, aviation, banking and financial, capital markets, contracts, consumer, corporate, employment and pension, energy, entertainment, environment, immigration, insurance and reinsurance, intellectual property, litigation, mergers and acquisitions, mining, oil and gas, project finance, real estate, regulatory, shipping, taxation, telecommunications. The office has grown steadily within the corporate environment. In an unprecedented initiative amongst Brazilian law offices, Veirano Advogados created a Consultative Board made up of outstanding local and international businessperson, from varying business activities who periodically meet to appraise and advise the Firm. The members of this board cannot be clients hence providing greater administrative transparency and helping to extend the office’s market view. This board contributes to the Firm’s strategic planning and assists in the identification of new business opportunities. ∎ Where to find Veirano Advogados? Veirano Advogados has offices in Rio de Janeiro, São Paulo, Porto Alegre, Brasília and Ribeirão Preto. Strategic alliances are maintained with the offices of Sousa & Associados, Portugal; Beretta Godoy, Argentina; and Macleod Dixon, Canada. The Firm is present in more than 90 countries, through a network of international correspondents, including, since 2004, the “China Area Project”. The aim of this project is to meet the needs of the growing relationship between Brazil and China and the demands for specialized legal services by Brazilian and Chinese companies located in China. The intention is to offer to clients legal consultancy specialized in the Brazilian and Chinese markets through profound knowledge of the legislation in Brazil and the Popular Republic of China. The firm counts on lawyers with fluency in mandarin and with professional and life experience in China. ∎ What services can Veirano offer to investors? The office provides legal consultancy in the several areas related to Corporate Law. As a differential the office maintains a program of investment in the talent and specialization of its professionals, promoting the taking of courses in recognized overseas educational establishments and participating in in-house training programs at renowned partner offices in the USA and Europe. This allows for the creation of a highly qualified legal team with multi-language fluenc Contact | Ronaldo C. Veirano | [email protected] | Tel.: +55 (21) 3824-4724 Av. Presidente Wilson, 231 – 23º andar – Castelo, Rio de Janeiro – RJ – CEP: 20030-021

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PicturegivenbyVeiranoAdvogados.

Partners

Decision: Rio | Attachments FIRJAN System

Picture given by Furnas.

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Work in progress at the Simplício hydroelectric power station.

Anexos

ATTACHMENTS Attachment 1 – Methodology Decision: Rio has as an objective the plotting of the investment intentions for the State of Rio de Janeiro for pre-established periods of the three upcoming years. The research includes the following phases: data gathering; data confirmation, and data analysis. The data gathering takes as its starting point the identification of investments announced for Rio de Janeiro by researching the most important newspapers and periodicals in circulation in Brazil, and by contact with the companies themselves. The confirmation of all the assembled data is made by obtaining confirmation from the private and public sector investors, and the municipal, state, and federal governments to whom responsibility for the information is attributed. The next phase looks to compile and analyze the received data. And, finally, the research provides details of the larger investments together with supporting information for the private and public agents.

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Attachment 2 – Geographical Regions and Municipalities in the State of Rio de Janeiro 90

Northwestern

58 46

TOTAL AREA 43,696.1 km2

Central Northwestern

76

45

71 32 15

Southern

66

80

26

42 51

57

35

25

68

67

20

Northern

83

27

39

12 29

43 75 47

40

37

13

9

30 1

17

55

50

62

22

49

44

61

82

65

87

86

91 7

69

38

10

4

60

56

23

77

54

8

79 24

84

88

52

89

92

74

16 19 21

59

72 18

70 2

34

31

14

Highlands

63

11

33

36

85

64 3

73 48

41

81

78 28

5

6

53

Eastern

Rio de Janeiro state capital Lowlands Área I

Lowlands Area II

Municipalities of the state of Rio de Janeiro

1 – Angra dos Reis 2 – Aperibé 3 – Araruama 4 – Areal 5 – Armação dos Búzios 6 – Arraial do Cabo 7 – Barra do Piraí 8 – Barra Mansa 9 – Belford Roxo 10 – Bom Jardim 11 – Bom Jesus do Itabapoana 12 – Cabo Frio 13 – Cachoeiras de Macacu 14 – Cambuci 15 – Campos dos Goytacazes 16 – Cantagalo 17 – Carapebus 18 – Cardoso Moreira 19 – Carmo 20 – Casimiro de Abreu 21 – Comendador Levy Gasparian 22 – Conceição de Macabu 23 – Cordeiro

24 – Duas Barras 25 – Duque de Caxias 26 – Engenheiro Paulo de Frontin 27 – Guapimirim 28 – Iguaba Grande 29 – Itaboraí 30 – Itaguaí 31 – Italva 32 – Itaocara 33 – Itaperuna 34 – Itatiaia 35 – Japeri 36 – Laje do Muriaé 37 – Macaé 38 – Macuco 39 – Magé 40 – Mangaratiba 41 – Maricá 42 – Mendes 43 - Mesquita 44 – Miguel Pereira 45 – Miracema 46 – Natividade

47 – Nilópolis 48 – Niterói 49 – Nova Friburgo 50 – Nova Iguaçu 51 – Paracambi 52 – Paraíba do Sul 53 – Parati 54 – Paty do Alferes 55 – Petrópolis 56 – Pinheiral 57 – Piraí 58 – Porciúncula 59 – Porto Real 60 – Quatis 61 – Queimados 62 – Quissamã 63 – Resende 64 – Rio Bonito 65 – Rio Claro 66 – Rio das Flores 67 – Rio das Ostras 68 – Rio de Janeiro 69 – Santa Maria Madalena

70 – Santo Antônio de Pádua 71 – São Fidélis 72 – São Francisco de Itabapoana 73 – São Gonçalo 74 – São João da Barra 75 – São João de Meriti 76 – São José de Ubá 77 – São José do Vale do Rio Preto 78 – São Pedro da Aldeia 79 – São Sebastião do Alto 80 – Sapucaia 81 – Saquarema 82 – Seropédica 83 – Silva Jardim 84 – Sumidouro 85 – Tanguá 86 – Teresópolis 87 – Trajano de Moraes 88 – Três Rios 89 – Valença 90 – Varre-Sai 91 – Vassouras 92 – Volta Redonda

Attachments

Lowlands – Area I (9) Itaguaí, Japeri, Mangaratiba, Mesquita, Nilópolis, Nova Iguaçu, Paracambi, Queimados, and Seropédica. Lowlands – Area II (7) Belford Roxo, Duque de Caxias, Guapimirim, Magé, Miguel Pereira, Paty do Alferes and São João de Meriti. Central Northern Rio de Janeiro (13) Bom Jardim, Cachoeiras de Macacu, Cantagalo, Carmo, Cordeiro, Duas Barras, Macuco, Nova Friburgo, Santa Maria Madalena, São Sebastião do Alto, Sumidouro, Teresópolis and Trajano de Morais. Eastern Rio de Janeiro (16) Araruama, Armação de Búzios, Arraial do Cabo, Cabo Frio, Casimiro de Abreu, Iguaba Grande, Itaboraí, Maricá, Niterói, Rio Bonito, Rio das Ostras, Saquarema, São Gonçalo, São Pedro da Aldeia, Silva Jardim and Tanguá. Northwestern Rio de Janeiro (13) Aperibé, Bom Jesus do Itabapoana, Cambuci, Italva, Itaocara, Itaperuna, Laje do Muriaé, Miracema, Natividade, Porciúncula, Santo Antônio de Pádua, São José de Ubá and Varre-Sai. Northern Rio de Janeiro (9) Campos dos Goytacazes, Carapebus, Cardoso Moreira, Conceição de Macabu, Quissamã, Macaé, São Fidélis, São Francisco de Itabapoana and São João da Barra. Highlands (7) Areal, Comendador Levy Gasparian, Paraíba do Sul, Petrópolis, São José do Vale do Rio Preto, Sapucaia and Três Rios. Southern Rio de Janeiro (17) Angra dos Reis, Barra do Piraí, Barra Mansa, Engenheiro Paulo de Frontin, Itatiaia, Mendes, Parati, Pinheiral, Piraí, Porto Real, Quatis, Resende, Rio Claro, Rio das Flores, Valença, Vassouras, and Volta Redonda. Rio de Janeiro State Capital (1) Municipallity of Rio de Janeiro.

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REALIZATION

PARTNER

REALIZATION

PARTNERS