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Despite calls for further international land purchase controls to be introduced as legislation in recent weeks, interest in the Goiás state is showing no signs of abating with Chinese investors, in particular, continuing to be attracted the regions enormous potential (marked industries including agriculture, pharmaceuticals, minerals and tourism).

Goiás economic growth initiated in the 1980s when a number of the relatively large companies in the region were offered tax incentives under the Formentar programme (which went on to form the Produzir programme) in order to remain loyal.  The state is now globally recognized as an important agricultural base for Brazil and Latin America – particularly for soy, beef and sugarcane – responsible for 35 percent of the regions total gross domestic product (compared to 2 percent in the 1980s).  Such growth has pushed Goiás from 12^th to 9^th place in terms of economic size – now being the top generic medication manufacturer; the highest beef exporter; the second highest milk producer; the third highest wholesaler / distributor and the fourth largest grain exporter.  Future expansion looks firmly set, such as via the government strategic development plan entitled Goiás 2030 – aimed at doubling GDP levels via diversification, added value and boosting the state’s share of foreign trade.  Confidence levels are high and, despite the global financial crisis in 2009, the state reported a trade surplus of a record US$ 762.2 million.

The state benefits from having a good climate, optimum topographical characteristics and reserves of water (it is the largest irrigated area in Latin America) conducive to healthy agricultural growth.  Two regions that have particularly grown in investment attractiveness are Cristalina – a municipality with the highest agricultural GDP in the state with 49,000 hectares of irrigated land; 256 watercourses; 574 irrigation pivots and 100 dams as well as Aparecida de Goiânia – a region that has removed itself from the reputation of being a sleepy town to be recognized as having an important logistical position due to being well connected to the midwest, north and south of the country.

Total earmarked investment is expected to reach R$ 31.85 billion by 2013.  A 2010 survey by the Superintendent for Statistics, Research and Information (SEPIN) stated that a total of 704 projects are underway – with 53.5 percent being focused in sugar / ethanol; 15.7 percent in mining / ore processing; 6.8 percent in metal mechanics; 6.2 percent in food / beverages and 5.5 percent in transport and logistics (see the Goiás state guide for detailed statistics).

Other interesting facts with regards to the state include having above average literacy rates, a low infant mortality rate, high life expectancy and a good rating on the international Human Development Index.

Despite the many positive indications of strong growth across sectors, a number of infrastructural bottlenecks have emerged – particularly related to transport.   The current development of 50 of the state’s major highways has been seen as a step in the right direction yet improvements are still very much necessary.  Indeed, as roads are viewed as the main means of transporting the rising amounts of goods produced, 70 percent are over 25 years old and in need of reformation.  Yet encouraging progress includes the expansion of the Anapólis airport to include a cargo terminal (as well as increasing the size of the main runways) in addition to ongoing progress being made on the north-south railway.

To highlight some of the prominent industries in operation:

Sugarcane

The state is the fourth largest producer of sugarcane / ethanol and currently has 36 mills in operation with 50 to be in place by mid-2012.  Brazil’s National Food Agency reported a 15 percent increase in production levels when comparing 2009 and 2010 – a pattern which is expected to continue.    Many of the newer factories have also been installing bagasse (sugar cane waste) recycling facilities to generate electricity as well as modern transport piping to assist alleviating the major bottleneck of transportation mentioned above.

Soybeans

The main international export from the state is soy – which, since 2009, has witnessed significant expansion and attracted investment by large scale and institutional Chinese groups (mainly in land and processing plants).  The product is a staple commodity in many Asian countries, for which reason the Chinese government have been establishing fortified partnerships which look set to boost production levels by over 50 percent (current production levels are at a 13 million tons annually) – starting with the deployment of 2 million hectares of land for production use along the North-South railway line (which continues to be developed).

Energy

The level of electricity production in the state is comparatively high, being exported for use in other states (largely via the hydro generation).  Yet – as a result of rapidly rising usage – quality levels have been bought into question.  The Brazilian electrical energy regulator (Agência Nacional de Energia Elétrica, ANEEL) reported that the Goián supply is below standard – pointing to the frequency and duration of power cuts being above the national average.  The main central distribution network CELG have found themselves in a difficult position having built up debts valued at up to an estimated R$ 6 billion and defaulting on a loan to the publically owned company Eletrobras – making the organization ineligible for government programmes and unable to raise rates.  The issue is currently attempted to be resolved through a loan repayment agreement involving the organisations involved with state and the national government.

Mining

With over US$ 2.5 billion expected to be invested by 2015, Goiás state will be able to maintain its position as the third largest state producer of minerals in Brazil (with prominent funding being applied to the bauxite, gold, nickel, niobium, copper, phosphates, lime, manganese, ceramics and asbestos industries).  One major project is a US$ 1.8 billion investment in the Barro Alto municipality by the British company Anglo American to serve rising global stainless steel demand.  The Yamana Gold company has also increased its annual investment budget with production levels of copper and gold expected to reach 24 million tons per year.  The main issue facing the sector is the state’s central geographic position, far from country’s major ports – an issue that may be resolved by the various Growth Acceleration Programme (PAC) investments being undertaken such as the north-south railway.

Pharmaceuticals

It has only been in the last decade that the Goiás pharmaceutical industry has grown at a robust pace to have the third largest sector in the Brazil (after São Paulo and Rio de Janeiro).  In 1999, for example, production accounted for just 1 percent of the total market which had grown to 22 percent by 2010 (according to the IMS Health consultancy, annual growth of 6 percent is expected until at least 2014 with an investment of R$ 800 million).  Some noteworthy projects recently undertaken include a R$ 60 million investment by the Halex Istar organisation to expand their operations during 2011 and R$ 100 million being earmarked to enable product growth by the Equiplex Group.

Beef

Despite 2009 losses estimated at R$ 70 million (due to low export demands), cattle farming and meat packing companies are now enthusiastic about the future – particularly as rising demand from countries such as China (who have recently lifted beef import restrictions) looks set to excel exportation levels from the state which – according to Leonardo Veloso do Prado, head of the Goiás State Agriculture, Livestock and Food Supply Demand (SEAGRO) in an interview with the Valor newspaper in June 2010 – should triple by 2020.

Tourism

With its countless mountains, plateaus, hills, valleys, lakes and waterfalls the state has developed its reputation as an eco-tourism hub – complemented by infrastructural investments by the Goiano Tourism Development Programme (Podetur/GO) – in partnership with the Brazilian Ministry of Tourism – using credit lines from the Inter-American Development Bank (IDB).  Indeed, funding levels increased from almost US$ 24 million in 2007 to US$ 100 million in 2010.  Some of major attractions include the largest global hydro-thermal reserve in the Caldas Novas; the mountainous Cachoeira Dourada (the most visited region in the state) and the Emas National Park, a world natural heritage site.

Please access the full ‘Goiás Real Estate and Land Investor State Guide’ by clicking here with in-depth information on each of the 246 municipalities of this north-eastern state (including an interactive map, population figures, a range of statistics related to GDP, local enterprise numbers, salary / per capita income levels, gini coefficients, human development index ratings and more). Note you will have to be a subscriber to the Brazil Real Estate and Land Investor Guide, which can be done in under a minute by clicking here.