State Guides - Minas Gerais
|Population (as at 2010)||19,597,330|
|Urban Population (found under Synopsis of the 2010 Population Census) (as at 2010)||16,715,216|
|Population Density (inhab / km²) (as at 2010)||33|
|Number of Municipalities||853|
|Occupied Private Housing Units (as at 2010)||6,037,879|
|Average of Residents in Occupied Private Housing Units (as at 2010)||3|
|Housing Deficit (as at 2008)||474,427|
|Number of Active Construction Companies (as at 2009)|
|Employed Personnel in Construction Companies (as at 2009)|
|Total Salaries and Other Compensation (as at 2008)|
|Credit Operations Total (as at 2009)||R$ 93,408,312,181|
|Savings Total (as at 2009)||R$ 38,137,074,827|
|Average Monthly Household Income from Work (as at 2009)||R$ 1,628|
|Average Monthly Household Expenditure on Housing (as at 2009)||R$ 752|
|Average Multiple of Minimum Wage (as at 2009)|
|Population Earning No Income||8.3 %|
|Population Earning up to 3 Times the Minimum Salary (as at 2008)||84.2 %|
|Population Earning Between 3 and 5 Times the Minimum Salary (as at 2008)||6.5 %|
|Population Earning Between 5 and 10 Times the Minimum Salary (as at 2008)||0.7 %|
|Population Earning 10 Times and Over the Minimum Salary (as at 2008)||0.3 %|
|Gini Coefficient (as at 2009)||0.46|
|UN Human Development Index Rating (as at 2009)|
|Permanent Private Households with a Septic Tank (as at 2009)|
|Number of Municipalities with Solid Waste Management (as at 2009)||853|
|Poverty Incidence (as at 2009)||27 %|
|GDP at Current Prices (as at 2008)|
|GDP per Capita (as at 2008)|
As the fourth largest state in the country, Minas Gerais is now well recognised as one of the leading economic regions in the country (it is currently the second wealthiest in terms of GDP with a land mass greater than that of France). Located in the south east (inland), it borders Bahia, Goiás, Mato Grosso do Sul, São Paulo, Rio de Janeiro and Espírito Santo – connected by the some of the largest highways in Brazil including the BR-116 (Rio de Janeiro-Bahia) and the BR-040 (Rio de Janeiro-Brasília).
Geographically, the state is populated with huge rivers (the main ones being the São Francisco, Paraná and Rio Doce); some of the highest mountains in the state (including the Serra da Mantiqueira and the Pico da Bandeira) as well as caves, caverns and waterfalls (particularly in the Serra do Cipó, Sete Lagoas, Cordisburgo and Lagoa Santa regions). It is also home to some of the largest global reserves of gemstones (including aquamarine, amethyst, citrine, emerald, garnet, topaz, beryl, tourmaline, opal and diamond) as well as gold and iron (see below).
Indeed, it was the discovery of the green tourmaline in 1554 by Portuguese explorer Fransisco Spinoza that triggered population growth which expanded further when gold, other gems and diamonds were discovered in the late seventeenth century. The old mining towns of Ouro Preto, Diamantina, Tiradentes and Serro are testament to the history of the state, several of which have been officially classed as UNESCO World Heritage sites. During the 18th and 19th centuries, Minas Gerais played an integral role in transferring the majority of the country’s wealth from the north east to the south and also held equal national political responsibility with the state of São Paulo for a period.
Today, clear divisions in the states’ economic makeup are apparent (although most municipalities would have a broad industry base):
South: electronics and dairy products
Central: iron ore and automobiles
Zona da Mata (south east): furniture and textiles
Midwest (central south east): cement and foundry
Jequirinhonha / Mucuri (north east): fruits and sugarcane
Rio Doce: steel and pulp
Alto Paranaíba (north of centre west): agriculture and ceramics
Northeast: gold, silver and processed fruits
Triãngulo (west): sugarcane and grains
North: cattle vaccines and ceramics
Throughout the duration of the global economic crisis, the state was able to maintain a fairly solidified position despite some drops in the output of its housing, mining, steel and automotive industries. By mid-2009, the state not only saw its trajectory of growth back on track but also an increased development of more diversified industry dispersed across its territory which government officials have viewed as a ‘silver lining’ of the brief recessionary period the state and Brazil as a whole experienced.
As the second largest state in terms of GDP, according to FIEMG (Federação das Indústrias do Estado de Minas Gerais, Federation of Minas Gerais Industry), industry constitutes 45.4 percent of the economy; services contributes 46.3 percent and agribusiness 8.3 percent. There are over 800,000 companies officially registered employing over 3.11 million people (and rising). Below are some of the most important industry highlights (some of which are outlined in detail below):
Steel – with over 11 large scale plants, the state is currently responsible for 38.9 percent Brazil’s total production;
Mining – at 823 million tonnes, the state is responsible for 35 percent of Brazil’s total production;
Automobiles – the Italian Fiat group has its main factories in the Betim municipality and is now the biggest vehicle producer in the country. In Juiz de Fora, Mercedes Benz have their main Brazilian operation producing luxury cars for domestic use and export;
Distribution & Logistics – the state has the regional benefit of being strategically located to the Southeast, Midwest and Northeast of the country; having the largest highway network in Brazil with 250,000 kilometres serving the states of São Paulo, Rio de Janeiro, Espírito Santo, Goiás, Brasília, Mato Grosso and Bahia (linked to all of the 853 municipalities) as well as possessing the most extensive railroad network in Brazil (at over 5.329 kilometres, representing 18.3 percent of the total). The largest distributor-wholesaler in Latin America – the Martins Group – has its main headquarters in the state;
Agribusiness – the state has the third largest bovine herd in Brazil and is the country’s largest producer of milk (at over 30 percent of the total);
Textiles – Brazil’s largest weaving plant is in the Coteminas municipality and there are several other operations in the state (including the Cedro, Cachoeira and Santo Antônio groups);
Electronics – located largely in the Santa Rita do Sapucaí municipality, thousands of companies consolidate to develop what is being fast recognised as one of the country’s fastest growing information technology sectors. The municipality is now the second largest fireworks producing hubs on the plant (after China).
Below is a list of the state’s top 50 companies (and their industry) as provided by data from the Minas Gerais state government:
1) Fiat (vehicles and auto parts)
2) ArcelorMittal Brazil (metallurgy and steel)
3) Usiminas (metallurgy and steel)
4) Cemig (electrical energy)
5) Andrade Gulierrez (construction and engineering)
6) Gerdau Açominas (metallurgy and steel)
7) Acesita (metallurgy and steel)
8) Coteminas (textiles, leather and apparel)
9) Minerações Brasileiras Reunidas (MBR) (mining)
10) Martins (logistics and wholesale commerce)
11) Alcoa Alumínio (metallurgy and steel)
12) Alesat (oil and gas)
13) Samarco (mining)
14) V&M do Brasil (metallurgy and steel)
15) Votorantim Metais Zinco (metallurgy and steel)
16) Cataguazes Leopoldina (electrical energy)
17) Fosfertil (chemicals and petrochemicals)
18) Algar (telecommunications)
19) Copasa (water and sanitation)
20) Telemig Celular (telecommunications)
21) Mercantil do Brasil (multiple banks)
22) Magnesita (mining)
23) BMG (multiple banks)
24) Itambé (food)
25) Bretas Supermercados (retail commerce)
26) CBMM-Cia Bras de Metalurgia Mineraçao (metallurgy and steel)
27) Localiza (specialised services)
28) Arcom (wholesale commerce)
29) Cenibra (paper and pulp)
30) Remil (beverages and tobacco)
31) Cooxupé (agriculture)
32) Ferrovia Centro Atlântia (FCA) (transportation and logistics)
33) Rural (multiple banks)
34) Prosegur (transportation and logistics)
35) Tambasa (wholesale commerce)
36) Aethra (automobiles and autoparts)
37) Pif Paf – Rio Branco Alimentos (food)
38) Rima Industrial (metallurgy and steel)
39) Fidens Engenharia (construction and engineering)
40) Sociedade Mineira de Cultura (SMC) (specialised services)
41) Líder Táxo Aêreo (transportation and logistics)
42) Supermix (construction and decoration material)
43) Frigorifico Mataboi (food)
44) FL Brasil (chemicals and petrochemicals)
45) Ceva Logistics (transportation and logistics)
46) Drogaria Araújo (retail commerce)
47) Fasal (wholesale commerce)
48) ESAB (metallurgy and steel)
49) Cedro e Cachoeira (textiles, leather and clothing)
50) Construtora Barbosa Mello (construction and engineering)
By the close of 2010, the FIEMG have estimated that R$ 31 billion in private investment will have entered the state, specifically for industrial development – with a similar amount expected in public funding. The state, nonetheless, is not without its challenges with industry leaders stating that heavy tax burdens and a lack of long term financing amongst the biggest ones.
The state’s 450 year old mining industry looks set to continue its expansion with a number of projects announced in recent years combined with further untapped discoveries being made (Brazil is currently the second largest iron producer after China, of which 71 percent is extracted from Minas Gerais). Brazil’s richest man, Eike Batista of MMX Mineração e Metálicos, invested in the development of a iron ore drainage corridor to be located on the route between Minas Gerais and Rio de Janeiro which will also house the largest ore duct in the world as well as several industrial units (total investment upon completion is expected to reach US$ 2.35 billion). The Compania Vale do Rio Voce will invest over US$ 2.2 billion up until 2012 in what they have termed the ‘Trunk Project’ (part of their Brazilian expansion plan involving over US$ 59 billion throughout this period). The Companhia Siderúrgica Nacional (CSN) have also invested R$1.9 billion on its Casa de Pedra mine which supply the Presidente Valgas plant in Volta Redonda. In 2010, Vale also announced plans to construct one of their research and innovation centres in the Ouro Preto (as well as in Belém (Pará) São José dos Campos (São Paulo) – with a total investment of R$ 400 million.
Despite drops in global demand in 2008 and 2009, steel industry leaders are optimistic about the future. Researchers have long pointed to the states’ steel industry being able to benefit from ongoing economies of scale due to the possession of high quality ore as well as established / improving logistics and close proximity of mines, plants, ports and consumer centres. The Usiminas group (now well established throughout Latin America) has an earmarked investment of over US$ 8.4 billion by 2015 – the largest to date by a Brazilian steel company. As the second biggest company in the entire state, Arcelormittal’s most recent announcement in 2010 was an agreement with the Vale for the annual transportation of 1.75 million tonnes to be distributed throughout Minas Gerais as well as Rio de Janeiro and São Paulo. The Gerdau group inaugurated the Açominas plant in Ouro Branco in 2009 which will have an annual production capacity of 1.9 million tons as well as the creation of over 10,000 construction jobs and 1,314 direct employment positions – 90 percent of the gas will be used domestically. According to Vice President Manoel Vitor de Mendonça Filho: “this link is essential for our long term growth strategy.” The group also announced a total investment of R$ 1.2 billion at their established sites in Barão de Cocais and Divinópolis and their Ouro Branco sites will collectively receive R$ 2 billion for expansion purposes.
Established since 1976, eleven of the 15 companies owned by the Italian group Fiat are located in the state. The main activities in Brazil are concentrated in the production and sale of automobiles and trucks (in partnership with the Iveco group) with a current output level of 800,000 per year; the development and production of engines and transmissions (Powertrain Technologies); the production of iron castings for the domestic auto industry (Teksid Brazil); the manufacture of agricultural machinery and construction (CNH); the production and marketing of automotive components (Magneti Marelli) and the provision of industrial automation equipment (Comau).
The sugar industry is also playing an important part in the state’s growth with over R$ 4 billion being invested in the industry since 2003, according to the Sugar and Alcohol Industry Union of Minas Gerais (Sindicato da Indústria do Açúcar e do Álcool, SIAMIG) – including the installation of 22 new plants and the expansion of older factories as well as the generation of 40,000 employment positions (doubling the total workforce). According to SIAMIG, for the 2010/11 period, 43 plants are in operation – processing over 56 million tons of cane, 2.6 billion gallons of ethanol and and 3 2 million tons of sugar. In turn, the bioelectricity industry (via sugarcane) has also grown in the state – producing over 4 percent of aggregate power generation (780 megawatts of installed capacity of which 340 MW is exported to the grid). Sugarcane crushing rose from an average of 780,000 tons of cane per plant in 2002 to an average of 1.37 million tons in 2009 (an increase of 63%). According to SIAMIG, the largest unit which milled about 2.2 million tons of cane in 2002 now grinds about 4.9 million tons.
The main area of real estate interest is in the south, where the majority of the state wealth is located (towards the borders of Rio de Janeiro and São Paulo). The notable municipalities, in addition to Belo Horizonte, include Pouso Alegre, Varginha, Juiz de Fora, Poços de Caldas, Contagem, Betim, Montes Claros, Uberlândia, Governador Valadares, Ipatinga, Sete Lagoas, Uberaba, Patos de Minas, Divinópolis, Aimorés and Ouro Preto. The country’s main developer chains have presences throughout these cities such as Cyrela, Rossi and MRV in addition to companies, such as AGM, who established themselves in the city and have continued spread their interests to several parts of southern Brazil.
The state huge size has necessitated the need to generate adequate energy provision for its population which, in turn, has enabled it to take advantage of its huge hydrographic basins that now serve of 18.5 percent of Brazil’s electrical output (this is expected to increase as the hydroelectric power stations of Irapé, Capim Branco 1 and Capim Branco 2 reach their full capacity). Energy generation is managed and distributed by CEMIG (Companhia Energética de Minas Gerais, Energy Company of Minas Gerais) which was founded in 1952 and serves 97 percent of the state with 57 plants in operation– its network is the largest in Latin America, spanning nearly 460 thousand kilometres. The company also operates in 11 other Brazilian states as well as in Chile and has its securities traded on the São Paulo, New York and Madrid stock exchanges. The state also has natural gas, charcoal and mineral energy incorporated into its matrix – which are controlled and managed by both CEMIG and GASMIG(Companhia de Gás de Minas Gerais, Minas Gerais Gas Company) as well as Petrobras.
The state’s self pronounced ‘Electronics Valley’ (‘Vale da Eletrônica) is located in the Santa Rica do Sapucaí municipality and, with the benefit of being close to both Rio de Janeiro and São Paulo, contains over 120 industrial plants that manufacture of 11,000 different types of product – including 50 percent of Brazil’s television transmitters as well as computer software, telecommunications equipment amongst many others
The state is also well recognised for its educational achievements – being the location of some of the best universities in the country including the Minas Gerais Federal Universities (UFMG) in the Viçosa, Ouro Preto, Juiz de Fora and Uberlândia municipalities as well as several federal technical schools specialising in electronics, mechanical engineering and biotechnology. Petrobras also has a major training school in the region, focused in all areas of oil and gas production. The Minas Gerais Innovation System (Sistema Mineiro de Inovação, SIMI) was also created in recent years to act as a central meeting point for entrepreneurs, technicians and researchers to develop and foster partnerships whilst also involving small business support services such as the Support Service for Micro and Small Companies (Serviço de Apoio as Micro e Pequenas Empresas, SEBRAE); the Minas Gerais Federation of Industry (Federação das Indústrias do Estado de Minas Gerais, FIEMG) and the Euvaldo Lodi Institute (Instituto Euvaldo Lodi, IEL). Such activities have received extra encouragement in the form of further grants vias the ICMS tax. Reserach by Professor Rubén Dario Sinisterra Millán, coordinator of technology and innovation at the University of Minas Gerais, confirmed that the state has the largest amount of international patents in Brazil: 212 registered in Brazil and 71 in other countries.
The main tourism regions of the state are: Ouro Preto (voted as an UNESCO World Heritage site, this former mining city holds several examples of Baroque architecture as well as spectacular panoramic views); Congonhas do Campo (another UNESCO world heritage site with several examples of Baroque sculpture and architecture); Mariana (the oldest city in the state of Minas Gerais that retains its traditional roots dating back to the 17th century); São João del Rei (a growing town which has retained many of its 18th century features); Diamantina (another UNESCO World Heritage Site, the picturesque town is home to several examples of Baroque architecture and mountainous terrain popular amongst trekkers and rock climbers); Caxambu (a small town which is most popularly known as having twelve sources of natural mineral water running all day, every day); São Lourenço (a region well known for its natural beauty and excellent quality of water); São Thomé das Letras (popular for eco-tourists attracted to its waterfalls, large cave system and the Mata Atlântica jungle) and the Caparaó National Park: bordering the states of Minas Gerais and Espírito Santo, this region is home to one of the highest peaks in Brazil: the Pico da Bandeira). The Estrada Real route (an old colonial transportation highway that crosses the state as well as Rio de Janeiro and São Paulo has also become an increasingly popular choice for road trippers (with supported by a rising amount of tourism infrastructure).
In terms of road and highway development, the state is also considered a leader particularly in terms of developing effective partnerships between the public and private sectors – such as via the Estrada Real Institute was created by the Minas Gerais Federation of Industries (Federação das Indústrias do Estado de Minas Gerais, FIEMG). Two notable achievements in the last decade include the MG-050 highway, which slices the south-west of the state providing extra access to the São Paulo region (a public-private partnership) as well as the MG-050: a formerly degraded 372 kilometre route that received a US$ 800 million credit line in 2008 (the Nascentes das Gerais group, who won the bid, will manage and maintain the highway for a 25 year period). The growth of these projects was effectively due to the mechanisms and instruments inherited from the private sector into public management as well as the development of key relationships.
There are 82 airports in the state (with the majority being used for trade purposes) – the main ones of which are highlighted in our state guide. The airport of Belo Horizonte serves all parts of Brazil as well as regular international flights.
The system of waterways has also been increasing within the state with the focal points being located within the so-called ‘Minas Triangle’ between Iturama, Santa Vitória and Pirapora – these ports are considered key in the growing transportation of goods via river, especially with regards to established and growing trade relations with the Southern Common Market (Mercosur).
Other notable infrastructural improvements being undertaken include new prison construction; services for the state government’s administrative centre (office space, parking, restaurants etc.) and basic sanitation projects in the Jequitinhonha Valley.