Arquivos Chinese company - Murray Advogados

Chinese company wants to turn country into gateway for neighbors in South, Central America

07/04/2022

Marcelo Barella — Foto: Divulgação

Brazilians going to Qatar to watch the FIFA World Cup in November have a good chance of going to and from the stadiums in one of the 1,800 electric buses that China’s Higer sent to the host country to transport the fans of the 32 national teams. Those who will stay in Brazil, on the other hand, may also have the opportunity to know the vehicle — if government programs to electrify bus fleets move forward. This is expected to materialize quickly in some cities, especially in São Paulo.

The Chinese manufacturer has set up a business plan to hit the streets in Brazil and make the country the gateway to its neighbors in South and Central America, such as Peru and Colombia. The company intends to compete for space with big brands that dominate the Brazilian market, some of which have been operating in the country for more than 60 years.

Founded in 1998, Higer has four plants in China and grossed $5.5 billion last year. It is a young company when compared to competitors, especially the European ones. “We already have 50,000 electric buses in the streets – mostly in China, but also in Europe,” said Marcelo Barella, Higer’s head for Latin America. In Brazil, the Chinese company will operate with TEVx Motors, which will import and distribute the vehicles.

The company has put together a business plan where the operators of the transportation system, whether private or public, will not need to buy the vehicles nor worry about the charging infrastructure. Everything will be leased. The electric bus is 2.5 times more expensive than a diesel-powered one. “A combustion bus costs around R$900,000. The electric one reaches R$2.6 million,” Mr. Barella said.

Higer signed an agreement with Enel in order to compete for the supply of electric buses in São Paulo, which is Brazil’s largest market – and the perfect place to debut in the country, in the Chinese company’s view. The Italian power company holds the power distribution concession in São Paulo’s capital city and 22 other cities in the metropolitan region around it. Enel will compete in biddings for the supply of the vehicles. If it wins, Enel will buy the vehicles from Higer, assemble the charging infrastructure, and lease the whole package to the operators. Higer will run bus maintenance and driver training, which includes having its own personnel inside the operators’ garages.

“The rental system allows the fleet to be changed as quickly as possible. If operators had to buy an electric bus, I’m not sure if they would get the credit for that,” Mr. Barella said. He recalled that São Paulo has 14,000 buses and plans to reach 12,000 electric buses by 2028. Of this total, 2,600 would be running by 2024 and 600 between 2022 and 2023.

The company plans to gain space in São Paulo, as it is one of the most complex urban transportation systems in the world. If it is able to meet the standards of SPTrans, which manages the city’s system, the company will be able to serve any other city in the country, in the executive’s view. Higer invested $10 million to adapt the buses to Brazilian standards. “We have all the tooling ready. If I have an order for a thousand buses, I am able to meet the demand.”

If Higer’s plans go as expected, the company estimates to have 300 employees in 2023 and 500 by 2024. There would be eight to 10 employees in each garage.

At first, the battery-powered vehicles will be imported in one piece, but the company is negotiating with the government of Ceará an area in the port of Suape to install an assembly line, with an estimated investment of $20 million. With the local unit, the idea is to import the buses in a PKD (Partial Knock-Down) system. “The structure of the car comes ready and here we put the windows, seats and engine,” the executive said.

In a second moment, the SKD (Semi Knock-Down) system would be adopted, with higher added value. Mr. Barella explains that a good part of the vehicle maker’s suppliers in China are already in Brazil and could meet Higer’s needs in Ceará. They are global suppliers, such as Siemens and Dana, for engines; ZF for suspension; Bosch for steering gears; or Wabco for brakes. The batteries are from CATL, which has signed an agreement with the Brazilian battery manufacturer Moura for post-sale services. The unit in Ceará will also be the export base for the region.

The choice of Ceará reveals the next step in the automaker’s strategy for Brazil: hydrogen buses. The state has a large supply of clean energy and several projects for green hydrogen production in the medium term. Higer already has 400 hydrogen buses running in China. But it is a longer-term project in Brazil.

Well before the use of hydrogen, the Asian group plans to enter the segment of passenger and cargo electric vans and trucks in Brazil. The vans are expected to arrive later this year and will require a dealer network. On the other hand, Mr. Barella acknowledged that competition for trucks is likely to be fierce. The executive, who has worked for Higer since 2004 in several countries, knows that the heavy truck segment has its leaders, but as seen in the 2018 World Cup, when underdog Korea disqualified world champion Germany, favoritism is only confirmed at the end of the game.

*By Carlos Prieto — São Paulo

Source: Valor International

https://valorinternational.globo.com/

Álvaro García-Maltrás — Foto: Divulgação

A Chinese company that arrived in Brazil in 2016 managed to become, in five years, the largest seller of photovoltaic panels for the solar power generation market in the country. Trina Solar imported to Brazil enough solar panels to generate about 1,500 megawatts at peak last year alone, according to data from consulting firm Greener.

Trina was founded in China in 1997 and today supplies more than 100 countries with modules and other equipment for photovoltaic generation, as well as smart grid and power systems and a cloud power operating platform. The company has been listed on the Shanghai Stock Exchange since 2020, when it achieved global operating revenues of $4.5 billion.

Brazil now accounts for almost 10% of the company’s sales worldwide, said Álvaro García-Maltrás, Trina’s vice president for Latin America and the Caribbean. “This is very significant, especially considering how fast we have grown in Brazil. It is very rewarding to see that when we arrived in the country, the market was relatively small, and now it is one of the main markets in the world,” he said.

Trina offers solutions for both centralized generation, which are the large power plants, and for distributed generation, which includes projects in which the consumer himself generates power through panels on the roof, for example. Mr. García-Maltrás says that operating on both fronts has contributed to the company’s rapid expansion in Brazil, because both segments have seen great growth in the country in recent years. Between 2016 and February 2022, the solar source went from 93 MW of installed power in Brazil to 13,520 MW, according to data from the Brazilian Photovoltaic Solar Energy Association (Absolar).

For this year, the source is expected to see a new leap in Brazil, especially in the segment of distributed generation. New rules for projects in this segment were signed into law by President Jair Bolsonaro in January, with the forecast that the projects that request connection to the electrical system until the beginning of 2023 will remain exempt from paying grid usage fees. The scenario has generated a rush for new projects.

“The stable legal framework will allow the distributed generation segment in Brazil to grow even more. Last year, the growth was already strong, but I believe that by 2022 it can be up to 50% bigger,” Mr. García-Maltrás said.

To meet the growth, the group intends to expand the team in the country this year. Despite the upbeat perspectives, the executive said that the market suffered with the pandemic and that logistical restrictions in the delivery of equipment that comes from China will probably still be felt in the first half of this year, with a return to normal expected for the second half of 2022. “This is limiting our ability to get the equipment here, in some cases. The goods are typically manufactured in China and brought to Brazil, so the distance is great,” he said.

Another point of attention, in the specific case of Brazil, is the volatility of the currency and the impacts of this on the final costs of the projects. Data from Greener show that the prices of the photovoltaic system for the final customer in January 2022 saw an average year-over-year increase of 8% and reached the highest levels in the last two years.

According to Mr. García-Maltrás, however, price variations have not limited the growth of the source in the country. There are also no major changes expected in the trends for the sector after this year’s presidential elections. “Solar technology is among the most competitive. I believe success and growth is guaranteed. Governments can make it faster or slower, but growth will materialize,” he said.

Among the technological bets for the next few years, the company foresees the growth of distributed generation projects with storage solutions, such as batteries, which help guarantee the autonomy of power supply when there is no sunlight, such as at night. In the segment of centralized generation, one bet is on green hydrogen solutions associated with solar power. “This will be one of the technological solutions that will lead to market growth. We already see this very advanced in Chile, for example. Several centralized generation projects in Chile are already being designed with these systems,” he said.

Source: Valor International

https://valorinternational.globo.com

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