While our middle class recovers slowly, millions of consumers in Brazil (and China and India...) are clamoring for American products ... if only American businesses would sell to them
VITORIA DE SANTO ANTAO, Brazil - Last year, Kraft built a gleaming new factory on the outskirts of this town in northeastern Brazil. When I visited it last month, my heart sank.
The state-of-the art, $80 million facility seemed to be yet another example of the inevitable shift of jobs from a declining America to emerging powers like Brazil, China and India.
When I looked closer, though, it was clear that the globalized economy at work here is not a zero-sum game. There are opportunities for Americans as well. We simply need to let Europeans teach us how to seize them.
After decades of poverty, northeastern Brazil is one of the fastest-growing regions in the country. The birthplace of former President Luiz Inácio Lula da Silva, Pernambuco state is attracting hefty domestic and foreign investment.
The Brazilian government is constructing a new World Cup stadium here at a cost of $500 million, replete with hotels, shopping malls, apartment buildings and a university. State-run companies have hired 40,000 workers to construct one of the country's largest refineries, port and shipyard complexes at a cost of $13 billion.
In a former sugarcane field, Fiat is building a $1.7 billion auto plant that will produce 200,000 cars a year in 2014. Chinese, South Korean, Filipino and Russian companies are here as well.
Last year, Kraft joined them. The Chicago-based conglomerate is the world's second-largest food company. Over the years, it has purchased Cadbury, Toblerone and other rivals, but some analysts and investors - including Warren Buffett - have criticized it for trying to grow too quickly.
Kraft's new factory here employs 700 Brazilians and churns out tens of thousands of tons of Tang, chocolate wafers and Oreo cookies for sale to northeastern Brazil's growing middle class. If all goes as planned, expansions will triple the size of the factory and its workforce to 2,200 over the next five years. For now, this corner of Brazil is a winner in globalization.
Cities and towns across northeastern Brazil competed to be the site of the new Kraft plant. Each offered larger and larger concessions to the company. In the end, the town gave Kraft the land for the factory for free, and the state gave the company a 90 percent tax break. Kraft, like other multinationals, is a big winner in globalization as well.
A tour of the factory was filled with surprises and lessons. Andre Imianoski, a young, friendly and professional Brazilian engineer, told me this was Kraft's first LEED environmentally certified facility in the world. There were solar panels from Spain, high-speed packaging equipment from Italy and German-made machinery that churned out tens of thousands of sweet-smelling, chocolate-covered wafers.