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The State of Bahia has demonstrated an aggressive policy of investment attraction since the beginning of the 90´s, occupying fourth position in the country today as a destination for investments. This success is based on two pillars. The first is the administrative continuity, that makes possible the fulfilling of obligations assumed with companies at the time of implantation of their enterprises. The second is the policy of fiscal adjustment that made possible the complete ordering of the State’s public accounts, maintaining payment of obligations rigorously up-to-date, the payroll within the limits established in the Federal Constitution and around 15% of the revenue available for application in investments.
With its size and strategic geographic position in the 160 million Brazilian market (itself part of the considerably larger - and growing - Mercosur economic community), its vast natural resources, diversified economic base, proven growth potential and outward - oriented business climate, Bahia offers the international investor a powerful combination of advantages. All major centers of economic activity are accessible by 4,400 km of federal highways which also link Bahia to the rest of the country. ln addition, there are some 18,400 km of mostly asphalt secondary motorways as well as over 100,000 km of local roads connecting the State’s 417 municipalities. The rail system consists of three trunk lines (total length: 1,900 km) which originate in Salvador and fan out to cross over into Minas Gerais to the South, Pernambuco to the North and Sergipe along the coast respectively. Sea-bound freight is handled by three ports: Salvador (general cargoes, containers, grains), Aratu (bulk solids and liquids, gaseous products) and Ilhéus (general cargoes, containers, liquid fuel). All have deep berths (8 to 12 m) and a 70% to 80% capacity utilization. Salvador’s Deputado Luís Eduardo Magalhães International Airport is served by regular domestic and international flights as well as tourist charter flights from cities in Europe, South America and the United States. Two other main airports, Ilhéus and Porto Seguro, are frequent destinations for Brazil's major airlines and also receive international charter flights. Some 100 airfields serve the State’s smaller urban centers. Bahia is drained by perennial river basins, most notably the São Francisco basin, which spans the generally arid central-western and northwestern regions of the State. The main industrial centers, located in Greater Salvador and Feira de Santana, get most of their water supply from the reservoir of the Pedra do Cavalo Complex on the Paraguaçu River. Most electric energy used in Bahia is generated by Cia. Hidrelétrica do São Francisco, a subsidiary of Eletrobrás. The company shares the distribution market with three other enterprises, most notably Coelba, which was recently privatized. A modern statewide telecommunications system includes telephone, Internet and data-transmission services as well as the relaying of television signals to rural areas. interstate and international telecommunications, as well as marine and computer communications, are handled by Embratel. Service quality is high and there are low congestion rates. The Bahia´s GDP is estimated US$24 billion in 1999 (R$43 billion), its economy is larger than those of Uruguay and Paraguay combined and in the last two decades has frequently grown at a faster pace than the national average. Some 350 Bahian companies sell over 500 product lines worldwide; in 1999, the State exported goods worth US$1.6 billion and had a trade-balance surplus of US$114 million. The Government, both state and federal, is investing extensively in public and economic infrastructure and private-sector investment is being stimulated with sizeable fiscal and credit incentives. The State’s finances are in sound order, with payroll costs using less than 60% of total revenues. This has allowed the administration in recent years to allocate approximately 15% of its budget to investments in public infrastructure. Another reward for fiscal discipline has been over US$ 1 billion of credit from the World Bank and the lnter-American Development Bank. Good and deep soils, long sunlight days and water resources are characteristics that qualify the state for irrigating 1.6 million hectares, of which 252 thousand hectares are currently being used.
Bahia’s coastline has approximately 200 points for unloading fish and 11 important aquatic ecosystems. Regarding shrimp farming, 70% of its production is sold outside the state. The demand for it is increasing in the domestic and in the international market due to its quality. It should be taken into consideration a potential area, which is one-hundred-thousand-hectares big, for implementing shrimp farming.
Bahia’s Savannah is extremely attractive for business: great dynamism, excellent productive and natural resources, appropriate climate, altitude and topography and good supply of water, besides the land low price (varies from US$150 to US$300 per hectare) and governmental support in terms of financial resources and infrastructure (electrical energy, roads, ports and telecommunications). The climate is defined by two distinct seasons: one is wet and hot (November through April), the other is dry and warm (July through September).
FORESTRY PRODUCTION AND FORESTRY BASED INDUSTRY Throughout the state of Bahia there are remarkably good areas in terms of soil, climate and sites for growing wood, specially for the manufacture of short fiber cellulose. There are opportunities for investments in wood production related industries, due to the infrastructure, urban support, besides a good supply of skilled workers, making possible business in the production of furniture, components and reprocessed products.
The state of Bahia has two-thirds of its territory rated as part of the Brazilian Northeastern Semiarid Region. Goat raising is quite suitable to this region. Its herd is the biggest in the Country - 4 million heads. Aside from the goat herd, the sheep herd has 2.7 million heads, considered the second largest in the Country. Sheep is raised mainly in the Semiarid Region.
Beef Cattle
Dairy Production The cattle herds that produce milk in the state are of mixed background and also produce beef, because very few farms specialized in raising Pure of Origin Dairy Cattle. Most of the Semiarid Region of the state gets its income from Cattle raising. In the last few years this activity has been affected by long droughts that have limited water and pasture supplies. The Bahia State has lined out a program to stimulate the Dairy Activity. Its goal is to unite all agents engaged in this activity to increase production and income, and also to offer more jobs. Traditionally milk production is a small business. More than 80% of the suppliers of the Processing Plants deliver less than 50 litters a day. The Dairy Cattle Program seeks the upgrade of technical levels, by introducing new technology and financing the purchase of Pure of Origin cows and bulls, and also the improvement of the farm facilities and food supply. At the same time the program motivates cattlemen to associate in cooperatives and rural unions, so that they can bargain milk price and negotiate payment conditions within the Dairy Industry.
Coffee production in Bahia has been growing, creating opportunities, passing boundaries and bringing wealth and prosperity to the coffee growers who believed in it. The state of Bahia is working toward its firm objective of becoming the second largest national producer of coffee by the year 2005, with a production of 5,000,000 bags.
Brazil, which has a large territory and different kinds of climates, is thus a big producer and exporter of fruit and its byproducts worldwide. In the state of Bahia one can find the best natural conditions and governmental support, in terms of production, marketing, processing, and exportation. The fruit crop of Bahia is a good business alternative, whose investment opportunities are found in all stages of the productive chain, from the plantation to the retailing in supermarkets and special food stores that sell high quality perishable products. It meets the quality standards required by the domestic and foreign market, especially in the USA and European Union.
In considering the Brazilian fruit crop, Bahia has a growing share, which today is 10% of the total domestic production. There are also some areas that present favorable features to the cultivation of sub-tropical and temperate fruit, such as grape, melon, plum, strawberry, and khaki, which are fit to our tropical semi-arid climate. Based on its natural comparative advantages, Bahia has been establishing important areas of plantation, like the productive regions of Baixo Médio São Francisco (Lower Middle San Francisco River Valley), Western, Southeastern, and Far Southern regions, and Bacia Paraguaçu (Paraguaçu Basin). The state has three maritime ports: Ilhéus, Aratu, and Salvador, that provide support to the cycle of production/manufacturing. Besides, there are international airports handling regular flights to all continents. The Lower Medium San Francisco River Valley is well known by Juazeiro, considered one of the country’s main fruit growing hubs. Most of its crops come from irrigation, highlighted by the tommy-atkins mango, the most demanded variety in the market, followed by the other kinds such as aden, palmer, and keith. These kinds might produce 20 tons per hectare. Besides, there are grapes of different types like Itália, Piratininga, Red Globe, Benitake and Festival (without seeds), whose average output is 50 tons per hectare, in addition to melon, Barbados cherry or acerola, guava, and banana, as well as some exotic fruit like sweet-sop and graviola. In the Western region, the irrigated fruit crop has been expanding itself with excellent results, especially in the Savanna area, where banana, citrus, guava, mango, watermelon, and papaya are produced on an area of 10,000 hectares. There is potential for further development of avocado, Barbados cherry, sweetsop and pineapple. The potential area is 30,000 hectares. The Southwestern region is renowned for the irrigated agriculture of Vale do Rio de Contas (Rio de Contas River Valley), highlighted by the production of mango, banana, guava, passion fruit, and sweetsop. There are conditions for further production of khaki, umbu, and pineapple. The Far South is well-known for the following crops: papaya (the largest area in Brazil), coconut, citrus, and banana. The planted area is able to produce 30 tons of papaya per hectare and 20 tons of coconut per hectare. There is also potential for graviola and macadam. In Paraguaçu River Basin, close to Chapada Diamantina (Diamantina Plateau), pineapple and lemon are being grown. There are natural conditions for developing banana, passion fruit, figo, grapes, guavas, jambo, cajá, cajarana, pitanga jenipapo, carambola and amora.
The objective of the Bahia’s Cotton Crop Development Program is to put the state among the country’s major producers, with almost a million hectares available.
Bahia is the biggest producer of coconut in Brazil, mostly grown in the northeastern region of the country. In 1999, the state produced 56,069 tons in an area of 71,626 hectares, which will be increased by 10,000 hectares between 2000 and 2003 under its plan for the development of this business. The aim is to modernize this form of agriculture, raising the average level of production in the areas under cultivation so increasing income and the number of job opportunities. Given the importance of coconut growing to the state’s economy, since Bahia is the biggest producer in the northeast of the country, other comparative advantages which justify its promotion are:
Source: IBGE/PAM (Municipal Agricultural Production)
Flower growing is perhaps the most highly evolved branch of agriculture. The cultivation of flowers is another of the Brazilian economy’s growth areas and is provoking a great deal of interest due to its high profitability. The production of flowers is an additional way to encourage rural population to remain in the countryside by taking advantage of parcels of land considered too small for other agricultural purposes, and offering the assurance of a quick return on investment because of the short productive cycle of most of the varieties cultivated. Potential flower growing areas in the state of Bahia are concentrated in the Chapada Diamantina highlands (Morro do Chapéu, Piatã and Bonito); the São Francisco valley (Juazeiro); on the north coast (Mata de São João) and all along the south coast. For flowers and tropical plants such as heliconia, alpinea, bastão-do-imperador, orchids, arum, bromeliah, jibóia and dracena, among others, the north coast and the Juazeiro region would be ideal. For those who prefer a mild climate, the Chapada Diamantina highlands with their altitude (4000 feet), quality of the light, climate and phytosanitary isolation is the area with the greatest potential to become a center for cut flowers, seedlings, seeds and bulbs in Bahia. Despite its potential, the production of flowers and plants in Bahia is still at the early stages, and doesn’t meet the demand from within the state itself which imports 97% of its consumption from the towns of Holambra and Atibaia in the state of São Paulo. Mata de São João, Morro do Chapéu, Amélia Rodrigues and Vitoria da Conquista supply just 3% of all the flowers sold in the state. It is important to remember that flower growing, with its year-round production, is a highly profitable, labor-intense activity, and that the annual per capita consumption in Brazil is worth around US$ 5.00 compared with US$ 25.00 in Argentina and US$ 135.00 in Europe. A privileged position which could be exploited.
Bahia possesses 850 thousand ha appropriate to palm culture. This area extends from the Metropolitan Area of Salvador to Th e Extreme South, characterized by a topography suitable for m mechanization and with a favorable climate – rainfall between 1600 and 1800 mm / a, average temperature higher than 23º C and luminosity superior to 1600 h/year. According to data from FAO, participation of palm oil in the word market of vegetal oils should supersede that of soybean oil by the year 2003. Brazil currently imports 100 thousand t of palm oil and derivatives a year. It is estimated that the potential internal market of these products is of 400 thousand t/year. Thus, with an assured market and excellent conditions for the culture, Bahia has everything to produce the palm oil that Brazil and the world need |
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INVESTING
IN BAHIA
The Bahia State area is 567,295 km2,
this is the size of France and makes it the largest of Brazil’s
northeastern states. Situated between the equator and the Tropic
of Capricorn, it enjoys a tropical climate with annual average
temperatures between 19º and 27º C and rainfall from 2,000 mm
in the coastal plain region to 360 mm in the northern low-lands
of the São Francisco basin. The State has 12.5 million inhabitants
of whom almost 20% live in the capital, Salvador. Other major
cities are Feira de Santana, Ilhéus, Vitória da Conquista, ltabuna,
Juazeiro, Jequié, Camaçari, Barreiras and Porto Seguro.
The state of Bahia, whose climate is typically tropical, and
its coastline is 1,188 km long, which represents 13.2% of the
country’s coastline. It’s the longest in the country.
The estimated state’s herd is 10 million heads.
With the objective of improving the Beef Cattle activity. The
Bahia State government improving the Beef Cattle activity with
the Young Calf Program. The entrepreneurs that join the program
can count on special credit lines and technical assistance, that
help them applying methods for reaching the ideal goal of obtaining
a 210 kg ox for slaughter, within two and a half years.
With
a planted area of 280,000 hectares, from which 89,600 are irrigated,
the fruit crop of Bahia generates an average annual revenue of
US$ 500 million and 560,000 jobs. The water resources are available
for irrigating 1.6 million hectares, which means that there is
plenty of room for expanding irrigated agriculture. In this way,
the scenario is favorable for the development of irrigation and
for growing different products, with a high level of output per
hectare. 
Western Bahia presents all of the characteristics required for
competitive growing, including: 
Bahia’s tradition in the cultivation of palm goes
to the XVI century. The State is the country’s second producer,
with a cultivated area of more than 30 thousand ha, extracting
about 10 thousand t/year of oil.
