Governor Branstad has had what he calls “very productive” visits with South American business leaders during his trade mission in Brazil and Chile.
“Other than China, I think this is where we have the greatest potential for growth,” said Branstad, who is in Chile today and spoke with Iowa reporters by phone early this morning.
Farmers in neighboring Brazil are poised to sell their own corn and beans to make up for a drought-depleted U.S. harvest and Brazil is becoming a major player in the world economy, but Branstad said Brazilians also have the potential to be partners rather than competitors in a number of areas.
“We’ve had receptions and we’ve had…seminars where we’ve had an opportunity to exchange business cards and we have a lot of prospects to follow up on,” Branstad said, “so we think there’s opportunity to significantly expand trade, but also potential direct investments in Iowa from this area.”
Brazil is one of the most expensive places to do business in the world, with a mix of very high taxes and transportation problems. Iowa Economic Development Authority director Debi Durham and the governor were able to schedule a meeting with a key prospect, but they’re keeping the name of the firm secret. Branstad and Durham touted Iowa’s single-factor corporate income tax and the fact there’s no state tax on machinery and equipment.
“A certain industry in Iowa identified this company that has a very, very innovative product,” Durham told reporters this morning. “…What we had done for this company is say, ‘Look, here’s the value proposition: not only is our electricity cheaper and, you know, we have an abundant supply, let’s look at your taxes and our job-training program.’…We provided them with a list of 900 companies that they could do business with in Iowa…and that got the CEO’s attention. In fact, he looked at his people (and said): ‘We need to look at Iowa.’”
The governor considers Brazil and Chile the two best countries to “prospect” in South America. Durham said over 125 business executives attended the first “Iowa seminar” the delegation hosted in Sao Paulo.
“It was surprising because we’re a little bit into winter here and many people are on vacation and yet when they heard it was Iowa, what we were told is that many of these CEOs, decision-makers of these companies made an effort to be there,” Durham said. “…I think it shows that they are very interested not only in investment in the United States, but specifically learning more about Iowa.”
Representatives from Iowa businesses like Pioneer, Vermeer and Principal Financial Group are part of this trade mission. The delegation made a side trip to visit an Embraer factory. The Brazil-based company is the world’s third-largest commercial aircraft maker and purchases flight gear from Cedar Rapids-based Rockwell Collins and Rockwell hosted a luncheon at the plant. The delegation also visited the chief executive of JBS in Sao Paulo. JBS owns the pork processing plant in Marshalltown.
Branstad and the rest of the Iowa delegation left for this South American trip last Saturday. They are scheduled to return to Iowa tomorrow.