Secondary Economic Activities (Leaving Cert Geography): Revision Notes

Secondary Economic Activities

Overview of Brazil's secondary sector

Secondary economic activities account for approximately 15% of Brazil's workforce, representing a smaller proportion compared to both primary and tertiary sectors. However, this sector has experienced remarkable growth and transformation since the mid-20th century, establishing Brazil as a major industrial power in South America and globally.

Historical development and government investment

Before World War II, Brazil's economy relied heavily on agricultural exports to Portugal, with around 80% of all exports consisting of agricultural products like sugar, coffee and cotton. The war significantly disrupted international trade routes, preventing Brazil from importing many essential manufactured goods. Combined with rapid population growth, this crisis forced the country to develop its own domestic manufacturing capabilities.

The Brazilian government recognised the importance of building a strong industrial base and invested heavily in iron and steel manufacturing during the 1940s. The establishment of the Volta Redonda Steel Mill in Rio de Janeiro state became a cornerstone of this industrial development strategy.

The secondary sector began experiencing rapid growth from the 1970s onwards. This manufacturing expansion triggered increased rural-urban migration as people moved to larger cities seeking employment in the new factories. The Real Plan of 1994 further strengthened Brazil's manufacturing sector by reducing inflation and improving the value of the national currency. These economic reforms contributed to Brazil's GDP rising dramatically from less than $50 billion in 1970 to$2.4 trillion by 2014.

Iron and steel manufacturing

Brazil has established itself as the ninth-largest steel producer globally, with this industry developing due to extensive deposits of iron ore and substantial government investment. The country utilises charcoal generated from Amazon Rainforest timber to produce steel, with the industry primarily concentrated in Minas Gerais and Rio de Janeiro states due to their rich supplies of iron ore and carbon.

To reduce dependency on imports, several state-owned or semi-state steel mills were established. Government-led steel production continued until the 1990s, when privatisation of steel mills began. Today, Brazil operates 29 steel mills owned by 11 different company groups, demonstrating how the country has transformed from a major steel importer to a major exporter.

The steel industry produces approximately 35 million tonnes of steel annually, generating €12.5 billion per year and providing employment for over 110,000 workers. This sector has also stimulated the development of related industries and supply chains.

Automotive industry transformation

Brazil's automotive sector underwent significant transformation following the country's membership in Mercosur (a trade agreement between South American countries) in 1991. The opening of the Mercosur market attracted substantial investment from multinational corporations (MNCs), particularly European and Asian car manufacturers.

Rio de Janeiro and Santos were selected as the primary centres for automotive manufacturing due to their large labour pools and well-developed infrastructure. Previously, car manufacturing had been impossible in Brazil due to high production costs, lack of highly skilled workers, and insufficient technology.

However, inward investment from MNCs such as Toyota and Fiat enabled Brazil to become a major car manufacturing nation. The government implemented several supportive policies:

Protectionist measures

Any cars not produced in Brazil or other Mercosur countries face a 30% extra tax to protect the market from cheaper Chinese imports. By 2017, 10 out of 12 steps in car production must occur in Brazil or other Mercosur countries for cars to be exempt from this tax.

Research and development investment

The government began investing in research and development (R&D) to create new car models with more energy-efficient engines. Inmetro serves as the organisation responsible for setting standards for engines and electrical appliances. By 2017, all cars must meet specific CO₂ emission standards to receive Inmetro certification.

Brazilian companies have pioneered flex-fuel engines, which can operate using fuel made from ethanol and petrol. This innovation supports environmental sustainability while utilising Brazil's abundant sugar cane production.

Industry scale and impact

Brazil now produces 65% of all cars purchased in South America and ranks among the world's top-10 car manufacturers. The country produces 3 million cars annually, with car ownership increasing as citizens' living standards improve. For instance, approximately 1,000 new cars are purchased daily in São Paulo alone. The automotive sector also creates additional employment through the manufacture of car parts such as tyres and brakes.

Food processing industry

Brazil operates an intensive food processing industry built upon the country's extensive agricultural sector. With a population exceeding 200 million people, the country benefits from a large domestic market for processed foods.

The food processing sector includes:

• 45,000 food processing companies distributed across Brazil
• Annual revenue generation of €195.4 billion
• Investment from major MNCs including Nestlé, Cadbury and Kraft

These multinational corporations have chosen to invest in Brazil due to the availability of inexpensive raw materials, access to a large labour force, and the substantial domestic market for their products.

Textiles industry

Rising living standards among Brazil's expanding middle class have created increased demand for clothing and textiles. This domestic demand has supported the growth of a substantial textile manufacturing sector.

Key features of Brazil's textile industry:

• Production of 9.5 million garments annually, making Brazil the fourth-largest textile manufacturer globally
• Employment of 1.9 million workers, making textiles the second-largest employer in the country
• Only 15% of textiles produced are exported due to strong domestic market demand

The textile industry demonstrates how Brazil's growing prosperity creates demand that supports domestic manufacturing employment.

Geographic distribution of industry

Industrial development in Brazil is not evenly distributed throughout the country. Manufacturing is heavily concentrated in the south-east industrial triangle encompassing São Paulo-Rio de Janeiro-Belo Horizonte. This concentration exists for several key reasons:

Natural resource availability

The south-east region contains rich deposits of natural resources, particularly iron ore and bauxite. These resources attracted iron and steel mills to states such as Minas Gerais, creating the foundation for further industrial development.

Established urban centres

Large cities already existed along the south-east coast, providing substantial labour pools and sizeable local markets. Cities like Rio de Janeiro and São Paulo offered the workforce and consumer base necessary for industrial growth.

Infrastructure development

The south-east region benefits from well-developed telecommunications systems, modern road and rail connections. The government has invested significantly in broadband infrastructure, supporting modern industrial operations.

Energy resources

Oil and gas deposits discovered off the coast near Rio de Janeiro led to the development of refining and petrochemical industries, creating additional industrial clusters.

Transportation advantages

Established ports in Rio de Janeiro and Santos made it easier and more cost-effective to transport goods for both domestic distribution and international export.

Regional economic disparities

The standard of living remains much higher in the south-east region, where the wealthier population provides a market for expensive manufactured goods. In contrast, the north-east's historically poor agricultural economy did not develop manufacturing capabilities due to unsuitable climate conditions. This meant food processing and textile manufacturing did not establish themselves in the north-east, though recent inward investment is beginning to change this pattern.