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The industrial sector in Minas Gerais moves the state’s economy

by | Dec 31, 2023

From investing in research to creating jobs, the industrial sector in Minas Gerais plays a primary role in the development of the state.

Using an analogy to explain the importance of the industrial sector in Minas Gerais, we can say that its industry is a powerful engine made up of several gears that fit together and rotate ideally to produce the force necessary to turn a vast machine. Industry in Minas Gerais is characterized by the diversification of segments, with highlights being sectors such as food and beverages, fashion, automotive, and mining. Together, they currently form one of the country’s most modern and thriving industrial clusters.

Potential

The strength of the industrial sector in Minas Gerais helps keep the state in a prominent place in Brazil’s national economic development. It results from much work and investments, which can be translated into the numbers that bring a multiplier effect to the economy. According to the Federation of Industries of Minas Gerais (FIEMG), the industrial sector accounts for 58.8% of service and merchandise tax (ICMS) collections. To get an idea of the potential of the industrial sector in Minas Gerais, for every R$1 produced by the state’s industry, R$2.06 is generated in the economy of Minas Gerais.

Generation of work and income

Minas Gerais, a prominent state in Brazil, owes a significant portion of its economic vitality to its robust industrial sector. The state has historically been a powerhouse in Brazil’s industrial landscape, particularly in the mining, metallurgy, and agribusiness sectors. The industrial activities in Minas Gerais generate substantial employment opportunities for its residents and contribute substantially to the state’s gross domestic product (GDP). As of recent data, the industrial sector accounts for a notable percentage of Minas Gerais’ GDP, underscoring its pivotal role in driving economic growth and development. This underscores the symbiotic relationship between the prowess of the industrial sector in Minas Gerais and its overall economic well-being, positioning the state as a vital cornerstone in Brazil’s industrial economy.

With all this economic relevance for the state, the industrial sector also maintains a crucial role in the social development of Minas Gerais, being directly present in many people’s professional growth and lives. Currently, the industrial sector in Minas Gerais employs more than 1.1 million workers, representing, according to the FIEMG, 23.1% of the generation of formal jobs in the state.

Innovation in the industrial sector in Minas Gerais

Responsible for 67% of investments in research and development in the private sector, the industrial sector in Minas Gerais also stands out for its pioneering role in using and studying new technologies. One of the main generators of innovation in the state, the industrial sector of Minas Gerais contributes to the development of the economy and the strengthening and consolidation of the sector as one of the most important for the state’s development.

Minas Gerais has made strides in various research and development (R&D) areas, reflecting its commitment to innovation and technological advancement. Some specific prominent areas of R&D in Minas Gerais include:

Mining Technology

Given its rich mineral resources, research in efficient extraction methods, sustainable mining practices, and mineral processing technologies is paramount.

Agricultural Research

Minas Gerais is an agricultural hub with research focusing on crop optimization, sustainable farming practices, and the development of new agricultural technologies.

Biotechnology and Pharmaceuticals

The state hosts research institutions and companies developing biotechnological products, including pharmaceuticals, biofuels, and bio-based materials.

Information Technology

Minas Gerais has a burgeoning IT sector with R&D activities centered on software development, artificial intelligence, and digital solutions for various industries.

Renewable Energy

With a growing emphasis on sustainability, R&D in Minas Gerais also encompasses renewable energy technologies, including solar, wind, and biomass.

Several prominent organizations and companies in Minas Gerais are at the forefront of R&D activities:

Centro de Desenvolvimento da Tecnologia Nuclear (CDTN): Engaged in nuclear technology research, focusing on applications in medicine, agriculture, and industry.

Universidade Federal de Minas Gerais (UFMG): A leading academic institution conducting research across various disciplines, including engineering, life sciences, and humanities.

Vale S.A.: One of the world’s largest mining companies, headquartered in Minas Gerais, with significant R&D efforts in sustainable mining practices and mineral exploration technologies.

Biominas Brasil: A biotechnology hub that fosters innovation and entrepreneurship in the life sciences sector, supporting startups and R&D initiatives.

SENAI (Serviço Nacional de Aprendizagem Industrial): Offers industries’ R&D services and technical assistance, promoting innovation and technology adoption across sectors.

These organizations and companies, among others, play a crucial role in advancing Minas Gerais’ R&D landscape, driving innovation, and contributing to the state’s economic and technological progress.

Made in Minas Gerais

Located in the heart of Brazil, Minas Gerais is in a strategic position that favors the distribution of what is produced in the state to supply both the Brazilian and international markets. The proximity and ease of access to the main Brazilian ports and airports mean that the mining industry is present in practically all Brazilian states and a large part of the world. According to FIEMG, the segment accounts for 78.8% of Minas Gerais exports of goods and services. It is a force that takes the quality and name of Minas Gerais to the four corners of the planet.

Beyond mining industry products, the other items that the industrial sector in Minas Gerais exports to the world include:

Agricultural Products: Minas Gerais is a significant producer and exporter of agricultural commodities such as coffee, soybeans, corn, dairy products, and sugar. The state’s fertile lands and favorable climate contribute to its agricultural productivity.

Processed Foods: The state has a thriving food processing industry, exporting products like meat, poultry, processed dairy items, confectionery, and various food preparations.

Metallurgical Products: While the mining sector is dominant, Minas Gerais also exports a range of metallurgical products, including iron and steel products, aluminum, and metal alloys.

Textiles and Apparel: The state has a growing textile and apparel industry, exporting various textile products, garments, and accessories to international markets.

Footwear and Leather Products: Minas Gerais is home to a vibrant footwear and leather goods industry, exporting shoes, leather garments, and accessories crafted with traditional craftsmanship and modern design.

Automotive Parts: The state is a significant producer of automotive parts, supplying components to Brazil’s automotive industry and exporting to global markets.

Chemicals and Petrochemicals: Minas Gerais exports a range of chemicals, including fertilizers, industrial chemicals, and petrochemical products, reflecting its diverse industrial base.

Furniture: The state has a well-established furniture industry, exporting various wooden and upholstered furniture products.

These exports showcase Minas Gerais’ economic diversity and its role as a vital contributor to Brazil’s export-oriented sectors. The state’s export prowess extends beyond its borders, forging connections with international markets and contributing to Brazil’s global trade footprint.

Relevance to Brazil

The industrial sector in Minas Gerais represents 10.9% of the added value of the overall Brazilian industrial sector. It employs 11.7% of the total number of workers in the country’s sector, according to data released by FIEMG. To get an idea of the importance of the productive sector in Minas Gerais in the country, for each new job created in the industrial sector in Minas Gerais, 32 new jobs are created in the Brazilian economy. Such numbers attest not only to the economic strength of Minas Gerais but also to its vocation as a highly qualified, competitive, and attractive business environment with growth opportunities for those who want to invest.

Minas Gerais is one of Brazil’s most industrially vibrant states. It plays a pivotal role in the nation’s economic landscape. The state’s dominance in mining, particularly its vast reserves of iron ore, positions Brazil as a global leader in mineral exports. This mineral wealth fuels domestic industries and boosts Brazil’s international trade profile. Minas Gerais is a nucleus for automotive manufacturing, housing major production units that contribute significantly to Brazil’s automotive output. The state’s commitment to innovation is evident in its thriving biotechnology and pharmaceutical sectors, fostering research and development and supplying essential medicines and advancements to the national healthcare system.

Furthermore, Minas Gerais has emerged as a hub for information technology, fostering digital innovation and driving Brazil’s digital transformation. Lastly, with a growing emphasis on sustainability, the industrial sector in Minas Gerais is harnessing its natural resources for renewable energy projects, positioning itself as a key player in Brazil’s transition to cleaner energy sources. Minas Gerais’s industrial prowess collectively underscores its indispensable role in shaping and advancing the broader Brazilian economy.

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