Foxconn, Apple’s long term manufacturing partner had set up ambitious plans to manufacture the iPad tablet in Brazil though all of that seems to have come to a naught. The plant was supposed to be able to produce iPads in July 2011 though it was subsequently pushed back to November. Later, the schedule was revised once again to December but it now seems it has been pushed back forever. The reason being put forward for the plans to have turned sour are a breakdown in negotiations between Foxconn officials and Brazilian authorities. The size of the deal in numeric terms is a staggering $12 billion.
Brazilian officials though have put the blame on the Taiwanese company’s ‘crazy demands’ for the deal to fall through. Foxconn is reported to have sought tax breaks and is expecting special treatment in the South American country. Brazil’s custom department is notoriously slow and Foxconn has asked for priority treatment so as to speed things up a bit. Also, Brazil is already known for its high tax rates along with other factors such as an overvalued currency and a lack of skilled work force all of which combined against the manufacturing of the high tech iPad tablet PCs in that country.
“The talks have been very difficult, and the project for a Brazilian iPad is in doubt,” one official revealed to reuters before also adding, “(Foxconn) is making crazy demands” for tax breaks and other special treatment.
What Foxconn is demanding is being termed as way too complex for the Brazilians to handle as of now. For it entails the setting up of a new ‘intelligent city’ outside of Sao Paulo which would have the best of facilities such as top notch infrastructure, good connectivity along with its own energy source. Rule of the land requires Brazilians business partners to give shape to such ambitious and high value projects. However, the technology sector in Brazil lacks the financial depth to dole out the necessary funds to support a project of such magnitude. A possible way out is to either scale back the project’s scope or Brazil will have to shore up its resources.
“We’re dealing with a lot of issues, like the (Taiwanese) trying to figure out how to do business in Brazil … and Brazil figuring out how to produce these complicated products,” a second government official told Reuters.
“Maybe we will end up starting with something smaller.”
As an idea of the high import tax structure in Brazil, an iPad 2 tablet costs nearly $900 there which is almost twice that of the $500 that the same costs in the United States.
Sovan Mandal is the senior tablet and tech corespondent for goodereader.com. He brings a international approach to news that is not just applicable to the North American market, but also Asia, India, Europe and others. Sovy brings his own writing flavor to the website and is interested in Science Fiction, Technology and Writing. Any questions, send an email