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Brazil Aviation: 96% of Embraer’s US$ 6 Billion in Revenues Come from Overseas

Brazilian Embraer Phenom 100 in the assembly line The Arab market is one of the main fronts for growth for Brazilian aircraft maker Embraer. This according to company president Frederico Pinheiro Fleury Curado, during a presentation to the Brazilian market of the company results for 2007.

"Our focus in the Arab region is greater and greater," said Curado, also adding that the Arab countries are a strategic market for Embraer. The company, according to Curado, currently dominates the 70- to 120-seater commercial jet market in the region.

Among the Arab nations that received Brazilian aircraft last year were Saudi Arabia, Egypt, the United Arab Emirates, Jordan and Libya. According to Curado, the Arab market is very similar to the Brazilian, as the passengers expect characteristics like comfort in the aircraft, space for cargo and luggage and air conditioning.

The president at Embraer added that it is also important that the company has diversified its client portfolio in recent years. "Two or three years ago, there was concentration on some clients. Today the capillarity of our client base is very large," said Curado.

Figures supplied by the Ministry of Development, Industry and Foreign Trade show that last year Brazil exported US$ 144.8 million in aircraft to Egypt, US$ 120.6 million to Jordan, US$ 27.5 million to Saudi Arabia, US$ 27.4 million to Libya and US$ 24 million to the United Arab Emirates.

In the figures disclosed by Embraer, the Arab countries are in the category "Others", as the main markets, answering to 58% of revenues, are in the Americas, followed by Europe, with 24%. Brazil has 4% and the remaining markets 14%. The percentage of the "Others" answered to around 1.39 billion Brazilian reais (US$ 822 million) in 2007, out of total revenues of 9.9 billion reais (US$ 5.9 billion).

That is, 96% of Embraer revenues came from the foreign market last year. Company revenues grew 20.7% over 2006. Net profit reached 657 million reais, against 622 million reais in the previous year. Embraer ended the year of 2007 with US$ 18.8 billion in firm orders.

Between firm orders and options, the total reached US$ 44.8 billion. The figure is well above that for 2006, when Embraer closed the year with US$ 33 billion in firm orders and options, of which US$ 14.8 billion firm. Embraer made 169 deliveries in 2007 and plans another 215 in 2008.

Of total company revenues last year, 63.8% came from commercial aviation, 16% from executive aviation, 10.7% from aeronautics services and 6.6% in aircraft for government and defense. Last year the company invested US$ 452 million. "Well above the historic average of US$ 250 million," recalled Curado.

In 2006, Embraer invested US$ 202 million and in the previous year, US$ 166 million. The company has, according to the chairman, 16 technological development projects in progress, is centralizing actions turned to the environment and organizing the area of aeronautics services.

Embraer is building three new service centers in the United States and one in France, in what used to be just a hangar. "We want to expand our participation in the post-sale market," explained Curado.

According to the company's president, Embraer wants to be one of the main producers up to the middle of the next decade and is working on the construction of the infrastructure necessary for that.

Last year, Embraer hired 4,500 people raising the number of employees to 23,774. Of this total, 21,000 people work for the company in Brazil and the remaining ones work abroad. All of the employees have at least completed secondary school.

Anba

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