IANS/EFE | 16 Aug, 2013
China's Foton Motor plans to invest 250 million reais ($108 million) to build a truck factory in the southern Brazilian state of Rio Grande do Sul, the state government said.
Foton signed a letter of intent to build the factory a day after it was announced that the company had canceled plans to construct the plant in southeastern state of Rio de Janeiro.
Under the terms of the agreement between Foton Aumark Brasil, subsidiary of the Chinese automaker, and the Rio Grande do Sul government, the factory will be built in Guaiba, a suburb of the regional capital of Porto Alegre.
Foton will begin constructing the plant this year and it should start operating in 2016, the state government said Wednesday.
The Chinese company expects annual output at this Brazilian plant of as many as 21,000 trucks with carrying capacity of between 3.5 tonnes and 24 tonnes.
The Rio Grande do Sul government said Foton suspended its talks with the Rio de Janeiro authorities due to the difficulty of finding a suitable location for its project in that state.
The Rio de Janeiro government expressed surprise Tuesday at Foton's decision to call off the talks, saying they were in an advanced stage.
The Rio government had agreed to provide the Chinese company with land for the factory, help with securing a loan and tax breaks.