Livoltek, a Hexing Group company, has opened its first factory in the Manaus Free Trade Zone, with an investment of over BRL 70 million ($12.4 million). The Chinese company chose the capital Amazonas to produce photovoltaic inverters, lithium batteries and chargers for electric vehicles to serve domestic and international markets, with an eye on Latin America. The industrial complex covers 18,000 m² and is expected to generate 600 direct jobs and more than 2,000 indirect jobs.
Initially, given current market conditions, the plant’s production capacity is designed to supply 1.8 GW, or approximately 300,000 inverter units. However, it could reach 3 GW without the need for new investments in machinery, just by increasing the number of shifts and workers.
The factory will go through three phases, expected to be completed in the first quarter of 2025. The first will mark the start of production of on-grid inverters, the second will mark the start of production of hybrid and off-grid inverters, chargers and batteries, and the third, electric boat motors and other inverters.
Domestically produced equipment should become more competitive compared to imported equipment due to tax, fiscal, logistics and commercial factors, said Thiago Varanda, general manager of Livoltek in Brazil. Hexing’s experience with the Eletra Energy brand, which produces energy meters in the country, where it has a market share of around 70%, was an important factor in convincing the holding company to also invest in local inverter production.
“A lot of research was done to understand whether it really made sense to produce the inverters, batteries, chargers and electric boat motors here in Brazil, and whether they would pay for themselves. And yes, they do,” the director told reporters after the plant’s inauguration. In addition to the tax and fiscal benefits of investing in the Manaus Free Trade Zone, products made in Brazil will be better suited to the Brazilian market because they are subjected to tests that reproduce the country’s field conditions, Varanda said.
Abolition of ex-tariffs on inverters, logistics benefits and exchange rate protection
In addition, there is a prospect of a reduction in tariff exceptions (ex-tariffs) for inverters with similar specifications. “If you have a product that is not manufactured in Brazil, you benefit from the ex-tariff. As a manufacturer, this advantage will certainly have some limitations and as a result we will have an even greater difference in the price of this product compared to the international price,” said Varanda. An initial study conducted by the company indicated that this elimination of ex-tariffs could create an 18% difference in relation to the price of the international product, he added.
Recent increases in the cost of international freight and the dollar also strengthen the competitiveness of domestic products, Varanda noted.
Livoltek sales director Mateus Gomes emphasized that the company would count on the support of Eletra’s distribution centers, which form inverter stocks in Fortaleza and Curitiba, in addition to the Manaus factory. Once these stocks are formed, the minimum delivery time can be up to five days from order, depending on location.
“From the factory in Manaus, the equipment goes by boat to Belém and from there it is shipped to the rest of Brazil. Supplying these distribution centers in Fortaleza and Curitiba will initially take 15 to 20 days, but later we will work with times of five to 10 days, depending on the final delivery. So logistics is what we are focusing a lot on, even in advance, to be able to carry out this operation quickly,” Gomes said.
Gradual nationalization of inputs
The Livoltek factory will produce everything from inverter housings and chips to printed circuit boards, but in the first months of production, input will mainly come from China. Preliminary studies indicate that the share of national inputs could reach 70% of equipment.
“It is a new factory and there will even be test production in August and September,” said Varanda. “We are already taking orders, very focused on production in October,” says Varanda. “Initially we wanted to know if the entire production process was correct, so we didn’t want to take the risk, let’s put it this way, that there would be a supplier qualification process running parallel to the production process. So at this first moment the production chain consists of Chinese inputs; the trend is for us to have as many nationalized products as possible and I want to build this up over the next 18 to 24 months. This is my mission and Livoltek’s mission, precisely so that we have this control over the chain, do not suffer from sea freight, do not suffer from changes in the dollar, but we know that there are some products that are not produced in the US . Brazil.”
The company is already working towards being accredited as a local manufacturer with the Brazilian Development Bank (BNDES) and other development lines, he added.
Hexing is headquartered in China and has factories in Indonesia and Africa, as well as operations in Europe. The investment in the new factory in Brazil will help the country, which with new installations is already one of the leading players in the global photovoltaic market, position itself as a major player in the production of equipment for this industry, Varanda explains.
“First we are going to supply the domestic market, that is the purpose of the plant, and then we are going to supply the Latin American market,” he told journalists after the plant’s inauguration. “We are evolving from consumer to manufacturer.”
Regional potential
For the company, in addition to the tax and fiscal benefits offered by Manaus, the location of the factory also brings it closer to potential markets in the Northern Region, especially in the case of electric boat motors and battery systems. The region uses the river transport system and is not connected to the electricity grid in many places, using diesel in both cases. Furthermore, being a warm region, there is a high consumption of air conditioning even at night, which could drive the adoption of batteries in distributed generation systems, to store energy generated during the day and used at night.
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