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Brazil's Armored Cars Find a Space in Iraq
By TODD BENSON
http://www.nytimes.com/2004/06/24/bu...armor.html?8dt


Published: June 24, 2004
SÃO PAULO, Brazil, June 23 - A few years ago, the armored car business was one of Brazil's fastest-growing industries. As urban crime and kidnappings soared, armored car dealers sprouted up by the dozens, and sales jumped almost sevenfold in five years.

But while violent crime continues to plague Brazil's biggest cities, armored car sales have been declining for two years - partly because of a harsh economic slump and partly because most wealthy Brazilians who felt the need for bulletproof cars already own one.

So to keep their business humming, makers of the cars are turning to the export market - becoming the latest of many industries to look beyond Brazil's borders for growth. And perhaps no region is more attractive as a market for armored cars than the Middle East - especially Iraq, where attacks on American troops and employees from Western companies have become common.

"On a daily basis, things are getting blown up and people are getting killed in Iraq, so it's no wonder the demand for armored cars there is so big," said Franco Giaffone, president of Abrablin, a trade association representing more than 30 Brazilian armored car manufacturers and dealers.

"And because a lot of armored car companies in places like the United States are already operating near capacity, people are looking to Brazil to get what they need," added Mr. Giaffone, whose own company, G5 Blindagens Especiais, is in talks with several Eastern European governments to start armoring cars for their diplomatic corps in Iraq.

After decades of focusing almost exclusively on Brazil's domestic market, all types of companies are bringing much-needed dollars into the country and driving an economic rebound by exporting everything from washing machines to commercial airplanes. In May alone, exports totaled a record $7.94 billion, helping the country post a monthly trade surplus of more than $3 billion for the first time in history.

With one of the most skewed income gaps in the world, Brazil became a big force in the armored car business in the second half of the 1990's as the country's elite scrambled to shield themselves from surging crime. Sales soared from 388 cars a year in 1995 to 4,681 in 2001, making Brazil the world's top producer of bulletproof vehicles, ahead of other crime-ridden countries like Colombia and Mexico.

But by 2003, sales had plunged by a third, to 3,123 cars, forcing some smaller companies out of business. The industry kicked off 2004 betting that sales would edge up 5 percent or so this year as the economy picked up, but then requests for vehicles for Iraq started trickling in. Now armoring companies expect to revise their sales forecasts upward, though they caution that it is too early to say by how much.

"All of sudden people are waking up to the fact that the Middle East can be a promising new market for us," said Eduardo Rodrigues, industrial director at Grupo Inbrafiltro, one of Brazil's biggest car-armoring companies.

Inbrafiltro, which also makes bulletproof cockpit doors for Empresa Brasileira de Aeronáutica, the Brazilian aircraft maker known as Embraer, is one of a few armoring companies that has received orders to ship vehicles to Iraq.

Mr. Rodrigues said he was approached at a trade show last month in Miami by representatives from a half dozen American multinationals - mainly big energy and construction companies that he declined to name - all interested in buying armored vehicles to be used in Iraq. Now Inbrafiltro is closing deals on its first two orders for export to the Middle East, for a total of 60 sport utility vehicles, at a cost of about $100,000 each.

"We're talking about orders that can add up to millions of dollars," said Marcelo Carneiro, managing director of Central Brasileira de Blindados e Segurança, a São Paulo armoring company that is negotiating contracts with one American and two European multinationals operating in the Middle East.

Another company benefiting from the demand for armored vehicles in Iraq is the International Armoring Corporation do Brasil, the Brazilian subsidiary of the High Protection Company, in Atlanta. High Protection, which already armors Humvees for the United States Army at its plant in Fort Lauderdale, Fla., recently received three large orders for shipment to the Middle East - all of which it expects to fill at its factory in Itaquaquecetuba, on the outskirts of São Paulo.

The orders include 200 autos for the Saudi Arabian government, 130 for the government of Jordan and up to 50 heavily armored S.U.V.'s for the Parsons Corporation, the engineering and construction giant in Pasadena, Calif., that was awarded a $1.8 billion infrastructure contract in Iraq earlier this year.

"We're going to send the vehicles from here in the United States to Brazil, and then from Brazil straight to the Middle East," Maurício Junot De Maria, High Protection's chief executive, said by telephone from Atlanta.

To be sure, not all the car-armoring companies in Brazil are likely to find themselves signing million-dollar contracts to ship vehicles to Iraq any time soon. Most companies here aim at the domestic market, which means they armor cars to protect motorists from random street violence at intersections and stray bullets from handguns - a common occurrence on the main highways leading into Rio de Janeiro, stretches of which are straddled by sprawling shantytowns controlled by heavily armed drug gangs.

An armored car in Iraq, however, must withstand high-caliber automatic weapons like AK-47's and explosive devices. That can cost more than twice as much as a basic armoring job, and requires technology that only the biggest armoring companies here have.

"Here, if a car isn't armored well, you can still escape an incident, though not always," said Boris Kruijssen, regional director for Latin America of the Control Risks Group, a security consulting firm that is advising American companies operating in Iraq on where to go to buy armored cars in Brazil.

"But in Iraq, if it's not armored well, you will get killed," he said. "Because of that, our clients are asking us to test cars here."