DEG-financing for German automotive supplier in Brazil

• Subsidiary of GPM Group provided with a loan of EUR 5m
• DEG accompanies international expansion of German SME

The emerging market of Brazil, being the world’s fourth biggest car market, is an important location for the German automotive industry. Larger manufacturers have long been represented with their own plants in the country that at present is dominated by the Soccer World Cup. The supply industry has followed their path.

Geräte- und Pumpenbau GmbH Dr. Eugen Schmidt (GPM) from Thuringia is such an example. Already in 2001 it established a subsidiary in Brazil, called GPM do Brasil Automotivas Ltda (GPM do Brasil). DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, provides GPM do Brasil with a long-term loan of EUR 5 million for the expansion of its production facilities.

In Indaiatuba, 90 km away from São Paulo, GPM do Brasil produces water and oil pumps for automotive manufacturers in Brazil. The company has experienced strong growth over the past few years. To be in a position to handle the number of orders by its customers also in the long term, GPM do Brasil invests in additional production facilities and tools to expand its capacities. "The country-specific, expert assistance of DEG allows us to make the investments in time and to ensure that our customer can start production within the planned timetable", said Andreas Schmidt, Managing Shareholder of GPM.

The GPM Group has around 1,100 employees worldwide at locations in Germany, Brazil, China and the United States. The oil and water pumps for combustion engines developed by the company are mainly supplied to car manufacturers, but are also used in motorcycles and commercial vehicles. GPM pumps are characterised by its fuel-saving designs, thereby contributing to reducing CO2 emissions.

The product design and development of the pumps is done in Germany. Modern installations on site, detailed process descriptions and support from assigned staff members result in a know-how transfer to the Brazilian subsidiary.

DEG's financing and accompanying activities of German companies in emerging and developing countries are a focus of DEG's business. DEG has been active in Brazil since the mid-1960s. The current portfolio in the country has a volume of about EUR 255 million. Since 2002, DEG has been represented with an office in São Paulo to support customers from the Mercosur region.