The Decision to Build in Manaus

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<< 3. Creating a Useful Bike for Developing Countries
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<< 6. The Decision to Build in Manaus
<< 7. The First Factory Manager-34 Years Old
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During the initial Sumare project effort, a series of strong suggestions by Mr. Natan, president of Moto Importadora, the importer of Honda products in the city of Manaus, urged Iida to build a factory in this northwestern Brazilian city. Because Mr. Natan was so persistent, Iida and Fukatsu finally gave in and visited Manaus early in 1975. Once there, they were greeted by Mr. Natan's enthusiastic, persuasive talk and a strong request from Mr. Canpeiro, head of the Manaus Free Trade Port Management Agency, who said, "We would like to industrialize this region. Therefore, we wish to extend a warm welcome to Honda if you would join us here."

Because Manaus was a free-trade port, upon their arrival Fukatsu and Iida learned that to build a new factory there would allow them the privilege of paying no business taxes for a period of ten years. Moreover, the steps required to reach the percentage of local content were much more relaxed than in São Paulo.

"The tax privilege," said Fukatsu, "was more than enough to offset the disadvantage of distributing parts and completed vehicles between São Paulo and Manaus. Additionally, from the standpoint of local-content percentage it meant only a small initial investment. This was very much in keeping with Honda's policy of 'bearing a small child and raising it to be a big grown up.' "

Iida had made up his mind to build a factory at Manaus. Therefore, in order to obtain the approval of the Board of Directors, Fukatsu went back to Tokyo. Later, following an exhaustive feasibility study and approval from the Board of Senior Managing Directors, an application for construction was submitted to the Brazilian government. Although the expected period of Presidential approval was at least a month, the plan was approved in a very short time due to a strong push from Natan and Canpeiro.

"These two believed their dream of developing Manaus would finally come true, thanks to the cooperation of Honda," Fukatsu recalled. "I heard they even went to the trouble of traveling to the Presidential Office in Brasilia on our behalf."

Factory construction began immediately upon receipt of official approval in September 1975.
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