Brazil's Positivo bets on booming computer sales

SAO PAULO Wed May 23, 2007 4:00pm EDT

SAO PAULO (Reuters) - Positivo Informatica (POSI3.SA), Brazil's leading personal computer manufacturer, is betting that computer sales in Latin America's largest country will grow rapidly over the next four years.

With the economy gaining steam and real wages on the rise, personal computers are no longer a distant dream for many low- and middle-income Brazilians, Positivo Chief Executive Helio Rotenberg said.

"Between 2005 and 2006, 8 million people went from poor to low-middle class. That's an astonishing amount," Rotenberg said in an interview. "And the middle class has more money and more credit. This is an explosive formula."

Personal computer sales in Brazil jumped 46 percent last year, surpassing the 8 million mark, according to industry data. Positivo expects continued growth, estimating overall PC sales will grow 35.5 percent a year through 2010.

With the market booming, Positivo plans to expand its product line to include multifunctional printers and educational laptops. To that end, the company is more than doubling the size of its only factory, located in the southern state of Parana.

"Our focus will be on retail," Rotenberg said, adding that the new products would "complement our line of computers."

Founded in 1989, Positivo did not begin targeting the retail market until 2004. Less than a year later it became the largest PC maker in Brazil, surpassing big U.S. producers like Dell Inc. DELL.O and Hewlett-Packard Co. (HPQ.N).

Positivo has also emerged as an investor favorite on the Sao Paulo Stock Exchange. Since selling shares to the public last December, its stock price has risen more than 50 percent.

With sales up almost 54 percent so far this year, Positivo is now setting its sights on foreign markets, starting with neighboring Argentina.

"We're still in preliminary studies ... but we have to look at all opportunities all the time," Rotenberg said. He added that the studies should be concluded in four to five months.

Brazil's PC market growth has led to a proliferation of manufacturers. More than 60 companies now make them in Brazil, but over time Positivo expects the market to consolidate.

"The market remains strong and it keeps attracting more players," Rotenberg said. "But over the years, we're going to see a consolidation process with some companies closing down and some mergers."

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