At Sugarloaf Mountain

Siemens launches in Brazil

Siemens opens its own regional company in Rio de Janeiro in 1905. Its establishment marks a temporary pinnacle in the history of the German electrical engineering group in Brazil, which dates far back into the 19th century. Siemens is the first major company in the industry to set up permanently in the South American country. 

Favorable investment climate – expansion of the communications infrastructure

Siemens has already been active in Brazil for decades when it founds a regional company of its own on November 6, 1905 in Rio de Janeiro, what was then the country's capital. In the early 1860s, the London office – then responsible for overseas markets – was already supplying telegraph cables to the South American country. In 1867, Siemens Brothers build Brazil’s first long telegraph line, connecting the residence of the monarch in Rio de Janeiro with the province of Rio Grande do Sul. Five years later, the firm begins laying the first submarine cable from the Brazilian capital to Montevideo in Uruguay – it was around 2,500 kilometers long and went into operation in 1875. In spite of these major orders, the German electrical engineering industry remains only sporadically active in South America for some time. 

 

It is not until the 1890s that low-voltage business picks up again. This is partly because the transition from the monarchy to a republic in the year 1889 had a positive effect on the investment climate and led to a less centralized economy.

 

In 1896, Siemens is once again involved in a large telegraph project: laying a submarine cable around 2,000 kilometers long through sections of the River Amazon. It is intended to connect remote regions of the huge country with the telegraph network already in place and thus help expedite the export of rubber. 

The main beneficiaries of the Brazilian government’s efforts to modernize the country were the cities. In 1897, Siemens & Halske (S&H) won the contract to construct Brazil’s first public telephone exchange. In 1898, the Brasilianische Elektrizitätsgesellschaft (BEG) was founded with headquarters in Berlin to act as the financing company for this project. The telephone office was commissioned in 1899 and expanded to just under 2,000 lines by 1904.

Power engineering orders ensue – founding of a sales office in Rio de Janeiro

In the 1890s, Siemens & Halske receives its first orders to supply technical equipment to overseas power plants. In 1894, the company is commissioned to build Brazil’s first steam power plant in Belém. As South America grows in importance as a market for power engineering, the German electrical engineering company opens a “Technical Bureau” only a few months later in Rio de Janeiro. Prior to that, various commercial agents represented Siemens’ interests locally.

 

The sales office operates under the name of “Siemens & Halske, Berlin, Representação Geral para América do Sul.” Its employees are instructed to look out for sales opportunities not only in Brazil, but also all over South America and clarify the specific conditions of an order to the extent that the individual projects could be processed in Berlin without delay or the need for further inquiries.

 

The decision to establish a permanent presence in Brazil pays off. In 1896/1897, Siemens & Halske build Brazil’s first electric tram system in Salvador. This replaces the mule-drawn tramway that had been in operation for almost 20 years and connected the suburbs on a peninsula with the center of town.

 

Between 1899 and 1905, Siemens electrified a further tram line in a suburb of Rio de Janeiro with the participation of the Brasilianische Elektrizitätsgesellschaft. These lines, in combination with the six power plants that the company supplied to Brazil until the beginning of the 20th century, represented an important contribution by Siemens to the country’s electrification.

Further development of the organization – new legal form, highly promising mergers

The Technical Bureau in Rio functions successfully for five years as the agent of Siemens & Halske in South America. In order to expand the capital base, the company’s management in Berlin decides in 1899 to convert the office into a stock corporation under Brazilian law. From 1900, the company thus operates under the name of “Companhia Electrica Brasileira Siemens & Halske” and its employees now concentrate increasingly on high-voltage business.

 

This is followed by numerous further changes, mostly in response to further development of the management and organizational structure of the whole company. This is also the case in 1903, when Siemens & Halske takes over one of its most important competitors in the area of power engineering, the Elektrizitäts-Aktiengesellschaft vorm. Schuckert & Co. (EAG). As a result, the heavy-current departments of Siemens & Halske are merged with those of EAG to form Siemens-Schuckertwerke GmbH (SSW). To ensure effective marketing, the foreign sales organizations of the two parent companies are combined. 

Direct footprint in the country – foundation of a regional company

In 1904, the Brasilianische Siemens-Schuckertwerke Elektrizitätsgesellschaft m.b.H. with headquarters in Berlin is founded to serve the Brazilian electrical market. The former Technical Bureau in Rio de Janeiro was is reorganized and from November 6, 1905, operates under the name of “Companhia Brasileira de Electricdade Siemens-Schuckertwerke.” It is the first Siemens company to exclusively serve the Brazilian market, both in the field of high-voltage and low-voltage business. As a consequence, in 1905 Siemens expands its presence and opens sub-offices throughout the country in cities such as São Paulo, Belo Horizonte, Porto Alegre and Bahia.

 

In the subsequent period, systems business in particular is continuously expanded. By 1907, Siemens has built a further 16 power plants, including a hydroelectric plant in 1904 in Rio Claro in the province of São Paulo, the most industrialized region of the country. In only a few decades, Brazil thus developed from the “difficult terrain” described by Werner von Siemens in a letter to his brother Carl in 1866 to a fruitful market for the company.

 

 

 

Dr. Ewald Blocher

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Further information on this topic

Further reading

  • Siemens in Brazil. 100 Years Shaping the Future, hrsg. v. Siemens Ltda., São Paulo 2005
  • Gerhart Jacob-Wendler: Deutsche Elektroindustrie in Lateinamerika. Siemens und AEG, 1890–1914, Stuttgart 1982 (only available in German)
  • Age of Electricity. Pioneering Achievements in Electrical Engineering. Photographs from the Siemens Historical Institute, Berlin 2014