Espírito Santo

Espírito Santo is a state with a growing population, a diversified economy, and modern infrastructure. The state's economy is built on industry, commerce, and tourism. It serves as a significant industrial hub, particularly in the production of oil, natural gas, chemicals, and petrochemicals. Additionally, Espírito Santo plays a crucial role in steel production and is a major producer of pulp, paper, and fruits.

It is important to explain that "capixaba" is a term commonly used to refer to people or things associated with the state of Espírito Santo, Brazil. It's both a demonym for the residents of Espírito Santo and an adjective to describe anything related to the state.

    
            HDI:
            0.737 - High
        
            Population:
            3,833,712 (est)
        
            Total Area:
            46,074  km2
        
            Roadways:
            9,583km

State’s highlights:

- Second most industrialized state in Brazil;

- World’s major producer of iron ore and steel;

- Strong agricultural industry, being the second largest national coffee producer;

- Robust port infrastructure, with Tubarão Terminal, the world's largest and most efficient terminal for exporting pellets and iron ore.

Demographics and Geography

Espírito Santo is in the smallest state in the southeastern region of Brazil, with a land area of forty-six square kilometers. The territory of Espírito Santo is divided into 78 municipalities and its capital is the city of Vitória. Espírito Santo borders Rio de Janeiro, Minas Gerais, Bahia and the Atlantic Ocean. It is fully integrated into the national and international markets.

The state population in 2022 was 3,833,712 people. Around 43.5% of the inhabitants live in the fourth largest municipalities located in the state’s metropolitan area: Serra, Vila Velha, Cariacica and Vitória. It presents an enticing demographic landscape for potential investors seeking a vibrant and growing market.

Espírito Santo's population is characterized by its youthful exuberance. According to the 2021 IBGE census, the median age in the state is 32.4 years, making it one of the youngest in Brazil. They also have an equally impressive educational landscape, with 83.2% of the population over 25 years old having completed primary education, while 48.7% have attained higher education.

Economy

Espírito Santo is recognized for its role as a notable exporter, with key products comprising iron ore, cellulose, and coffee. The state's prominence in the iron ore market underscores its significance in the global steel industry. Additionally, the export of cellulose aligns with the production and distribution of wood pulp, a fundamental component in paper manufacturing. The state's agricultural prowess, particularly in coffee production, further solidifies Espírito Santo's economic importance within both regional and national contexts in Brazil. The state is also a prominent player in the oil and gas industry, with significant offshore exploration and production activities. Finally, Espírito Santo is the second most industrialized state in the country, with industry accounting for 38.3% of the state's Gross Domestic Product (GDP), according to 2021 data released by the IBGE.

According to a study published in 2023 by EDP Brazil, the primary sectors driving the state's economy include steelmaking and mining, positioning it as the world's largest exporter of iron ore pellets and a notable steel producer. Additionally, Espírito Santo plays a key role in the oil and gas sector, ranking among Brazil's major producers. The state is a major player in the pulp industry, particularly in the production of bleached eucalyptus pulp, serving both domestic and international markets.

Another noteworthy sector is the production of ornamental rocks, where Espírito Santo stands out due to its substantial reserves of various types and colors of marble and granite. The state is a major national producer of ornamental and cladding stone (RO). According to data from the National Mining Agency (ANM), the state was responsible for 30.86% of the value of Brazilian mineral production in this segment in 2021. in addition to RO, Espírito Santo produces other mineral goods, such as gravel, sand, clay, gravel, mineral water, limestone, among others, and this production is distributed over almost all of its 78 municipalities. The state has become a significant contributor to the furniture industry, holding a prominent position on the national stage. Beyond these focal areas, Espírito Santo is involved in diverse segments, including metalworking, construction, clothing, and food.

In terms of economic performance, Espírito Santo recorded a Gross Domestic Product (GDP) of R$155.4 billion in 2021, accounting for 2.3% of Brazil's GDP for that year. The services sector emerged as the primary contributor to the state's GDP, 71.3% of the total. Following closely was the industry sector, representing 25.3%, and the agriculture sector, contributing 3.4%. Notable agricultural products include coffee, papaya, bananas, tomatoes, and cocoa.

Regarding the oil and gas industry, according to the Yearbook of the Oil and Natural Gas Industry in Espírito Santo 2022, published by the Federation of Industries of the State of Espírito Santo (FINDES), the state has 69 fields in the production phase and 4 fields in the development stage. In addition, the state has 34 exploratory blocks divided into two sedimentary basins: part of the Campos basin and the entire Espírito Santo basin. In the confrontation with the Campos basin, the state has 11 fields and 6 exploratory blocks. In the Espírito Santo basin there are 62 fields, 7 in the offshore part and 55 in the onshore part. Still in this last basin, there are 28 exploratory blocks, 10 in the offshore part and 18 in the onshore part.

In the state, 19 oil companies operate with fields in the production stage or in the production development stage. Among them, 7 foreign companies (CNOOC Petroleum Brasil, ExxonMobil Exploração Brasil, ONGC Campos, QP Brasil, Repsol Exploração Brasil, Seacrest and Shell Brasil Petróleo) and 12 national companies (3R Petroleum, BGM Petróleo e Gás, Capixaba Energia, IBV Brasil, Imetame, IPI, PRio, Petrobras, Petromais, Petrosynergy, Ubuntu Engenharia and Vipetro Petróleo).

The study also projects that between 2023 and 2027 total oil production will have an average annual increase of 10.3%, reaching in 2027 a production of 90.0 million barrels of oil. For natural gas, an average annual increase of 11.9% is projected between 2023 and 2027, reaching a production of 2.43 billion m³ in 2027. The reversal of the downward trend in production is expected in the transition from 2024 to 2025, both for oil and natural gas.

The state has natural gas distribution available in the Metropolitan Region of Vitória, in Aracruz, Anchieta and Cachoeiro de Itapemirim. There are already projects underway for other inland municipalities with an industrial vocation, such as Colatina, Linhares, São Mateus and Sooretama, to also receive natural gas distribution networks.

Coffee continues to be important in the agricultural sector in Espírito Santo, which is the second largest coffee producer in the country and the first for conillon coffee, according to Embrapa. The state also has the largest area planted with this type of coffee: 256,55 thousand hectares.

To enhance its position as a global coffee source, recognized for productivity and the well-being of producer families, Espírito Santo has instituted the Sustainable Coffee Development Program. The Program is structured around the pillars of governance, sustainability, technology, social aspects, and value addition. The aim to position Espírito Santo as one of the main sources of coffee globally, recognized for both productivity and the well-being of producer families. Constructed in collaboration with all stakeholders in the coffee production chain, the program will be implemented by various institutions. A key focus of the program is sustainability, a theme integrated into all its projects. One of the planned initiatives includes a project for mapping the use and control of certifications, with the goal of expanding the availability of certified and traceable coffees. Other actions involve training producers and technicians for the rational use of agrochemicals, increasing the use of bio-inputs, irrigation management, and forest conservation. Additionally, there are goals for implementing low-carbon coffee production practices.

According to the Capixaba Institute for Research, Technical Assistance and Rural Extension, Espírito Santo has an area of 1.46 million hectares of pastureland, most of which is used for beef and dairy farming. Natural pastures accounted for only 0.18% of Espírito Santo's agricultural land, while planted pastures occupy 48.91% of the total. These pastures are home to around 1.94 million head of cattle.

Dairy farming stands out for providing monthly income throughout the year for producers, who supply milk to 90% of the municipalities in Espírito Santo. In 2023, the state produced around 1 million liters of milk a day, which represents an annual turnover of around R$727 million, with around 10,000 dairy farmers. It is the second most common activity on Espírito Santo farms, after coffee production.

To improve and sustain the milk chain in Espírito Santo, the Sustainable Development Program was strategically designed around key pillars such as adding value, production, productivity and field technology, sustainability, human resources on farms and encouraging consumption. The program encompasses 17 projects, from which sustainable practices stands out, with the adoption of ESG practices, socio-environmental adaptation of rural properties, recovery of degraded pastures, and the promotion of integrated systems and minimum nutrition for recovery.

Dairy and beef cattle accounted for 12% of the total gross value of agricultural production in Espírito Santo in 2017, with R$426.7 million per year for dairy cattle and R$677.77 million per year for beef cattle. Another important sector in the state is genetically superior animals suitable for milk and meat production, which drive the livestock market on farms, at fairs, auctions and agricultural exhibitions.

According to the State Competitiveness Ranking 2023, drawn up by the Center for Public Leadership (CLP), the state is the 10th most competitive in the country. Espírito Santo ranks 2nd in infrastructure and fiscal soundness, and 4th in environmental sustainability. As highlights, the state has good indices for the quality of electricity, fiber optic backhaul, fuel costs and the cost of basic sanitation in the Infrastructure pillar. In addition, waste disposal, water loss, transparency of actions to combat deforestation, speed of deforestation and deforestation were indicated as Espírito Santo's strengths in the Environmental Sustainability pillar. Other points in which the state stands out are: scientific research, in Innovation; labor market formality, in Human Capital; access to basic sanitation - water and sewage, in Social Sustainability; fiscal solvency and liquidity index, in Fiscal Solidity.

Likewise, World Bank's publication “Subnational Doing Business in Brazil 2021” shows that the state boasts one of the lowest tax burdens in the country. This advantageous tax environment is complemented by a low payment frequency for most local taxes, making it more convenient and less burdensome for companies operating in the region. Also, In the capital city of Vitória, the local municipality has taken proactive steps to enhance business processes. Notably, the decision to phase out the in-person option for obtaining an operations license reflects a commitment to modernization and efficiency. Instead, the municipality has embraced a fully online system, a move that streamlines procedures and aligns with contemporary digital trends. In addition, the transition to virtual dispute conciliation hearings in April 2020 showcases Espírito Santo's adaptability, particularly during challenging times like the COVID-19 pandemic.

Infrastructure

The state of Espírito Santo gathers one of the largest port complexes in Latin America, featuring highly specialized ports that place the state among the top five in cargo handling in the country. Combined with installed distribution centers, the structure and efficiency of the ports in Espírito Santo enable the handling of a wide variety of cargo types, making foreign trade one of the main economic activities in the state. Additionally, the state has important railways and a significant road network.

Ports

North Capixaba Terminal (Transpetro) – Located in Barra Nova (São Mateus), it handles oil from onshore fields in northern Espírito Santo through ships docked at a single-point mooring buoy.

Portocel – Located in Barra do Riacho (Aracruz), it specializes in cellulose and is one of the most efficient in the world. It also operates with marble and granite blocks, in addition to steel products.

Barra do Riacho Aquatic Terminal – Handles liquefied petroleum gas (LPG) and natural gasoline (C5+), resulting from natural gas processing in Cacimbas.

Tubarão Port Complex - Brings together five terminals with a structure comparable to the best ports in the world:

Tubarão Terminal – Operated by Vale, it is the world's largest and most efficient terminal for exporting pellets and iron ore.

Liquid Bulk Terminal (TGL) – Specialized in handling petroleum derivatives.

Praia Mole Terminal – Specialized in unloading ships with coal (70% of the volume imported by steel mills), coke, and anthracite.

Diverse Products Terminal (TPD) – Has an integrated system for receiving, handling, and storing grains (15% of Brazil's exports) and fertilizers (8% of the imported volume).

Steel Products Terminal (TPS) – Handles, in addition to steel products, pig iron, marble/granite, and vehicles. Operated by the consortium ArcelorMittal Tubarão, Usiminas, and Gerdau Açominas.

Vitória Port Complex - Administered by the Espírito Santo Ports Company (Codesa), handles general cargo through the terminals Cais de Vitória, Capuaba, Peiú, Atalaia, Flexibrás, TVV, and CPVV.

Vila Velha Terminal (TVV) – Container specialized terminal operated by private initiative (Log-In Internacional and Logística). It is an excellent alternative for container import and export operations, standing out as one of the most productive Brazilian terminals in this segment.

Vila Velha Port Company - CPVV – Serves offshore oil exploration and production operations in Espírito Santo.

Ubu Port (Samarco) – Movement of pellets and iron ore, bulk solids, and general cargo. Used for supply boat operations for the oil industry and others.

Railways

The Vitória to Minas Railway is responsible for 40% of the country's railway cargo, even though it represents only 3% of the national railway network. It moves about 115 million tons of iron ore per year, along with 25 million tons of general cargo such as coal, grains, fertilizers, and steel products.

Railway 118 (under construction) – The railway will connect Espírito Santo to Rio de Janeiro. It will have a length of 577.8 km, linking the port complexes of the two states, transporting up to 15 million tons per year.

Roads

BR-101 (Rodovia do Sol)

BR-101 is a major federal highway that runs along the eastern coast of Brazil. In Espírito Santo, it plays a crucial role in connecting the state's northern and southern regions, linking cities such as Vitória, Vila Velha, Guarapari, and others. This road is vital for the transportation of goods, commuters, and tourists.

BR-262

BR-262 is another important federal highway that crosses Espírito Santo, connecting the western and eastern regions of the state. It contributes to the transportation of agricultural products, minerals, and other goods, supporting economic activities in both urban and rural areas.

ES-060 (Rodovia do Café)

This state highway, known as Rodovia do Café, is crucial for the transportation of coffee, one of Espírito Santo's significant agricultural products. It connects important coffee-producing regions and facilitates the movement of agricultural goods to processing facilities and ports.

ES-010 (Rodovia do Sol)

This state highway runs along the coastline and is vital for connecting coastal cities, including Vitória and Vila Velha. It supports tourism and trade activities, contributing to the economic development of the coastal regions.

ES-080 (Rodovia Aracruz / Barra do Riacho)

Connecting the municipality of Aracruz and the Port of Barra do Riacho, this state highway is essential for the transportation of goods to and from the port. It supports the export and import activities related to products like cellulose, steel, and other cargo.

Airports

The state is also home to two international airports, Vitória Airport and Eurico Sales Airport, connecting the state to the rest of the country and even others. These airports serve as vital gateways, connecting the state to domestic and international markets, fostering tourism, and facilitating trade and investment.

They are also undergoing infrastructure improvements and expansions to meet the growing demand for air travel. These investments enhance the airports' efficiency, capacity, and passenger experience, further positioning Espírito Santo as a competitive destination for business and tourism.

Innovation

The state has been actively cultivating an innovation ecosystem, particularly in sectors such as agriculture, forestry, and renewable energy. Research centers, technology parks, and incubators support innovation and entrepreneurship. Espírito Santo is known for its research in sustainable agriculture and forestry practices, aligning with global demand for eco-friendly and responsible production methods.The state boasts a thriving startup scene, with Information Technology and Communication (ITC) leading the way, emphasizing software, artificial intelligence, and cybersecurity. The industrial sector, particularly in oil, natural gas, energy, and mining, and the agribusiness sector, focusing on precision agriculture and biotechnology, also contribute significantly to Espírito Santo's innovation landscape.

According to the Brazilian startup mapping 2022, published by the Brazilian Startup Association (ABStartups), Espírito Santo had over 450 startups in operation in 2022, one of the highest concentrations of startups per state. The state also had 18 accelerators and incubators in operation in 2022, together with the Technology Park of Vitória, working to nurture an entrepreneurial ecosystem.

One important initiative is the SEEDES, which stands for State Startups and Entrepreneurship in Development in Espírito Santo. As the first public startup acceleration program in the state, SEEDES offers a spectrum of benefits to participating startups, including training, mentorship, networking opportunities, and financial resources. Complementing these efforts are Espírito Santo's innovation labs, incubators, accelerators, venture builders, living labs, and innovation hubs, collectively contributing to a dynamic and cohesive innovation ecosystem.

Other notable innovative projects that demonstrate the state's commitment to technological advancements are:

Vitória Smart City: A project that aims to transform Vitória into a smart city using technology to improve urban management, citizen services, and environmental sustainability.

ESCOLA 4.0: A program that aims to prepare Espírito Santo's students for the challenges and opportunities of the digital era by integrating technology into education.

About Brazil

Brazil is a federation composed of 26 states, one federal district, and the 5,570 municipalities. Learn more about what each region can offer:

Brazil's diversified economy includes agriculture, industry, and a wide range of services.[259] The large service sector accounts for about 72.7% of total GDP, followed by the industrial sector (20.7%), while the agriculture sector is by far the smallest, making up 6.6% of total GDP.[260]

More about Brazil

Regions

North Region

With seven states, the region is dominated by the Amazon Rainforest, the largest tropical rainforest in the world. The economy is influenced by agriculture, forestry and mining, with the sustainable management of natural resources at the center of public policies.

Northeast Region

The region presents a lengthy coastline along its nine states. Although agriculture has been a traditional economic driver, renewable energy, petrochemicals and innovation have seen a significant growth in recent years, changing the region's vocation.

Central-West Region

Only three states and a Federal District make it the agricultural heartland of Brazil. It is also home to a diverse array of wildlife and ecosystems, including parts of the Amazon rainforest and the Pantanal, the world's largest tropical wetland area. Brasília, the country's capital, is an important hub in the region.

Southeast Region

Marked by its dynamic urban centers, the region drives Brazil's innovation, commerce and industrialization. Comprising four states, it is home to the country's financial capital, São Paulo, which is also Latin America's economic center and one of the major global cities.

South Region

The region stands out as a well-developed portion of Brazil. It has a strong economic performance supported by a highly productive agriculture and a skilled industry, which reflects in the region's high standard of living, efficient infrastructure and economic stability.

Paraná

Santa Catarina

Rio Grande do Sul