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Embraer to build 2 jet components plants in Portugal

LISBON - Brazil's Embraer, the world's third-biggest commercial jet maker, said on Saturday it would invest 148 million euros in two new plants in Portugal -- its first industrial units in Europe that will make wings and tailpieces for exports.

The two plants will be based in Evora in the south of the country. One, which will cost 100 million euros, will build large metallic parts for aircraft, like wings, while the other will work with composite materials for tailpiecess.

The investment plan spans the next six years, Embraer said in a statemenet.

The construction of the wings unit will start this year and it should start producing in 2011, and the second plant would become operational in 2012, Embraer said. Portugal's Economy Minister Manuel Pinho, said earlier production could start as early as the end of next year, but he later corrected himself.

The deal between Embraer and Portugal is the result of a cooperation agreement signed in 2006. Embraer, which is one of Brazil's top exporters, in its turn imports many components from other countries, but those are rarely made at its own installations.

"These new centres of excellence are part of Embraer's industrial expansion ... Europe represents one of the most important markets for Embraer," said the copmany's chief executive officer, Frederico Fleury Curado.

Asked whether Embraer was considering building complete aircraft in Portugal, Fleury Curado said it the company had no such plans at the moment, but it was "possible" in the future if Embraer sees scale gains in local production.

Brazilian President Luiz Inacio Lula da Silva, present at the signature ceremony, praised Embraer's expansion as an important sign of Brazil's economic development.

"The moment Brazil is living today is highly unique in the history of the country. Brazil is forging ahead on the road of development and there is no turning back. The combination of economic stability with domestic market growth is very strong," Lula said.

The expansion to Portugal by a successful, technologically-advanced Brazilian company, which will create hundreds of jobs here amid an economic slowdown, is also symbolically important for Latin America's largest country, as it was once Portugal' colony.