1. Establishment of NIPPONDENSO COMPRESSORES LTDA. (NDBC)

[1] Investigating a joint venture with Springer

As mentioned earlier, NDB suffered from skyrocketing import customs duty hikes, yet the lack of industrial incentives from the Ministry of Development in Brazil, Industry and Foreign Trade was another factor that made it difficult to continue its business operations. The background to this situation included the fact that São Bernardo do Campo, where NDB’s plant was located, was designated as an industrial concentration exclusion zone and was already home to a car A/C industry supported by local capital. As a fully-foreign-owned company, NDB was ineligible for industrial incentives from the Brazilian Ministry of Development, Industry and Foreign Trade. However, the Ministry of Development, Industry and Foreign Trade assumed it could provide incentives to joint venture businesses formed with Brazilian companies.
“We want you to bail out the ailing Springer Admiral.”
It was June 1977 when the Minister of Development, Industry and Foreign Trade in Brazil, approached DENSO with this request.
Based in Porto Alegre, 600 km south of São Paulo, Springer manufactured and sold color TVs, room air conditioners, car A/Cs, refrigerators, and other home appliances. Springer’s room air conditioner technology had been introduced from Admiral Corporation of the US, and the company sold 15,000 car A/Cs annually, making it a leading company with a 50% share of the Brazilian market.
The Brazilian Ministry of Development, Industry and Foreign Trade’s proposal was simple, establish a joint venture company to produce compressors, and supply them to NDB and Springer. Although DENSO jumped on this opportunity and formulated a plan to assemble air conditioners in Manaus, the project was axed in 1979 due to disagreements between the SUFRAMA administrative agency, which operated the free trade zone, and Springer over the ownership ratio.