1. Establishment of NIPPONDENSO COMPRESSORES LTDA. (NDBC)

[2] Establishing a company under the BEFIEX system

Some three months after dissolving the project with Springer, NDB was approached by the Ministry of Development, Industry and Foreign Trade’s Industrial Development Bureau in Brasilia, the capital, with a proposal to set up a compressor production business leveraging BEFIEX.
Struggling with a foreign currency shortage at the time, the Brazilian government established BEFIEX as a new special incentive system to encourage export industries. Moreover, it was designed to provide incentives to any company, even one that was fully foreign-owned, if its business was considered by the government to hold prospects for increasing exports. Despite Ford having been the first company to receive this designation already, Brazil’s economy was unstable and few companies were willing to actively build new plants.
Volkswagen, Fiat, and other companies that had previously been pioneered by NDB also made strong overtures to DENSO about reentering Brazil.
Doing so was also expected to have a favorable effect from the viewpoint of trade between Japan and the US. Following the first oil shock, the popularity of low fuel consumption Japanese cars led Japan and the US down the path of economic friction in the 1980s. However, the trade imbalance between Japan and the US could be mitigated by switching the exporting country from Japan to Brazil.
In autumn of1979, DENSO applied to participate in the BEFIEX system. At the time, DENSO’s investment obligation was 10 million dollars, its export obligation was 30 million dollars over 10 years, its duty-free import allotment for equipment and devices against these obligations was 4 million dollars, and its import duty abatement allotment for parts for assembly was 10 million dollars.

In this way, NIPPONDENSO COMPRESSORES LTDA. (NDBC) was born in the city of São Paulo in April 1980.