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December 9, 2011

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What makes Mario run? Ethanol

MARIO Garnero, known as the father of Brazil's ethanol car, is still driven to bring clean-energy vehicles to drivers around the world.

Garnero, revved up at 74, was recently in China, the Kingdom of Cars, which needs cheap, nongrain ethanol. He said he has business in China and hopes for joint ventures with Chinese companies in Brazil. He said he made contacts in Beijing and Shenzhen in Guangdong Province on a recent trip and is analyzing possible cooperation. He did not elaborate.

China traditionally uses corn and other grain to make costly ethanol to replace gasolinek which is costly and takes land out of food production. Brazil uses sugarcane, which is cheap and efficiently made using stalks and waste to fuel production. Brazil is the world's largest exporter of biofuel and the second-largest producer; China has lowered tariffs on ethanol imports.

Garnero is chairman of the Brasilinvest Group, Brazil's first private development agency, which he founded 36 years ago in 1975. Brasilinvest, which has 80 associates in 16 countries, is involved in financial, telecommunications, infrastructure, real estate, environment, health agricultural and other sectors in Brazil and abroad.

The innovator and entrepreneur also promotes greater international cooperation with his worldwide social network that includes major political, business and other figures.

Garnero brought mobile phone technology to Brazil in the early 1990s when he was president of NEC do Brazil - at that time people were lugging around big phones.

He is best known for bringing auto makers and the Brazilian government together during the petroleum crisis in 1979 and developing sugarcane-powered ethanol cars to replace millions of gasoline vehicles.

"The question then was not that it was too risky to go from the standard production of gas-powered cars to ethanol ones," Garnero said in an interview with Shanghai Daily. "The major risk was not using ethanol to save the industry.

"It was much more a question of transforming the crisis into an opportunity."

Now the father of the ethanol car in Brazil says he is thinking about bringing his most widely known product to China, the world's largest auto market where more than 18 million cars were sold in 2010.

Speaking of his lifetime achievements, he said, "Nothing is impossible as long as you love what you are doing ... Passions changes whole horizons."

Early days

Born in 1937, Garnero received a law degree from the Pontifical Catholic University of Sao Paulo, but didn't pursue law. He studied business, finance and industrial relations in the United States and Germany.

"I knew for sure that I would never be a lawyer since I was obviously more interested in politics and business," Garnero said.

"There's no sense doing something you don't like," he said. "If you don't like what you are doing, get away and start a new life because you have to consider your work as your hobby."

Time proved him right in choosing business over law.

In 1975, he established Brasilinvest, initially a classic merchant bank, which has a net worth today of US$700 million. It has structured and completed projects and investment plans in Brazil worth more than US$6 billion.

"Industries may be different from each other," Garnero said, "but the philosophy behind each is the same and can be applied to each one of them."

According to Garnero, "what we shall do in the auto industry is to make a good car, satisfy customers and make financially sound results."

The year of 1979 was a watershed for Garnero and the Brazilian economy. A nationwide petroleum crisis forced the government to consider gasoline rationing, which would mean disaster for auto sales.

Garnero, who was president of Brazil's National Association of Automotive Manufacturers, believed ethanol-powered autos were the only solution for the worsening fuel crisis and took the first step. He mobilized the private sector. At the time he was director of industrial relations for Volkeswagen in Brazil.

Willingness to take risks is crucial to find innovation and opportunity, even when one is at a difficult crossroads, Garnero said.

First, Garnero persuaded the presidents of the four major auto makers in Brazil, including Ford, Volkswagen, General Motors and Fiat, to set a goal of making one million ethanol cars - the total vehicle production in the preceding year. He then produced a petition by more than 800 major business leaders, urging production of an ethanol-powered car. Finally, he persuaded President General Joao Batista Figueired to launch the "One Million Ethanol Cars" operation. This reassured ethanol and sugarcane producers as well as the automotive industry.

In four months the transformation began. Three years later 90 percent of Brazil's new automobiles were fueled by ethanol, significantly cheaper than gasoline.

Today Brazil is a leader in developing and using ethanol. Sugarcane is widely considered an ideal and cheap alternative fuel, but other countries may not have Brazil's climatic advantages, vast area and sophisticated cane and biofuel industries.

China emphasizes alternative fuels for transport and produces a lot of grain ethanol but this takes land out of food production and raises prices. The government now encourages use of agricultural waste to make ethanol and has lowered import prices.

Garnero has had China contacts for many years. In 1981, he opened the first Brazilian business representation office in Beijing.

Although he's at an age when he could step back and slow down, Garnero said enthusiasm drives him. As for his financial success, he observed, "When you create wealth, you can see people enjoy it and their faces show beauty. Beauty represents the wealth and money you make."


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