Early years There are reports that in 1762, the
Casa do Trem was established in
Rio de Janeiro with the purpose of repairing and maintaining weapons and equipment for existing troops at the time. This date coincides with the creation of the Rio de Janeiro War Arsenal. Officially, the defense industry in Brazil emerged in 1808 with the establishment of the
Fábrica de Pólvora da Lagoa Rodrigo de Freitas (Gunpowder Factory of Lagoa Rodrigo de Freitas) in Rio de Janeiro by King
John VI. Since it was government-owned, the gunpowder factory was part of the Ministry of the Army for many years until it was finally incorporated into the newly created IMBEL in 1975. In the postwar period, many firearms manufacturers emerged, including the
Indústria Nacional de Armas (INA), founded in 1949 by a military officer who reportedly received the rights to manufacture the Danish
Madsen M1946 submachine gun. This was after he participated in a Brazilian Army technical mission and helped Denmark prevent certain weapon designs from falling into Nazi hands. INA, along with CBC and the Fábrica de Itajubá (a weapons factory belonging to the Ministry of the Army, later incorporated into IMBEL in 1975), became the primary manufacturers and suppliers of firearms for military and
police forces during the 1950s and 1960s. A crucial technological issue was the adoption of motorized and mechanized vehicles. Arguments in favor of maintaining partial reliance on horses included the high cost of replacement, the insufficient
transportation network, the need to import fuel, limited industrialization, and the absence of a domestic defense industry capable of producing such vehicles—though importation remained an option. An agreement with the United States allowed for some degree of motor-mechanization, but by the 1960s, its level was still low. Infantry units largely moved on foot, and a significant portion of the
cavalry remained horse-drawn.
Apogee (1960s and 80s) Concerns about dependence on foreign arms imports had already emerged during
João Goulart’s presidency and continued among military leaders and geopolitical strategists after the
1964 coup. There was a strong interest in modernizing the
Armed Forces to match the level of weaponry and equipment used by global powers, reducing reliance on external suppliers, gaining geopolitical influence in the Third World, and showcasing the competence of the ruling elite. As a result, various companies began adapting and developing entirely domestic projects, often based on successful foreign designs. A key factor in this success was Brazil’s general indifference to the political alignment of its customers, many of whom were under sanctions from the United States or multilateral organizations. However, all sales had to go through the
Ministry of Foreign Affairs, which at times intervened—for instance, blocking the shipment of armored vehicles to El Salvador and Honduras, fearing it would escalate conflicts. There were no restrictions on the use of exported products, leading to situations like Libya purchasing equipment and transferring it to Iran, which drew U.S. protests. A 1991
U.S. Congressional report noted that the
Departments of State and
Commerce had restricted technology transfers to Brazil’s defense sector due to concerns about proliferation. The Middle East accounted for 48.3% of Brazil’s arms sales between 1982 and 1986, with Iraq alone representing 38.6%. This surge was driven by the
Iran-Iraq War, which created a boom in Brazilian defense exports. North Africa was also a major buyer, while in Latin America, key clients included Chile and Colombia. The international market was favorable to Brazilian arms exports. The United States, the Soviet Union, and the United Kingdom were losing ground to other powers such as France, Italy, and Germany, while more advanced developing nations were also entering the market. Technology transfer was widespread. The
1973 oil crisis increased arms purchases in the Middle East and led oil-importing countries to export weapons as a way to earn foreign currency. Brazil took advantage of this through
countertrade, paying for its oil imports with arms exports. By 1986, this trade model covered 65% of Brazil’s oil imports. Former colonies, often overlooked by traditional suppliers, sought alternatives beyond their former colonial powers. Meanwhile, the heightened tensions of the
Cold War from 1979 to 1985 further stimulated arms demand, as the United States restricted sales to many non-aligned countries. Thus, the defense sector reached its peak between 1980 and 1992, managing each year—except 1981—to be among the world's top 20 arms exporters. In 1985, Brazil achieved its highest position, ranking 10th globally and accounting for approximately 1% of global arms sales that year. A conservative analysis from 2001, skeptical of the real size of the industry and accusing both the industry and the press of exaggerating its importance, cites earlier studies with the following conclusions: employment reached 39,000 workers in 1986 (representing 0.4% of industrial employment and 0.06% of the overall economy) and did not exceed 50,000 at its peak.; its share of GDP never exceeded 0.2%, while its contribution to industrial production peaked at 0.9%, resulting in a very limited overall economic impact; export value peaked at US$570 million in 1987, averaging US$186 million annually between 1975 and 1988, and it is uncertain whether the sector provided a positive net balance of trade. Other estimates for arms exports during the 1980s vary significantly, ranging from US$200 million to US$1 billion annually, or as high as US$2 billion at the 1985–1986 peak.
Companies Armored vehicles In the armored vehicle sector, Engesa was the dominant company, with smaller contributions from
Bernardini, Biselli
, Novatração
, Gurgel, and Motopeças. The broader land vehicle sector was more extensive. From the 1960s and 1970s onward, nearly the entire fleet of non-armored vehicles used by the Brazilian Army was supplied by domestic manufacturers. This included buses, vans, general transport pickups, ambulances, and various types of trucks, such as cargo, tanker, workshop, and all-terrain trucks. Key manufacturers included
Willys (e.g., Rural),
Chevrolet (e.g., Veraneio), and
Volkswagen, while Engesa specialized in adapting and militarizing many of these trucks. At the same time, the need for motorization and mechanization had become undeniable, and previous counterarguments were no longer valid. By this period,
Petrobras was supplying fuel, the road network and industrial base were sufficiently developed, and GDP had grown significantly. As a result, infantry brigades and battalions became motorized, cavalry units were mechanized, and the number of armored units increased. The supply of mechanized and armored formations required a three-stage project by the army in São Paulo. At first, national engines and mechanical components were adapted to imported vehicles in the mid-1960s, successfully modernizing the
M8 Greyhound reconnaissance vehicles. Then, national wheeled armored vehicles were developed, the
EE-9 Cascavel and
EE-11 Urutu by Engesa, national and international successes. Between 1,352 and 1,758 Cascavels and between 420 and 888 Urutus were sold. Finally, the development of tracked armored vehicles began parallel to the previous phases with the modernization of the
M2 Half-track and
M3 Stuart, with the main participation of Biselli and Bernardini. The
M41 Walker Bulldog was also modernized. This stage culminated in the 1980s with the development of two main battle tanks, the
MB-3 Tamoyo by Bernardini and the
EE-T1 Osório by Engesa, which, however, did not find a buyer. == Notes ==