Foxconn's Brazilian expansion thrust into doubt

Foxconn's plan to open an iPad production line in Brazil appears to be in jeopardy as the company reportedly makes 'crazy' demands for special treatment from the country's government.

Foxconn, one of the world's largest OEMs and the company responsible for the bulk of Apple's iPhone and iPad production, announced plans to move the iPad production to Brazil back in April. At the time, the news was welcomed by the country's officials, who claimed it was a sign of Brazil's economic growth that an Asian giant like Foxconn would consider an expansion to within its borders.

Sadly, the project has been beset by delays: originally due to start production in July, Foxconn pushed the date back to November - a delay which is increasingly looking like it will turn into an outright cancellation.

The news comes as Foxconn is rumoured to have missed out on production orders for Apple's upcoming iPhone 5 and iPad 3 devices due to the negative publicity surrounding a rash of suicides at the company's Chinese manufacturing facilities. While unconfirmed, the rumours claim that rival OEM Pegatron is planning to take over production - which would make Foxconn's Brazilian facility surplus to requirements.

Whether as a result of that rumoured contract loss, or due to the company's problems at home - including a recent fire at its Yantai facility or the aforementioned run of employee suicides - reports indicate that Foxconn is pushing Brazilian officials too far, either in an attempt to trim its bottom line or as a way of extricating itself from the deal altogether.

Anonymous sources from within the Brazilian government have told news agency Reuters that the company is making "crazy demands" for tax breaks and special treatment in return for the opening of the facility. It is also reported that the state development bank BNDES is on the brink of withdrawing funding for the project.

Thus far, however, nobody's willing to go on record as saying the project is dead. At the time of writing, nobody at Foxconn was available to comment on the matter.