Brazil’s Modular Data Centers mulls expansion, new capital

Brazil’s Modular Data Centers, developer and manufacturer of modular and compartmentalized solutions for the datacenter industry, is considering expanding production capacity overseas amid a rise in delivery and demand for projects, VP of business development Marcos Paraíso told BNamericas.

Modular operates in Brazil what it claims to be the largest modular component manufacturing facility in the southern hemisphere, a 50,000m2 complex in Santana do Parnaíba, São Paulo metropolitan region.

The area includes 10 independent production lines, for projects of various sizes and scopes.

Modular’s performance testing area (FAT) ensures that each module meets the highest quality standards before being shipped to customers, while on-demand module storage areas ensure readiness and efficiency.

For the first time since its creation, the company is engaged in talks for the supply of projects outside Latin America, namely in the US, Europe and Middle East.

Modular does not sell directly to large cloud providers but it has built a relationship with these companies by selling modules and components to providers that serve them.

On the back of that, Modular is currently negotiating with four cloud providers in the US and two in Europe, while participating in an RFQ, for example, in Norway.

Modular, said Paraíso, is among the three suppliers shortlisted by a major tech company for a 90MW datacenter project in the Nordic region.

The question now is how to serve these markets, whether by exporting directly from Brazil, installing a plant overseas or partnering with a local player or civil construction group.

“The most reasonable thing from an efficiency and cost standpoint would perhaps be to set up a plant abroad,” said the executive. “But we're still evaluating that.”

Prior to joining Modular, Paraíso has led large operations related to public cloud, hosting, software and hardware in Latin America. He was part of the executive team at IBM for 26 years and was the director responsible for the value creation area at VMware Software Latin America.

Regional demand

Meanwhile in Brazil, demand remains high for domestic and Latin American projects.

To date, Modular has sold over 30MW of equipment capacity for datacenters in Brazil, Chile, Mexico and Colombia.

The pipeline in advanced negotiation amounts to further 80MW, mostly for projects to be developed in Brazil and Chile. Overall, Modular is eyeing 300MW that could potentially result in sales in the next 6-12 months, said Paraíso.

Its largest client is Scala Data Centers, whose CEO, Marcos Peigo, is a member of Modular's board.

Scala is the hyperscale provider with most datacenter projects in terms of capacity in operation in Latin America.

Beyond Scala, Modular has clients of other sizes and segments in datacenters. The company has also sought to diversify its portfolio to include applications for 5G, smart cities and industry 4.0.

Modular's growth should soon require it to raise more resources to cope with expansion and production.