Business increase in Brazil

Rolls-Royce PLC
2 August 2001

                                                                August 2, 2001

                   ROLLS-ROYCE INCREASES BUSINESS IN BRAZIL



Rolls-Royce announced today (August 2, 2001) contracts for helicopter engines
and an industrial gas turbine in Brazil, building on the company's extensive
activities in the country, which cover all its business sectors: civil
aerospace, defence aerospace, marine and energy.

Under a new procurement process launched by the Brazilian Ministry of Defence,
Rolls-Royce will provide additional Gem 42 engines and spare parts worth $10
million for the Brazilian Navy's fleet of Westland Lynx helicopters.

Rolls-Royce has also won a contract for a combined heat and power project in
Brazil with one of Latin America's largest pulp and paper producers. A 31MW
Rolls-Royce gas turbine will provide power and process steam at the expanded
Votorantim Celulose e Papel (VCP) plant at Jacarei, 80km north east of Sao
Paulo.

The announcements were made during a visit to Brazil by Sir Ralph Robins, the
Chairman of Rolls-Royce, who was in a business delegation led by the British
Prime Minister Tony Blair.

Speaking in Rio de Janeiro today, Sir Ralph said: 'Brazil is already a very
important market for Rolls-Royce and we see considerable potential for future
growth here.'

The Gem contract is under a process which allows the Brazilian defence
procurement agency to acquire military equipment under a credit agreement with
Paribas, a major international bank with headquarters in France.

The 14-strong fleet of Gem-powered Lynx helicopters used by the Brazilian Navy
operates from destroyers, corvettes and naval frigates - some also powered by
Rolls-Royce propulsion units. The Super Lynx is a fully marinised helicopter
used in transportation, search and rescue, anti-surface warfare and front-line
operations.

VCP selected the RB211 6761 DLE (Dry Low Emissions) after a study of a 25-year
equipment life cycle found much greater efficiencies in producing steam from
exhaust gas than firing boilers direct with gas. The steam will be used to
generate additional power in a steam turbine and will also be used in the pulp
and paper manufacturing process.

On-site power will also give the plant greater reliability of power supply,
compared with importing electricity from the national grid - increasing the
production efficiency. The plant is due to go into service in mid-2002.

Rolls-Royce already has a £30 million contract with Electricidade de Portugal
(EDP), the national power company of Portugal, to build a combined heat and
power station at the Petrobras Fertiliser factory site at Fafen in the state
of Bahia, Brazil, featuring two RB211 DLE gas turbines.

The first generator set package was delivered to site on schedule. The complex
will be in full production in early 2002 but will meet some of Petrobras's
requirements in 2001 through a staged commissioning programme.

EDP's local Brazilian company Energen will operate the plant, which will
supply power and steam to the Petrobras facility and to other local industrial
users. The project is part of the Brazilian government's 'Thermal Electrical
Programme' - promoting the installation of thermal plant to supplement
hydro-power when water levels are low.

Rolls-Royce is also active in other sectors in Brazil. In June this year,
Rolls-Royce handed its 1000th AE 3007 engine to Brazilian aircraft maker
Embraer. As the exclusive engine on Embraer's 37-50 seat jets, the Rolls-Royce
AE 3007 is one of the company's fastest growing programmes. Firm and option
orders for Embraer twin-engined corporate and regional jets are around 1600.

For further information, please contact

Martin Brodie

Head of Corporate Media Relations

Rolls-Royce plc

Tel [phone]

E-mail: [e-mail]