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Mark Trainor, New Zealand Ambassador to Brazil: This is a trillion dollar economy. It’s a huge domestic market. The economy is diversified and has a number of highly sophisticated sectors. It is important that New Zealand companies that want to enter the market in Brazil recognise the challenges that they will have to be prepared to handle in order to succeed.
Jessica Acherboim, Brazil Regional Manager, New Zealand Trade and Enterprise: The six major reasons to invest in Brazil are: first, its strategic location; second, the sustained growth; third, the technology and innovation; fourth, the natural resources available; fifth, investments and profitability; and sixth, governmental priorities…
In general Brazilians are very friendly and warm people compared to Anglo Saxon cultures where people, especially in business, go straight to the point. Here we need to have more informal contact with counterparts. In this way, communication skills are very important – the way Brazilians behave – and represent one of the key ways to be more successful in doing business in Brazil...
NZTE Sao Paulo can help assist and support your company to enter this challenging market with less risks and seeking to optimise your profits. In this work, we also help you, as Brazilians, in identifying the best partner because we really know who is who. In most of the main sectors we have contacts in the private and in the public sector. We are able to provide the information of high quality, directly from the market.
Hamish Wiig, Business Development Manager, Tait Communications: Tait Radio Communications has been active in Latin America in general for well over 25 years and in Brazil for at least that time. Brazil is a market that has actually treated us very well. Within the last basically three years we have taken our business basically from next to nothing to $30 million. It hasn’t been without pain but it has been very rewarding…
One of the key challenges we faced, one of the key critical success factors I should put it, was having a representative here with a very strong reputation – a lot of experience in the marketplace, and a strong company brand. And they had relationships right across the market with the right people at the right level. And without this type of support, there’s just no way we would be in the position we are today. They were critical in helping us to get a foot in the door, getting a reference if you like into the market, and then growing from there …
We have to face some extremely fierce competition from multinationals with a lot more resource than we do. American firms, European firms, Japanese firms. So we have to be nimble, we have to be very flexible. We have to try things. We have to gather all the market intelligence required to make effective decision making. Luckily, that’s exactly what we have gone ahead and done … There’s no way we could leave our business alone to our dealers to manage on their own. We have to be alongside them. We have to show support to them.
We have to show a long term commitment to the market and only through having a presence here, being able to really understand the ins and outs of the buyer purchasing process, understand the competitive environment – either directly or indirectly involved in the tenders we participate in. Everything relevant. We must provide a context to the work we are doing here in Brazil and you can only do that by being here… We’re gathering intelligence from all the different levels – from technical people right up to the senior management, the political level if you like. Now with the assistance of NZTE and the NZ Embassy we are looking to attack different levels, and making sure our message is both consistent and the message that we want to be communicated to the various states of Brazil – that we’re not just targeting Sao Paulo, we are present and have sold in multiple different states in Brazil.
Stephen O’Sullivan, Partner, Mattos Filho: Brazil is very much a land of opportunity – possibly so much so that that can be part of the problem, or part of the challenge of doing business in Brazil. Because in certain sectors, the share wealth of opportunity can hinder focus on a particular opportunity. It’s the too many trees in the forest type of syndrome…
Compared to doing business in New Zealand, Brazil is more complex. The legislation – particularly the tax which has already been commented on – the regulatory regime in general and the bureaucracy tends to be more complex than companies may be used to dealing with in other jurisdictions…. If you are able to approach the market in a careful manner maybe you do have an advantage over companies that aren’t well prepared.
So, in a way the important thing is not to give across a message that Brazil is a terribly complex place to do business. It’s really that you have to know what the challenges are and if you do know what the challenges are then you are reasonably well placed to be able to deal with them and to develop a business in a way which is in compliance with the relevant regulatory structure….
A positive is that NZ companies tend to be very dynamic and entrepreneurial and are able to adapt to situations relatively quickly. Perhaps the negative side of that may be that it is too much of the DIY approach – that when in a market like Brazil, maybe this really is one of those markets where you do need to be well informed, well advised from the outset...
In many situations doing business in Brazil can require you or at least doing business more efficiently in Brazil can mean having to set up a company in Brazil. This is perhaps in many other jurisdictions not so necessary. The thrust of the tax legislation and the regulatory requirements, taken together, seem to direct foreign companies towards setting up something in Brazil simply because that is the more efficient structure …
Enforcement of protection measures of IP rights again is easier through a Brazilian company rather than having to do it as a foreign company. In other words if you do have to take any kind of legal measures in court it is rather more complex as a foreign company rather than as a Brazilian company.
Craig Bell, Leite Verde: Brazil is a very very wealthy country, with a lot of people… I would describe it as New Zealand thirty years ago but on a continental scale. So as New Zealand emerged in the 70s from inflation, and we had the freeing up of the economy, Brazil is more or less going through the same process. It’s just that it’s about 30 times more the scope to do things in Brazil than there was in New Zealand at the time. So, there are wonderful opportunities. But it’s also a magnet to a lot of other companies. If you look at the S&P 500, you will find the vast majority of them already have operations on the ground in Brazil…
What New Zealand can bring to the party though I think is some particular competencies – and I’m talking more in the agri-business area here because I am more familiar with that – the production of animal protein and the processing of that protein. As an example, our dairy farm produces forty times more milk per hectare than the average Brazilian dairy farm. So, there is a scope to take a quantum leap in certain areas. And the same thing applies in downstream processing of dairy products or meat products. I think New Zealand has got some competencies in that areas that Brazilians are still playing catch up with.
The most important thing, looking back, what would you have done differently? We have heard a little bit about bureaucracy and that. The flipside of bureaucracy is that you must keep every single receipt. A bank statement is not good enough for the authorities. They need to see the original document and often stamped by the company to prove that it is an original document as well. It is excessive, it’s a pain in the backside, but you just have to do it…
The operations manager of a very large company won’t take a decision unless the CEO signs off on it. And if the CEO happens to be away from Christmas to Carnival, nothing happens. In New Zealand, we tend to delegate authority much much more than a Brazilian company would delegate. It is a factor you’ve got to take into account…
Setting up a dairy farm, as we have done, require a dozen to fifteen different permits from state bodies that might be 1000 kilometres away and you just have to drive there and sit in the queue and get it done. Which means you have got to have good language skills, you’ve got to have good people. You’ve got to be tapped into the networks and you’ve got to really manage that process quite well. So be prepared to put a lot more resources into the compliance/permits part of your business.
Stephen O’Sullivan: Brazil embraces technology very, very quickly so that the growth in the access to the internet and so on is fairly exponential … I think there is an openness to new technology and the internet in particular.
David Milburn, International Sales Manager, Fisher & Paykel Healthcare: We’ve been working in Brazil for probably twenty years now – but with limited success until very recently. And that’s because I suspect primarily the language issue and being able to burrow in to the market intelligence … until we opened our office in Sao Paulo (we have just two people there, but nonetheless, they’re local, they’re Brazilians) … our ability to truly understand what was happening, for example, at hospital level, at levels of clinical research, funding, and negotiations with our visas, all of those things were dramatically improved as soon as we had people on board in Sao Paulo. And that’s enabled us to grown our business in the past four years considerably.
Stephen O’Sullivan: Brazil embraces technology very, very quickly so that the growth in the access to the internet and so on is fairly exponential … I think there is an openness to new technology and the internet in particular.
David Milburn, International Sales Manager, Fisher & Paykel Healthcare: We’ve been working in Brazil for probably twenty years now – but with limited success until very recently. And that’s because I suspect primarily the language issue and being able to burrow in to the market intelligence … until we opened our office in Sao Paulo (we have just two people there, but nonetheless, they’re local, they’re Brazilians) … our ability to truly understand what was happening, for example, at hospital level, at levels of clinical research, funding, and negotiations with our visas, all of those things were dramatically improved as soon as we had people on board in Sao Paulo. And that’s enabled us to grown our business in the past four years considerably.
Mark Trainor: The opportunity in Brazil to transfer the competencies that New Zealand has, in the area of animal proteins and meat processing areas and more widely into another country that is a southern hemisphere country which has enormous productive capacities, and importantly also, unlike Australia, has a very large proportion of the world’s fresh water reserves – something like 14 percent of the world’s fresh water reserves – and a huge country, with enormous amounts of currently unused or underused land. Putting all those things together, I think it does make quite a compelling proposition or opportunity for investment …
This is one of a number of events that government agencies are putting on to increase the level of understanding in New Zealand of the opportunities here in Brazil and the way in which we, in New Zealand, need to approach the Brazilian market in a careful, well prepared way, in a way that makes it possible for our companies to extract or secure valuable gains out of this market.
NB. The views expressed these video clips are those of the individuals quoted, not the Ministry of Foreign Affairs and Trade.
