São Paulo – The "Brazil cost" mines competitiveness of domestic industry, but many companies manage to break with this logic. This is the case with Avanço/Orizio, a company of Italian origin, currently headquartered in São Paulo, which makes machinery for the textile sector. The capital goods and textile sectors are among those that complain most about foreign competition, and with reason, as they both accumulate strong deficits in their trade balances. Orizio, however, has not only solid market in the country, but is also winning space abroad.
“Even when the economy of Brazil was more closed, we never stopped investing in research and development, to continue competing on the international level. But that was not normal in Brazilian industry,” said the international market coordinator at the company, Ricardo Rossi.
According to him, the company started exporting from Brazil in 2005. In 2007, participation of foreign sales in the company’s revenues was 7% whereas it is currently 11%. “Our target is to reach 40%”, he said, at a time in which few Brazilian factories risk betting on growth on the international market.
The differential, according to Rossi, is innovation, like the machine that does not mark clothes, making it possible to produce finer articles; and the other for stripy fabric that stitches in two or three colours, and may be configured to up to six, while those of the competitors have only options for up to four colours. “We have five projects under development at the same time. It is not possible to set up a machine and keep producing it for 10 years, it must have innovation,” he said.
Abroad, when opening a market, Rossi always makes an effort to establish local technical assistance, bringing professionals for training in Brazil, to guarantee good service to clients. According to him, both for development of products and for offering services to clients, it is necessary to “do a little more”.
The company also invested in automation and in greater production. According to Rossi, in 2003, up to 20 machines left the factory each month, now they are 50, and there is capacity for 70. “Our breakeven point is much lower, we don’t even have to sell 50 machines, we can sell less than that,” he said.
Another example is that of the Brazilian subsidiary of L’Oreal, of hair products. According to the company’s market development director, Rodrigo Miranda, investment in innovation is 5% of revenues, more than double the average for the cosmetics sector. To the [L’Oreal] group, among the 82 markets, Brazil is probably the fourth. We invest to adapt to the needs of Brazilian women,” he pointed out.
To the executive, the Brazilian cosmetics market “grows more than any other”. Abihpec estimates that it will be the main market in the world by 2015. “Brazil is a great centre for innovation, thanks to the Brazilian creativity,” he said, adding that the country exports not just new products, but also services developed here, like the “Brazilian hair straightening method”, which does not use formalin. “Innovation is fundamental and has already shown that it is a solution for our country,” said João Carlos Basílio, from Abihpec.
*Translated by Mark Ament
