São Paulo – The even further appreciated dollar was not enough to spur Brazilian footwear exports. The industry is likely to post around US$ 1 billion in revenues from foreign sales this year, as against US$ 1.3 billion in 2011. The announcement was made by the president of the Brazilian Association of Shoe Manufacturers (Abicalçados) at the 44th International Shoes and Accessories Fashion Fair (Francal), which kicked off this Tuesday (26th) in São Paulo. Still, the exhibiting businessmen are enthusiastic about the foreign market.
From January to May, exports reached US$ 444 million, down 20% compared with the same period of last year. Should the Abicalçados forecast prove true, then the overall result for 2012 will see a decline similar to the one seen thus far. “That is provided that nothing changes,” said Cardoso, stressing that in order for sales to be at around US$ 1 billion, the dollar must remain high. He recalls that from 2004 to 2008, exports remained in between US$ 1.8 billion and US$ 1.9 billion. In 2009 and 2010, exports reached US$ 1.3 billion and US$ 1.4 billion, respectively, according to Abicalçados figures.
In order for there to be a true resumption of exports, says the Abicalçados president, the federal government needs to maintain the dollar’s recovery, along with other measures, such as exempting the processing industry from the PIS/Cofins social integration and contribution taxes, which is being considered. Cardoso believes the Brazilian economy should grow by 4% in the second half this year, but claims that in the past, it has been ascertained that the dollar needs to be higher than 2.60 reals in order for exports to be competitive. This year, the dollar reached 1.69 real in February, but as of this Tuesday it stood at 2.07 real.
Despite the somewhat pessimistic forecasts, the Abicalçados president claims that enterprises have maintained their export frameworks. Some are actually optimistic regarding foreign sales, and noticed, on Francal’s opening day, that importers are buying. Some of them, such as Abdul Al Garawi, a top executive with the Saudi-based Al Garawi Group, claim that they’re not in Brazil seeking pricing, but rather quality and design. He is attending Francal as a buyer.
The fair is a major sales point for the spring-summer collection, including exports, and thus it acts as a barometer for how the second half will be for the industry.
At company Werner’s booth at Francal, for instance, this Tuesday afternoon, 70% of buyers were importers, according to company director Werner Júnior. He claims Werner exports 30% to 35% and the rate might be higher than that this year. According to Júnior, the company had trouble exporting its last three collections, but now that the dollar is in the 2-real range, the situation has improved. He noticed the good phase while attending Expo Riva Shuh, last week in Italy, where the company exhibited. There, the company was contacted by importers from Qatar, the United Arab Emirates and Kuwait.
Werner makes approximately 500,000 pairs of shoes per year and exports to 45 countries, including Kuwait and the Emirates. However, the company has no regular clients in the Arab world, although it sells all of its collections to the region. Sales to Arab countries account to around 1% of total exports, according to Júnior. The company has been on the market for 43 years and manufactures its women’s shoes in Três Coroas, in the state of Rio Grande do Sul.
Ya Young Attitude is another Brazilian company participating in Francal that has good export expectations. The small-sized company has premiered its first shoe collection at the fair and is negotiating with buyers from Angola. The shoes are young and comfortable, all of them very colourful, bright, and creatively designed, featuring unusual prints. Based in the Nova Lima, in the Greater Metropolitan Area of Belo Horizonte, in the state of Minas Gerais, the company had been manufacturing shoes via an outsourcing regime for four years, and now it has decided to launch its own brand.
“I want to export,” says Dayse Soares, a partner alongside Iaia Resende. She believes the current dollar-real exchange rate allows sales to foreign countries. But she is looking for the right markets for her brand.
Vilhena Carvalho, a shoe company based in Bahia, is also in attendance at Francal, a fair through which it has exported in the past. “We have sold to Tokyo,” says the owner of the namesake brand. The sale to the Asians took place in 2010. Ever since, the small company hasn’t been able to place its shoes on the international market, although it has been in talks with Turkish importers. Carvalho says the dollar exchange rate has made it hard to export lately, but now she wants to export again. “To coastal regions,” says the businesswoman, who mentions Dubai among her possible targets.
The company makes open shoes, such as sandals, especially low-heeled, with lots of brilliance, stones, and chains. The products command attention at the booth.
*Translated by Gabriel Pomerancblum
