São Paulo – Bright prints in the beach products made by Mali, from Rio de Janeiro, have been successful among Lebanese women for the last eight years. It was at that time that businesswoman Ana Moretti started her sales to Lebanon and the national style of bikinis and bathing suits produced in Rio de Janeiro pleased Arab bathers very much. “They prefer tropical prints, with the face of Brazil,” she said.
The brand from Rio, which has 52 employees, is an example of how micro and small companies from Brazil are exceeding barriers like distance, language and cultural differences to take their products to the countries of the Middle East.
Without modification to the clothes, which include bikinis, bathing suits and wraps, she won the Lebanese selling the same products she sells on the domestic market. “They (importers) buy the Brazilian models. They buy few of the large sizes,” she said.
To Moretti, “it is well worth investing in the Arab market”. “The product is well accepted. Our modelling is pleasing and the prints are even more,” she said. We produce 10,000 to 12,000 items a month, Mali sends 5% of its clothes to Lebanon, as well as making some sales to the United Arab Emirates.
The Mali case shows a setting with much space for growth in Brazil, that of micro and small companies whose exports go beyond Latin America, crossing the ocean and reaching the Arab nations.
Recent figures made available by the Ministry of Development, Industry and Foreign Trade show that in 2011, exports by micro and small companies to the Middle East totalled US$ 35.3 million, or 1.7% of the total sold on the foreign market by these companies. In the total obtained by Brazil with exports to the region, which was US$ 12.2 billion that year, small companies participated with just 0.28%.
“The greatest challenge continues being the cultural barrier and the strength of the domestic market. Due to a great domestic consumer market and to the lack of a foreign language, generally English, entrepreneurs do not have sales to other countries on their radars, and more so to countries with such different cultures,” explained Paulo Alvim, Market Access and Financial Service manager at the Brazilian Micro and Small Business Support Service (Sebrae). “The consequence is lack of knowledge of the market and lack of adequate preparation for export,” he said.
Among the main products exported by Brazilian micro and small companies are items like shoes, garments and precious stones. “As the scale is not great – small businesses rarely export commodities -, the micro and small companies that are successful tend to be those that aim to produce different products,” pointed out Alvim.
To the Sebrae manager, the cultural particularities of the Arab market make greater study of the region necessary by micro and small companies. “The difficulty to access this market is connected to the consumer habits, language, phytosanitary demands, religion, geographic distance and culture. Such aspects require a little more study of this market by businessmen so that they may have the knowledge necessary to adapt their products, productive process and management,” he said.
Alvim also pointed out that the lack of capital to finance initial investment is also a barrier to small-scale exporters interested in selling in the Middle East. “It is a strategy for trade in the long term. Export may take up to 24 months to come true,” he said.
Despite the several factors to be analysed by entrepreneurs, the Sebrae manager points out advantages of going so far to sell production. “Despite the challenges pointed out, it is one more opportunity businessmen have for promotion of their product on the international market, thus having greater competitiveness through diversification of their client portfolio,” he finished off.
They also got there
Today, according to Alvim, there are 11,600 Brazilian micro and small companies selling on the foreign market. These companies represent most of the exporters of Brazil, but their export revenues total just 0.8% of total domestic exports. However, participation of micro and small companies in all Brazilian exporter companies is over 60%.
With 50 employees, Phama Nectar, a producer of bee products, is another example of a successful company in the Middle East. Exporting to Oman for six years, it is now going to make its client in the region a representative and hopes to expand its presence in the Arab world. “Our expectation is for operation to be local, in countries like the United Arab Emirates, Saudi Arabia, Egypt and the entire Middle East,” explained José Alexandre de Abreu, the company director.
The executive explains that last year he participated in a trade mission to Saudi Arabia and to the United Arab Emirates, where he learnt the potential of the local market for his products. “We identified honey brands with much lower quality than what we produce here,” said the executive. After that, the company decided to release a “premium honey”, focussed on the Muslim countries. “It is very pure honey, just like it comes out of the hive. It does not undergo any process,” said Abreu. Pharma Nectar produces 60 tonnes of honey and one tonne of propolis a month.
Currently, the countries in Latin America are the main destination for exports of micro and small Brazilian companies. “Exports to these countries may be justified by the geographic and cultural proximity. There is also the ease acquired through trade agreements made by Brazil with these countries, which reduces trade barriers for access to these nations,” explained the Sebrae manager.
It is worth recalling, however, that the government of Brazil has been working to simplify company access to more distant markets, with steps like the trade agreements signed between the Mercosur and countries like Egypt and Palestine.
Company Goldesign, from Minas Gerais, however, started making use of the Arab market’s potential longer ago, seven years back, and already exports its jewellery to the Middle East. Currently, they may be seen in shop windows in the United Arab Emirates, Saudi Arabia and Bahrain. Of the company’s total production, 30% goes to the foreign market, with most being shipped to the Arab nations. “The Arabs like Brazilian stone very much. They are enchanted by blue topaz, aquamarines, and tourmalines,” said Ana Márcia de Albuquerque, design director at the company, which has 30 employees. According to her, the Arabs prefer lighter stones, except for white.
To Albuquerque, the Arab market is “very demanding”. “Arabs are used to what is best. They want quality, exclusiveness. To supply the region you must be well prepared,” she said. The director believes that for success of exports in the region there is no difference if the company is large or small. “The size of the company does not matter, what matters is quality,” she finished off.
*Translated by Mark Ament
