São Paulo – Honey, cosmetics, footwear, clothing, fruit, and technology are all products manufactured by micro and small enterprises in the state of São Paulo. And these are also products that leave these companies‘ plants each month to travel the world. The state accounts for 37.3% of exports by Brazilian micro and small businesses, according to data supplied by the Brazilian Micro and Small Business Support Service (Sebrae) of the state, and is the region of Brazil in which companies in this segment are the strongest when it comes to the international market.
Micro and small companies in the state export the highest value in the country, according to the director superintendent of Sebrae-SP, Ricardo Tortorella. "Due to easy access to means of communication and transport, small enterprises (in the state of São Paulo) are becoming more and more integrated with foreign companies and the foreign market, and this exchange has made our businessmen more open to internationalization issues ," said Tortorella.
According to the general manager of Business at the Brazilian Export and Investment Promotion Agency (Apex), Sérgio Costa, the state of São Paulo answers to 27.8% of total Brazilian exports, which attests to the strength of the companies on the international market. "São Paulo is a strong exporter of finished products," he claimed.
He highlighted processed foods, auto parts, vehicles, medical and dental equipment, furniture, textiles, assorted machinery and equipment, and aircraft parts as products sold by small businesses. "In addition to having a wide variety of products, São Paulo has companies capable of competing on the international market with high value-added products," said Costa.
The executive also claimed that the state is a strong exporter of services, and is home to design and advertisement firms with offices abroad. "São Paulo is adopting a very aggressive stance, and is home to professional exporters," he said. One of the reasons for that, according to him, is that the state offers strong support for small businessmen to obtain training, provided by technological research institutes, technology centres, and laboratories that aid in product development.
According to Tortorella, the number of exporting small businesses has dropped recently, mostly due to the appreciation of the Brazilian currency (real). The main obstacles faced on the foreign market, according to him, are low production capacity; products that do not meet the quality standards required by many markets; lack of awareness of habits, regulations and laws of other countries; lack of logistics and proper packages; scarcity of resources for attending international events; and lack of good product catalogues.
Limited financing resources are another obstacle preventing small companies to reach farther markets. Because of the nearness of Latin American countries, the region accounts for 40% of exports by small businesses. Costa explains that on the other hand, São Paulo is the leading aerial hub in Brazil, and this makes it easier for these businesses to export.
In spite of the obstacles, Tortorella claims that small businesses are adapting themselves to the appreciated real, by selling products to market niches in which consumers are less price-sensitive, want differentiated products, and do not bother paying a little more for that.
Growing and exporting
São Paulo-based company Blue Macaw Flora, which manufactures natural ingredients derived from exotic fruits for foods, cosmetics and healthcare, is an example of a small business that is doing its homework in order to conquer the foreign market.
Founded in 2007 by two partners, the company currently has four direct employees, and 20 other outsourced ones. "The first year was basically dedicated to establishing the company, doing market research, finding suppliers, prospecting potential clients, adapting products, creating our brand, elaborating our Website and developing technical and promotional material," said company partner Ana Tovasi.
According to her, the company was established to supply the foreign market. In a short while, powder from fruit such as umbu, cajá, graviola, assai, guava, acerola and passion fruit attracted the attention of other countries. They are mainly destined for the food industry, for the manufacturing of sweets, cakes, juices, shakes, morning cereal, and ice-cream dressing. Each month, the company ships approximately 15 tonnes to foreign countries.
The company first exported in late 2008. "We are still at an early stage when it comes to client development. Our product’s sales cycle is quite long, but we already export to the United States, Canada, South Africa, France, Germany, Norway, the Czech Republic, Australia, Japan and Korea," said the partner.
"Exporting is always a challenge, the international market is always very demanding, particularly regarding quality, certifications, and now sustainability," said. The main obstacles to exporting, according to her, include exchange rate fluctuations, which lead Brazilian products to become unattractive and detracts from their ability to compete, and difficult access to credit.
Technology
Another small company based in São Paulo that has stood out on the foreign market is Bionext, which manufactures biotechnology products. The company was founded in 2002, and it took it four years to get approval from the National Health Surveillance Agency (Anvisa) for its factory to operate. According to the company’s engineer and partner, Gerardo Mendoza, the focus is on technological research.
Bionext’s first product to conquer the foreign market was the Bionext membrane, a biocellulose dressing for treating skin lesions. The technology developed was so revolutionary it ended up attracting the attention of other countries, which now import from the company, such as Costa Rica, Colimbia, Taiwan and Indonesia. The next destinations will be Mexico and the United States. The company started exporting in 2008.
Presently, the company is developing biocellulose-based membranes for replacing parts of the brain, bones and cartilage, and membranes for corneal reconstruction. According to Mendoza, the company is capable of producing up to 3.4 million centimetres per month, enough to meet the entire domestic and foreign demand. Presently, 50% of the output is exported.
Bionext has 10 employees and 20 collaborators, including researchers and scientists from universities and research laboratories.
*Translated by Gabriel Pomerancblum
