Cracking the Brazilian market by starting with a trade mission

As the 'B' in the BRIC emerging market group, Brazil presents an attractive market for businesses looking to start or increase exporting. GrowthBusiness meets two companies which are hoping to capitalise on the nation following trade missions.

As part of Whitefox Technologies’ visit to Rio de Janeiro and Sao Paulo and Muc-Off’s journey around the South American country, we asked each business what each trip involved and what useful information and experiences were taken away.

The Clean and Cool Mission to Brazil, which Whitefox Technolgoies joined, was part of an accelerator programme for promising UK clean technology businesses to help build market knowledge, networks and profile with potential investors overseas. The Brazil Mission, run by The Technology Strategy Board, UKTI and The Long Run Venture, was specifically for clean technology companies focusing on water and waste water, bioenergy, wind and solar, future cities and agriculture.

The Santander Breakthrough trade mission Muc-Off was invited on was set up as part of a programme aimed at businesses with a turnover of up to £25 million per annum with demonstrated growth of 20 per cent or more in turnover, profit or employment. It aims to help businesses fulfil growth potentials to create jobs and stimulate supply-chain demand and a private sector led recovery.

Whitefox Technologies, which has bases in London and Calgary, is a cleantech company which operates in the membrane market. Its membrane-based ethanol production offering is focused on the biofuel ethanol, pharmaceutical, industrial and potable ethanol areas.

Gillian Harrison, CEO of Whitefox Technologies:

‘Jeito Brasileiro’ has a depth of meaning that is poorly served by translation. ‘The Brazilian Way’ encompasses the way in which Brazilians will approach a given situation by understanding where they want to get to and pragmatically taking whatever route is required to get there.

They will rarely accept defeat as an option. The route may be circuitous and to an outsider may be frustratingly slow, but you may achieve something that initially appeared impossible.

Legally the system is complex and rules have been written in such a way that makes navigation for an outsider impossible without good local advice. It almost feels as though it is there as a challenge, will the hurdles put you off entering the market, or have you got the patience to try and understand and work with and around the system?

Import duties are set in your path to make your product less competitive to locally produced goods, and you will question whether there will be any margin left to make it worthwhile. If your product has distinctive qualities and is in the ‘national interest’, then there are ways to get exemptions to reduce these costs, but get moving as the time to deal with this will delay your first foray into the market. 

You may also find that your goods take longer than you would like to leave your chosen port of entry, be it Santos in Sao Paulo or another entry point. Make sure you use someone with experience of getting goods liberated at customs and in any event be prepared to tear some of your hair out.

My week in Brazil as part of the Clean and Cool Mission has shown that Brazil is hungry for innovation, and sustainable solutions to the problems it faces. As the GDP per capita increases, so does the requirement for energy, water and waste treatment, the road infrastructure needs to be rapidly improved to ensure it is fit for growth and homes need to be built that are affordable yet give improved quality of life. All these issues can only be dealt with successfully if done in a long lasting and sustainable way.

The meetings at BNDES, FINEP and FIESP during the week emphasised that the Brazilian government has made sustainable innovation a priority. It was therefore great to see that without exception all the Clean and Cool companies were recognised by the Brazilians we met as having solutions that Brazil needs and it needs them now.  We may not all speak Portuguese on this mission, but we have all been speaking the same language.

Brazil is a huge country, its size may appear daunting to small companies, but the problems are big enough that there has been a welcoming reaction to the Mission companies and there are clear opportunities to be taken advantage of.

My advice to the companies who visited Brazil and for those looking to move into the market is to remember that Brazilians like ‘dating’, as Damien Polopo from BG Group put it so brilliantly one Saturday night in Rio. Go home, do your due diligence, but keep your new contacts warm, stay in touch, show your interest, ask them questions, call them (not just email) and plan to visit sooner rather than later. Do not be concerned if they don’t email you straight away, they will be busy with their businesses, when you are here they will make time for you, when you are in London it is easy for them to forget.

Building a relationship with the contacts you have made is just the first step on your path to doing business, the ‘Brazilian way’.

More on trade missions:

Poole-headquartered Muc-Off produces cleaning products for sports enthusiasts such as cyclists or motorcyclists. Its product is used by downhill mountain biker Steve Peat and the Force India Formula 1 racing team.

Sam Ellis, finance director at Muc-Off:

Our business Muc-Off may be small but that hasn’t stopped us from being ambitious. International expansion has always been high on our business agenda and we currently work across 40 different countries worldwide. 

When we were offered the chance to attend the trade mission to Brazil through the UKTI and the Santander Breakthrough Programme, we were thrilled to be a part of it.

The trip was designed to help small businesses grow internationally, allowing us to scope out the potential in the country’s growing market.

Although we have already started trading discussions, Brazil has proved a difficult territory for us expand into, not simply due to the language barrier but because of the different trading laws and highly complex tax systems. 

The country has a bourgeoning economy that offers huge potential to companies from across the world and a wealth of opportunities for entrepreneurs and small businesses alike. Brazil is so often described as a country of the future, but with the FIFA World Cup and the 2016 Summer Olympic games fast approaching, now is a fantastic time for a sports-focussed business like ours to become fully immersed in opportunities offered by this South American nation.

Just recently, the Brazilian government commissioned a study to quantify the economic rise these two sporting events are set to bring. Forecasts predict a $24.5 billion increase between now and 2027. This predicted boost, which is mainly thanks to increased spending by tourists and growth in employment and construction, will provide UK businesses with ample opportunities.

However, expanding into a new territory is not always easy. For example, there are 60 separate processes involved in launching a company in Brazil, which can typically take an average of 120 days to complete.

During my time on the trade mission to Brazil, pre-arranged meetings with expert advisers helped answer the majority of my questions and enabled me to get to grips with the famously tricky tax system.

Just being in Brazil physically also meant we were able to further develop our relationship with our current distributor. Furthermore, we were introduced to four new contacts, which enabled us to have initial conversations with potential new clients.

We were also thrilled to be able to show off our new car product range, which we are yet to introduce to the country. In addition, the opportunity to connect with local businesses and meet them face-to-face allowed us to better understand the complexities behind Brazilian business culture.

If you are also looking to expand your business during challenging economic times, I strongly recommend you look overseas and take advantage of the host of untapped markets that are available.

Brazil is only going to build on its current successes and the growth potential there is simply huge. Following my trip we are actively looking forward to developing our new offering in Brazil. We now have a much more in-depth understanding of the Brazilian market and a real understanding of business operations in a leading, global economy.

Hunter Ruthven

Hunter Ruthven

Hunter was the Editor for from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

Related Topics