Internationalization versus export: the case of the Brazilian pig farming

09/03/2006 0 By Rodrigo Cintra
Brazilian companies S & atilde, the, increasingly, for & ccedil clipart to face the world market, having to develop strategy & eacute; gies of insertion & ccedil; & atilde; the products and brands under penalty of being outdated and become uncompetitive. Like this, to participate & ccedil; & atilde, the world market n & atilde; the & eacute; just another advantage for a growing n & uacute; number of companies, & Eacute; a matter & HAND the Survivor & ecirc; INSTANCE.

The quest & HAND central becomes & ldquo; what kind of internationalization MAKE-HANDS; the & eacute; most appropriate?”. There v á rias ways to get involved with the theme of internationalization & ccedil; & atilde, the, Eat & ccedil; walk with easy export & ccedil; & otilde; s AT & eacute; the opening of production units in other pa & iacute; ses. In the middle of this path, & Eacute; poss & iacute; vel find & ccedil; & otilde; es is & ccedil; & atilde, the, hires & ccedil; & atilde; the international actors, distributors or joint ventures.

& Eacute; Importantly, n & atilde, the there is an ideal model, j á such that the & ccedil; & otilde; s can be developed concurrently or as a larger process stages. However, each case & eacute; a case, and so should be treated. Companies must be willing to invest seriously in the development of strategy & eacute; gies of internationalization & ccedil; & atilde, the, knowing the risks, costs and return possibilities.

A sector that has been particularly obliged to face the world & eacute market; Brazilian pig farming, especially when you think in the case of its stake & ccedil; & atilde, the the Russian market.

Currently the R & uacute; russia & eacute; the target 65% das exports & ccedil; & otilde; Brasileiras meat is your RIVER na, a volume of 404,739 a thousand tons, corresponding to US $ 805 millions (according to data from ABIPECS), It is most casing MAKE-frozen (low added value). The pa & iacute; s established a pol & iacute; tica quotas for imports & ccedil; & atilde, the meat and, although Brazil is its main supplier of meat su & iacute; in, n & HAND possesses a dimension pr & oacute; Pria – getting their exports & ccedil; & otilde; s restricted to a shared quota with several pa & iacute; ses.

For 2006 quotas are still very R & iacute; gidas, the Brazil divide & aacute; a volume of 181,032 a thousand tons (38% do total) with other pa & iacute; ses exporting su & iacute flesh in for R & uacute; sepsis. The rate of matter & ccedil; & atilde; the & eacute; in 15% It is the extra-quota 60%. However Brazilian opportunities in the Russian market s & atilde, the derived mainly from the inability of the other pa & iacute; ses in supply (even partially) request, in the face of low capacity or problems with animal diseases. The high Brazilian competitiveness, whose cost of production & ccedil; & atilde; the meat su & iacute; in & eacute; the world's smallest, causes opt for importing meat arising pa & iacute; s.

To determine an poss & iacute; level strategy & eacute; gia increased insertion & ccedil; & atilde, the industry suin & iacute; Brazilian glue on your main importer & eacute market; necessary & aacute; rio analyze some factors such as: & ecirc which the tendon; INSTANCE consumption in R & uacute; sepsis? which standard & otilde; s production and its trend & ecirc; TRENDS? which are & HAND the competitors and the main strategy & eacute; t & ecirc gies, adopted m?

A study of this role would go beyond the limits of this article, By & eacute; m & eacute; poss & iacute; vel indicate some of the answers, in order to better understand how choices can be made regarding & worse; internationalization & ccedil; & atilde, the Brazilian companies.

Tend & ecirc; TRENDS Russian market

The brief increase in production MAKE-HANDS, the inner meat in R & uacute; sepsis (totalizing 4,7 millions of tons, even with government incentives) makes the pa & iacute; s still depend almost 50% of matter & ccedil; & otilde; it is. If we consider the estimates that in 2010 the consumption of meat arrive & aacute; The 10 millions of tons. This dependency & ecirc; INSTANCE stay & aacute; for a long time, with quotas pressing the toughest markets, and reexports & ccedil & otilde, is surfacing in times of crisis.

In an attempt to supply the market with a volume and wider variety of industrial products & aggravate; meat-based, the Russian company Euroservice He made an investment € 277 & otilde million; es in the construction & ccedil; & atilde; the 10 ind & uacute; strias processing for the complex Russian meat; a sign that both the government and the private sector is & atilde; the willing to encourage increased demand for protein & iacute; the animal in the pa & iacute; s.
Al & eacute; m & mercadol be a need oacute; gene, the company has its biggest profits from the sale of imported meat in the form of processed products. In 2004 dos US$ 430 millions, US$ 350 They were from imported meat sale, which means that the company was interested in solidifying this market segment and increase their market share within the R & uacute; sepsis.

The Euroservice & eacute; pioneered large investments in ind & uacute; stria meat processed in pa & iacute; s strategy and has & eacute; gies well set for an expansion & atilde; s & oacute; deals. His hist & oacute; rich as evidence, by m & uacute; ltipla acts & ccedil; & atilde, the, the company & eacute; now a player weight in the Russian meat market. Since his sling & ccedil; & atilde; in the 1991 (after & oacute; s order Uni & HAND the Sovi & eacute; topical), as a distributor of American products & aggravate; Chicken meat was gradually becoming and, by pr & oacute; pria business need, investments started in á related areas of the meat complex.

This expansion & atilde, the worse was due &; s pr & oacute; Pippen difficulties; the company has adapted to the market, tackling their difficulties mercadologicamente. Most of them were the result of the lack of development of neg & oacute; heats and pr & oacute; prizes consumers. & Let heavier; s eight d & eacute; ed Uni & atilde, the Sovi & eacute; tica prevented investment and consumer developments. Like this, When the pa & iacute; s opened, lacked structure and diversified market.

& Eacute; Interestingly, the strategy & eacute; strategy of the company & eacute; m & uacute; ltipla, that is, it acts as a distributor of imported products and their pr & oacute; prizes products, takes care of promo & ccedil; & atilde, the your brand and improving its production processes and distributes & ccedil; & atilde, the, by verticalizes & ccedil; & atilde; and increased the distribution networks, respectively.

The big move is the international business opportunities meat su & iacute; the cheap and how to turn & ccedil; & atilde, the this in manufactured products opens a market opportunity that n & atilde; it was AT & eacute; fully explored time in R & uacute; russia by complex high-tech meat.

When we consider that 97% the ling & uuml; r & ccedil; the pa & iacute; s & s atilde; made by the regional producers, and R & uacute; sepsis has a meat consumption with growth 10% per annum, & Eacute; Clearly this market needs to processors who can supply the demand with low price & ccedil, the. A Euroservice projects an increase of 400% in manufactures & ccedil; & atilde; the ling & uuml; r & ccedil, the, of 4 tons to 20 tons / m & ecirc; s.
currently Euroservice operates in the field of cooling & ccedil; & atilde, the transportation products and c & aacute; rneos, production MAKE-HANDS, the ra & ccedil; & HAND animal, and high value-added products (processed and embedded) beef, their RIVER na and birds.

At the same time, the Russian company Miratorg, major distributor of imported products in the meat complex, – as Sadia marks – invest & aacute; in the construction & ccedil; & atilde; the farm with a capacity of 100 tons / day.

The facts above show that this & eacute; the moment Russian companies and subsidi á international holiday in the territory & oacute; River decided to invest in the growth of demand and capacity gift & eacute; stica in supplying the market with industrial products.

Another important point that supports and drives the sale and consumption of meat processed in R & uacute; sepsis & eacute; the discovery that replacing & ccedil; & atilde, the nitrates and nitrites allows preserves & ccedil; & atilde, the products & aggravate; base of fresh meat and chilled for longer. This discovery increase & aacute; the sale of meat complex products, j á the shelf life of food be & aacute; bigger. Per & iacute; odo Preserve & ccedil; & atilde; the ling & uuml; r & ccedil; fresh, of 2 a 3 days, Power & aacute; pass to 20 a 30 days, allowing the storage of these products s ​​& atilde, the widely consumed in the pa & iacute; s.

An important factor also & eacute; m for companies & eacute; the possibility of selling fresh and chilled beef to region & otilde; most extreme es pa & iacute; s, activity committed by dist & acirc; INSTANCE of the great producing centers of some region & otilde; s East.

It is noteworthy that, in comparison & ccedil; & atilde, with Europe, US and Japan & atilde, the, the population & ccedil; & atilde, the Russian est & aacute; It is at a different á gallium consumption. While the former are concerned with quality, involves & ccedil & otilde; & is worse; to STILL and variety of products, in R & uacute; russia the problem still & eacute; income and supply capacity of ind & uacute; stria gift & eacute; stica, which are & oacute; is maintained & eacute; m with high n & iacute; LEVELS of matter & ccedil; & atilde, the.

The Russian winter and its impact on din & acirc; mica market

Considering the reality of pa & iacute; s – during the winter becomes inacess & iacute; by sea level – the id & eacute; ia to ensure products with high value lime & oacute; rich and prot & eacute; ico, f á cyl on storage and perishability, & Eacute; very pertinent. As n & atilde, the h & aacute; access of vessels to the ports of pa & iacute; s during winter, a matter & ccedil; & atilde, or consumption of meat and its RIVER na in nature is compromised.

As matters & ccedil; & otilde, it is meat for you 9 months – with n & iacute; LEVELS above consumption for storage during the per & iacute; winter anode and further processing – & Eacute; a large neg & oacute; & eacute and cesium; necessary & aacute; rio for maintenance & ccedil; & atilde; the supply pa & iacute; s.

So the t & aacute; tica of ind & uacute; Russian meat stria (increase the production & ccedil; & atilde; the industrial products) & Eacute; mercadologicamente interesting. & Eacute; Importantly, these investments could well be made by a joint venture Brazilian, or even by an ind & uacute; national stria installed on pa & iacute; s realized that this demand.

& Eacute; an excellent market opportunity that n & atilde, gained prominence in the ind & uacute; stria meat su & iacute; in Brazil, very keen to maintain the volume of exports & ccedil; & atilde; the meat su & iacute; in in nature, the inv & eacute; s to invest in ind & uacute, local strias for the product & ccedil; & atilde; the finished products – and the most important: n & HAND belonging to the quota system.

The annual increase in the demand for processed products, their meat mainly RIVER na e birds & eacute; R na significant STILL SSIA; in this way, provide consumers more variety and conditions & ccedil; & otilde; s consumption & eacute; virtually creating a new market niche.

While meat producers su & iacute; in care in exporting housing & ccedil; frozen for R & uacute; russia, stuck in the quota system and the low value of the product, other pa & iacute; ses advance MAKE-am on the race consolidates & ccedil; & atilde; the pa & iacute market; s.

Also & eacute; m the companies that produce meat products su & iacute; in T & ecirc; m its share of responsibility, because even they choose to have their products distributed & iacute; of the R & uacute; russia (as & eacute; the case of Sadia na Miratorg) the inv & eacute; s in the manufacture pa & iacute; s, which would allow a combat insert & ccedil; & atilde; in the much larger market.

Conclusion & atilde; the

Businesses and Euroservice, Danish Crown e Smithfield s & atilde; T & atilde, the competent as the main Brazilian processors, the big difference & ccedil; a & eacute; they seem willing to invest in major markets from the construction & ccedil; & atilde; the ind & uacute; strias, marketing projects of products and encourage consumption, that is, They seek to enter markets creating s & oacute; n & read bases and atilde, the only exporting or selling through intermediary á rivers.

The example of Euroservice & eacute; interesting, because the company has become an important player National & worse due; its ability to detect market opportunities within the R & uacute; russia, creating a structure pr & oacute; Pria production MAKE-HANDS, and distributes the MAKE-HANDS, the, a R & oacute; very different gene importer of Brazilian reality. A R STILL SSIA & eacute; its predominantly importing meat RIVER na, so the Euroservice fetched in the international offering their products to consolidate & ccedil; & atilde, the domestic; differently, the Brazil – that & eacute; exporter – You have to seek access to markets and through marketshare alkane & ccedil ado consolidate.

It would be an opportunity for Brazil (considering the need to supply pa & iacute; s and extensive trading partnership, signed diplomatically between the two os pa & iacute; ses) that the companies would produce in territory & oacute; Russian River, by means of joint ventures or subsidi á holiday, as reciprocity of market.

Another difficulty that presents & eacute; the meager initial access to suppliers, distributors and frigor RIVER GRAPHICS. The Euroservice currently has a full range of support in the Russian chain, construction & iacute; in the little over a d & eacute; each & ecirc exist; INSTANCE and intense acts & ccedil; & atilde; the market. Brazilian companies, to prime RIVER pio, n & atilde, would have all these channels open and would be necessary & aacute; rio the employment strategy & eacute; gies of mega-marketing to facilitate the creation & ccedil; & atilde; that of a market structure; considering the import & acirc; INSTANCE of R & uacute; russia for Survivor & ecirc; industry INSTANCE suin & iacute; Brazilian cola, although these difficulties trim & ccedil; am the opportunity cost & eacute; lower than the gains.

This would help the pa & iacute; s out of a R & oacute; Gene basically export to a foreign investment mechanism, despite having higher risks, also & eacute; m can give larger and consolidated gains in m & eacute; audio and long term.

H á markets and h & aacute; opportunities, however & eacute; I take courage to get out of in & eacute; exporter rcia surrounding the Brazilian pig and enter firmly the international market.

* Rodrigo Cintra & Eacute; Executive director of Focus R. I. – advisory & Consulting & Rela ccedil; & otilde; s International and Vice President of C & acirc; mara With & eacute; Argentine-Brazilian Commerce S & atilde; Paul
** Mariana Ricci & Eacute; expert in pig farming in Focus R. I. – advisory & Consulting International Relations


originally published in:

RelNet

RelNet columns in. 13 ,mês 1-6 ,year 2006