Manufacturing in Brazil: Personal account, advice
Today, many global manufacturing companies are turning to Brazil for low-cost manufacturing. And with good reason: it is a rich, diverse country with abundant natural resources and 200 million consumers providing ample market opportunities. In addition, unlike some other possible low-cost locations, the infrastructure for manufacturing is in place.
Today, many global manufacturing companies are turning to Brazil for low-cost manufacturing. And with good reason: it is a rich, diverse country with abundant natural resources and 200 million consumers providing ample market opportunities.
In addition, unlike some other possible low-cost locations, the infrastructure for manufacturing is in place. All of our major suppliers (including IT infrastructure and banking) have operations in Brazil. Plus there's a skilled workforce.
Many people suffer under the misconception that Brazil, like many other low-cost countries, has poor levels of education. In fact, Brazil has some of the finest universities in South America. As a result, the educational system is in place to provide the skilled base of workers a manufacturing company like Bosch Rexroth needs to succeed.
Some areas of Brazil, like the most southern three states, are very appealing to manufacturers. The security level is higher, the governments and regulatory agencies are easier to deal with, worker morale is higher, and educational levels are as good as in the large cities.
Lately however the competitiveness of manufacturing has suffered due to the exchange rate development of the Brazilian real compared to major world currencies. Therefore, it is even more important to invest in those businesses which have significant internal markets and not to depend to a large extent from the export business.
The key to unlocking these wonderful opportunities, however, goes deeper than exchange rates, a skilled labor force, a stable economy, infrastructure, and competitiveness.
Think your business can prosper in Brazil without getting to know the language and the culture? Think again. Brazil, like most other Latin American countries, has a business culture based on relationships.
I had the opportunity to learn this lesson at a very young age. When I was a child, my family was transferred to Sao Paulo, Brazil. Fortunately, there was a large German population there—in fact, Sao Paulo has more German companies within its borders than any city outside of Germany. But I can assure you that I was not living isolated in an enclave populated solely by my countrymen. I was immediately enrolled in a German-Brazilian school and quickly learned the language.
My good fortune was to continue. When I was 14, my father saw the advantage in having me learn the hydraulics manufacturing industry at a very basic level. As a typical teenager, I was perhaps a little slow in seeing those benefits. But I certainly see them now.
Not only did I learn the hydraulics business from the ground up—cleaning manifold blocks, running machine tools, assembling valves and electronics cards, and designing power units—but I also got to see first-hand how our Brazilian workers performed. And, in the process, I learned a lot more about their culture and values.
That experience has served me well in my current position as president and CEO of Bosch Rexroth Corporation, which extends my responsibilities throughout the Americas. At my first meeting of the Brazilian sales organization, I addressed the group in Portuguese. Judging by the response, that small gesture meant a great deal to my new colleagues.
I have always found Brazil to be friendly and inviting, with many opportunities to submerge or integrate myself into the culture. Many of the people who taught me the finer points of hydraulics– as well as Brazilian culture – are still working for Bosch Rexroth.
I am fortunate to have them as friends and colleagues. They serve as a constant reminder that in Brazil, as in so many (or all) other places in the world, the most important resources are the human ones.
Berend Bracht is president and CEO of Bosch Rexroth Corp., a global provider of drive, control and motion technologies operating in 80 countries. In 2007, the company celebrated its 40th year of doing business in the Americas.