Holland goes Brazil

Brazil is one of the four BRIC countries, next to Russia, India and China, and is seen as a prosperous economy. With the booming offshore industry and the emerging inland shipping industry, among others, it offers many business opportunities for the Dutch maritime cluster. Maritime by Holland Magazine offers an insight in the challenges and the opportunities for Dutch maritime companies in one of the world’s fastest growing major economies and the initiatives to make the Netherlands a success in Brazil.

Brazil is already high on the Dutch priority list of potential countries to do business with. There have been quite a few trade missions, incoming as well as outgoing. The latest took place in November 2012, under the leadership of HISWA. Farouk Nefzi, Export Director HISWA Holland Yachting Group: ”This was one of the biggest trade missions ever with over 170 companies attending. The yacht building industry was presented by 17 companies. It was a great mission and I am very enthusiastic about it. The fun part about working in the yacht building industry is that you have to go sailing for your job and Brazil has a beautiful coastal line.” Also Holland Shipbuilding Association participated in the trade mission. ”I wanted to experience how Brazil works”, says Mieke Bakker-Mantjes, director of Holland Shipbuilding Association. ”There are not many marinas yet, which means not a lot of pleasure cruising. However, there certainly is growth potential in the yacht building industry.” Nefzi agrees: ”The Brazilian yacht building industry yearns for knowledge and quality and the Netherlands is seen as the Mecca of yacht building. Some of the delegates, like Aluland, Amartech, Imtech and VanBergeHenegouwen, were able to generate sales leads.”

A lot of potential

Next to yacht building, other interesting industries to pay attention to are offshore, inland shipping, shipbuilding and maritime suppliers, according to Bakker-Mantjes: ”These are the potential growth markets. Marina development could also be an interesting field for Dutch companies to participate in, as well as port development. The Port of Rotterdam is already engaged in the development of the port of Rio de Janeiro, for example.” However, to obtain a foothold in Brazil is difficult for foreign companies, Brazil has a high level of protectionism, financial institutions demand up to 70% local content when offering advantageous financing rates and export duties are high. Producing in Brazil is also difficult; first of all it takes a long time before a foreign company is able to settle in Brazil because of many bureaucratic procedures and then companies are obviously bound to local content during production. ”The best option I think is to have a very good local agent in Brazil”, advises Bakker-Mantjes. 

Holland Marine House Brazil

Dutch maritime companies can turn to the Holland Marine House Brazil (HMHB) if they need help obtaining a foothold in Brazil. The HMHB’s goal is to bring Dutch maritime expertise to Brazil and become a bridge between the Brazilian and Dutch maritime industry. The trade office was founded in August 2009 and is a joint initiative of the Dutch Ministry of Economic Affairs, the Dutch Ministry of Transport, Public Works and Waterways, the Dutch Maritime Network and Holland Marine Equipment (HME). The HMHB currently counts 21 member companies. Johanna Baart is HMHB’s managing director. With 15 years of experience and many connections in Brazil, she is eager to make sure the Brazilians have no choice but to acknowledge the Dutch maritime cluster: ”HMHB can help Dutch companies to get a foot into the door, as the HMHB is situated in Rio de Janeiro and therefore is always up to date with the latest developments. The HMHB is building a reputation in Brazil for the Dutch maritime industry and is able to do research for the member companies. The follow up is done in person by the companies themselves together with the HMHB.”

Joining forces

Loggers, a solution provider in the field of shock, vibration and noise control, has been a member of the HMHB for 1,5 years now. Key account manager responsible for the Americas Dirk-Jan van Ramshorst has a lot of experience in Brazil: ”It is a tough process to get an opportunity to do business there. We work closely together with the HMHB and Johanna, who has many connections and supports us when we visit Brazil. Being physically present is a must and Johanna plays a major role in that by helping us making appointments. However, if you are a member of the HMHB, do not expect everything to come for free. Your success depends on your own initiatives. You need a lot of patience and a long-term vision when doing business in Brazil. Firstly, you need to earn the trust of the Brazilians, then you can find common business interests. We need to draw the attention to what the Dutch maritime industry can mean to Brazil, we have to strengthen each other and cooperate to make sure that we together can offer a complete solution. Offering a complete solution means offering added value. If you cannot offer that, it is almost impossible to obtain a foothold, as the Brazilians will always choose local content over your products. If we look at the trade missions, we have seen that the Brazilians are impressed by how the Dutch run their businesses and the Dutch technologies and the innovation abilities, so they see the added value that Dutch companies can offer them. The will to buy our products is there, but the Brazilians do not always have the possibility because of the local content obstacle and the financing schemes.”

Opportunities in inland shipping

To strengthen each other and be able to offer a complete solution for Brazilian customers, some companies within the HMHB started the inland waterway workgroup. Van Ramshorst: ”Inland shipping in Brazil is not very big yet, but is expected to grow extensively in the years to come as it is planned that the biggest part of the inland transport will be done via inland shipping. With the workgroup we try to play a part in the growing Brazilian inland shipping industry. When you join forces you can bundle your innovations in one end product to offer to the Brazilian clients. The Brazilian industry is still in its infancy regarding shipbuilding and they can learn from the Dutch industry with regard to knowledge and technologies. We started the workgroup only a year ago, but we have already had some successes. However, there is still a long way to go.” In January 2013, Alewijnse received an order to do the electrical engineering and supply several systems for two new Brazilian pusher vessels for grain transport. Loggers also received an order for the same vessel, which is expected to be delivered in October 2013 and will operate on the Brazilian inland waterways. But also other members of the HMHB were successful. Baart: ‘‘Last year, four orders were placed with HMHB members.”

Maritime hotspot

Rio de Janeiro also is one of the three maritime hotspots that were appointed late 2012, the other two being St. Petersburg and Istanbul. Goal of the hotspots is to intensify the relationship with important maritime regions worldwide. Arne Heutink, project manager innovation at HME: ”With the maritime hotspot project, we look for a joint approach to get Dutch maritime companies on the Brazilian map. There are plenty of possibilities for the Dutch maritime industry, the Brazilian offshore industry is booming, as companies as well as the government invest a lot in this industry, the dredging industry is big and Dutch companies like Van Oord and Boskalis are already active there. Port development is interesting, there is a lot of potential and development, which results in a lot of pressure to build new vessels. A lot of possibilities in a market that is expected to continue to grow. However, it is difficult to enter the market and find your way to the government and the state-owned companies. Therefore it is important to join forces and reinforce each other’s strengths. We have a very diverse group of 20 that joined the project: branch organisations, financial institutions, individual maritime companies – some already experienced in doing business with Brazil – and NL Agency, a division of the Dutch Ministry of Economic Affairs that supports sustainable joint initiatives in developing countries and emerging markets. The maritime hotspots programme runs from 2013 until 2015.” HISWA is also one of the participants in the project. Nefzi explains: ”The yacht building industry is mainly business to consumer oriented, whereas the rest of the maritime industry is business to business related. It is difficult to intertwine that, but let’s see if we can tackle some issues together with the whole maritime cluster, for example the Holland branding issues and diplomatic issues, think of the export duties and distribution issues.”

Points of action

The first steps to a success were made on 12 February, when the group met for the first time. Gust Biesbroeck, head of transportation at ABN Amro and chairman of maritime hotspot committee Rio de Janeiro, comments: ”Our first meeting was successful, we got to know each other and outlined our ideas. The idea of the hotspot is to jointly tackle obstacles that the Brazilian market offers from a Dutch perspective. The Brazilian market is one with many challenges, as an individual the obstacles are difficult to handle. The industry and the government together, however, can make huge leaps forward. This project fits in the Topsector Water programme and the government agreed to support this project. Foreigners are often quite impressed about the fact that the Dutch maritime cluster can put aside its differences and search for the similarities. It is a nice group, some of the participants are already active in Brazil and were able to identify the obstacles and that resulted in some points of action.”

Heutink agrees: ”It was a positive meeting, where we formulated six points of action. First of all, we will map all obstacles for doing business with Brazil on a fiscal and administrative level and try to get the Dutch government involved to help us by speaking with the Brazilian government about these obstacles. Also, we want to discuss what we can do about the export financing problem. To be competitive you need to have good conditions for export financing, but the Netherlands lags behind compared to other countries, which gives us a competitive disadvantage. We asked the involved financial institutions to think about how we can strengthen our position regarding this issue. The next point of action is to make more use of the exchange possibilities with Brazil, for example exchange programmes for trainees and managers or training programmes to show the Brazilians what the Dutch market is like, let Brazilian managers experience how we work. It will be a good opportunity to broaden our network and to exchange knowledge.”

”A next trade mission to Brazil is planned for the coming November, lead by the Minister of Foreign Trade Liliane Ploumen”, Heutink continues. ”We agreed to incorporate the maritime industry in this mission and prepare m this mission together to present a strong o maritime cluster, taking into account what we A learned from former missions. We also spoke about what the HMHB can do for us and A decided we want to strengthen the position of n the HMHB, maybe by trying to incorporate 0 it into the consulate. This needs further 3 elaboration, though. Last point of action is to 5 investigate best practises of other countries m that are doing business in Brazil, with a focus 5 on Norway. What is their secret to success? Let’s see what we can learn from that.” Loggers, also part of the maritime hotspot project, was positive about the first meeting as well. Van Ramshorst: ”We wrote down several ideas, now we have to see how we can translate these ideas into reality. Hopefully we can ensure that the cooperation between the industry and the government becomes more concrete, with tangible solutions, for example to help us to get onto the vendor lists Brazilian companies work with. As a company, you need to be on the list to be considered as a supplier and the government may be able to open this door for us.”

Brazil is a country with plenty of possibilities for the Dutch maritime industry. The first steps have been taken and the first successes have been secured. It will take time and a lot of patience, but with interesting initiatives to join forces and to achieve a cooperative strategy between the industry and the government, the Dutch maritime cluster should be able to expand its successes in Brazil.

Gail van den Hanenberg