Holland goes South America
South America has shown consistent growth over the past years. Nothing extreme, but steady and increasing. Unlike Asia, which is susceptible to fluctuation, the South American economy is relatively cocooned. The maritime and offshore industry is up and coming and there is ample opportunity for the Dutch to bring their expertise.
Where Brazil was the main market in regards to offshore and oil and gas opportunities for a long time, along with Argentina, a shift is occurring regarding other South American countries which now also show exciting possibilities. From fishery to naval, as well as port infrastructure and inland shipping – all industries where the Dutch can offer leading knowledge and technology. Arne Heutink, trade promotion manager with Netherlands Maritime Technology explains:
“In comparison, other South American countries are now more open to Dutch parties. Companies such as Huisman, Damen and Royal IHC are already very active in South America and even have local offices there. When you look at port enhancement, dredgers like Van Oord and Boskalis also have a base there. We had hoped that the larger corporations would allow success for smaller companies; unfortunately this has not always been the case. Some smaller companies have succeeded and others have not. Within South America, it simply is a question of trial and error. The basics would be to have an agent there to help deal with business matters from within the continent.”
According to Heutink countries such as Paraguay, Uruguay and Colombia also show great potential. On the west coast, Peru has proven to be open to naval related business opportunities and Chili in regards to fishery.
Open to foreign parties
Dutch oil and gas players will find very real possibilities in South America, but let us not forget, it is not all oil and gas. Dredging, port logistics and inland shipping are three other main opportunities. In fact, some Dutch companies have already been very successful in these segments. Success stories belong to, among others, the Concordia Group, VEKA Group and De Kaap Shipyard, selling 17 pushboats to various South American shipping companies.
Heutink: “Dutch maritime expertise in respect to inland shipping and port logistics is just that bit more advanced in the Netherlands and can offer the edge South American companies are looking for when choosing business partners. Though, in respect to doing business it will mostly be dependent on how protected the market is in regards to foreign parties.”
Inland shipping can be assisted with effective infrastructure within South American waters. This in turn can offer opportunities for shipbuilders and dredgers alike. Damen Shipyards, for example, have been active in Argentina since the 1990s choosing to work with local parties to develop and build the right kind of equipment for the continent. For instance, a special Damen pusher was designed and built in cooperation with Argentinian shipyard SPI for the Hidrovia, the Paraguay-Paraná-Uruguay-La Plata river system, which is the busy 3,400 kilometre long shipping canal. There the waters can dip as low as two metres in the dry season and the new Damen pusher, thanks to its draft, will allow work to continue all year round.
Vessels and equipment are only part of the equation, the transfer of knowledge is as important in equal measure. One organisation active in this respect is the STC-Group, founding STC-Brasil to be able to offer the continent quality education in cooperation with governmental bodies and local parties.
Please be patient and loyal
So many opportunities to offer equipment and to allow local parties to train their staff accordingly. But what about the practice of doing business? How does this differ from other countries?
Heutink: “The process of doing business in South America is very different, though this will vary from company to company. As a whole, Dutch companies cannot expect deals to happen overnight. A South American company appreciates investment and as such a company will be expected to form long-held ties. Striking a deal is much more indirect than in the Netherlands. Loyalty is key, which brings us back to investing. Companies will need to be in for the long haul, there is no room for impatience.”
The branch organisation Netherlands Maritime Technology can assist its members in doing business in South America by keeping in contact with local parties and keeping a watchful eye on trends and developments. A signal could for instance be how the economy is developing and what is happening within the market. Another is presenting Dutch companies and innovations to a broader South American presence.
One of the opportunities to do so is during Marintec with the Netherlands Maritime Technology Pavilion. This international maritime fair will be held from 11 to 13 August 2015 in Rio de Janeiro. There the pavilion will team up with the government to initiate several activities.
Heutink:“One of which will be our network reception on Wednesday 12 August. Furthermore, the Technology Leadership Dutch Innovative Solutions for Brazilian Markets seminar will be held, where several Dutch companies will be able to present themselves and their products to the South American market. In 2014 the fair welcomed 360 exhibitors and 18,000 visitors, among which representatives from important shipyards and state-owned companies such as Petrobras and Transpetro. In short a great opportunity for the Dutch companies there present. Next to that Netherlands Maritime Technology is also one of the main sponsors of the fair, alongside Wärtsilä, which is good exposure for the Netherlands.”
In short, yes there is ample opportunity for Dutch companies to seek out business in South America. Patience is a virtue and will be required alongside high quality technology and knowledge.
Rebecca van den Berge – McFedries