Trading Overseas
Published
by Westchester International Corp. – Vol. 1 – No. 3 – July-August
2004
The life of an entrepreneur is always quite prosperous. Not necessarily
in the financial view, but certainly full of life and experiences. In a country
filled with surprises and difficulties such as Brazil, the establishment of a
company demands, besides competence, perseverance.
The life of 49-year-old Samuel Fernandes has not been different. Capixaba
(natural from Espírito Santo), from a small village near Castelo, Samuel is a
“typical Carioca (natural from Rio de Janeiro) from Baixada Fluminense”: he
landed in Nova Iguaçu when he was six years old, where he established
everlasting ties.
Despite his deep knowledge, he reveals a mix of
honesty and transparency in his mode of speech when he talks about himself, his
company or the cosmetic sector. When the subject is communication, he especially
surprises all for his sensitivity towards his right and wrong decisions.
Samuel graduated in Chemistry (technical course) at Associação Brasileira de Ensino Universitário, a private institution in Belford Roxo, a district of Nova Iguaçu at the time. In 1970, Samuel started working with his older brother Itamar Serpa, owner of Embelleze, also a company in the cosmetic sector. There lies some interesting news: one of Samuel’s main competitors is his older brother, who is a chemical engineer as well as a federal congressman for the PSDB political party.
Five years later, he left his brother and started working in the retail trade business. In 1983, he returned to Embelleze as a director, where he had his own car, chauffeur, and secretary, in addition to all the conveniences that most of the executives all over the world dream of.
This comfort made Samuel, a businessman-to-be at the time, run out of gas. “When you run a business of your own, the quality of life decreases because you have to start from the ground. I had never worried about filling the car up; it was my chauffeur’s job. Suddenly, the engine stopped running and I found out I was out of gas”. Today he laughs at the setback, although admitting it was not fun at all back then.
In 1986, Samuel launched a new project. He founded his own cosmetic company with ten employees. Aroma do Campo (Scent of Countryside), whose name has a complicated history at INPI (National Institute of Industrial Property – INPI, in Portuguese), arose in the market. The name was written down after a brain-storming reunion, when he was still a director at Embelleze. “I though it had everything to do with nature, as our products are natural. It is our image. However, when I tried to register the company’s name at the INPI in 1986, I found out that the do Campo brand was registered. That’s the reason the INPI did not let me use the name Aroma do Campo. After three years of quarrel, I met the owner of the brand, a company called Cabeça Feita. I ended up buying the do Campo brand and then could register Aroma do Campo. To my surprise, INPI started accepting the register of brands such as Perfume do Campo. There are around 50 Something-do Campo spread in Brazil”.
Despite the difficulties, the businessman remembers even the tough parts in a good mood. “I was everybody at the company: the chemist, the supervisor, the salesperson, the manager. It was necessary to have my signature to buy a broom”, he says.
“It was not easy. Those were the Cruzado Plan times. We started out with some good sales but the dream became a nightmare six months later, in this country of so many economic plans: after Cruzado, the Bresser Plan came. We hit the bottom line. But, fortunately, our sales increased in 1987, when we had around 20 to 30 employees”.
A new product had Aroma do Campo’s business take off: Alise e Tinge was the first hair straightening product with Brazilian dye. “I developed it myself in our lab. There were nine different colors. In 1989, Alise e Tinge was a sales hit. Our company boomed and we extended the number of employees to 150”. Today there are 700.
As it is a highly taxed sector, since it is considered superfluous just as the cigarette sector, Samuel prefers to talk about strategies, tactics and communication policies rather than numbers.
However, he ranks the company tenth in the sector, considering the presence of the largest (Natura, Gessy-Lever, Loreal, Avon). Although the sales had a nominal increase of 9% last year, there was a 3% real decrease. He foresees a real increase of 20% this year.
“We have been highly investing in media. This year it will be around 6% of our budget”, he announces. “We used to invest around 3%”, he compares. “We have faced failure due to wrong communication policies. I have seen people losing millions because of a wrong communication policy”, he warns. Samuel remembers Maria Rosa, an emblematic example of correct and profiting advertising. She was a beautiful mixed-race woman, interviewed at a program hosted by Jô Soares in the 80s. “It was a short correct sentence. She boosted the sales of a product from Embelleze”, he remembers.
Samuel also highlights it is necessary to pay attention to regional peculiarities. “To enter the American market, for instance, we had to prepare a 400ml packaging. In Brazil, the volume consumed is 300ml”.
Another characteristic remarked, although it has nothing to do with regionalizing but with strategy, is how to sell. “Natura is good at door-to-door sales and it has 800 thousand employees for this purpose. Embelleze will try the same strategy again. It did not work the first time. But my brother is stubborn. I know we can sell our products well on drugstore and supermarket shelves”.
Caring about the foreign sales is also a deep concern. “We are quite satisfied with the investment we made – taking into consideration both results and costs - when he hired Westchester International Corp. to evaluate our possibilities in the North-American market”, Samuel announces. Today the exports from Aroma do Campo correspond to only 2% of the sales. “We want to reach the 6% mark”, the businessman says.
The company has two different tactics for the United States and Europe. In the United States, Arama do Campo intends to enter the market via the ethnical, Brazilian, and Hispanic shares (as it is already noticeably present in Paraguay Bolivia and Honduras) and then reach the white and African-Americans.
In Europe, it is a different game to play. He wants to enter through France and access the Africans who live there (from Gabon, Senegal, Mali and Burkina Faso). Afterwards, Samuel believes he will increase the sales in Africa, through these countries. He had a similar experience with Portugal, which served as a platform for the sales in Congo and Cape Verde.
Thinking forward, Samuel teaches his sons. Samuel Filho, 26 years old, runs the domestic sales. Bruno, 22, is in charge of exports. While the former sells the shampoo line for US$0,90 each, the latter points that the price in foreign countries varies from US$1,20 to US$1,50.
Except for the two sons and a sister who is responsible for the regional management in Rio de Janeiro (the other points of administration are in Curitiba, São Paulo, São José do Rio Preto, Recife, Belém and a seventh future point, probably in Belo Horizonte, to include Espírito Santo, as well), there are no family members in commanding positions. “The family knows this is a professional company”, Samuel explains.
Professional and worried about its profits, Aroma do Campo participates, in the social area, in labor training programs together with Sese; and in the cultural area, together with Sesc. Since April this year, it takes part in a project called Vida Nova, escola de beleza (New Life, school of beauty), offering make-up, hairdressing, manicure and waxing courses, taught in Family Assistance Units from Nova Iguaçu City Hall.
Real
Case
Force
Majeure
By Paula Muniz
(International
Consultant at Westchester International Corp.)
A Brazilian company exports a cargo to a specific port; however it is shipped to a different port due to a strike at the contracted port.
Who should be responsible for paying for the extra expenses, the exporter, or the importer?
That is a case of Force Majeure, term used to describe unexpected events that may occur during an export or import process, related to political and economic aspects; such as a strike, a war, or natural events, as a storm, for instance.
In this case, the ship-owner/transporter acted correctly when unloading the goods at the nearest port. He has this right if it is not possible to ship the cargo to the intended port due to Force Majeure. He is covered by the terms and conditions contracted in the Bill of Lading (BL)
If the international transportation is under the exporter’s responsibility, he is in charge of delivering the cargo at the originally specified port. However, under the circumstances, the problem that prevented him from doing his duty was caused by the importer’s country and not because he did not mean to fulfill the contract.
In such situation, if on one hand the exporter is covered by the legislation, on the other, he has no interest in losing his client, and also the importer needs the merchandising. Thus, the best manner to solve this conflict is through an agreement between the exporter and the importer, where each undertakes part of the extra expenses for transferring the goods to the correct destination. It is also possible to analyze the commercial terms in the contract (delivery terms) in order to reach a better definition of responsibilities.
It is important to emphasize that the company that wants to explore the international market needs to analyze the intended market. It is essential to acknowledge the country’s history, the social and economic situations, the political database, the local customs, the commercial legislations, and trade agreements before reaching an agreement with this country.
For any
further information, contact us at TRADING OVERSEAS: Av. das Americas, 3333 suite 1216, Rio
de Janeiro, RJ 22631-003 Brazil
Phone +55(21)2431-1165 Fax +55 (21) 2432-8358
e-mail:
editors@tradingoverseas.com
To have
this newsletter - in either English or Portuguese – on your computer, visit our
website at http://www.tradingoverseas.com/
Trading
Overseas is a publication from WESTCHESTER INTERNATIONAL –
USA
Responsible
Director: Aloysio Vasconcellos
Design
Graphic: Renato Pereira, Rio de Janeiro.
Print service: ADOIS Grafica e Editora, Rio de Janeiro.
Page 2
(right column)
A new means of financial remittance –direct and free of charges–
integrates the casting of creative actions of the emigrants in the United
States: the purchase of nourishment via Internet, destined to the relatives who
live in their homeland, paid in the foreign country, with strong currency.
Such system brings wealth to the homeland and economy to the purchaser
abroad and it tends to spread. Some supermarkets explore this new market:
Carrefour Online, from Madrid and Barcelona, paid by international credit cards;
Compra Fácil, from Chile, which serves the major cities in the country, also
paid by international credit cards; and Disco, from Argentina, using the same
way of payment.
According to the Peruvian company E. Wong, the survival of the Internet
project launched in 1998 should be largely credited to the Peruvians. In order
to establish its clientele abroad, E. Wong implemented an advertising campaign
in television channels, newspapers and other types of media in Florida,
California, New York, New Jersey, and Washington, where most of the Peruvians
live.
Pão de Açúcar, from Brazil, had some try-outs. The researches showed that
5% of the supermarket’s sales over the Internet were originated by Brazilians
who live in a foreign country and addressed to their families in Brazil. At the
moment, the company is reevaluating this type of business. In our country, there
are other supermarkets which accept orders by Fax, from areas that concentrate a
larger number of emigrants’ families. The payments are made through a detached
remittance.
Supermarkets, as a result, are seriously attracted by this new market,
mainly composed by blue-collar emigrants, however rich and living abroad without
much support, always looking for solutions to their problems and needs, among
them the welfare of their families in the homeland, the biggest concern of all.
Latin-Americans are famous for the loyalty to their families and roots.
At present, the potential nourishment market joins the varied
possibilities of real estate investments. Some other uses of the Latin-American
wealth abroad are still to come, driven by the constant need of favorable
conditions so that those who live in foreign countries can help their families
left in Latin America.
The fashion market, whether masculine or feminine, has been facing the
challenge of presenting the new in colors, styles, and creativity. Consumers are
tired of what they see and wear in everyday life.
The major distributing chains resent the competition of similarities,
which presents the same brands, known by all and, in some cases, already
saturated. They admit consumers are ready for the new.
Once again, the strength and beauty of the new Latin-American market in
the United States is in the spotlight. Today, Latin-Americans represent 14% of
the North-American population and 20% of the youth. The giant J.C. Penney has
tested this growing market in the North-American spring last year. It released
the Havanera line by Perry Ellis in 200 stores, whose main consumers are
Hispanics. There was Havanera in 500 of the 1,000 stores at Christmas. At the
moment, they are releasing a Havanera line with back-to-school material, for
next quarter.
Men’s Wearhouse Inc. has searched for a formula capable of attracting men
from 25 to 45 years old by offering a charming stylish line. It opted for the
Latin-American design by Eddie Rodriguez.
Kellwood Corp., a clothing manufacturer in St. Louis, Missouri, has
introduced the Lucy Pereda sports collection and its distribution is addressed
to the middle-class market reached by Sears Roebuck. Kmart Holding Corp. released Thalia
Sodi, a broad collection for women, as well as towels and fragrances. Perry
Ellis International distributes masculine lines, such as Cubavera for department
stores and Contigo, exclusively for Dillard’s Inc. Brown Shoe Co. succeeds at a
shoe line with its tag signed by the famous Mexican guitarist Carlos
Santana.
Brazilian exporters must observe these tendencies and be ready for what
may be a promising future for our manufacturers and stylists.
By Robert Walton
Westchester
International Corp. Consultant for the European Union
Each inhabitant of the European Union Member States produces between 250 and 620 kilograms of household waste per year. About 25 to 30 percent of this is packaging waste. European Union Council Directive 94/62/EU on Packaging and Packaging Waste required that by the year 2001, all European Union Member States had to introduce a system for the collection and recovery of packaging, and to recover between 50 and 65 percent of the packaging waste. It is up to the individual countries to decide how they would achieve the recovery and recycling targets.
This legislation is based on the "Polluter Pays" principle and stipulates that any person responsible for first placing on the market packaged products used by households must contribute to or provide for the disposal of their used packaging. Since no company, irrespective of its size can undertake the responsibility to re-collect its used packing waste, an organization called the "Packaging Recovery Organization Europe s.p.r.l." (PRO EUROPE) was founded to organize the collection, sorting and recycling of used sales packaging.
PRO EUROPE is an umbrella organization of national compliance schemes responsible for the recovery and recycling of household packaging waste in Europe and holds the European Trademarked Green Dot. The Green Dot on packaging means that a financial contribution has been paid to a qualified national packaging recovery organization that has been set up in accordance with the EU directive and respective national law. For each European country one nationally recognized collection and recovery system has been established. These collection organizations deal mainly with household packaging and working on a not-for-profit basis.
The countries within the EU that have adopted the Green Dot trade-mark are: Austria, Belgium, Czech Republic, France, Germany, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Norway, Poland, Portugal, Slovenia, Spain, Sweden, Turkey and the United Kingdom.
While the maximization of waste reduction is required the requirements in each EU countries may vary. PRO EUROPE ensures that each national law is incorporated into its Green Dot program thereby reducing the variance which could create barriers to trade that would occur if each country forced manufacturers to attach different national trade marks to the packaging or have to create different packaging for each member state.
The amount paid for the Green Dot depends on the weight and type of material of the packaging. Licensed companies have to declare the total number and type of packaging they put on the market once a year. From this declaration the fee is calculated. Green Dot fees vary from country to country depending on the type of packaging but range between € .01 and € 1.50 per kilogram of packaging waste.
It is important to understand that the Green Dot is not a recycling symbol; it’s only a recognized symbol of financial contribution to a national packaging recovery company established in accordance with the European Packaging Directive.
European consumer and retailer recognition of and demand for the Green Dot trademark on packaging labels are very high. Pressure is increasing in Europe for all packaging labels to carry the Green Dot trademark, to the point that not having the trademark is a competitive disadvantage. New companies entering the EU market should go though the process of obtaining the Green Dot certification on their packaging to ensure that it does not act as a barrier to market entry.
