It’s our number eight wire mentality that’s making Kiwi companies succeed in Brazil - a country that’s without a doubt one of the toughest export markets in the world. But it’s no longer just the traditional, hands-on attitude of "let’s make a smarter product" that makes the Dairy Board or hi-tech companies like Deltec beat their competitors. These days, you’ve got to think of innovative ways of dealing with your customers, to outsmart the Nokias and General Electrics of this world.

It’s all about thinking outside the square. It’s about exporting the knowledge base our top companies have built up in our own competitive New Zealand environment.

The Brazilians have suppliers from all over the world knocking on their doorstep, so they have plenty of choice. What this fast developing country really wants is superior know-how, as well as products. The Brazilians prefer to work with companies that can deliver a competitive advantage. In this market of vast opportunities, the one thing you need is a smart, number eight wire attitude to making your customers succeed.

The profitable export of knowledge
Take the Dairy Board, for example. Operations in Brazil were started only four years ago, and in that period dairy exports skyrocketed to the value of some US$60 million per year. But right now, the aftermath of the Asian economic crisis is hitting Brazil hard. As a result, turnover is expected to contract to the value of some US$40 million. Still, New Zealand Milk Products, as operations are called in Brazil, expects profits to remain at the same levels as before. The only way to do that was to create a shift from exporting dairy commodities to exporting dairy know-how.

"For us, being successful here is all about exporting technology and innovation, as well as product," says general manager Craig Bell at New Zealand Milk Products (Brazil).

"We started as a supplier of standard ingredients in a sophisticated food market and had to compete hard with local suppliers. Then we specialised and started to provide customised ingredients instead, making ourselves unique. One of our customers, for example, buys a specially manufactured blend to produce a UHT long-life product. Sure, they pay a small premium over the standard product, but now they have less rejects, create products with a more consistent flavour, and have reduced their operating costs. By exploiting our superior dairy technology we can make our customers very happy," says Mr Bell.

Re-engineering the customer's business
"But the real advantage we can offer local producers is in the area of technology consultancy and business re-engineering, and that’s where the big money is to be made – both for ourselves and for our customers."

New Zealand Milk Products has helped a number of customers to create value innovation. "By showing a manufacturer of yoghurts how to make ‘fromage frais’, we managed to help them quadruple their production. This has given them a huge advantage in the market, with better capital utilisation and improved operating costs," says Mr Bell.

"By commercialising our knowledge, we’re now exporting technology and innovation, and by doing that we’re making more money for the farmers back in New Zealand."

Superior high tech solutions
Other Kiwi exporters have also discovered that if you can provide your customers in Brazil with superior solutions, they’re happy to pay a premium to improve their efficiency and profitability. Recently, six New Zealand companies ventured out to Telexpo ’99 in Sao Paulo, one of world’s biggest telecommunications fairs. Their initiative was organised together with Trade New Zealand, which offered assistance with travel, logistics and running the stand.

Telecommunications company Deltec exhibited its remote control system for downtilting antennas in cellular networks, and found a number of prospects interested in its innovative products. In fact, just one week before Telexpo ‘99, the Wellington company signed up its first major deal in Brazil through Ericsson, with Sao Paulo cellular network provider Sercomtel.

With this contract in the back pocket, Deltec has created a niche window of opportunity in the Brazilian market for its sophisticated and technologically superior Teletilt cellular antennas.

"Operators of cellular networks have to make the most of a limited number of frequencies and ever growing numbers of customers, so they constantly need to change the tilt of their antennas to change the size of their cells," says Jonathan Black, who manages the South American market for Deltec.

Creating cost savings
"Traditionally, you’d have crews driving around the city all day taking care of that job. But each time you downtilt an antenna, which involves quite a bit of work, you need to shut it down and drop all calls from that site, causing huge numbers of customer complaints. That’s why we came up with a smarter system, which is already selling very well in Australia and Asia."

Deltec’s Teletilt system can be operated through a manual control on site, or through remote control on a PC.

"Sure, our system comes at a premium price compared to a more traditional system. But we use a simulation on a laptop to show our prospects the kind of savings they can make by using our Teletilt system," says Mr Black. "We can illustrate how a small operator with 20 cell sites in a downtown cosmopolitan area could easily save $500,000 per year, just on dropped calls. Our system is extremely cost-effective and improves efficiency, and our clients appreciate innovative solutions like that."

It's exporting Jim, but not as we know it
One other exhibitor at Telexpo was Industrial Communications Service, which was trying to find business partners to locally manufacture and sell its wireless communications products. "The principle is simple, we want to develop local solutions that suit this market, together with new partners," says Roger Carter, General Manager of ICS Ltd.

"We don’t really mind whether that company wants to import circuit boards that are manufactured in New Zealand, or wants to put their own circuit boards together. The real money is in exporting the know-how we have developed back home in our own advanced and competitive market."

Brazil as a testing ground for a new approach
Brazil is definitely not an easy country to get established in. Tariff and non-tariff barriers hold back exporters, as well as language problems and other difficulties that pertain to many developing markets. Still, there also are valuable opportunities, as the vanguard troops of our export community are discovering right now. New Zealand has a lot of innovation to offer and Brazilian importers, distributors and business partners are keen to discuss the possibilities.

In July, a Trade Mission of some 30 Kiwi companies, accompanied by the Hon Lockwood Smith, will hit Brazil and three other countries in South America. No doubt some more export success stories will develop from that Trade NZ initiative. Any company with excellent products or services, persistence, and a willingness to invest time and some money, should consider entering what’s still a land of vast opportunities.

Paul Vaughn,Market Services Manager, South America,Trade New Zealand