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Chinese agchem companies face lots of difficulties in access to Brazilian market
Aug. 17, 2015
"Brazil is the biggest and most important market in the world and, therefore, who is not present here, will disappear." Hirata pointed out that, currently, the Brazilian market is very concentrated - very few big companies obtain a big slice: "Just eight companies occupy 75.3% of market share. If we broad to 12 companies, the scope gets to 88%, and considering the 20 biggest, the percentage reaches 98.57%. Among those, there is just one national company: Nortox".
One explanation is the difficulty of entrance in the Brazilian market. Hirata listed the major difficulties in this sense, the registration of new products being the biggest issue. "This is the main barrier, above all issues of access and distribution - which generally will be done if the product really works," explained Hirata.
Other problem is the "credit risk". This is because big producer are like "connected to big distributors". "How do I have the guarantee that I will receive the payment for the product that I delivered?" Hirata affirmed that the credit guarantees, in general, are presented at the first purchases of inputs, which are made with traditional suppliers.
Other barriers pointed out by Hirata are:
• New competitors on generic – mostly Japanese
• Companies who have registration acquiring resales to sell directly to final consumer
• Variety of portfolio
• Logistics
• Product quality
• Currency variation
• Partnership for acting in the regional market
Source: AgroNews
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