The State of the Remanufacturing Industry in Brazil
- By Flavio Oliveria
- Jan 01, 2010
Brazil is a large country in many aspects. It is the world’s fifth-largest country, occupying nearly half of the South American continent. The Brazilian economy has been showing constant growth in the last few years as many new initiatives have been brought by the federal government to stimulate foreign investment and market opening. Brazil is the world’s ninth-largest economy by purchasing power parity and the 10th largest at market exchange rates. The country has surpassed 190 million inhabitants – what represents a substantial market and will require a lot of printing.
It is important to note that we are talking about 10,000 formally registered companies within the printers and cartridges sector, engendering approximately 100,000 direct jobs. The aftermarket in Brazil has been growing, improving its techniques and maturing. As a consequence, the remanufactured products are getting more credibility in the society.
On one hand, the industry has many players well-known for providing high-quality services to their clients and for that serious work they are being recognized and trusted. On the other hand, there is still a large slice of the market that lacks quality and technical know-how.
“Brazilian consumers have been choosing to buy more affordable products and remanufactured goods to attend this demand; however the overall quality of the products still have to pass through significant technical improvements,” said Vladimir Bossoni, national sales manager of Katun Brazil.
Two labor syndicates have recently been created in the country: Printer Cartridges Recycling Companies Syndicate from São Paulo (SERCISP) and Printer Cartridges Recycling Companies’ Employees Syndicate from São Paulo (SINTERCISP). These two syndicates are more evidence of how the Brazilian industry is trying to organize itself and consequently, improving quality and professionalism that will help the market develop as other similar engagements start to take place around the country.
There are two associations that represent the industry: Brazilian Printer Cartridges Remanufacturers’ Association (ABRECI), open to companies located anywhere in Brazil. It is very informative to new players as it is supportive to its associates. The other association is South Region Printers Cartridges Remanufacturers’ Association (AGRECI), which represents South Region companies only. Both associations have been contributing to the development of the market by implementing actions that benefit the industry as a whole, such as training courses, up-to-date information about the market, legal advice, and support of national expositions.
At the end of 2008 the general feeling of the Brazilian remanufacturing industry was reflective of President Lula’s statement that the world economic crisis would not affect Brazil. Of course, it did affect Brazil, as it did nearly the rest of the world.
Most companies — remanufacturers or not — had to reevaluate their roles and search for alternatives to survive. “The Brazilian market had been presenting good results and growth during the last few years. But due to the world’s economic situation, in 2009 we have watched the market stagnate. If by one side we conquered some new clients that were searching business’ alternatives to survive the crisis, by the other side we have lost some sizeable clients that could not carry on after the recession,” said Carlos Alberto Marques from Tinta e Toner Group – one of the only companies in South America that works with remanufacturing systems under a franchising setup.
The Brazilian market as a whole did not grow as previously projected in 2008. Many businessmen were interviewed and different opinions were heard.
“Many factors have worked concurrently for the negative analysis of the Brazilian market that we make out. Low quality, large entry of Chinese products and lack of vision of some businessmen have played a part in the situation we are facing. The market has grown less than projected in 2008. In our specific segment of consultancy and training for the re-industry, we have endured more with the crisis’ effects because our potential clients have postponed their investments and less new players entered the market, which are our core business,” said engineer Cassio Rodrigues from Cassio Rodrigues Institute.
It is appropriate to remember that Brazil has been facing economic crisis for decades. Only in the last few years has some stability become a reality to Brazilian people; therefore, this crisis has not heavily affected the day-to-day lives of citizens or companies.
Some Brazilian groups have found other opportunities by varying their range of products, reducing costs, creating new products, and modifying strategies in order to achieve the previously planned goals for 2009.
Luciana Cruz, international trade manager of Parai Innovative Solutions, commented on how Parai has bypassed the crisis: “In spite of the world’s economy downturn we have accomplished the previously projected growth for 2009. With new ideas like putting six times more ink in a cartridge, we have conquered new clients. We feel that the market is more open to consuming recycled or remanufactured goods. We believe that is due to the market’s tendency itself of being more ecologically responsible and to the credibility achieved by serious companies that have been constantly investing in quality to offer trustable products, exclusive services and an innovative business conception.”
The cartridge remanufacturing industry in Brazil has still grown in 2009, but not as much as it did in 2008. Oswaldo Devienne, ABRECI’s president, gave his opinion about the market this way: “The growth in Brazil was lower than expected before the announced international economical crisis and its higher effects were only felt in the second semester of 2009.
“The reaction was discreet because it affected all field of activities. The market has grown but less than in the first semester of 2009. Some remanufacturers had to cut costs and change strategies to overcome the recession. Even though there is a positive expectation for 2010 and we do believe the industry will upsurge to regain the growth rate of the first semester of 2009.”
The Brazilian industry suffered consequences of the recession; some companies felt its effects much more than others, some have changed strategies to embrace new opportunities and did whatever it took to keep their businesses going. Ultimately, the general feeling of the industry in Brazil is clearly that the cartridge remanufacturing business still has great potential within Brazilian territory — meaning the outlook is good for the industry in Brazil, and hopefully for the world’s economy as well.
Contact Flavio Oliveira at rejunger@hotmail.com
This article originally appeared in the January 2010 issue of Recharger.