Brazilian companies plan to expand abroad – FDC survey

RIO DE JANEIRO, BRAZIL – The business expansion plans of Brazilian companies operating abroad or even of others preparing to start their international expansion have not been affected by the Covid-19 pandemic, according to the survey “Internationalization Trajectories of Brazilian Companies 2021,” conducted by the Dom Cabral Foundation (FDC).

According to the study, 78% of companies plan to expand or greatly expand in countries where they currently operate, and 71% plan to enter new markets in the coming years.

Asked about the influence of the pandemic on their internationalization strategies, 70% claimed that they were not affected or were slightly affected by the Covid-19 context. For 57% of companies, international results have improved in the current context and for 64% domestic results have improved in the current context.

“In the survey’s 15 years, with each edition we have seen an increase in Brazilian companies’ degree of internationalization. This shows maturity in the choice of long-term strategic paths and greater qualification of teams to conquer new markets,” says the study coordinator of the FDC Center for Strategy and International Business, Lívia Barakat.

The study was conducted in the 2020/2021 period with 154 companies. Among the participants, 49% answered that they started operations abroad, while only 15% interrupted this process in a country. The main markets where Brazilian companies expanded their operations were the United States, Argentina, Portugal, Uruguay, Colombia, China, and Mexico.

STRATEGY

The main mode of entry chosen by Brazilian companies for new expansions is through the opening of a commercial office (37.1%) and exports (28.9%). This points to the strengthening of foreign trade against the internationalization of greenfield operations, when the operation is started from scratch, or the acquisition of an existing production plant (10.3%). “Despite the higher dollar exchange rate, making investments abroad more expensive, companies are planning to conquer new markets,” the researcher says.

She also highlights that digital transformation can contribute to this process. “It is possible to have new ways to expose your product or service with the strengthening of e-commerce and home office. It is not always necessary to have a physical presence outside Brazil.”

RANKING

The study also presents the internationalization ranking of Brazilian multinationals, which is assessed based on three indicators: assets, revenues, and employees abroad. Non-textile materials manufacturer Fitesa leads the ranking according to its internationalization level for the 5th consecutive edition.

Artecola chemical company also stands out, reaching second place in the ranking for internationalization degree for the first time, as well as CZM, a company from Minas Gerais state that leads the ranking by revenue index.

“The survey results help companies assess the strategies used by others at a more advanced stage of internationalization. It is an opportunity to reflect on what is necessary to advance in their own internationalization process and to learn what other companies have done,” Barakat adds.

Top 10 companies in the internationalization ranking:

1st – Fitesa

2nd – Artecola

3rd – Metalfrio

4th – CZM

5th – Stefanini

6th – Suzano

7th – Iochpe-Maxion

8th – WEG

9th – Tigre

10th – Braskem