Manufacturers eyeing the foreign market
Brazil doesn’t export many bicycles, but companies want to turn the Manaus Industrial Pole in a large center of the sector, attain economy of scale and increase shipments.
São Paulo – Brazilian bicycle exports are “insignificant”, according to the vice-president of the Brazilian Association of Motorcycle, Moped and Bicycle Manufacturers (Abraciclo), Eduardo Musa. In all, 3,000 articles were exported from January to November of this year, with domestic output at 3.6 million and imports at 245,000.
However, that doesn’t mean that the industry has its eyes shut to the foreign market, especially with the strong dollar appreciation against the real since the end of last year. “We are looking at exports and could use our installed capacity to open new markets”, said the executive.
The problem is that, in the case of bicycles, the appreciated dollar is a double-edged sword. If, on one hand, this turns Brazilian products cheaper abroad, on the other hand the sector uses a large volume of imported parts, which, for the same reason, are more expensive in the domestic market, which offsets the currency exchange advantage. Besides, the world’s largest exporters are China and other Asia countries, which have a huge scale in production and competitive prices.
Musa believes that Brazil has the capacity to sell more, especially to the United States, Europe and Latin America markets, but to do so it needs to achieve progress in the development of a national supply chain that would involve all the links in production.
That’s what the companies based in the industry hub Polo Industrial de Manaus Industrial (PIM), in the Amazon state, want to do. For this, they need to convince other manufacturers spread out through the country to start producing from the capital of Amazonas state, increasing the scale of domestic production and, therefore, encouraging the parts manufacturers, local and foreign, to do the same, creating a “cluster”, or production arrangement, of 'steeds'.
“Our dream is to bring not only the manufacturers, but all the parts chain, using the example of our motorcycle colleagues”, said Musa, mentioning the motorcycle industry, which is very strong in the Manaus Free Trade Zone. This would help not only exports, but also the domestic market, since, according to the executive, the sector was forced to transfer to the Brazilian consumer the hike in costs with imported parts due to the dollar appreciation.
According to Abraciclo’s CEO, José Eduardo Gonçalves, the idea is to turn Manaus in the largest bicycle production hub outside of South East Asia.
Besides Caloi, which in 2013 was acquired by the Canadian group Dorel, other companies started to recently produce in Amazonas state: Houston, from Piauí, Sense, from Belo Horizonte, and Isapa, from São Paulo. “We hope that in the mid-term, Polo Industrial de Manaus Pole will be ever more important to bicycles”, said business owner Isacco Douek, of the Isapa group, whose plant at PIM has the capacity to produce 240,000 units per year.
In all, these companies, according to Musa, work with ten brands and account for 40% of the local market and 45% of domestic output, Manaus-based or elsewhere.
Besides traditional bicycles, Sense manufactures eletric models and, according to the company’s director, Henrique Ribeiro, this is a market niche that also tends to grow. “More than one million electric bikes are sold in Europe per year and I hope Brazil follows the same path”, he said. The company’s plant at PIM has the capacity to produce 150,000 units per year.
According to Musa, besides the manufacturers, bike parts suppliers have shown an interest in setting up in the hub, but this is a movement yet to be consolidated so that before there's an “increase in density” in the production chain. “It’s something for the mid or long-term”, he added.
*Translated by Sérgio Kakitani