Movelsul Brasil showing good growth
Event attracts variety of American buyers
By Powell Slaughter -- Furniture Today, March 21, 2004
BENTO GONALVES, Brazil — BENTO GONALVES, Brazil – With the exhibitor count up 14 companies to 430 versus two years ago, Movelsul Brasil 2004, Latin America's largest furniture trade show, got off to a strong start earlier this month.
Through the first two days, 11,000 buyers came through the doors, ahead of the pace at the same time during the biannual show's last edition in 2002. This year's number included almost 700 foreign buyers.
Participation in this year's Movelsul Buyer Project, which brings representatives from potential customers for Brazilian furniture from around the globe, indicated that international attendance increased in both quality and quantity. The program attracted U.S. buyers from Ikea and executives from major warehouse clubs, a growing channel for furniture in the U.S. market, as well as contract and office furniture buyers.
Adam Pontrelli of Global Resources in Los Angeles, a buying agent for warehouse clubs and department stores, came away impressed with Brazilian manufacturers' production capacity and quality. He was looking for dining, office and occasional furniture, such as bookcases and entertainment centers, as well as garden/outdoor furniture.
"First, it's totally out of the ordinary to be invited to come to a show like this, with the organizers setting up the meetings and providing transportation," he said. "The Brazilians are serious about doing business in the States, and we identified some manufacturers we think we can do business with. I've never had a more efficient showing.
"Second, we're down here because so much of the industry is sourcing out of China, and we feel we have to have alternatives."
While Brazil lacks the types of mega-plants for furnishings found in China, Pontrelli was impressed with the facilities he visited, and the fact that many manufacturers here manage their own supply chain for raw materials.
"The factories I've visited are as impressive as the ones I've seen in China," he said. "From what I've been told, they've come a long way in the past two-and-a-half years. … I believe they can produce the quality and quantity we're looking for."
Seizing the day
More potential U.S. customers cited efforts in the States to limit Chinese bedroom imports during their visits with Incema, said Franklin Sternberg, export director. His company makes beds, bunks and chests in solid Forest Stewardship Council-certified solid pine.
After starting to export 11 years ago with two containers a month, Incema now exports 50 a month. With a new feeder plant in Lages in operation and new equipment on the way in its main 70,000-square-foot plant in Florianópolis, the company expects to ship 65 to 70 a month by the end of this year.
"We doubled our capacity last year because of the Lages plant," Sternberg said. "Three years ago, the U.K. was 70% of container volume, but we have aggressively changed our U.S. channels. We still use agents there, but we're doing more direct-container business."
The U.S. market now accounts for 40% of Incema's sales.
Crossmart Brasil, which has nearly three decades of experience sourcing product for European catalogs out of 40 Brazilian plants, showed here for the first time.
"We are starting to approach the U.S. market," said Rudolf Swarte, president. "We'll mix containers out of various factories, which makes it a lot easier for smaller dealers who don't want to get a whole load of a single product. After 27 years working with French catalog companies, you get very flexible."
Crossmart relies on seven inspectors who constantly visit plants to check moisture content, finishes and overall quality. Swarte said the company currently does $20 million a year in French mail orders alone.
"We've had 10 to 15 serious inquiries here from the U.S. and Canada," he said.
Opportunity in contemporary
Another development creating interest in Brazilian furniture is the disparity in the value of the U.S. dollar vs. the euro, said Johann Schneider of the Brazilian export consultant Schneider Associates.
"Brazilians are becoming a low-cost alternative to Italian manufacturers in the contemporary category, especially when they don't make straight Italian designs," he said. "The situation with the euro is to their advantage. … This is an opportunity window in time that might not be there next year to build market share in the United States and Latin America, as well."
A case in point is first-time exhibitor VidaLuz, a small producer of contemporary furniture with proprietary designs. The company uses intriguing materials, including a sedimentary stone — scalloped ardosia — found only in the Parana state of Brazil, with a naturally scalloped texture; high-carbon steel, often deeply textured; and itoaba, a dense, clean Brazilian hardwood.
"This is not going for the floor of a traditional store, or one who says, 'he's selling something well so I need it on my floor'– the retailer has to be a style leader," said Walter Brown, a U.S. representative for the company.
VidaLuz, which had worked only through the design trade, came to High Point in October, but will hold off for a while before showing there again. It stocks 40 to 50 items in Hickory, N.C., to introduce the product to the U.S. market, with a goal of very focused, limited distribution.
"We maintain a 15-day factory lead time and have no minimum order quantity per piece," Brown said.
The big challenge for Brazilian producers targeting the U.S. market in the more traditional styles remains wood finishes, said Domingos Rigoni, president of Abimovel, the Brazilian furniture manufacturers' association.
"The finishes we have here are adequate for our market, but we have the new materials, the technology, to provide better finishes for the new markets we're approaching," he said. "The hardest thing about exporting is getting the finish right."
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