Creative and ICT:
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Summary
- Brazil is an agricultural giant that has an overlapping export profile with New Zealand. This means New Zealand’s many key agricultural commodities do not generally enjoy an advantage in the Brazilian market.
- Still, the revenues and new business won by New Zealand exporters, with whom NZTE works closely, experienced significant growth in the last year. This growth reflects the New Zealand agritech sector’s ability to target efficiency gaps across the Brazilian economy, including through their cost-reducing or production-increasing products.
- While there are challenges to operating in the Brazilian market, New Zealand businesses with a medium-to-long term vision willing to invest time, relationships and capital with local presence have found success.
Report
In Brazil, New Zealand is not known for our commodities exports such as dairy or meat products. Amongst Brazilian importers of New Zealand products, New Zealand is instead known for its high quality, niche technology that targets efficiency and productivity pain points.
The success of exporting such technology has seen revenue and new business won by New Zealand exporters with whom NZTE works closely grow substantially in the last year. In addition, 13 Memorandums of Understanding (MOUs) were signed during the Minister of Trade and Investment’s Trade Mission to São Paulo(external link) in October 2024. The partnerships from these MOUs are set to generate over $100 million in revenue over the next three years.
Why are we known for technology, not agricultural goods?
The success of New Zealand companies in exporting New Zealand technology reflects the characteristics of the Brazilian market in three key aspects:
- Brazil is an agricultural giant. Agricultural commodities make up a large part of Brazil’s export profile. For example, Brazil is the world’s largest exporter of beef, poultry, pork, soybeans, sugar, and coffee. Significant domestic production of dairy and high tariff rates also mean Brazil is not an easy market for New Zealand dairy. As such, Brazil is not a market where New Zealand agricultural products necessarily have an advantage.
- Low productivity and efficiency gaps in Brazil’s enormous agricultural industry, and other industries writ large, create opportunities for savvy New Zealand agritech and other cost-reducing or production-increasing products to address these deficits.
- The Brazilian market is receptive to adopting new technologies and has a sophisticated consumer environment with a booming e-commerce scene. For example, the fintech ecosystem in Brazil (concentrated mostly in São Paulo) is similar to that of London in terms of innovation. Brazil’s technology-friendly environment has produced 25 unicorn startups (privately held startups that have a valuation of at least USD1 billion and not listed on a share market).
The above characteristics combined with the sheer size of Brazil (10th largest economy in the world by nominal GDP according to the IMF) present significant opportunities for New Zealand businesses looking to diversify beyond the Indo-Pacific and traditional markets.
Success stories – Kiwi wins in Brazil
With the support of NZTE, New Zealand businesses have found success in the following sectors: agritech, education technology, communications, health tech, and services. Successful New Zealand exporters to Brazil have developed a value proposition and products that have found a good fit in the market that either enhance efficiency (saving money for the Brazilian customers) or increase productivity (generating more profit for the Brazilian customers). Despite entering the Brazilian market at a higher price point due to various tax burdens, these exporters successfully compete against Brazilian companies and high-quality international products and services. Some examples of Kiwi success stories in Brazil are:
- QCONZ has operated in Brazil for 15 years, leading the market in quality systems for the primary sector. They specialise in data capture, reporting, and assurance programs, with services including audits, training, animal welfare, and digital solutions for agricultural efficiency and compliance. With around 40 employees in Brazil, QCONZ serves major clients like Nestlé and the Brazilian Ministry of Agriculture (MAPA) and maintains a strong presence across Latin America.
- Tait Communications has operated in Brazil for over 10 years, delivering critical voice and data radio solutions for public safety, transportation, and utilities. It is the leading supplier of P25 terminals to police forces throughout Brazil and partners with major companies like Enel, EDP, Neoenergia, Vale, Petrobras, and Santos Football Club. Tait has a broad dealer network and recently started managing their entire South American market operation from its Brazil office, the company’s most productive market outside New Zealand. Tait runs one of the largest New Zealand operations in Brazil.
- AD Instruments is a global leader in user-friendly, high-quality data acquisition software and equipment for life science research and education. Operating in Brazil for over 17 years, with a São Paulo office since 2008, the company has a skilled team of eight servicing Brazil and the broader Latin America region. Its main clients include top universities such as USP (University of São Paulo) and UNESP (São Paulo State University), as well as leading hospitals and research centres like Incor (Instituto do Coração).
- Mindhive is a recent entry into the Brazil market with its AI-powered leather grading system. The technology identifies and grades blemishes on cowhides, ensuring consistency and accuracy in leather production. Mindhive signed a Memorandum of Understanding with Brazilian company JBS, the world’s largest meat processor, during the Minister of Trade and Investment-led Trade Mission to São Paulo in October 2024. The technology is now being introduced to JBS operations.
Further opportunities – untapped potential for New Zealand tech
More opportunities for niche technology products have been identified by NZTE in areas such as:
- Climate monitoring as Brazil seeks to adapt its farming practices to the changing climate and increasing regulation and requirements from international retailers;
- Automation as Brazil’s relatively young workforce starts to age and the cost of labour rises; and
- Aerospace, targeting Embraer, a Brazilian multinational aerospace corporation.
Some challenges, but not insurmountable
While there are plenty of opportunities for New Zealand businesses looking to expand their horizons to the largest economy in South America, there are also things to consider when operating in the Brazilian market. Some of these include navigating bureaucracy, various federal and state taxes, as well as tariffs for imports, and the language and cultural differences.
However, these challenges are not insurmountable. New Zealand businesses with a medium-to-long term vision willing to invest time, relationships and capital with local presence have found success in the Brazilian market, as evidenced by the strong growth figures for NZTE customers in Brazil over the past year.
Comment
Though Brazil does not offer an obvious market to send some of our most well-known products to, it does provide opportunities for New Zealand to export the technology that contributes to our success with those well-known agricultural products. The clear match between New Zealand services/technologies and the needs of Brazilian customers, combined with their appetite and willingness to try new technology to improve productivity and efficiency, present growing opportunities for New Zealand businesses to take advantage of and diversify their exports.
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