Market knowledge key to success in Brics

Foreign business cultures in Brics countries do not make for easy trade relations, but the significant opportunities make it worth the effort to understand the markets and the people says KWE managing director, Arend du Preez. “The Brics markets aren’t easy and if you haven’t done your homework you will run into trouble,” adds Du Preez. “It is worth partnering with local companies to overcome some of the business culture differences. We successfully partnered with companies in both India and China. Partnering with a local company in Russia was a disaster though, because of the prevalent corruption.” KWE has invested heavily in Brics countries, particularly China and India, with planned investments in South America in early 2013, after a 10-year hiatus. “In terms of our global strategy, we have a strong footprint out of the East, particularly China, and we’ve seen consistent growth in this market. Through massive warehouse infrastructure in China, we source materials and parts from around the world and assemble them into finished products. These are sold into the Chinese market where we are competing for market share. End products are also distributed internationally.” Du Preez adds that India holds enormous potential for KWE, but like Russia the challenges are local logistics and infrastructure. “It isn’t a first world infrastructure in India – everything from overcrowded ports to inoperative railway systems make trade challenging. In Africa, Russia and Brazil corruption, infrastructure and skills are the biggest obstacles, says Du Preez, but he is quick to add that the Brics countries present significant opportunities and with the flat growth in the EU, KWE’s focus is definitely on these emerging markets.