Brazilian beauty products manufacturer Avanty Quimica will start its export business by opening a production facility late this year in Osceola County, capitalizing on the plethora of free trade deals the United States has with countries that Brazil does not, the company's president told GrowthSpotter.
"The U.S. is a very open market with many free trade deals, so from the U.S. we can have much easier access to markets like Colombia, Mexico and Canada that we could not sell to directly from Brazil without facing trade barriers or tariffs," said Alexandro Braga in a recent interview.
Based in Fortaleza in Brazil's northeastern state of Ceará, Avanty Quimica has produced professional-line beauty and hair care products for domestic sale since 2002. It is best known for hair-care brand Azenka and Brazilian keratin hair-straightening treatments. The company did BRL 6 million ($1.95 million) in Brazil-based sales last year, up 5 percent from 2013.
When Braga began planning in 2014 to pursue export markets for Avanty he saw countless barriers to Brazilian producers. Most countries in the world apply import tariffs to Brazilian products, often a consequence of Brazil's own steep protectionist tariffs on foreign goods.
Braga found he could kill two birds with one stone by establishing production 3,600 miles to the north in Osceola County, opening the U.S. to Avanty products and exporting to nearly every foreign market he wants going forward.
Operating locally as Avanty Brands of America, Braga now has a small sales and management team with office space in Kissimmee. He's searching for 2,000 square feet of warehouse space that can accommodate an industrial laboratory and meets fire safety and air conditioning requirements for cosmetics producers.
"Our initial investment here won't need to be high, around $100,000 to lease warehouse space and buy our machinery," Braga said. "We'll generate 10 new jobs by the end of this year and 30 new jobs in our second year as we establish a call center and logistics."
The U.S. has 14 free trade agreements in force with 20 countries. In 2014, 47 percent of U.S. goods went to free-trade partner countries.
The U.S. is currently negotiating for an Asia-Pacific trade deal known as the Trans-Pacific Partnership (TPP) Agreement, and a trade deal with the European Union that will be the largest free-trade zone in the world, known as the Transatlantic Trade and Investment Partnership (T-TIP),
In contrast, Brazil has arguably the fewest free trade agreements of any country in the world for an economy its size. Brazil has only formed bilateral deals with Israel, Palestine and Egypt since 1991, when it joined the Mercosul group of nations in South America.
Similar to Avon and Mary Kay in the U.S., Avanty operates as a direct sales cosmetics brand in Brazil. It will establish the same direct sales network of representatives in the U.S. and new export markets.