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Ray Fu Enterprise Playing Safe in Latin American Market

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2013-07-10

 With the rise of emerging markets and the shifting investment focus, it is advisable for investors to make adequate studies before biting this Latin American big pie lest the investment should become a big burden. Despite of this, Ray Fu Enterprise Co., Ltd. humbly said that they have not accumulated sufficient experience in the Latin American market yet, however, it will be their pleasure to share the experience for the industry to have a better understanding of it.   

 

Ray Fu specializes in the import and export of metal fasteners and operates as a subsidiary of Chen Nan Iron Wire Co., Ltd. Its product range includes screws, bolts, nuts, washers, and steel wire, which are all compliant with ISO9001, TS16949, CE, and other environmental protection regulations and certifications. Backed by the excellent quality, its products are selling with a great success in over 30 countries.

When talking about the market, Export Manager Candy Wu said, “The diversification of products is the key to extending the product life cycle (PLC) and expanding the overseas markets. Since the establishment of the parent company Chen Nan Iron Wire, the business has begun from material production, processing, manufacturing of fasteners to the later market expansion in charge by Ray Fu established later on. Development within the entire supply chain is heading forward in a more international way.”

 

Seeking Stable Business Rather Than Big Business for Risk Diversification 

Ray Fu, originally selling materials to the Latin American market, unexpectedly developed the Brazilian market due to the high acceptance of their fasteners by the wholesalers there. The cooperation has been ongoing for 4 years. Although the company has plans to develop more markets in Latin America, Wu frankly pointed out that some features of Latin American market being evaluated still keep Ray Fu from doing so.   

 

99% Cooperation Influenced by People’s Traits

The Latino people place enjoyment above everything and this affects the efficiency of the public sector as nothing is more important than holidays. This is not to say they lack sincerity, it’s just the trait of the people.  

Payment Collection Being Not Easy

The local import tariff and currency exchange control has caused the payment by Latin American clients to be relatively slow. For example, there is a big difference between the exchange rates of US dollars and Brazilian reals, so the fluctuation can affect the payment efficiency.  

Concerns on Public Security

The “urban-rural gap” and the “income gap” are two factors contributing to the public security being an issue in developing countries. Despite of the very good development in countries like Brazil, Argentina and Chile, personal safety has always been something to watch for when people go out.

 

European and North American Markets v.s. Latin American Market

The European and North American markets are mature with comprehensive regulations and systems; the emerging Latin American market, whereas, is less regulated. The difference in regulations has directly affected two aspects: First, the demand side of “practical v.s. usable.” In Europe and North America, the usage of all types of screws are clearly defined, clients buy fasteners for corresponding needs; while in Latin America the regulations have not been developed, the clients look for products which are generally usable instead of practical products for specific purposes. The second issue is product safety in ports. It is once reported that products were detained at ports for no reasons or containers being detained in the Customs for a long period of time because clients did not pay and were fraudulently claimed later, causing the loss of manufacturers. These incidents reflect the risk of doing business in the Latin American market. 

Even so, Ray Fu thinks there still exists potential in the Latin American market. Operators interested in the market are advised to make advance preparation.

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Tanya Shih, Fastener World Inc.
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2013-07-10

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