Despite Lower Dollar Brazilian Shoemaker Wants to Export More

Melissa sandal from Brazilian Grendene Grendene, a shoe company from Brazil, has expanded the volume of its exports by 41.7% in the first quarter of this year. The company shipped 18.6 million pairs of shoes abroad between January and March this year against 13.2 million in the same period last year.

Shipments grew by 5.4 million pairs early this year. Among the buyers were ten Arab countries: Saudi Arabia, Egypt, Kuwait, Lebanon, Oman, Bahrain, the United Arab Emirates, Palestine and Qatar.

Bulk revenues with exports totaled 90.4 million Brazilian reais, against 75 million reais in the same period last year. The increase was 20.4%. In dollar terms, the growth was 46.3%, from US$ 35.6 million to US$ 52.1 million.

Despite the increase in revenues, there was a reduction in the price of the footwear exported: 15.1% in dollars. In reais, there was a 3% increase. The company informs that the foreign market sustained revenues. Grendene had gross revenues of 328 million reais from January to March, 0.6% more than in the same months in 2007.

Exports compensated a company reduction in revenues on the Brazilian market. Grendene went from gross revenues of 251 million reais (US$ 151 million), from January to March 2007, to 238.2 million reais (US$ 143.5 million) accumulated this year up to March. The reduction was 5.3%.

There was growth in volumes sold, 5.1% to 19.5 million pairs, but there was a reduction in average price, 9.9%. The performance on the domestic market was lower than expected.

For this reason, Grendene plans to continue investing in exports. Despite the lower prices, as advantages to exports Grendene mentions the use of spare capacity and the consolidation of the company position on the foreign market.

"The company does not plan to reduce export efforts," stated the company in its quarterly results. In a company press statement, the organization said that expansion of foreign sales took place due to its segmentation strategy, constant innovation and also aggressive marketing.

The performance abroad was positively surprising for the company, according to information published in the quarterly balance sheet. Grendene plans to maintain the selective market positioning and distribution of the Melissa sandal brand.

"We can currently state that Melissa is a Brazilian fashion brand with more consistent distribution on the foreign market," stated Grendene. The company has already established partnerships with Iraqi architect Zaha Hadid for the creation of some new models and should do the same again.

The factory was established in 1971, in the city of Farroupilha, in Rio Grande do Sul. Grendene is currently the largest Brazilian company in the shoe sector, in terms of production volume. It is also, according to information in the company site, a main producer of sandals in the world.



  • Show Comments (7)

  • João da Silva

    [quote]Given today’s present fobia about importation, illegals or otherwise, you are right to keep your pigs in Brazil and Spain’s tropical muds.[/quote]

    Excuse me, Simpleton, are you saying that Ch.c has already brought his pigs into Brazil, illegally? I always thought Ch.c was a law abiding citizen 😮

  • Simpleton

    Despite Subsidies
    just though I’d let you know ch that my feeble attempt to import Brazillian Chest Nuts was unsucessful. Given today’s present fobia about importation, illegals or otherwise, you are right to keep your pigs in Brazil and Spain’s tropical muds. The uncontaminated biomass in my backyard is better suited to setting up a spa for the rich (and a bit quirky) Health Nuts. Brazil and I both need to devise better marketing skills for selling something you don’t really have to transfer ownership of or physically export. As to the leather market, you make very good points but don’t you think controlling the supply of French Fried Pata Negra skins (which are ‘value added’) would be a better move except for the fact that the Swiss don’t eat that either.

  • João da Silva

    [quote]The answers are quite easy for the most idiot Swiss :[/quote]

    You sounding too modest and self critical today. Is your health alright? 😉

    As for rest of your comments: A nice tutorial. 😉

  • ch.c.

    Joao…Joao !!!!!
    Your stupid question ” “How to add value to your Product”
    The answers are quite easy for the most idiot Swiss :
    ADD QUALITY !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    – Why my BBC can be sold at around US$ 4.- per pound instead of your Lower than US$ 1.-, LOW QUALITY COFFEE (farm price) ???????
    – Why is Spanish Pata Negra ham sold at such a high price when compared to Brazilian ham ?
    – Same for Italian Parma ham.
    – Same for the price difference between a Swiss and a Chinese watch (dont you recall our discussion on that subject a while ago……with your example of US$ 10.- chinese watches….battery included ?)

    On volumes and quantities :
    As I said so many times in my cynical comments : Brazil is going to more than triple their already over production of sugarcane ! right ?
    Welllllll….then I can safely say…..your sugarcane and ethanol producers wont make a lot of money.
    Reducing your existing production by 10-15 % would DOUBLE THE PRICE !
    Assuming your production cost is around $ 0.10 per pound and selling price at 0,11, your margin is 1 US cent.
    I should not be so wrong, looking at Cosan !!!!!!!

    Now if that 1 cent profit would go to 10 cents….that is 1000 % MORE but only on 85 % of your output quantity since you would produce 15 % LESS ! RIGHT ?
    That still makes 850 % more profits….than today !

    Just look at grains when world production doesnt increase or production going down by only 2 to 3 % !!!!!
    PRICES DOUBLE AND TRIPLE !!!!!!!!!!!!!

    On leather :
    No need to go to last year discussion.
    Just re-read my comments from this week….on textiles and shoes.
    I said :
    – Brazil is restricting textiles Chinese imports, when Chinese have only 1 % market share of the Brazilian textile industry.
    – on shoes, Brazil CANNOT compete against Chinese and Vietnam.
    – in Europe 65 % or so of shoes sold are already made from China and Vietnam. A similar ratio for shoes sold in the USA.

    Conclusion : as long as you provide them with cheap leather, you cant compete neither for internal Brazil consumption or for exports even if you reduce your salaries to the Chinese and Vietnamese ones, because ALL their exports industries are government subsidized. YESSS…ALL OF THEM !

    SOLUTION : CREATE A SHORTAGE IN LEATHER SUPPLY ! They need to produce goods or collapse. And without enough supply of goods….they will bid up prices as high as necessary to fill their needs.
    Leather EXPORTS prices could easily TRIPLE…if you were smart !
    And without leather….China/Vietnam cannot produce shoes….by definition.
    Simple idea : put an export tax on leather and quotas limit on quantity. That will make your
    industry…….SHINE !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    Remember : China and Vietnam are taking world market share in textiles and shoes at the expense of older traditional exporters such as first Europe and the USA, then Brazil and Bangladesh, Pakistan.
    That is what globalization is…to my knowledge ! Production move to the lowest production cost regions.
    You enjoy doing it ONLY when it is favorable to you. Not so strange…..coming from Brazilians.
    Short memory on my previous comments ????? I doubt !

    Think again….more than twice !

    Same for oil prices. Who do you think are the most penalized with high oil prices ?
    Developed or emerging importing nations ??????
    furthermore…….stop listening what idiots economists or medias are writing.
    Emerging nations are against agriculture subsidizes from developed nations, but are quite willing to accept FREE foods help, puting prices….even lower….by definition.
    And should food price be higher as SOME emerging nations say, why are they complaining when the food price is high as today ?????? and why are some countries such as North Africa, Egypt and many others subsidizing wheat and oil ? Because the price is too high….or too low ????
    Hmmmmmm….doesnt add up.

    Ohhhh and on oil prices :
    in China, India, Indonesia, Philippines, some of the most populated countries WITHIN the oil importing countries….OIL PRICE IS GOVERNMENT SUBSIDIZED !!!!!!!!!
    And for exporting oil nations, nearly ALL governments subsidize….OIL PRICES !!!!


    Lets face it, Brazil even subsidizes its own coffee industry, when no developed country produce coffee !!!!!!
    Quite normal… the filthy thinking of Brazilians !

    That is the brazilian UNcommon sense !

  • João da Silva

    [quote]Joao…Joao…where are you ?[/quote]

    I just got to read your comments and your demand to know where I am. Let me assure you that I am still alive and well in spite of a boring meeting I had yesterday on “How to add value to your Product” ( I am not kidding). Thanks for asking about my whereabouts and health.

    I did not have to re read the article again to understand the numbers. I really would like to know the current situation from our fellow bloggers from RS, which is confronting a severe crisis in their Leather Goods Manufacturing sector, because of the exchange rate. As you may recall, this issue was discussed in this forum last year.

    btw, I think that the writer of this article is an advertisement agent that translates what the PR persons in large corporations say into English and gets paid for doing so (Value Added Product!). It is obvious that the person does not understand numbers and hence the veracity of the facts.

    I suggest we let our Gaucho friends comment on this issue.After all you are an outsider 😉

  • ch.c.

    should read

    “19,5 millions pairs” or US$ 7,33 per pair !

  • ch.c.

    Joao…Joao…where are you ? Smile
    Re-read the article carefully :
    “Grendene went from gross revenues of 251 million reais (US$ 151 million), from January to March 2007, to 238.2 million reais (US$ 143.5 million) accumulated this year up to March. The reduction was 5.3%. “

    BOOMING sales ????

    And “19.5 million pairs” or around US 7.74 per pair !!

    For foamed plastics Brazilians flip flops ?

    😀 😉 😀 😉

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