How can Australian METS companies enter into the Latin American market?
Here are four steps Australian METS companies can take to help them successfully enter into the Latin American mining market.
The political landscape in many Latin American countries has stabilised in recent times, providing opportunities for Australian mining equipment, technology, and services (METS) companies to capitalise on the region’s vast natural resources.
While Australian companies are generally well received in the region, it can still be difficult for companies to navigate their way through the linguistic, cultural, and economic intricacies of foreign systems.
So how can Australian METS companies develop a strategy that leads to successful business dealings with miners in Latin America?
4 steps to setting up in Latin America
In a recent IMARC webinar (Mining in Latin America), Natalia Gorrono, Senior Trade and Investment Director – Latin America at Global Victoria shared four key pieces of advice for Australian METS companies looking to enter into the Latin American mining market.
1. Come to town and get an understanding of the market
Visit the market that you are looking to enter and get a sense of the opportunities available for your service, product or technology, and understand the way in which companies in that market may find your product interesting. Every mining company has a different way of taking on new service providers, so you need to know how companies in your desired market will respond to your offering.
2. Get boots on the ground
It’s not always easy to do business in Latin America remotely, so if you see a fertile ground for your offering, appoint a local representative or set up shop in that market. In the instance that any issues arise, companies - especially the majors and the mid-tiers – will expect to have someone in your business they can contact who is in the same time-zone and speaks the same language.
3. Don’t overlook the smaller companies
While it’s tempting to go straight for the big-players, many of the majors already have strong service contracts in place with METS companies. According to Natalia, there is always a willingness to receive different services and technologies from smaller and medium mining companies.
4. Leverage the support of your local trade agency
Government trade agencies such as Trade and Investment Victoria have been designed to help companies set up in international markets. They can open doors, provide market intelligence, and help you to overcome barriers, so reach out and see how they can assist you.
Tailoring the approach between Technology, Equipment, and Services
According to Kate Bennett, past Director of the Australia-Latin America Business Council (ALABC) and co-founder of Somos21, strategies for METS companies looking to enter the market may differ depending on whether they are providing technology, equipment, or services.
Many markets in Latin America are looking for new technologies to enhance mining industry performance, be it improved environmental management, community engagement or general operational efficiency and productivity. Kate has seen technology companies establish and maintain a presence in the market by appointing local implementation partners to assist with a local roll-out.
“Having an implementation partner, particularly one with a pre-established regional presence, means you avoid the need for physical presence in those countries you consider a viable market. While your technology still needs to be designed to support multiple languages, the challenges of engaging locally to configure and implement the technology can be effectively addressed through the use of trusted implementation partners.”
Equipment providers seeking to enter the market should take advantage of the established channels, programs and services provided by state and national government trade and investment agencies. Key opportunities for Australian METS lie in the export of innovative solutions that address key productivity challenges, enhance environmental efficiencies and reduce operating costs.
“Equipment providers that have had significant success in the region have ultimately established local manufacturing, retail, distribution and/or customer service networks to enhance their ability to effectively service the region, but such developments were the result rather than the precursor to successful market entry.”
If you are providing an in-country service, successful delivery almost inevitably requires in-country presence. However, sometimes there is a desire for Australian-based companies to procure services in Australia that only require remote engagement with their activities and operations in the region. While many Australian-based METS companies could be successful in delivering these services, Kate says that inadequate language capacities often let them down.
“I think where we are falling down in Australia when it comes to selling services into the region is the language capability. We’re very fortunate that we have a huge number of Latin American professionals here in Australia that we can draw on to boost that capability, but if we’re serious about pursuing opportunities in the Latin American region in future, METS companies need to start building that diversity in their workforce now.”
This article has been created from comments provided during the IMARC Mining in Latin America webinar that took place on Wednesday 7th August. You can watch a recording of the full discussion here