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08 Apr 2024Amidst the accelerated drive for globalization and international expansion within Foshan's enterprises, KEDA Industrial Group Co., Ltd. (referred to as "KEDA Industrial Group") stands as a vanguard. While others focus on Southeast Asia, Africa, and Europe, KEDA Industrial Group has set its sights on a new frontier for international expansion – Latin America.
Why Latin America, thousands of miles across the ocean? In February 2023, when KEDA Industrial Group had just entered Mexico, Mr. Yuanfeng ZHENG, the head of ceramic machinery for the American region responsible for the Mexican market, also harbored doubts. "At first glance, it seemed desolate."
However, a year after pioneering efforts, leveraging Mexico as a lever, KEDA Industrial Group's industrial layout has extended to multiple countries in Latin America.
For KEDA Industrial Group and other enterprises in Foshan, Latin America represents a vast expanse filled with both unknown challenges and hopeful prospects. As Mr. Yuanfeng ZHENG now perceives it: new lands breed new opportunities.
"Placing a Bet" on Mexico
KEDA Industrial Group's inaugural venture into the American market has chosen Mexico as its starting point. The core consideration lies in diversifying market placement to achieve more efficient production and supply chain management.
In 2023, international orders for KEDA Industrial Group's ceramic machinery business exceeded 60%. Over the past few years, this giant in Foshan's ceramic machinery industry has already penetrated international markets such as Southeast Asia, Turkey, and Africa.
Where are the new markets? How to penetrate them? These are the focal points of KEDA Industrial Group's new round of global expansion.
Mexico serves as a crucial transit point for land transportation between South and North America. It is also one of the countries with the highest number of signed free trade agreements globally, making it attractive for trade facilitation, avoiding high tariffs, and reducing transportation costs.
"Mexico is like a vast hub; where many products destined for the United States and various South American countries are exported from. It can be said that entering the Mexican market is equivalent to establishing a foothold in the Americas," remarked Mr. Yuanfeng ZHENG. "Furthermore, the demand for tiles within Mexico itself is robust."
In 2023, Mr. Yuanfeng ZHENG spent over half of his time in Mexico. The official language of Mexico and many other Latin American countries is Spanish, and Mr. Yuanfeng ZHENG studied in Spain in his early years, which greatly facilitated his rapport with Mexican customers and employees.
Through thorough understanding, Mr. Yuanfeng ZHENG discovered that Mexicans prefer to first establish friendships and brotherhood before discussing business matters. Consequently, Mr. Yuanfeng ZHENG and his colleagues spent nearly 5 months running markets and making friends together.
During their visits, they discovered that the ceramics industry in Mexico had long relied on European solutions and machinery. However, in recent years, due to shortcomings from European manufacturers in areas such as product delivery, technical guidance, and machinery maintenance, many Mexican ceramic companies have expressed their interest in trying Chinese products.
From providing technical services to Mexican customers to establishing mutual trust, and from repairing European machinery to selling KEDA products, KEDA Ceramic Machinery has gradually made headway in Mexico.
Today, many factories in Mexico's ceramic production areas have adopted KEDA ceramic machinery. "One factory here needs 2 squaring & chamfering lines, while another factory over 3 requires several polishing lines," Mr. Yuanfeng ZHENG remarked. Chinese products offer high cost-effectiveness compared to European counterparts.
While a European machine costs over a million, KEDA provides a solution at around four to five hundred thousand. "Relying on cost-effectiveness and service assurance, KEDA Industrial Group now possesses the capability to compete with long-established European companies."
Expanding into New Frontiers
In this new phase of global expansion, KEDA Industrial Group's first move in Mexico extends beyond mere superficial intentions.
Data indicates that in 2023, the 8 major ceramic-producing countries in the Americas collectively boasted a population of 851 million, with a per capita ceramic production capacity of 2.22 square meters, showcasing tremendous potential for market development.
In KEDA Industrial Group's new strategic game, Mexico represents not only a fresh market but also a new window through which the company can demonstrate its supply chain management capabilities and service reputation to Latin American nations. Indeed, Mexico has become the springboard and leverage for KEDA Industrial Group to radiate into the Latin American market.
"Similar to Mexico, other major ceramic-producing countries in Latin America have historically adopted European solutions and machinery. This facilitates KEDA Industrial Group in extending the successful experience gained from exploring the Mexican market to other Latin American countries," remarked Mr. Yuanfeng ZHENG. "Clearly, KEDA's incremental growth in the Americas cannot remain confined to Mexico alone; it needs to expand further southward."
On December 6th, 2023, the groundbreaking ceremony for the first building glass production line in South America, the Peru Float Building Glass Production Line project, was held by KEDA Industrial Group.
This not only signifies KEDA Industrial Group's first step into the South American market in the building glass industry but also marks further steady progress in the "large-scale building materials" strategy. Additionally, the KEDA Peru Building Glass Factory will be the company's first building materials project in Peru.
On March 26th of this year, the first anniversary of China's diplomatic relations with Honduras was celebrated. Meanwhile, KEDA Industrial Group is planning to invest approximately USD 74.8527 million in Honduras to construct 2 building ceramic production lines, designed to produce products such as wall tiles, colored glazed tiles, antique tiles, and color-penetrated tiles, with an annual ceramic tile production capacity of about 20 million square meters.
"This year, we have formulated a development plan for the Americas, including Brazil, Nicaragua, Honduras, Guatemala, and the entire Caribbean region. We will visit all ceramic factories in these countries, regardless of their scale or operating conditions, as long as they are related to ceramics," stated Mr. Yuanfeng ZHENG.
Targeting the Next Generation of Entrepreneurs
After a brief respite in China, Mr. Yuanfeng ZHENG has once again returned to the Latin American country across the ocean.
"I am currently overseeing KEDA Industrial Group's new projects in Mexico, while also preparing for the visit of two major ceramic conglomerates from Mexico to China," said Mr. Yuanfeng ZHENG. "They are eager to understand KEDA Industrial Group's complete production line, and the high output of KEDA ceramic machinery is highly attractive to the local market."
In addition to continuing to cultivate the Mexican market, Brazil stands as another important target for KEDA Industrial Group's industrial layout.
In the past, Brazilian ceramic factories predominantly engaged in deep cooperation with European manufacturers who shared a common cultural background. There were scarcely any precedents for cooperation with Chinese brand suppliers on complete production lines or major projects.
This situation relegated Chinese brand suppliers to the periphery of Brazilian ceramic factory machinery demands, making it challenging for them to engage in meaningful exchanges and collaborations with the core forces of the Brazilian ceramic industry.
However, as the successors and fresh blood of Brazilian ceramic enterprises increasingly come to the forefront, this situation is changing.
"After our interactions, we have found that the new generation of Brazilian ceramic entrepreneurs is open to cooperation with Chinese companies, and they are much more accepting of the high-output ceramic production models from China," stated Mr. Yuanfeng ZHENG.
Taking ALMEIDA in Brazil as an example, the second generation of entrepreneurs has dominated the complete factory's transition from SITI in Italy to KEDA. They not only directly upgraded their polishing & squaring machine and broke through old operational habits but also boldly attempted KEDA 's track storage system.
They have expressed that future investments in new complete production lines will prioritize cooperation with KEDA.
During the Canton Fair, the young generation of families like LEF from Brazil and other factories came in groups to observe and gain insight into China's ceramic industry.
Mr. Yuanfeng ZHENG believes that these young entrepreneurs will be the hope for further expanding KEDA's market in Brazil. It is estimated that they will generate approximately USD 15 million to 20 million in operating revenue locally in 2024.
Mr. Yuanfeng ZHENG further stated that through promoting Chinese ceramic planning and design concepts, the KEDA brand, complete production line output, and process service support, as well as establishing subsidiaries to do after-sales service, consumables glaze ink, radiating to surrounding countries, and exploring local assembly, production machinery, parts and consumables, KEDA will further open up the Latin American market and further refine its strategic goal of globalization.
（Xinan LONG, Nengjun YE from Nanfang Daily)
