The article is based on an interview conducted with Mrs. Melinda Váradi, operative director of Dr. Bata Ltd.
Zita Buday / RCISD
Dr. Bata® Ltd. is a biotech company based in Hungary, committed to the development of alternative solutions for animal health disorders for more than 30 years. The roots lie in the development of fermentation processes, which expanded to the research and development of highly effective natural plant extracts, enzymes and mycotoxin inactivators for livestock animals. The commitment to feed safety and reducing antibiotic use has made Dr. Bata® one of the leading companies and their natural products are available in more than 60 countries through their own subsidiaries and committed partners in Europe, the Americas and Asia.
The company has recently received the „Best Exporter Award” at the „Winners of the Decade” award ceremony by the Ministry of Innovation and Technology and the Macronom Institute.
Dr. Bata Ltd. has recently announced the start of construction of its first factory in Brazil, in Chapeco/SC City
The project and investment of Dr. Bata Ltd. is realized by the financial support of the Hungarian Government’s Export Protection Programme, amounting to 1.070.404.285 HUF (~ 2,9 M EUR)
Why Brazil?
The cooperation started back in 2005, when Dr. Árpád Bata met, Mr. Jorge Winokur, President of Vetanco SA, a veterinary pharmaceutical company covering most of Latin America, at the VIV Asia international trade fair. Vetanco SA manufactures and distributes veterinary medicines and they were looking for alternative products in order to complement this portfolio and to provide their partners with preventive tools. Vetanco has a presence in practically all countries of the Americas, but the most important are Argentina, Brazil and Mexico. At the same time as the cooperation was established, Brazilian livestock production has also undergone significant development, and is now the 5th largest livestock producing country in the world, making it an essential player in the international market. Brazilian livestock production is highly centralised. Nearly ¾ of poultry and pork production is controlled by two of the world’s top ten producers. The headquarters of these integrators are located nearly 1000 km from the targeted site, but their livestock production is concentrated in the three southern states. One of these three southern states is Santa Caterina. The city of Chapeco is practically at the centre of the livestock industry. In terms of logistics, 60-70% of the Brazilian market can be reached within 48-72 hours.
The relationship with Brazil started as a business partnership, but the effectiveness of the products and the professionalism of the team has always been the number one reason why Vetanco chose Dr. Bata Ltd. The advanced R&D background was essential. Over the years, the collaboration has expanded to research topics, which allowed understanding South American livestock production in more detail, both in terms of assessing mycotoxins that compromise feed safety and in the field of local animal health challenges.
About the benefits of the presence in Brazil: Dr. Bata Brasil Ltda is 100% owned by the Hungarian Dr. Bata Ltd. The benefits are twofold. On the one hand, through the investment in laboratory R&D, a much deeper knowledge can be gained about the problems encountered in Brazilian and South American livestock farms, and this knowledge can be converted more quickly into product development. The production unit is then able to produce products for these local needs and provide a more flexible service to partners.
An important national objective is to support domestic agri-tech exports through this investment. By building a production unit and a laboratory centre, the innovative agricultural solutions of the company can be presented and offer the opportunity to place them in the Brazilian market and compete in one of the world’s largest agricultural producing countries. Not only the profitability is important, but also the product feedback received from end users that provide guidance in the search for optimal and effective solutions.
Through this investment, the Hungarian R&D centre will also benefit, from the product development results related to food and agri-technology, based on the feedback from the 210 million Brazilian market.
Challenges: the pandemic situation caused difficulties during the foundation process of the company, as Brazil introduced very strict rules to control the pandemic. Offices were closed for months, resulting in huge delays. In addition, it was necessary to become more familiar with the relevant laws and this was a new task for the team. The solution for this problem was to start the process with the support of a regional tax consultancy firm that has been contracted to ensure the maximum compliance with the foreign legislation while maintaining consistency with the Hungarian regulations.
Although modern IT tools have significantly reduced communication problems, the experience with both investment and partnerships shows that personal contacts, day-to-day communication, play a significant role in effective cooperation. Deeper discussions are much more effective done face-to-face, that’s why the visit to Brazil was very useful for the project launch. Discussing buildings, construction and technical issues in person was much more efficient than doing it online.
The Brazilian innovation and business ecosystem from Hungarian point of view:
A specific feature of Brazilian companies is that they operate in a so-called integrated way. This means that in certain cases, they produce part of the feed material themselves. The feed material is used to produce feed for the livestock farmers in the system. They have their own integrated livestock farms. The animals are slaughtered in their own slaughterhouse and processed to marketable products on their own food processing line.
Of course, regionally, many innovations related to the sector come from these companies, but the innovation activities of European companies are still highly influential and prestigious.
Compared to the turnover of these big companies, Dr. Bata Zrt.’s products represent only 0.2-0.5% of their value. It is therefore clear that the customer expects a high degree of flexibility from such a small supplier.
IPR-related considerations of course cannot be neglected. Protecting intellectual property is important everywhere. Wherever it is possible, the company does its best to register trademarks and patents and limit the leakage of valuable information. However, it is also important that the company itself and the products represent a high quality and professional reliability.
Opening ceremony in Chapeco, 4 April 2022 (source: Facebook)
Related article:
https://www.vetanco.com/en/2022/04/07/dr-bata-ltd-announces-start-construction-first-factory-brazil/