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After setting up operations in strong retail markets such as Chile, Peru and Colombia, US IT firm LogFire, which specializes in supply chain solutions, is shifting focus to Brazil, where it expects to launch operations officially during the first quarter of 2012.
To find out more about the firm's outlook for 2012 and its plans for the region, BNamericas spoke with LogFire CEO Diego Pantoja-Navajas.
BNamericas: What is the company's outlook in terms of international expansion for next year?
Pantoja-Navajas: LogFire is a company with headquarters in Atlanta, Georgia. Taking into account our international operations, we have subsidiaries in certain Latin American countries such as Chile, Colombia and Peru, as well as in some Asian markets through our subsidiary in India. For 2012, our plan is to consolidate our operations in the markets where we already operate and to focus on Brazil and India.
BNamericas: Are you expecting to open a field office to target the Brazilian market, or do you plan to do business there through an existing subsidiary in another Latin American country?
Pantoja-Navajas: We will have local presence through a subsidiary [in Brazil]. We always prefer to operate through local offices rather than through a partner network, and we always set up local operations in a country where we have business activity. That's what we did in Chile, Peru and Colombia in Latin America.
BNamericas: When are you expecting to open the Brazilian office? Where will it be located?
Pantoja-Navajas: We're already working on this project. The subsidiary was legally created, and we're in the process of hiring and training the staff. The Brazilian office will be officially launched in the first few months of next year. We've already appointed a country manager. The office will be located in Curitiba, in Paraná state. Obviously we're targeting the São Paulo market, but due to commercial reasons it was more viable for us to open the office in Curitiba.
BNamericas: Why did the company decide to launch operations initially in Chile, Colombia and Peru, and not in other markets in the region?
Pantoja-Navajas: The criteria we used to launch operations in these three markets had to do with the weight of the retail segment. As you know, the retail segment in these markets is very important, especially in Chile, where it is very developed compared to other markets across the region.
Once we had set up the office in Chile, we started to see that the Peruvian market was also experiencing significant activity in this segment, so we decided to open our field office in Peru. Many Chilean retailers decided to go to Peru to expand their business, and this is why the retail market in Peru grew significantly over the last years. We opened the office in Chile in 2008, while our Peruvian and Colombian branches were launched during 2009.
BNamericas: And why have you decided to target Brazil now?
Pantoja-Navajas: The Brazilian retail market has a different profile compared to the other markets where we already operate, but its volume is significantly bigger; retail in Brazil has a larger operational volume than these three countries combined. We have a lot of positive expectations and are looking to have a strong entry in this market.
BNamericas: Are you also planning further openings in Latin America?
Pantoja-Navajas: Argentina is always an attractive market, but it, as well as other countries such as Uruguay, could be very well covered through our existing subsidiaries. Once we launch our Brazilian operations, we will cover the remaining markets in the region through the four existing offices.
From Colombia, we can serve Venezuela and Central American markets, from Peru we can provide coverage to countries such as Bolivia, and from our Chilean office we can cover Argentina and Uruguay.
BNamericas: Taking into account that the company is expecting to expand its business in Asian markets, could you give an indication of the Latin American operations' weight in the firm's overall revenues?
Pantoja-Navajas: Our operation in Latin America will contribute with approximately 25% of the company's overall revenues. For next year, we have a very aggressive goal for the region: We're expecting Latin America to account for approximately 35-37% of LogFire's global revenues in 2012.
BNamericas: Given the huge volume of Brazil's market, are you expecting the country to become your largest revenue contributor next year?
Pantoja-Navajas: No. In 2012, our Chilean and Peruvian operations will still account for much of our regional revenues. We're seeing very high growth in Peru and are very surprised with our performance in this market. The Peruvian retail market is expanding year by year and is also becoming more competitive. After some uncertainties during the presidential elections, the scenario is clear regarding the economic outlook in the country.
BNamericas: How big is the company's current base across the region, and by how much does this base expand each year?
Pantoja-Navajas: We currently have a client base of approximately 10-12 large clients. This year we expect our client base to expand approximately 40%.
BNamericas: Taking into account LogFire's portfolio, which specific solutions are you seeing the most potential for across Latin American markets?
Pantoja-Navajas: We're seeing demand for all of our solutions. The demand we see in Latin America has a similar profile compared to the demand we're seeing from Asian markets.
About the company
LogFire is a global IT consulting and software development company. It specializes in supply chain solutions, with a focus on warehousing, transportation and inventory optimization.
The company's headquarters are located in Atlanta, Georgia. In Latin America, the company has offices in Chile, Peru and Colombia. In Asia, LogFire has an office in India.