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US specialized printing equipment and RFID solutions supplier Zebra Technologies is seeing increasing business opportunities in several verticals across the region. However, the government segment is offering significant growth opportunities for the company in certain markets such as Argentina and Central America.
BNamericas talked with Zebra Technologies' regional sales manager Sandra Harriague to find out more about the firm's outlook in Latin America.
BNamericas: How was Zebra Technologies' performance in Latin America during the first half of the year?
Harriague: First of all, I'd like to start with our performance in the Argentine market, which is a market in which we're experiencing very robust growth rates. In Argentina we're growing higher than the IT market's average growth rate. In 2010, our growth rate in Argentina was almost 50%, which is very high - but we also have to take into consideration that 2009 was a very difficult year.
During the first half of this year, we experienced a growth rate of 43% compared to the same period in 2010. The business outlook in Argentina is very positive.
BNamericas: And what is the outlook for the full year in the Argentine operation?
Harriague: For the full year, we expect sustained growth based on increasing demand from the government segment. We believe that we can grow 30-33% in revenues in Argentina this year, which is higher than what was initially expected. Despite the electoral year, the government is very active, and we're also seeing a lot of activity in several verticals such as food industry and mining, among others.
BNamericas: What sort of projects are you seeing growth opportunities for in the Argentine market?
Harriague: In the government segment, we are seeing a growing number of opportunities for fixed asset identification solutions, as well as for personal ID, such as the driver's licenses projects we're involved in. Most of our projects are at a national or federal level.
BNamericas: And what's the expected growth rate for the whole Latin American region?
Harriague: Regional growth is lower than the numbers we're seeing in Argentina, as there are certain countries, such as Colombia, whose growth rates are flat. We can say that this year, the region could grow approximately 14-15% in revenues compared to 2010, which is the growth rate that it has achieved over the recent years.
During the first half of the year, our revenues in the whole Latin American region expanded approximately 9% compared to the same period the previous year.
BNamericas: Taking into account Zebra's regional operation, from which countries are you seeing the highest contributions to the firm's revenues?
Harriague: The region is structured in three different regions - Brazil, Mexico and rest of Latin America. The Mexican operation currently accounts for 25% [of revenues], while Brazil represents approximately 30%. The rest of the region contributes the remainder. This latter region is growing at a more accelerated rate compared to the other two.
BNamericas: And in the rest of Latin America, which are the most active markets?
Harriague: We should mention Central American markets such as Costa Rica, Nicaragua and Honduras. We're also seeing a lot of activity in the Southern Cone, mainly in Argentina. Growth in the Andean markets, including Colombia, Venezuela, Ecuador and Peru, is limited compared the other regions.
BNamericas: You mentioned that the government sector is currently an important mover in Argentina. In what other countries is the government segment also key for Zebra's business?
Harriague: We are seeing movement in the government segment in Central American countries.
BNamericas: What kinds of solutions are you seeing increasing demand for in the region?
Harriague: Excluding the Argentine market, which has certain regulations, we're seeing increasing demand for mobility and self-service solutions. Our self-service solutions have the main goal of optimizing resources and making processes more efficient. As our clients look for more efficiency, our solutions are experiencing an increasing demand.
BNamericas: How does the company structure its sales across the region? Do you have channel partners, or do you also sell directly?
Harriague: We operate exclusively through our channel network across the region. We have wholesale distributors in Miami, as well as value-added resellers and channel partners. We don't sell directly.
BNamericas: How big is Zebra's partner channel across Latin America?
Harriague: In the rest of Latin America, we currently have 50 channel partners approximately. Taking into account the whole region, including Mexico and Brazil, I'd say we have about 70 channel partners.
In Brazil, the business is channeled mainly through large distributors. We've been expanding our regional channel base by 15% annually since 2008. We're always looking to attract new specialized partners. For example, we are seeing an expanding retail sector in Peru, so we're looking for partners with focus on the retail segment. We are moving toward a specialization of our partners. In Argentina, we have four channels.
About the company
Zebra provides a range of technology solutions to identify, track, and manage the deployment of critical assets for improved business efficiency. Zebra’s core technologies include on-demand printers as well as software and hardware solutions.
Global revenues during the second quarter increased 12.3% year-on-year to US$246mn. The company's quarterly net profits reached US$33mn in Q2, compared to US$22mn in the year-ago period.