Embraer and SKW Stahl-Metallurgie on going global safely

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If you asked a casual reader of the business pages whether Brazilian aircraft maker Embraer or the German metals and speciality chemicals company SKW Stahl-Metallurgie had more global spread, they would likely pick Embraer.

But Embraer as a company, despite the nature of its business, has a far smaller global footprint than SKW Stahl-Metallurgie, which has 98% of its workers based outside Germany.

The latter company has had longer to go global, having been founded in the 1940s.

Embraer was brought into being by the Brazilian government in 1969.

The 1980s though was a landmark period for both the heads of the businesses.

Ines Kolmsee, chief executive of SKW Stahl-Metallurgie, and Frederico Curado, chief executive of Embraer, both passed milestones in the mid-1980s with their companies.

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Mr Curado became head of his company in 2007, while Ms Kolmsee took hers to the German stock market in 2006, becoming the first female boss of a major German company in the process.

Cohesion

She says one of the most important roles for a chief executive is knowing the workforce: "HR [human resources] is the CEO's job and so every person that starts working for us in Germany is interviewed by me."

She doesn't leave it there, either: "I also interview the people who are running our country operations, and the level below that, I am also seeing them."

Another tip for a cohesive workforce, says Ms Kolmsee, is to make sure they learn from each other: "I like to put people in tandem, usually a younger person and an experienced person and that works very well.

"The benefits flow both ways - the younger person brings in new knowledge especially new technology knowledge and energy and the more experienced person their experience."

Embraer

  • The third largest commercial aeroplane manufacturer in the world
  • Established: 1969
  • HQ: Sao Paulo, Brazil
  • Revenue: $5.8bn (£3.6bn)
  • Number of employees: 17,629
  • Fact: Kung fu star Jackie Chan owns an executive jet by Embraer

SKW Stahl-Metallurgie is a small but vital part of the global steel industry, producing specific chemicals and compounds necessary in the refining processes needed to turn the plain ores into sheets and rolls of metals in the form that is needed for specific jobs.

Figurehead

Mr Curado may work in another metal-oriented industry, but his takes the prepared raw materials to be turned into products for clients.

He has become something of a figurehead for the country's growing global business presence, after almost 30 years working his way up the ranks of Embraer.

The company is now one of the world's leading plane manufacturers, particularly in the smaller personal jet and single-aisle commercial plane markets, where it is third in the world to Boeing and Airbus.

He says his country has come a very long way, a place he ranks - sometimes favourably - against the most successful and well-organised countries: "I like to compare Brazil with the benchmarks to the United States to OECD [Organisation for Economic Co-operation and Development] countries to the western European countries to Germany - when you look to other countries we have made more progress than some others did."

The one area he singles out as a problem is Brazil's labyrinthine bureaucracy: "I think overall the difficulty is the bureaucracy is a burden to business in the country still."

SKW Stahl-Metallurgie

  • Producer of specialty chemicals used in steel-refining processes
  • Established: 1940s
  • HQ: Munich, Germany
  • Revenue: $539m (£334m)
  • Number of employees: 1,025
  • Fact: Active in more than 40 countries, only 2% of the workforce is based in Germany

That is something Ms Kolmsee is getting first-hand experience of, as she is setting up in Brazil.

The two leaders diverge on the desirability of moving into the world's leading emerging market, China.

Embraer's recent growth has been concentrated on the Middle East and China.

But, for now, China is one country Ms Kolmsee will not be taking SKW Stahl-Metallurgie into in any substantial way.

She says there are two major stumbling blocks for her business: rules governing business and profits.

"The 'big black box' for us is actually China - because the business practices that we see in China in our markets just don't work for us," she says.

"We have very strict code of conduct rules and we want to have a margin and those two things don't work together in China in our business currently. Once we see that changing that is definitely a market we will tackle."

The Ideas Exchange is an eight-part series, starting on 1 September, broadcast on BBC World News on Saturdays at 02:30 and 15:30, and Sundays at 09:30 and 21:30 (all times GMT).

Every week, two international business leaders meet to talk about their different experiences of global markets and business.

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