The Brazilian Footwear Industry In the last four decades, Brazil has played a relevant role in the Footwear

History. The largest country in Latin America is one of the most outstanding manufacturers of leather articles, holding the third position in the ranking of the largest world producers, and having as well important participation in the share of womens shoes, which combine quality and accessible prices. The shipments abroad have been growing yearly, to over a hundred countries. Although the concentration of large size companies is located in the state of Rio Grande do Sul, the Brazilian footwear production is gradually being distributed to other centers, located in the Southeast and Northeast regions of the country, being highlighted the interior of the state of So Paulo (cities of Ja, Franca and Birigui), as well as the emerging states such as Cear and Bahia. There is also growth in the footwear production in the state of Santa Catarina (region of So Joo Batista), the neighboring state of Rio Grande do Sul, and in Minas Gerais (region of Nova Serrana). Nowadays, the Brazilian Footwear park presents over seven thousand industries, which produce approximately 755 million pairs/year, 212 million being destined to exports. The sector is among those generating more jobs in the country. In 2004, around 300 thousand workers operated directly in the industry. The large variety of raw material, machinery, and component suppliers, allied to the products technology and innovation, makes the Brazilian footwear sector one of the most important in the world. There are over 300 component industries installed in Brazil, more than 400 companies specializing in tanning and leather finishing, processing yearly over 300 million hides, and around a hundred machinery and equipment factories. It is with this highly capacitated structure that the footwear manufacturers perform the production of Brazilian footwear, presently exported to over 130 countries, with modern concepts of production administration and manufacture management, such as just in time, and other international quality processes. It is a highly specialized industry in every kind of shoes: womens, mens, and childrens, besides special shoes, such as orthopedic and work safety shoes. Exports destination The Brazilian footwear export sector structure is one of the most modern in the world. In 2004, 212 million pairs were exported. The marketing strategy involves the presence of Brazilian entrepreneurs in the most important international fairs, such as GDS, in Germany, MICAN, in Italy, Moss Shoes, in Russia, and the Las Vegas Show, in the United States. Latin America has been the target of different initiatives, such as the promotion of show rooms in the major consuming countries, as Argentina, Venezuela, Chile and Colombia. Due to the speed in obtaining information about the fashion world trends, added to the ease to obtain raw materials to develop the adequate modeling for the buying market, and afterwards the manufacture in series, Brazilian footwear producers have ample conditions to answer to the demand of importers of the most different profiles. Examples are the shoes manufactured for important brands, and North American and European stores, which are already used to see made in Brazil printed on their footwear. The United States is the principal buyer of Brazilian shoes,

with 70% of the exported total. To increase the sales percentage in other countries, particularly of Latin America and the Middle East, the sector has been developing a project so that more companies shall be part of the commercial balance, principally those of small and medium size. The production diversification is another competitive factor, as the adaptation to the most different collections is very fast. This enables Brazil to produce all kinds of footwear to meet the needs of both the domestic and the foreign markets. The economic development process of the Brazilian footwear industry began in Rio Grande do Sul with the arrival of the first German immigrants, in June 1824. Having settled in Vale do Rio dos Sinos, besides working in agriculture and cattle raising, they also brought with them the craft culture, particularly of leather articles. The production, which initially was home made and characterized by the manufacture of harnesses, became strong with the Paraguay War, which took place from 1864 to 1870. After this episode, the need of broadening the buying market arose. Therefore, some tanneries appeared and machines started being manufactured, which caused the production to be more industrialized. In 1888, the first Brazilian footwear factory was established in Vale do Sinos. It was founded by the son of the immigrant Pedro Adams Filho, who also owned a tannery and a harness factory. The demand for footwear Rio Grande do Sul increased, causing the production to grow year after year. As time went by, a big complex was formed, which became what is today one of the largest footwear clusters in the world. In the beginning of the 60s, as opposed to the export of salted hides, the need was felt to extend the commercialization of the Brazilian footwear overseas. The first Brazilian large scale export took place in 1968, when a shipment of Franciscano sandals, produced by Strassburguer, was made to the United States. The national production, in that decade, was 80 million pairs of shoes. New markets started to appear abroad and business thrived. Companies contacted international buyers and worked directly with the line builders responsible for the lines. Nowadays, footwear is the second main item in the Brazilian commercial balance.

The Impact of Operating in Multiple Value Chains for Upgrading: The Case of the Brazilian Furniture and Footwear Industries
Lizbeth Navas-Alemna
a

Institute of Development Studies, Brighton, UK

Accepted 20 December 2010. Available online 22 February 2011.

Summary
Exporting has been upheld as the Golden Standard for industrial upgrading. However, research using the value chain approach shows that upgrading for developing country firms is often limited to the lowest valueadded activities. Based on comparative research carried out in two Brazilian clusters (furniture and footwear industries), this paper shows that domestic and regional value chains can offer greater upgrading opportunities, providing space for activities of higher value-added, better remunerated and difficult to replicate, notably design, marketing, and branding. Moreover, this study highlights that many firms simultaneously serve multiple value chains (multichain) and that multichain firms have better upgrading prospects than those primarily exporting via Global Value Chains. Key words: value chains; Brazil; South America; multichain; functional upgrading