The color of success: With companies moving millions of dollars, Afro-Brazilian entrepreneurs overcome barriers and change the face of the game

Note from BW of Brazil: For many years Brazil has ignored its black population and promoted an image of a singular, monolithic type of market segment with singular tastes and opinions. But with studies of racism and social inequality strongly aligned along lines of race or color showing deep disparities in the society, Afro-Brazilian entrepreneurs have begun to carve out their own niche in this market. Although all Afro-Brazilian entrepreneurs don’t target their businesses specifically at the black population, they all have something in common: the will and determination to show that black Brazilians can also find success in the business world. And the need is there. Just think, only 15 short years ago, the market lacked simple things such as panty hose to match darker skin tones and cosmetics and featured unsatisfactory hair products. Since them, taking advantage of a consumer market driven by a rising black middle class with more buying power, an entrepreneurial class has stepped in and filled in many of the gaps created by a society that simply ignored the darker-skinned segment of its population. 

The Color of Money

Despite the economic gap between blacks of the rest of the population, many of them have managed to break the barriers of prejudice and grew on the business scene

by Rosenildo Gomes Ferreira

On Wednesday, May 14^th, directors of The New York Times assembled a team to communicate the appointment of prize-winning journalist Dean Baquet to the post of executive editor. This is one of the most prestigious positions in one of the five most influential newspapers in the world. One detail, however, caught the attention of everyone. Baquet is the first black journalist to assume the position in 163 years of the company. If in a country which since the 1970s has adopted affirmative action policies African descendants are still a minority in the centers of political and corporate power (despite President Barack Obama being black), imagine what happens in Brazil, where this debate is recent and in which, even after 126 years of the formal abolition of slavery, the statistics show a profound discriminatory bias, especially from the economic point of view.

The Perfil Social, Racial e de Gênero nas 500 Maiores Empresas do Brasil (Social, Racial and Gender Profile in the 500 Largest Companies in Brazil), prepared by the Ethos Institute, shows that in the period from 2001 to 2011 the number of senior executive negros or mulatos rose from 1.8% to 5.3%. In the US, where this group represents only 12.6% of the population, compared to 51% in Brazil, no less than 9.4% of command posts in the 100 largest corporations have black skin. Here, they also have a disadvantage in salary, receiving 36% less than the income of non-blacks. On the entrepreneurship side, the situation is not different. The Os Donos de Negócios no Brasil (Business Owners in Brazil) report by Sebrae indicates that 49% of small companies are commanded by Afro-Brazilians.

Scrutinizing the numbers, the fact that only 8% of the 11.1 million entrepreneurs of that racial profile are heads of structures with even a minimum of force is attention grabbing. Most are entrepreneurs of themselves. For whites, the most structured firms come to 19% of the total. So, why does this happen?  “In Brazil at play is a structural racism that impedes blacks from growing economically,” says social scientist Adilton de Paula, Coordinator of the Projeto Brasil Afroempreendedor (Afro-Entrepreneur Brazil Project), conducted the by Adolpho Bauer Institute (IAB), in Curitiba (state of Paraná). “When it comes to competing for credit, for example, blacks are deprecated, because there is a belief that he will not repay the debt or that his business will not move forward.”

Recurrent among Afro-Brazilian entrepreneurs, there are, however, exceptions to this type of complaint. One is São Paulo’s Geraldo Rufino, founder and president of JR Diesel, based in Vila dos Remedios, in São Paulo, specializing in recycling trucks. “I never paid attention to racial prejudice,” says Rufino. “Whoever comes at me this way failed because I always made of difficulties a lever upon which to grow.” Beside his long-lived career in Playcenter, which he entered as an office boy at age 14 and became a prestigious director, Rufino built a business history in partnership with his brothers, José e Moacir.

Adept at a management style based more in “feeling” than in the instructions for administration, he broke several times. But he always rose again. Today, his 100 employees disassemble one thousand trucks per year, which earned revenues of R$ 50 million in 2013, according to Rufino. They are scrapped vehicles, purchased at auctions or that went through severe conditions such as that of street cleaning company. No afrodescendente (African descent), however, has managed to go as far in Brazil as the Rio resident Heloísa Assis, better known as Zica, and her partner Leila Vélez, that head up the Beleza Natural salon, a network of salons specializing in the treatment of African textured hair.

The company was born intuitively, in 1993, in the Muda district in a Rio de Janeiro suburb, where they produced creams and formulas. The work of the duo caught the attention of customers, people who didn’t want to submit themselves to the dictatorship of the chapinha (flattening iron), but sought a way to maintain beautiful and treated curls. “I never thought my problem was shared by so many women,” says Zica who, in the 1980s, felt discriminated against by bosses in south zone Rio, who were reluctant to employ women with afro textured hair. The rest is history. In mid- 2013, Beleza Natural became the target of the GP fund (1), which paid R$70 million (US$31.5 million) for 33% of the network.

The expansion plan mapped with the aid of the GP will make Beleza Natural becomes the first company headed by a representative of the black race, in Brazil, to pierce the barrier of R$1 billion (US$450 million) in revenue. For Leila, this value should be reached by 2018. Last year, revenue was R$166 million (US$74.6 million). Because of this, the network aims to grow exponentially, multiplying the current 20 units seven fold. “We grew with the women who are our target audience,” says Leila. Zica’s creativity, inventiveness and dedication were added to Leila’s qualifications, who at 16 managed a McDonald’s restaurant.

It’s also with qualification that sociologist De Paula, of the IAB, hopes to help break down the barriers that impede the development of black entrepreneurs. To do so, the entity is dabbling with a mega-program of capacitation, in partnership with Sebrae and the Coletivo de Empresários e Empreendedores Afrobrasileiros (Collective of Afro-Brazilians Entrepreneurs and Business People) in São Paulo. 100 entrepreneurs from 12 states from all regions of the country were selected to participate in courses and training. To fund the growth of this number, the idea here is to seek partners such as Caixa (2) and abroad, such as the World Bank. One of the agreements being tailored with the Fundo Baobá (Baobá Fund), managed by the Afro-Brazilian community and that has the support of American companies.

“We want, through example of well-prepared entrepreneurs, to end doubts about the management skills of afroempreendedores (Afro-entrepreneurs)” says De Paula. Another way to enhance the business led by this contingent has been the formation of networks so that the money from the community circulates among companies led by Afro-Brazilians. A pioneer in the concept of “black money” is the São Paulo businesswoman, Adriana Barbosa. Since 2002, she has organized the Feira Preta (Black Expo), an event that brings together cultural activities and selling ethnic products. Clearly assuming a racial profile has brought her numerous problems.

“I’ve lost several contracts with companies that only agree to sponsor the expo if we changed the name,” says Adriana. A militant of the Movimento Negro (black movement), she moved on. And she didn’t regret it. The last edition of the Feira generated on the order of R$700 thousand (US$315 thousand) in business. In total, the Feira Preta brand, which includes an institute where management courses are taught and cultural events organized throughout Brazil are produced, moves R$370 thousand (US$166 thousand) per year. “The black community needs to enforce itself through the intellectual capacity and entrepreneurship,” says the smiling Rufino, founder of JR Diesel, who prides himself on the facing of difficulties, always getting up, dusting himself off and making a comeback.

Source: Istoé Dinheiro

Notes

1. GP Investments was founded in 1993 to focus on investments in Latin America, at the time a nascent private equity market. Source

2. Caixa Econômica Federal, also referred to as Caixa or CEF, is a Brazilian bank. It is the second largest government-owned financial institution in Latin America, after Banco do Brasil. Source