For Brazilian distributor CYH,bearings roll through their veins and we spoke to Hiro Wai to find out more about their family business.
It all started back in the early 50s, when the grandfather of Hiro Wai, General Manager of CYH, emigrated from Japan to Brazil, with his family. At the time, he was working for a Japanese trading company in Brazil and saw a good potential in Japanese ball bearings. He quit his job and started importing Japanese bearings on his own.
Fast forward a couple of decades and what started in his grandparents’ garage, developed into one of the most traditional bearing importers in Brazil – Brastrela. Hiro’s dad was the commercial director for Brastrela and Hiro started working at the warehouse in 2001.
“I was 14 years old and on vacation. My cousin called me to go to the warehouse to give a hand, separating the orders. I really enjoyed it, it was a lot of fun! I ended up spending all my vacations working at the warehouse. When my classes returned, I continued working at the warehouse after school 3 times a week. From that moment on, I decided I was going to work with bearings.”
A new beginning
In 2007, Hiro’s grandfather passed away and the company were unable to reach a consensus about the future. So in January 2009, Hiro and his father, Yoshifumi Wai, left Brastrela and started CYH.
“Starting from scratch is never easy, but luckily my dad’s reputation in the bearing market opened up several doors. Within a couple of weeks, we were already a NACHI authorised distributor and IKO importer, and many other brands joined us afterwards.”
In 2009, Yoshifumi’s former team joined them at CYH. They were a new company, but with the same successful team from before. In 2014 Hiro’s sister, Yuki, decided to join the company after working at Microsoft:
“Yuki is a computer engineer in charge of IT and finance at CYH. She also created our new website all on her own! She enjoys doing the things I don’t and vice versa. So we complement each other very well.”
As a small company, CYH consists of 8 employees and the company focuses only on special bearings and solutions. In the past they competed against the big distributors. Over 60% of their sales are to other bearing distributors.
“Back in 2009, we were searching for a miniature bearing supplier, and luckily I kept a ZEN catalogue from 2007, which I got from Mr. Dieter Zens when he visited Brazil. The product range was really interesting, so I sent them an email asking if they still had an agent in Brazil or if I could quote them directly. Yago Zens replied telling me I could quote them directly.”
Their first order was placed in 2009, and a couple of orders later, Hiro asked for CYH to be the exclusive agent for ZEN in Brazil. They agreed but wanted to visit the CYH offices personally. What started as a business proposal, became a great friendship! At first, CYH were only stocking ZEN miniature bearings, but as of now, CYH cover most of the product range, especially stainless bearings and ZEN is their best selling brand.
“We are really grateful to ZEN Group, without their partnership we wouldn’t be where we are today.”
In 2010, Yago from Zen Group told I love to be in contact with other countries, that’s what my family has been doing for decades, so I can’t see myself working with anything else ” ” For Brazilian distributor CYH,bearings roll through their veins and we spoke to Hiro Wai to find out more about their family business. Hiro’s Grandfather, Takeichi Wai Hiro, Yuki and Yoshifumi Wai 19 Different Nations, Same Industry Hiro about BearingNet. Hiro gave it a try and found it really useful. CYH subscribed shortly after and is still a member today.
“My first BearingNet meeting was Berlin in 2011. Apart from the freezing cold weather, I had a great time! It was the first time I had contact with distributors from around the world and it was an amazing experience. I also attended meetings in Amsterdam, Chicago, Rome, Atlanta and Riga. After a couple of years absence, I will be at the Warsaw event, and I’m really looking forward to it!”
Bearings in Brazil
Next year CYH will complete 10 years in the industry and Hiro is thankful for the help of friends, customers and suppliers, throughout their journey. However, it hasn’t been without its challenges in the Brazilian market:
“The Brazilian bearing industry is still developing, so we are really dependant on imported products. Although the big players have local factories, most of their production is for the automotive industry.”
The US Dollar exchange rate varies and increased by 7% in July 2018, creating a scenario of uncertainty prior to the national elections.
“It can be really difficult to make investment plans for the future. We also can’t depend on banking loans as the interest rate here increases by up to 1.5% per month for small and mid-sized companies. If you’re a big corporation, it’s a different story. It’s not easy to run any kind of company in Brazil if you don’t have enough of your own resources.”
Despite the day to day issues, Hiro loves what he does and enjoys interacting with people:
“I love to be in contact with other countries, that’s what my family has been doing for decades, so I can’t see myself doing anything else!”
With the market in Brazil still very price sensitive, there are recurrent cases of counterfeit bearings and smugglers. Hiro is still confident that the country his grandfather moved to, is changing for the better:
“The Brazilian bearing industry is unique because we need to overcome many obstacles to keep the country moving! We are known worldwide for being friendly and relaxed, and I’m sure this helps us to bear all the setbacks.”
With import taxes in Brazil roughly 60-70%, CYH must pay in advance when clearing goods through Brazilian customs. They can reclaim some of it, but only when they sell. This makes it more complicated to place big orders for stock, without having a guaranteed sale.
“The Brazilian tax code is a true nightmare. Sometimes we don’t even know what our sales price is because each state has its own law, and they keep changing. We are not exporting at the moment, because after we pay all the taxes and duties, we are not competitive enough. There are ways to export with some tax exemption, but it’s complex and at the moment we don’t think it’s worth the extra work. We’re really pleased that over 80% of our sales are from products imported directly from Europe, Japan and China and that’s benefited us greatly. We are a developing country, with bearings being supplied to the agricultural industry, which uses the most simple Chinese bearings, up to the aerospace industry which demands super precision hybrid bearings. We’re excited for the future!”