Ignite Stories: Melhoramentos & Katam

Only four months after the initial meeting in November last year as part of a startup delegation in São Paulo, the Swedish startup has recently completed a successful Proof of Concept with the cellulose giant in record time in the Southeastern region of Brazil.

Katam was among the 12 Swedish startups that participated in a delegation journey organized by Ignite Sweden and SISP to São Paulo, aimed at exploring opportunities in the Brazilian market.

The startup, established in Malmö in 2016, specializes in providing advanced forest management solutions through data-driven decision-making tools, employing cutting-edge technologies such as drones and AI algorithms.

During the in-person matchmaking session facilitated by Ignite Sweden during the visit, Katam was introduced to several leading forestry companies in Brazil. One of them was Melhoramentos, a pioneer in the Brazilian forestry industry, boasting a rich legacy spanning 133 years in the production of high-performance cellulose fibers for the tissue market.

“They had this specific demand that was basically our core business, so we can say it was the perfect fit,” recalls Forest Engineer, Luiza Federici, from Katam’s recently-opened office in Brazil, who participated in the meeting. “We talked with the people from the technical team during the meeting. I think that is the reason the project started so quickly and was successful, because they were the right people to discuss technology with.”

The Collaborative Proof of Concept

After the initial meeting, Katam was selected by Melhoramentos to talk more about project possibilities. In the beginning of 2024, the companies started with the planning and the organization of the three-month Proof of Concept (PoC) in the southeastern region of Brazil.

“The project consisted of a PoC to test our technology in their environment. In Brazil, each state has its own vegetation, climate, and biodiversity, including varying slopes. The idea was to test our technology in their specific scenario,” explains Luiza. The region poses challenges due to its abundance of slopes and native forests, coupled with high humidity, resulting in the proliferation of diverse vegetation that complicates measurement processes and data collection.

The project aimed to digitize forest inventory processes, minimizing human errors, enhancing data accuracy, and reducing field time.

“This has a positive impact on the planet because it reduces efforts, resources and, consequently, gas emissions. The goal is to minimize environmental impact, while lowering resources and costs, and improving precision,” says Luiza.

In March, Luiza Federici and her colleague Ana Carolina Schimaleski traveled to Minas Gerais to apply Katam’s technologies, demonstrating how it is possible to digitize processes and collect high-quality data in record time.

The PoC concluded in April, and Melhoramentos is currently internally validating the collected data. Luiza is hopeful that the next step will be the implementation of Katam’s technology.

Opportunities for Swedish Forestry Startups in Brazil

Brazil’s burgeoning forestry market presents a lucrative opportunity for Swedish startups like Katam. After many years working actively in the country, Katam established its Brazilian office last year, signaling its commitment to catering to the region’s evolving needs.

“The establishment of the new subsidiary exemplifies the company’s commitment to providing personalized customer support and facilitating the digital transformation of forestry management for its B2B clients in Latin America. The initiative is driven by our commitment to meeting our customers where they are and supporting them throughout their digital transformation journey. As Katam continues to grow in Latin America, we recognize the need for a dedicated local presence,” wrote their CEO, Magnus Karlson, in a press release.

Luiza Federici has been working with Katam in Brazil for three years, overseeing all the startup’s projects in the country. The company has established clients and ongoing projects in Brazil and South America.

According to Luiza, Brazil currently boasts a rapidly growing forestry market with substantial investment opportunities. Many large companies are expanding quickly, yet they lack the necessary resources and technology to facilitate this expansion seamlessly.

“Many companies don’t have enough people to measure all the forests they buy or to manage all the data they receive. Katam has technology capable of extracting much more data and in much less time than current methodologies. Our customers have more information about their plantations and their forests are more productive,” explains Luiza.

Sweden’s esteemed reputation in forest management serves as a valuable asset for Katam when engaging with Brazilian counterparts.

The PoC was conducted at Melhoramento’s forestry in southeast Brazil

“Sweden serves as a significant reference for Brazilian companies. Saying that Katam is a Swedish company adds value when presenting our solutions to them,” says Luiza.

Navigating Challenges in the Brazilian Market

While Brazil presents a promising market for Swedish startups like Katam, it also poses unique challenges. Luiza advises fellow Swedish startups to tread cautiously, highlighting that understanding local dynamics and building robust business relationships are key.

“It’s a process, so you cannot rush things. I think that’s why Katam has been successful, because we understood that the market and the clients take time. But you need to be financially prepared to take and assume all the risks,” she advises.

Luiza emphasizes the importance of understanding the unique challenges and opportunities present in Brazil. “When Katam brought the technology from Sweden, they thought ‘it is just replicating what we are doing in Sweden’ in a homogeneous way,” she recalls. “But Brazil is huge, and the technology that you are bringing to the south of the country is different from the one you will bring to the north.”

“Swedish companies need to come to Brazil, be creative and do things from here if they want to succeed. Doing things only from Sweden it’s almost impossible,” she adds.

Despite these challenges, Federici sees immense potential in Brazil’s structured market and favorable regulatory environment. “There are many opportunities and the timing is perfect because the investment is very high at the moment. It’d be very nice for us to have other Swedish tech companies here to learn together and to knock the doors together,” she concludes.

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