Concentrix is expanding in Latin America. For the Fremont, California-based business process outsourcing firm, this strategy is about both physical growth and pushing higher-level services such as analytics work and digital transformation guidance.
In March, it opened a new multi-million location in the Nicaraguan capital of Managua to bolster its customer care and technical support service to clients in Europe and the United States. Manfred Kissling, Concentrix’s vice president and general manager in Latin America, expects the new delivery center to more than double the current head count of 300. Beyond this, the firm says it has immediate plans to add to the total even further in Nicaragua, and Kissling wants 600 workers there by the end of the year.
As the company grows, however, Kissling is trying to blend expansion with the realities of the market. In Managua, this means being cognizant of the fact that the country needs to develop its talent pool organically so that firms like Concentrix can try to recruit new entrants into the sector’s workforce rather than getting into a zero-sum game with competitors for the same employees. “I want to [expand] in a way so that the market doesn’t overheat,” said Kissling. “We all need to protect the market and make sure we can find the talent.”
Brazil is another growth area. Concentrix opened its third location in São Paulo the week of March 7 — the week before the Nicaraguan launch in what became somewhat of a Latin American tour for the company’s top officials. Kissling expects to double the current size by the end of the year and has not been deterred by the ongoing economic concerns nor the political turmoil now embroiling Latin America’s largest nation. “What is complicated for one person is an opportunity for another,” said Kissling.
He characterizes Concentrix as only a small player in Brazil now, but the company’s focus on digital transformation is appealing to firms there that are forward thinking about long-term growth and looking to gain market share now as others fail to navigate a difficult climate. He says this is becoming the company’s niche in Brazil. “The county is going through some uncertainty, but the business community needs to keep running … The crisis really requires them to find a provider that can provide value to them,” said Kissling.
Carlos Amaral, a director at Alsbridge, is also optimistic about the embattled nation. Political fallout of the impeachment process of President Dilma Rousseff is an obvious concern, and he is seeing industry people worried about taxes and inflation. Facing revenue shortfalls, the government seems to have an obsession with adding new tax revenues, and this is complicating the lives of everyone doing business.
But while it could be potentially very harmful to companies, he says, red tape and unpredictable taxation is nothing new in Brazil. Amaral doesn’t see the political quagmire affecting long-term investment from the industry. In fact, he agrees that expanding now makes sense. “In my humble opinion, now is a good time to buy local companies or services at a discount,” said Amaral. “The acquirer can then wait to make further investments until the dust settles.”
The demand for more advanced services isn’t just growing in Brazil. Kissling sees it region-wide. The clients that Concentrix is closing deals with are looking for a provider that can enhance operations and help with digital transformations. It is a growth area and a focus for the company across the globe, and Latin American clients are now increasingly asking for such services. “We are high value-added provider,” said Kissling. “That means we do a lot of innovation and transformation.”
The company’s biggest strength in Latin America now comes from the consumer electronic and technology verticals, both of which are strong in Costa Rica and the main focus of their head count of roughly 1,600 workers in San José. But Kissling expects an upcoming expansion to widen the capabilities there.
In May, Concentrix will break ground on a new facility that will “more than double” its capacity in the country, says Kissling, and this will accelerate the diversification of the portfolio. Health care is an area where he hopes the new hires can be used.
He also made a recent trip to the capital of Colombia, which he calls an “up-and-coming location for us.” Concentrix’s footprint here should grow soon. “We are actively looking to expand our presence in Bogotá,” said Kissling, noting that banking is one vertical that Concentrix hopes to grow in the future and that Colombia has an appealing potential for this work. He sees opportunity in the entire financial services realm throughout the region. “Insurance is one of the verticals that is growing in LatAm.”
The overall push in the region is an important one for a company that is trying to maneuver into higher-level services worldwide. It shows the potential for for such work in Latin America, and Concentrix is trying to tap that opportunity with growth in Brazil, Nicaragua, Costa Rica, and Colombia.