Nordson Corp., a Westlake, Ohio-based maker of systems that apply adhesives, sealants and coatings during manufacturing, is considering increasing its presence in Russia, a country where corruption corrodes the business climate.

What is Edward P. Campbell, Nordson's chairman and CEO, thinking? Campbell is thinking strategically.

Nordson is "considering forming a direct subsidiary in Russia -- although we've not made a commitment to do so," says Campbell. "What we're talking about is a very limited investment; the exposure we would have is not large in financial terms," he stresses.

Nordson is considering a wholly owned subsidiary as a base for providing local service to its equipment customers in Russia and for partnering with some of its customers in developing specifications for next-generation Nordson products. "We're not talking about manufacturing; we're not talking about sourcing any components for our factories in the West," Campbell emphasizes. For about a decade, Nordson, an $838 million company with 67% of its sales outside the U.S. in 2005, has primarily served the Russian market from Europe, with its "direct investment" in Russia limited to not more than a couple of employees at any one time, Campbell notes.

For about five years, Russia has been one of the four so-called "BRIC" nations -- the others are Brazil, India and China -- that have attracted substantial interest, and sometimes substantial investment, from U.S.-based manufacturers. But with the Czech Republic, Poland, Hungary, Vietnam, and, again, Mexico emerging as significant markets and places of production, is BRIC crumbling? Not really. Rather there seems to be less hype and more reality about BRIC's place in a world in which manufacturers are chasing lower costs of production and distribution and seeking new markets.

Update, By Country

Brazil. Has a history of high inflation, high interest rates and high import duties to protect domestic industry. But "the macroeconomic climate has been fairly stable . . . under [President Luiz In cia] Lula [da Silva]," notes Thomas Duesterberg, president and CEO of Manufacturers Alliance/MAPI, an Arlington, Va.-based business and public policy research group with about 450 member companies.

The ethanol industry is growing, and Brazil has a lot of iron ore, to which the Chinese increasingly are trying to get access, says Duesterberg. Nordson has had sales and service operations in Brazil for 15 years, but no manufacturing.

View article on one page