Multivac: Why Brazil?
‘Rising wage costs are awakening interest with companies in a greater degree of automation’
The company has a factory in Curitiba, Paraná and sales office in Campinas, São Paulo, and opened a subsidiary there in 2009.
Turnover for companies building machinery & equipment
According to the Foreign Office of the Federal Republic of Germany, the average growth rate between 2004 and 2011 was 4.3% per year, and the unemployment figure in 2012 was 6%.
While Brazil’s overall economic growth shrank in 2012, turnover for companies building machinery and equipment rose by 3.5% in the first half of 2013 compared with the previous year, according to Abimaq Trade Association.
The demand for machines to produce and pack consumer products was at an above-average level and the food sector is one of the most important customers.
Multivac’s production site in Curitiba produces the C 500 and C 550 double chamber machines, F 100 and F 200 thermoforming packaging machines and operates a spare parts warehouse. Application trials for customers are carried out in a 200m²showroom.
Michael Teschner, MD, Multivac do Brasil, said travelling distances for sales and service personnel are a major challenge in this huge country, where the most northerly and southerly points are more than 4,300km apart.
“The five salesmen of Multivac Brazil are supported by representatives and dealers in different parts of the country,” he added.
He believes that because Brazil is one of the largest producers worldwide of food and agricultural products the geographical challenge is worthwhile.
“The market potential is obvious with the example of poultry: the country produces 13m tonnes of chicken meat, 10m of which are for the domestic market,” said Teschner.
“In addition, 8m tonnes of beef and some 2.7m tonnes of pork contribute to satisfying the hunger of Brazilians for meat (PwC Agribusiness Research & Knowledge Centre 2013) and this will become even larger in the coming years.”
‘Bolsa Familia’ education and social program
The cause of the continual growth in the consumer market lies more than 10 years in the past, according to Multivac.
Factbox
Brazil’s strongest side
- Largest exporter of orange juice, green coffee, poultry, sugar
- Second largest exporter of beef and soya beans
- Second largest growth market
- Fourth largest democracy
- Fourth largest country in terms of area
- Fifth largest country in terms of population
- Seventh largest national economy
In 2003, the State President at the time, Luiz Inácio Lula da Silva, started the ‘Bolsa Familia’ education and social program.
This contributed significantly to the fact within 10 years’, around 40m Brazilians were able to rise to the middle class and boost consumption rapidly.
As in most modern societies, improved social status is accompanied by increasing individualisation. This is particularly so with women, said Teschner, more of whom will prefer a career to being a homemaker.
The number of small or single-person households increases, and with this, greater demand for frozen food and convenience products.
“This development opens up good prospects for Multivac do Brasil,” he added.
“Our annual growth is currently 60%. Since thermoformed packs have, up to now, beenused infrequently, there will continue to be good opportunities here. We are also benefiting from the fact, that rising wage costs are awakening interest with companies in a greater degree of automation.”
Teschner sees a strong competitive advantage in Multivac’s local presence for harnessing this potential.
“The fact that we share the timezone and language with our customers as well as being able to be on site with them in 24 hours gives us a powerful advantage,” he said.
“The physical proximity of Application Engineering, Service and Spare Parts has a positive effect and reinforces trust ion our company.”
Teschner was speaking to Multivac Update magazine Issue 2, 2014.
