Look to manufacture of motor and machine parts. One of Latin America's most innovative engine component companies shut down domestic facilities and outsourced production to China. Reuben Ford finds out more about the strategic move, which brings Brazilian engineering back to Brazil.
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Founded over 30 years ago, the Siverst Group was the first company in Brazil to develop engine parts resistant to the alcohol content of gasoline. Constant investment in innovation and quality has maintained a solid and competitive market position for the group both nationally and internationally.
Today, the Siverst Group comprises Raisman Autoparts in Brazil and the United States as well as a joint venture and distribution center in China.
With extensive product lines of parts for the automotive, civil construction, lawn and forestry and marine industries, Siverst and Raisman components are developed, designed and projected in Brazil, yet for the last eight years made almost entirely in China.
“Over the last few years, we have reinvented ourselves, deactivated production in Brazil and transferred manufacturing to China. It hasn’t been easy, but to remain cost-competitive, especially in the international market – it was necessary. We expect accelerated growth from 2015 as a result of these steps,” affirms Company President and founder of the Siverst Group, Ismael Trevisol.
Pioneer and Partner
Siverst began life as a simple workshop in its founder’s garage in 1983. Trevisol’s first product was a carburetor needle – in fact, the first Viton-tipped carburetor needle. Viton rubber, which is highly resistant to fuels, provided the market with an important differential and Siverst soon began developing similar components.
For six years the prospering company supplied steering shafts to Yamaha Motorcycles and also made membrane carburetors for Husquavarna Chain Saws. “In 2009 we started exports to US companies such as Pacer (motor parts and accessories) in Pensacola Florida,” Trevisol adds.
Siverst Indústria de Peças Ltda is now part of group that includes Raisman Indústria de Componentes Automotivos Ltda (founded in 1987) and Raisman Corporation Ltd (founded in 2007 in Miami, Florida).
Like Siverst, Raisman manufactures an extensive range of power parts and products – especially in the garden, lawn and forestry divisions. Raisman Corporation is the group distributor in North America.
“In 2005, when we initiated production in China following our engineering and technology, we had the opportunity to develop more products, in particularly for motorcycles. In Brazil we manufactured twelve families of products, 178 items in total. In 2014, we launched 62 lines comprising 1551 products for motorcycles alone,” Trevisol explains.
In the gardening and forestry sector the group has also developed more than 4,000 products, which attracted interest in China and established the joint venture named Land. Launched in 2012 in Yuyau, China, the Land venture produces machinery and equipment for the sector worldwide using Brazilian technology.
In 2013 the group opened its distribution center in Ningbo China to facilitate logistics operations.
Investing in Expansion
Moving operations to China was and is an important investment for the Siverst Group. “Currently only 5 percent of our products are made in Brazil, 95 percent are produced in China,” Trevisol confirms.
Lower costs and a firm focus on innovation, expansion and development have created a vast line of power parts capable of running with up to 25 percent ethanol in gasoline. Silverst’s extensive line of motor parts includes suspension, steering, cylinder, piston, brake, transmission, gear and electric components.
Raisman manufactures carburetors. The kits made in China are distributed throughout Brazil, Latin America, the United States and Asia.
Aimed at improving gardening and forestry equipment, the Land Joint Venture produces cutters, leaf-blowers, water pumps, chain saws, sprayers and lawn mowers as well as other related machinery.
Trevisol summarizes production: “Our main differential in relation to competitors is the quality of our products. Although produced in China, our companies have innovation in their DNA and engineering, projects, technical specifications and quality control are all carried out in Brazil. The team in China implements production stipulated by the group in Brazil.”
The Siverst facility located in Canoas, Rio Grande do Sul, Brazil covers 24,000 square meters and houses the group’s South American companies. Distribution centers in São Paulo and Santa Catarina states provide logistics support.
“Engineering is a primary area of investment. The recent development and launch of new products are important developments for us this year,” Trevisol says.
Products are exported to more than 50 countries worldwide, including the United States, Central and South America and more than 30 countries in Europe.
Changes and Challenges
Moving factories to China marks strides forward in production for the Siverst Group, while side-stepping the challenges of manufacturing in Brazil. “High interest rates, taxes and unpredictability make production growth in Brazil an uncertainty,” Trevisol clarifies.
He admits that the changes have not been easy and were based on economical manufacturing without compromising quality and maintaining a competitive advantage in an increasingly complicated market.
Trevisol is also confident that the company strategy, so far a success, promises future growth, particularly from 2015: “With all our changes being finished this year, we are also restructuring the commercial and sales departments in preparation for the challenges ahead.
A promising outlook. The Siverst Group has developed leaps and bounds from the garage of its founder. Successfully avoiding hurdles, the companies, all of family origin, have taken brave steps to secure a brighter future.
Engineered in Brazil, made in China, Siverst, Raisman and Land Joint Venture are a global group – Trevisol concludes: “We have the possibility to supply the whole world with quality power parts and competitive prices.”