One of the largest manufacturers of ceramic floor and wall tiles in Brazil - and the world - Carmelo Fior Ceramics is committed to producing high quality products at affordable prices. In an interview with Michael Sommers, director Eduardo Roncorini Fior explains why he's all fired up about the company's recent expansions in Brazil and future growth in the U.S.
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Last year, Carmelo Fior Ceramics celebrated a quarter of a century in business. In the 25 years since it was founded, the small family company has grown into the second largest manufacture of ceramic tiles (in terms of volume) in Brazil – and the eighth largest in the world, according to the Ceramic Tile Review. Today, aside from supplying a vast range of decorative floor and wall tiles to clients throughout all four corners of Brazil, since 2012 it has also been Brazil’s largest exporter of ceramic tiles, selling to more than 50 countries around the globe.
Expansion in Volume and Territory
“In truth, the history of the company stretches all the way back to the 1940s,” confesses Eduardo Roncorini Fior, director of Carmelo Fior Ceramics. “That was when my great grandfather started a business producing bricks and roofing tiles. Tragically, he died very young and the business closed. His children left the segment and only returned in 1989 when my grandfather, father, and uncle decided to resurrect the plant to manufacture ceramic tiles. In honor of my great-grandfather, they bestowed his name on the company they created: Carmelo Fior.”
Based in Cordeirópolis, a small town in the state of São Paulo, Carmelo Fior grew organically over time. The company started out producing a total volume of 868,000 square feet of floor and wall tiles per month. As a result of ongoing investments and upgrades in infrastructure, equipment, and technology, by 2001 output had more than sextupled to 5.6 million square feet. In 2015, the company estimates monthly production levels to reach 72 million square feet.
Carmelo Fior’s infrastructure has expanded along with its output. In 2011, the company inaugurated a second production facility in Cordeirópolis. Later that same year, it also opened a plant in the strategically located Northeastern state of Sergipe, providing access to the rapidly expanding markets of Brazil’s Northeast region. And last year, Carmelo Fior completed its geographic coverage of Brazil’s continent-sized territory when it purchased Pisoforte, a plant in the southern state of Santa Catarina, from where it can easily supply clients in the South as well as neighboring countries in South America.
A Dry Approach
Among the diverse techniques used to make ceramic tiles, Carmelo Fior specializes in a process whereby clay is dry ground. According to Eduardo Fior, the dry process is ideally suited to the specific properties of the raw materials available in Brazil, enhancing its inherently rich characteristics and enabling the creation of high quality products. “Opting to produce tiles via dry processing doesn’t alter the materials’ characteristics, either for better or for worse,” he points out.
Ultimately, the main – and most critical – difference between the various types of processes is the price. “Dry processing costs 30 to 40 percent less than other methods do. A large part of the reason for such savings stems from a more efficient use of electricity and water, which translates into greater sustainability,” says Fior.
High Volumes, Low Costs
Large volumes – and economies of scale – are key considerations based on Carmelo Fior’s target market, which embraces Brazil’s so-called B and C (upper-middle and middle). “Our main goal is to create top quality products with great design and finishes at an affordable cost so that they are accessible to the largest possible number of consumers,” declares Fior.
Over the last decade, this target market has become considerably larger as a result of government socio-economic policies that have seen an estimated 40 million (out of 200 million) Brazilians rise out of poverty and into the lower and middle classes. In addition to increased wages and disposable incomes, many less affluent Brazilians have been able to finance homes for the first time due to unprecedented access to public and private credit and payment installment plans.
Such factors help to explain Carmelo Fior’s positive annual growth rates – 17 percent between 2013 and 2014 and an expected 11 percent between 2014 and 2015 – which have remained healthy despite a recent economic slowdown. Meanwhile the company expects further growth as it embarks upon efficient expansion plans that involve opening and acquiring new production units logistically located in strategic regions throughout Brazil. “Situated close to major consumer markets and national ports, these units will make our distribution chain much more competitive, both domestically and internationally,” says Fior.
Indeed, if Brazil’s short-term economic outlook is less than rosy, Carmelo Fior can take comfort in the popularity of its products beyond the country’s borders. Since the company first ventured into exports in 1999, it has made considerable commercial inroads overseas. Today, it ships units to clients in nations throughout Africa, Europe, the Middle East, and the Americas, including the United States. In fact, in 2015, the plan is to tackle the U.S. market more aggressively, in an attempt to take advantage of America’s robust economy. With this in mind, the company has plans to up its presence at industry trade shows as well as increase its number of commercial partners and strategic clients and send its commercial directors stateside with the aim of making new contacts. “With the U.S. economy strengthening, we expect demand to grow a lot over the next three years,” confesses Fior, adding that the company hopes to raise overall international sales from 10 to 15 percent of total revenues during this period.
Adding Value – and Shine
In terms of strategies for growth, both abroad and at home, Carmelo Fior is actively seeking ways of meeting demand by offering products that boast high added value – often through investments in cutting-edge processes such as state-of-the-art ink jets – while reflecting the latest trends in terms of aesthetics, design, and finishes.
As an example of added value, Fior indicates the tendency towards increasingly large formats. This surging demand resulted in the company’s launching of tiles that measure 62 x 62 cm (24 x 24 inches). “Previously, the largest tiles available were 53 x 53 cm (21 x 21 inches); the 62 x 62 cm version was only available in porcelain. However, we were the first Brazilian manufacturer to produce the 62 x 62 cm format using dry processing.”
Other emerging trends are more narrowly related to aesthetics. For this reason, Carmelo Fior closely follows global design tendencies on display at important industry trade shows such as Spain’s Cevisana and Italy’s Cersaie. “This year, for example, we’re launching a new line of high sheen tiles,” says Fior. “These appeal to the Latin American market because Latin Americans have a real fondness for products that have luster and shine. With this in mind, we’ve introduced 62 x 62 cm high sheen tiles with patterns that resemble wood and stones, particularly marble.
“There is a real demand right now for designs that reproduce nature (which we recreate via ink jets). Purchasing a tile that resembles wood or stone is much cheaper than purchasing the natural material. It’s also more sustainable.” Fior pauses and then confesses: “In fact, sometimes our tiles are even more attractive than the real thing.”