Lorenge, a Brazilian developer and builder, has been employing innovative strategies and practices to cater to the needs of its demanding clientele. José Elcio Lorenzon talks with Lee Weingast about how the company has grown to be the largest company of its kind in the state while maintaining its rigorous standard of quality.
Thirty years ago Vicente Lorenzon started building houses to earn a living to support his large family in his home state of Espírito Santo in the central eastern Brazil. His efforts led to the formation of Lorenge, now a well known and extremely successful builder-developer, with a team of 600 employees. Still active in Espírito Santo state, Lorenge develops, builds and markets residential and commercial properties and hotels. Thanks to efficient management and a steady focus, the company has become synonymous with high quality and sophistication. José Elcio Lorenzon, Lorenge’s president and director, attributes his business’s health to its three-part philosophy of targeting the right market, reducing waste and adhering to high quality standards. Lorenge’s commitment to quality has helped it achieve its goal of growth and sustainability.
NUMBERS SPEAK FOR THEMSELVES
The statistics clearly reflect the efficacy of Lorenge’s practices. Wise investments, skilled management and an unwavering commitment to quality have brought Lorenge notable levels of success. Lorenzon reports that in 2007, the company saw 23 percent growth. In 2008, profits were up by 17 percent and in 2009 the company grew by an impressive 88 percent. In 2009, Lorenge had the distinction of being the largest builder in Espírto Santo state. Lorenzon attributes the company’s substantial growth to Brazil’s stable economy, lower interest rates and policies that promote investment in residential projects, such as the availability of long-term financing.
Lorenzon highlights the fact that both on the level of construction and overall company management, Lorenge aims at sustainability and efficiency, both economic and ecological. Lorenge employs some innovative economically and environmentally friendly concepts in its construction projects Tecnohome, Ecohome and an intelligent business center at the Enseada do Suá (the new economic hub of Vitória). These high-tech and highly efficient developments, reports Lorenzon, have been selling at rates well above the market average. As the names suggest, these buildings incorporate innovative technological and environmental features such as individual water meters and separate water tanks to facilitate treatment and reuse of water. These groundbreaking steps mean that as much as 70 percent of water from showers and sinks is reused. Whenever possible, pools in Lorenge developments are heated with solar energy. The use of fluorescent lights and motion sensors also help to reduce electricity usage. Lorenge’s Good Refuse Program, part of the company’s commitment to reduce waste has won awards from the Industry Federation and Confederation on both the state and national levels. These measures that save water and money as well as reduce waste are beneficial both to the residents and the environment. Lorenzon points out that the company also has a social conscience, “we support workers and their families by supporting education.” Lorenge provides children of employees with school supplies at the beginning of every school year.
Lorenge understands that its clients value quality in addition to financial and environmental savings. The company’s ISO – 9000 in 1997 provides added assurance of its adherence to strict quality standards. Lorenge’s buildings offer other features that are attractive to its target market – ample garage and parking space, tight security with control centers in residential buildings and penthouses with panoramic views.
“Our portfolio of clients,” says Lorenzon “is at the heart of our success. Our company is well known within our small city. We have families that have bought four, five and six apartments from us over the years so we must truly cater to the needs of our clients.” The bulk of Lorenzon’s clients are in the highest income bracket, known as classes A and B in Brazil and the company has traditionally geared its projects to that group. He explains that full-service, luxury developments with the option of personalization and customization of properties cater to this very demanding clientele. If the number of returning clients is an indicator, it appears that Lorenge is doing something right.
Sophistication and quality are the hallmarks of Lorenge. The company makes it easy for clients at its luxury buildings to implement custom features and alterations to adapt new residences to their specific needs. The company’s Web site makes the process easy with user-friendly guidelines, timelines and instructions for requesting and incorporating individual requests in the construction. Clients can take advantage of Lorenge’s technical assistance that makes available architects, decorators, engineers, tools, etc. to help adapt the units to clients’ specifications. These top-of-the-line benefits reflect the company’s serious commitment to providing excellent quality and service to its clients.
SERVING THE GROWING MIDDLE CLASS
With the Brazilian economy on the upswing, Lorenge is responding by amplifying its focus to include the fast-growing Brazilian middle class. The Royal, Light and Villaggio are developments aimed at the middle class clientele and have been dubbed “Total Life” because they include comforts and conveniences such as shopping centers, meeting rooms and a recreation clubhouse within the confines of the complex. Whereas Lorenge’s luxury residences generally have only one or two apartments per floor, these buildings may have as many as six to eight less spacious units per floor. While the personalization services are not available for these units, Lorenzon points out that they are built to the same excellent quality standards. He is confident that this new segment will prove to be a highly lucrative one for the company.
“This year, 2010, Lorenge is investing around R$ 450 million and will be building 262,000 square meters of residential and commercial property,” reports Lorenzon. He attributes the company’s success over its 30-year history to the continued focus on construction, while the steady growth comes out of leveraging the business and acquiring and merging with other companies. “It is clear,” affirms Lorenzon, “that this was the right way to go,” adding that the company has implemented a system of corporate governance and best practices which have led to impressive rates of growth with minimal risk. Lorenzon explains, “Our motto is to build and add value. We always focus on obtaining results and believe that in doing things right the first time. We seek out innovation that adds value and ways to save money whenever possible.”