BUT FIRST BRAZIL
Karcher was founded by the German engineer and entrepreneur Alfred Karcher. In 1935 he opened the company in Stuttgart-Bad Cannstatt in order to develop his product ideas in the field of heating technology. Four years later the company moved to Winnenden, where it still has its headquarters. At this time Karcher manufactured pre-heating burners for airplane motors and cabin heaters.
The breakthrough into cleaning technology came in 1950 with the development of the first European hot-water pressure washer (the DS 350 steam blaster). The construction for heating the water was so avant-garde that it still serves as the basis for all of the washers today.
Experience of his innovations was short-lived for Karcher, who died in 1959 at age 58. His wife, Irene assumed management and the company expanded its frontiers. In 1962 foreign subsidiaries were founded in France, Austria and Switzerland.
The first subsidiary outside Europe was opened in 1975 in Brazil. Irene Karcher, following her husband’s entrepreneurial legacy, had purchased some plots of land in Betel Paulínia, São Paulo with the intention of constructing a factory and tapping South America’s largest market.
During the same period, Karcher concentrated on high pressure cleaning. The color of the machines changed from blue to what has become the world-famous Karcher yellow.
In 1980 the company expanded its product line to include general cleaning products, starting with the application areas of transport and buildings. The program was gradually supplemented by wet and dry vacuum cleaners, sweepers, scrubber dryers, car washing systems, steam cleaners, cleaning agents and drink water and wastewater treatment plants. Of particular note were the introduction of the first portable pressure washer (the HD 555 profi) in 1984, and the development of roller brush technology for scrubber dryers in 1986 for the professional segment.
In 1988 the success of Karcher in Brazil required larger premises and the factory moved to Paulínia where it remains until today. The facility produces various products of the domestic, professional and industrial lines, and is recognized for its after-sales service.
With the passing of Irene Karcher in the following year, the company took on a more aggressive approach to globalization. “Karcher had always been a family company, but now in the hands of the next generation, it has taken on a more stream-lined and professional approach to development and expansion,” says Gustavo Hirsch, Industrial Director of Karcher Indústria e Comércio Ltda in Brazil.
The new focus of the company was client-based. Karcher developed innovative solutions for target groups, in accordance with customer requirements. Indoor cleaning for example saw the introduction of steam cleaners and vacuum cleaners for private households. In 2003 the world's first fully autonomous vacuum robot, the RoboCleaner RC 3000, was launched on the market. Following demand, in 2007 Karcher entered the completely new business segment of gardens, which encompasses watering pumps, drainage, and house water supply as well as an extensive line of accessories.
By 2008 Karcher was represented in 41 countries with its own subsidiaries, earning 85 percent of its turnover in foreign countries. Today, 40,000 service centers operate to ensure uninterrupted service to customers worldwide.
Karcher Brasil is the only factory in Latin America and the country has a further 500 technical assistance and distribution outlets offering clients full maintenance, replacement parts and accessories; “90 percent of all deliveries are made within 24 hours,” affirms Hirsch.
The facility produces selected products from each of the three sectors, according to national demand. “We produce equipment mainly for Brazil – 95 percent of production is destined for the national market. The remaining 5 percent is exported to Latin America and to Germany,” he adds. The relationship between the head office in Winnenden and Karcher Brasil is important: products are made to international standards to ensure the global brand quality. Karcher Brasil also imports small quantities of parts from Germany, the US, China and Italy where the group has factories.
Domestic customer requirements have also meant the development of national Karcher products. “The majority of the equipment made in Brazil conforms to our global portfolio, however the customer here has requested special order machinery tailored to Brazilian Industry,” explains Hirsch. He is referring, for example, to the country’s booming mining industry, which has led to specific equipment such as mineral washers.
Despite special orders, Karcher’s leading product worldwide is the high pressure washer. Customers recognize the Karcher brand for these powerful jet washers, with varied domestic and industrial cleaning applications, vacuum cleaners, steam cleaners and professional scrubbers and sweepers. The industrial sector also manufactures water treatment equipment for recycling and purifying water.
“At Karcher Brasil our production technology follows standards set by Germany, but is produced nationally. Certain equipment, such as the testing line for the high pressure washers is imported from our head offices,” Hirsch says. The attention to detail ensures that customers can expect the same quality worldwide.
The constant improvement of equipment and the universal effort to continue the strength of the brand is reflected in the technology developed by Karcher. More than 80 percent of developments are completed in less than four years. The modern designs, which consider ergonomics and easy handling, have led to more than 70 international prizes.
Three major investments for Karcher have been a distribution center in Germany and factories in China and Brazil. “The new $37 million factory in Vinhedo, São Paulo is scheduled for opening in 2013. At present 85 percent of our revenue comes from products launched in the last five years, and the new plant will increase production capacity by 26 percent,” explains Hirsch. The growth translates into a potential 600,000 units per year. The new plant will occupy 32,000 square meters, in preparation for continued growth.
Aligned with the mechanization of the cleaning industry, Karcher recorded annual growth of 20 percent in Brazil last year and a 40 percent national market share. The figures represented revenue of $110 million in 2011, approximately 5 percent of the multinational’s global income of $2 billion. “Brazil is of great importance to the global growth strategy and has become a major focus of the investment group,” Hirsch confirms. Projected revenue for Karcher Brazil in 2012 is $150 million.
Karcher also has facilities in Rio de Janeiro, and Indaiatuba (São Paulo) and stores in Porto Alegre (Rio Grande do Sul) and Count (Belo Horizonte, Minas Gerais). However, more are on the way; in August 2012 a subsidiary in Recife (Pernambuco) was scheduled for inauguration, with plans for Curitiba (Paraná) and Campinas (São Paulo) as future destinations.
While acquisitions have occurred abroad, expansion in Brazil has been organic. “We have extended to areas where our customers need us. Now for example we are producing the watering range for the garden, including sprinklers, hoses, timer control units and accessories.
A strong sense of environmental responsibility also led Karcher to produce equipment that consumes lower levels of energy and saves up to 80 percent water. As well as performance, the company emphasizes social, economic and environmental features of its products.
It is no surprise that the international crisis that wiped out many was a speck on the surface for Karcher Brasil. According to Hirsch, national sales accounted for many international declines, with the domestic segment compensating for a slight fall in industrial and professional lines. “We are not the cheapest product in the marketplace, but high performance and German technology are strong selling points in Brazil,” he says.
Karcher is synonymous with quality and tradition. With a marked world presence, the multinational recognized the meaning of Brazil from the start and continues to support intensely the market region’s growth. Over 500,000 units were sold in the country in 2011 and the new facility and innovative global technology promise an even brighter future, proving Brazil and the world are cleaner with Karcher.