July 26, 2016 Succcess In Tow

Volume 10 | Issue 4

In a country where 75 percent of all products are transported by truck, A. Guerra has grown into one of Brazil’s largest makers of transport

When goods and materials move from place to place in Brazil, they generally move by truck. The fifth largest country in the world, Brazil is a land of vast proportions and diverse regional differences. Sugar is grown mostly in the Northeast, soy and corn in the South, and coffee comes from the Southeast region. And that’s just a few of the country’s agricultural products. Heavy machinery is produced largely in Sao Paulo, while domestic goods are produced in the Amazon region. All of these products are transported along the highways of Brazil. In fact, over 75 percent of all products and materials produced in Brazil are transported by truck. But it wasn’t always that way. When transport trailer manufacturer A. Guerra began creating cargo trailers in the southern tip of Brazil in the 1930s, the most important cargo at the time was cattle.

Today, the company has 20 percent of Brazil’s truck transport market and produces over 1000 units per month, serving much of Latin America. With almost 50 sales and service centers, A. Guerra is one of Brazil’s largest manufacturers of truck trailers with exports to 16 countries in South America, Europe and Africa. Its success comes from a combination of factors, including its regional dominance in the Southern Region of Brazil, the ability to offer its customers a variety of solutions to specific transportation problems from livestock to alcohol, and perseverance with outdated government regulations and overwhelming competition.

Moving the Farm
Farming and agriculture has long been the primary business in Brazil’s southern state of Rio Grande do Sul. The state, which borders Argentina at Brazil’s southernmost tip is famous for its cowboy culture, stemming largely from the numerous small cattle and livestock ranches that represent over 60 percent of the land use in the state. Today, the ranchers, known in Brazil as gauchos, are responsible for over 14 million head of cattle and 10 million head of sheep. Not surprisingly, the state is also a major producer of leather goods, shoes, and many bovine-related products.

Along with animal production, the state of Rio Grande do Sul is a major contributor to Brazil’s agricultural yield. Over 25 percent of Brazil’s grain production comes from Rio Grande do Sul along with almost 50 percent of its rice and tobacco production. Most of the country’s wine – over 90 percent – comes from this area. But in the 1930s, it was all about cattle and sheep.

Back then, Ângelo Francisco Guerra made his living hauling animals around the countryside for many up-and-coming ranchers. At the time, his system of transporting livestock consisted of animal-drawn carts. By 1948, he founded his first company, A. Guerra & Bros., makers of wooden carts, single-axle trailers that could be pulled by mule or ox. His carts were made for hauling animals and grains, but in the 1950s, he encountered another opportunity when there was a sudden demand for the region’s timber. To meet the demand, Ângelo produced a special cart made of wood and iron, specifically made to haul timber. As demand grew in the region for various means of transporting goods, the solutions kept coming from A. Guerra.By the 1960s, Brazil began producing its first heavy trucks domestically and the ground transport business changed for good. “Brazil grew a lot during this time, with so much road transportation. And with an 18-year-old fleet on our hands, we began to grow and attend to this new demand for semi-truck trailers of all kinds,” remembers Marcos Guerra, Commercial Marketing Director and son of the founder.

The Road to Success
Beginning in the 1960s, Brazil’s industrial markets were growing faster than its agricultural industries and Sao Paulo was quickly becoming one of the world’s great industrial cities. A. Guerra was soon to leave its previous business behind and hitch it’s future to the industrial wave in the Southeast Region. “We began changing, leaving the animal transport business and going to truck transport. From 1964 until today, we focused on all types of transport, not just livestock and agriculture.” Angelo Francisco sold off the original business and began a new company, A. Guerra, S/A, with 20 employees and a factory of 75,000 square feet. “The challenges were many at first. We were a privately held family company fighting in the market with public companies that had a lot more money. There were many difficulties, economic and otherwise, but we managed to get 20 percent of the market.”

A. Guerra began developing a network of affiliates, service and sales centers to market its rapidly growing line of trailers to the southern half of Brazil and neighboring countries, like Argentina, Paraguay and Peru. “Marketing was always connected to the products,” says Marcos. “Our difference was our growing number of service centers for the client. We also began developing products for truck manufacturers. Today, our trailers are purchased and resold by companies like Mercedes, BMW, Volvo and Volks. They buy from us and then sell our trailers with their equipment here in Brazil and abroad. But this is not the biggest part of our volume; the biggest part is from our own 48 sales and service points.”

In the 1980s, the company hit another snag. Its latest trailer in production came up against outdated laws that prohibited its use on public highways. The trailer, which A. Guerra calls the Bitrem (or bi-train), is actually two trailers hitched together. “At the time, the law did not consider this a normal product for the street. The weights and balances laws were very old. At the time, the limit for third-axle trailers was 27 tons. Ours could haul 39 tons with no increased damage to the roads. But the laws did not permit us to use it. But we put it into production and got the laws changed.” The process, which took 13 years to complete, paid off. Today, 60 percent of the company’s product is based on its Bitrem technology. Production volume is currently at 3,000 units per month.

A. Guerra’s international growth came mostly in the 1990s. While the company had already made inroads into Argentina and other neighboring countries, the 1990s brought about an effort to create affiliates and service centers throughout the continent. Besides South America, the company’s products are sold in Mexico, Cuba, Portugal, Costa Rica, Angola and the Arab Emirates. Soon, the company opened factory units in both Sao Paulo and Argentina. Exports grew to represent approximately 20 percent of sales. “We are at about 20 percent in foreign sales and we have stabilized here, reached a maximum. To grow more at this point would be difficult.” As Marcos Guerra points out, the company is now focused on innovation and new markets.

Driving Technology
With the success of its Bitrem technology, A. Guerra quickly became a technology-driven company. Its advanced air suspension system offers greater stability, better handling, greater cargo capacity and lower wear and tear on tires. The company also perfected its disc brakes and began making its Bitrem trailers out of polypropylene instead of wood and metal. “Our new Bitrem Tecno 5 had a big demand,” remarks Marcos. “We used a system of dry paint that was innovative and environmentally sound.

Plus, the polypropylene got us away from using wood from trees and allows us more flexibility with designs.” New models are made specifically for towing Brazil’s newest products, including fuels made from sugar alcohol. “Everybody is paying attention to our country in regard to alcohol and ethanol. This is important for us because we create products to transport sugar cane to the refineries.”

The growth in this market has been astounding in Brazil over the past 10 years. Today Brazil is creating about 30 refineries each year and all of them need truck transport vehicles. “Our growth at this time is almost 20 percent in this segment and we see this continuing for the next several years,” adds Marcos. “We have tanks for transporting the alcohol and fuels, plus trailers for moving sugar and sugar cane.” It’s a sweet time for A. Guerra, who is ready for growth with economical and ecological solutions that can drive Brazil into the future.

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