July 26, 2016 Hot Prospects

Volume 11 | Issue 2

Stoking the fires of Brazil’s domestic and international growth is a company that specializes in industrial furnaces, heat treatments, refractories and powder metallurgy. Christopher Van Buren shows how Grupo Combustol & Metalpó is supplying the heat for Brazil’s key industries.

Brazil was born out of the fire…at least metaphorically speaking. The name “Brazil” comes from the Portuguese word brasa, meaning blaze and was inspired by the fiery red color of the seeds of the Pau Brasil tree. The tree and its seeds, which were used for making dye, were Brazil’s first official exports to Europe. Today, Brazil is supplying a different kind of fire to the world – the fire of forged metals. As metallurgy and steelworks heat up for Brazil, Grupo Combustol & Metalpó is there to provide the flames and the furnaces in which they blaze.
Dr. Thales Lobo Peçanha, president of the group, is organizing his company to take advantage of the growing markets in Brazil. “Our company is divided in to four main business units: equipment, which is our line of furnaces; services of heat treatment with our own equipment for third parties; refractory materials, which are special pieces for working with high temperatures and under wear conditions; and finally powder metal parts (P/M). We make the powders and manufacture the parts.” Combustol’s business today is 40 percent for equipment, 35 percent for powdered metal parts, 15 percent for services and 10 percent for refractory materials, including exports.

FORGING A BUSINESS
Furnaces are Combustol’s principal business and the company produces more than six lines for markets like petrochemicals, steelworks, glassworks and metallurgy, some of Brazil’s hottest industries. “Our main equipment is for heating, heat treat, forging, and casting metals. We have vacuum furnaces for steel and special alloys and furnaces for controlled atmosphere heat treatments. Our bigger furnaces can process 400 tons of metal per hour. We also make smaller furnaces with some partners overseas, including the U.K. France, the United States, Italy and Germany. We do technology partnerships and they also provide some components for us.”

“Continuous line furnaces are also very important,” Peçanha continues. “They are used for anealing, on tin plating and paint applications and we also have complete lines for galvanizing. This is an important market for us in Brazil.” Indeed, galvanized steel is used throughout Brazil for road and bridge construction, transmission towers and alcohol refineries. These infrastructure applications are receiving a lot of attention from the Brazilian government and are, consequently, some of the country’s fastest growing markets. Combustol’s continuous line furnaces are among its most important product lines.

Combustol also serves special needs for its clients, especially in industries dealing with volatile materials. “Sometimes our clients want something special that lets them process their pieces at a certain temperature or with a unique production cycle. They specify how the product has to leave the furnace, the level of oxidation, the metal and we develop the equipment. In other cases the clients define exactly what they want. One example is in petrochemical furnaces. One of our biggest clients is Petrobras. They specify what they want with a lot of detail and even do much of the engineering. Then we create the equipment.”

Other volatile applications requiring high levels of safety and security include furnaces for dangerous chemicals and offshore oil platforms. “We work with Selas Linde of Germany and Italy. They tell us exactly what they want and rely on our expertise to make it. These are important markets working with dangerous chemicals.”

With its expertise in furnace construction and engineering, Combustol ends up assembling even the largest furnaces that require parts from outside sources. “Up to 90 percent of these big projects are contracted from others and dispatched to the client site for mounting. This can take from 12 to 24 months. Just the assembly can take from six to 12 months. We coordinate all the pieces, equipment and assembly.”

For smaller equipment, Combustol provides complete fabrication and engineering at a production rate of up to three tons per hour. Servicing older furnaces is yet another part of the company’s equipment division. “Most of the machines were created by us, and we service them for many clients.”

WITHSTANDING THE HEAT
The manufacture of refractory pieces represents another part of Combustol’s business. These pieces are required for enduring the high temperatures inside furnaces, ovens and incinerators, such as the plates, runners and the furnace lining itself. “We are dedicated to refractory materials. These are components for working in severe conditions. We specialize in aluminum-and silica-based as well as silicon and silicon nitride carbides materials and we use these components in furnaces for metal forging and steelworks. They are connected to our furnaces unit.” Combustol also creates refractory pieces for chemical applications and applications that require either high or low amounts of thermal conductibility. Combustol’s refractory division represents about 40 percent of the Brazilian market for these products.

METAL FROM POWDER
In 1967, Combustol’s powder metals division transformed itself into a separate business within the Combustol group. The company, called Metalpó, came just in time to supply powdered metal (P/M) parts manufacturing to the growing Brazilian automobile industry. The process of manufacturing pieces from powdered metal is commonly used for gears and engine parts, pieces that require precision and consistency over great quantities. “These pieces are compacted and sintered. They are precision parts used in automobiles and electric motors, refrigerator compressors and kitchen appliances.”

The process of powder metallurgy improves reliability and reduces waste while allowing for adjustments in porosity and strength. Pieces generally require little or no machining after production. “The advantage is that the pieces are produced more economically and ecologically. You don’t generate chips and have better precision in great series. The molds we make have produced 20 million pieces without a single defect. The precision is similar to one-fifth of a piece of hair.”

Metalpó produces around 150 million pieces per year. Principal markets are the country’s key auto manufacturers: Fiat, Volkswagen, Ford, and GM. Other markets include electrical equipment manufacturers like Black and Decker and Tecumseh, which provides motors and pumps for companies like Whirlpool and Phillips. “These companies export to the entire world from their Brazilian units. Practically all cars, home appliance and motors [made in Brazil] have our products in them, like gears, oil pumps, auto-lubricated bearings, and shock absorbers.”

FIRING UP THE FUTURE
Clearly Combustol and Metalpó are supplying some hot markets with increased exports and a booming domestic economy. Peçanha is optimistic about the future of Brazil and his industry. “Petroleum is hot now and we have foreign groups that are investing here, like Shell Oil and others. This market has a high level of movement with five more years of heavy investments happening. We also have a big market in transforming petroleum into other products.”

Peçanha also points to the steelworks industry as an area of growth and identifies a new cycle of investment taking place. With several projects in operation and many others in planning, Combustol expects growth in this market for another three to five years. “Another market is automotive, which is very strong now, especially exports. This year we will manufacture near three million cars and production will pass all records and begin a cycle of investments that will last at least two to three years. This market uses our equipment and needs our pieces.”

Aluminum is another growth market for Combustol and Peçanha expects increases in commercial construction and housing to keep the aluminum market strong domestically. With increased domestic growth and housing development, the need for household appliances, most of which use parts manufactured by Metalpó, is keeping pace. “This year we are closing the first half of Metalpó with record levels of production – 140 million pieces. Our furnaces and heat treatment divisions are also growing, especially in the United States and in Europe. We are supplying thick sheets and the latest in digital furnaces.” Combustol expects to end the year with around 15 percent growth over last year and Peçanha feels this will continue for awhile. “Some segments are growing more and some less, but we expect the level to remain, then slow down around 2011. We should maintain two-digit growth until then.”

Presently, Combustol exports around 5 to 10 percent of its products and Peçanha feels that exports will play an important role in the future of his company and of Brazil. In fact, exports have always been critical to Brazil’s success as a nation and forged metals will continue to keep Brazil blazing into the future. As long as that’s true, Combustol will keep supplying the fire.

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