Brazil’s number one brand in building and construction project management reveals plans to double revenue in the next five years. Reuben Ford takes a closer look at a group that leads a competitive market with confidence.
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Investment in Brazil is challenged by a history of economic ups and downs. This year is no exception with interest rates rising, the value of the Brazilian real falling against the dollar and previously booming industries, such as the property market experiencing a slump.
Despite the questionable state of the economy, the market leader in construction projects is growing against the tide. In the three weeks between the first and second round of the presidential elections, Grupo Tarraf sold 320 units in a recently completed apartment building.
The surprising success was one of many for Brazilian Grupo Tarraf that puts its name to several well-known buildings and residential complexes nationwide. The Group, which also includes car dealerships and investment companies, is widely recognized for its achievements in the construction industry and has ambitious plans for new projects and 90 percent growth in the next few years.
“I don’t believe in the uniformity of our economy – history speaks otherwise. We have made staggering progress through calculated risk and have achieved great results,” affirms President of the Tarraf Group, Olavo Tarraf.
The history of the Tarraf Group dates back to the 1920s when Lebanese refugees fled to Brazil to escape war. “My grandparents arrived in Brazil ready to work – looking for real, credible work, which reflected in their behavior, culture and attitude. This is an ethic that we seek to emulate today,” Tarraf says.
Without substantial knowledge of the language, and little knowledge of Brazil, it was a tough start. It was the second generation that managed to successfully build on their parents’ hard work. They invested in various industry sectors where they identified potential. By the time business was passed to the third generation, Olavo Tarraf’s generation, it was evident that growth and as eye for ethics and successful projects was in the family.
In the hands of the third generation, Grupo Tarraf underwent changes. Separations in 1991 and again in 2004 finally left the leadership to Olavo Tarraf.
Beyond the automotive profits, Tarraf will also focus on real estate.“I am more enterprising, so there was a shift in focus to building and construction projects,” he says.
The essence of the group remained firmly unchanged. The care and attention to detail and service shown throughout the family’s business continues to be an important part of the group. Tarraf confirms: “This way of working and growth are in our DNA. We have a transparent, pedigree background, which is what makes us an interesting partner.”
A Change in Management
2004 saw important changes in management at Grupo Tarraf, despite 60 years since its inauguration. “In the construction industry it is difficult to make a significant difference through technology – everyone has access to technology. Our differential is management. Labor, training and application of control system at all stages of the project are important elements of our service. We work to strict organograms and never delay on the completion of a building or complex,” Tarraf explains.
Management and organization of building and construction projects from start to finish involves selecting the right team, technicians and equipment. Control is essential for Grupo Tarraf, which operates in São Paulo, southern Minas Gerais and Mato Grosso do Sul – all within a 150 mile radius of the company headquarters in São José do Rio Preto (São Paulo state).
“Our other businesses run nationwide. In the case of construction, the industry pays more and more attention to detail every day. We need to know our sites very well – we need to be close to them,” Tarraf says. All of the businesses are managed from Grupo Tarraf’s facility in São José do Rio Preto. According to Tarraf, centralizing operations was also a move towards more effective control.
“Successful building projects are a question of innovation without overdoing it. Innovation and modernization are important but practicality is more important than technology – you can’t be too futuristic in a region that just doesn’t need it,” Tarraf asserts.
Grupo Tarraf recently launched a building of luxury studio apartments. “The studio apartment is not a revolutionary idea, but it was ideal for the area,” Tarraf explains. In fact, despite two rounds of bitter presidential elections, which resulted in the closest results in Brazilian history, Grupo Tarraf still sold 320 studios in 21 days. “It was a giant step forward for us,” Tarraf confirms.
This is one of many success stories for Grupo Tarraf. The group was also responsible for the Villa Burghese housing project 15 years ago, which received critical acclaim as the first residential project for Brazil’s lower-middle class. The three closed complexes revolutionized the property market. “The government housing initiative ‘Minha Casa, Minha Vida’ did not exist at the time – Vill Burghese was one of a kind,” Tarraf says.
The result of the project was a highly-sought after residential area that has boosted property values and is now a well-respected middle-class neighborhood. “We innovate in the moment and our construction is a result of research and forecasts that have become an intrinsic part of the Tarraf brand,” he says.
Grupo Tarraf channels millions of dollars into projects throughout the year. At present over $150 million is tied up in constructions in seven cities. “Investment is part of our business,” Tarraf confirms.
As part of plans to double growth in the next five years – a strategy that will increase investment to $260 million – Grupo Tarraf has announced plans to develop two new areas in São José do Rio Preto. The first, a 28,000-square-meter area located in one of the city’s best regions, the second a vast farm just 15 minutes from the city center, which will offer 14,000 plots for residential construction. “They are huge undertakings and the reason for our accelerated growth in the future,” Tarraf says.
The Tarraf Group is moving forward, focused on construction. The market leader is a firm believer in the development and the continued urbanization of Brazil and executes projects aimed at providing the best for its clients.
Having built a solid reputation in competence and reliability, Tarraf is a consolidated brand in the engineering and construction industry.
“Our business is to offer security, partnership and planning of major constructions to large companies and the property market in general – and this is how we have gained market leadership,” concludes Tarraf.