Brazil’s leading manufacturer of steel pipes maintains market share despite economic twists and turns. Reuben Ford describes how focusing on efficient handling of an emerging economy and important resources are the secret to ongoing success.
Apolo Tubos & Equipamentos SA is a pioneer in the production of galvanized steel pipes and electrical conduits. Leading the way through past political unrest, uncontrollable inflation, economic reform and crisis, the 75-year-old company proves it has the experience and energy worthy of an industry frontrunner.
Together with its sister company, Apolo Tubulars SA, Apolo manufactures a full range of carbon steel pipes for channeling electrical cables, oil and gas and for civil construction purposes.
Hit hard by a recent fall in investment, Brazil’s infrastructural development is struggling back onto its feet. Sales Manager of Apolo Tubos & Equipamentos SA, Rubens Francisco Filho admits; “2012 wasn’t an easy year, but thanks to our tradition, trusted brand and quality we have stood our ground.”
Tradition & Technology
One of the most important developments since the crisis was Apolo’s purchase of new forming technology in June 2011. The equipment is installed in its own purpose-built warehouse at Apolo Tubos & Equipamentos’ 110,000-square-meter factory in Rio de Janeiro. “The roll forming machine considerably increased production times,” Francisco confirms. The completely automated system produces new lines and packaging, including 1.25 to 4-inch diameter tubing in thicknesses of 2 to 6.35 millimeters.
Apolo has a history of innovation and technology. Founded in 1938 as the first industrial company of the Peixoto de Castro Group, it was a pioneer in manufacturing steel ERW (Electric Resistance Welding) pipes.
In the 1990s, the company identified the growing need in the oil and gas sector and invested in a new facility based at Apolo Mecânica & Estruturas Ltda in Lorena, São Paulo, achieving its first API (American Petroleum Institute) certification.
The development of this project resulted in domestic and international opportunity (including in the United States). Recognition of Apolo’s progress in the industry and strong links between tradition and technology caught the eye of US Steel, a tubular steel and technology producer with over 100 years of experience. The two companies – US Steel and Apolo Tubos & Equipamentos SA – united in a joint venture at the Lorena factory, Apolo Tubulars SA.
Today, Apolo Tubulars has a staff of 250 and stands in a 420,000-square-meter industrial park, producing 120,000 tons of piping for the energy (oil and gas) industry every year.
Apolo Tubos manufactures electrical conduits for cables and power installations as well as explosion-resistant tubes and galvanized carbon steel pipes for construction. The plant in Rio de Janeiro has a production capacity of 70,000 tons a year and employs 370 people in production and administration.
From 2007 to 2011, a period of international crisis, developments in the Brazilian infrastructure sector added reinforcement to the company’s sales. “Without a doubt, investment in infrastructure and civil construction was vital for us,” Francisco confirms. Apolo has been concentrating on the use of tubular steel for industrial and commercial buildings. “Steel structures are more versatile and can be installed much faster than traditional buildings,” he says. The promising phase – investment in developing Brazil’s infrastructure and government incentives for construction – kept sales high.
Maintaining market lead since then has also been a question of quality. “We work to ABNT (Brazilian Association for Technical Norms) guidelines and our products are standardized for construction and industrial applications,” explains Francisco. Technical specifications, diameters and lengths of finished products must comply with industry definitions. “Pipe technology is a technical process, with no secrets and little room for ground-breaking research or development,” he adds.
So, how else does Apolo incorporate innovation? Aware of industry restrictions and growing competition from Asian (particularly Chinese) imports, Francisco points out that Apolo has pinpointed a number of variables to distinguish it from others. “We have a vast network of distributors served by regional sales representatives, who cover the entire country. Apolo is recognized for its strong tradition, pioneering spirit and commercial positioning.”
The company respects social and environmental responsibilities – including water management and recycling programs and reduction of air and waste pollution.
“We innovate and improve on the speed of production and welding-buying from the same suppliers as national competitors but carrying out all subsequent treatments on site so that manufacture is more efficient.” Francisco says.
Apolo is an expert in galvanized piping, having developed a specific streamlining technique for the application of the zinc coating. Traditional hotdip galvanization (which submerges the steel in molten zinc) can leave imperfections on the surface of the pipe. To avoid the zinc solidifying unevenly, Apolo’s production process blows cold air through the hollow pipe, instantly hardening the surface and leaving it smooth. The process is faster and more efficient.
Attention to detail shows expertise in a limited industry. Channeling cables and commodities, Apolo’s pipes must be faultless with high quality joinery and finish.
Further Down the Pipeline
Recent domestic recession in 2012 has placed emphasis on Apolo’s differentials, and greatly reduced exports. “Added value is more important than ever, and our biggest advantage is the trust that our clients have in us,” Francisco says. Apolo has kept a firm hand on its quality brand image, synonymous with innovation. “We have developed in the way the market needs us and invested in technology that maintains our market share and increases security for our clients,” he continues.
Apolo’s engineering and sales teams also look after important industrial clients and offer full technical support. “Our strength also lies in our team: our sales department, representatives and all of our staff, whose dedication and skills contribute to customer satisfaction. The result of all this is trust,” Francisco re-iterates.
Looking ahead, Apolo is concentrating on regaining the rhythm of its past. Francisco refers to existing participation in national oil company Petrobras’ Pernambuco and Rio de Janeiro projects and the potential of modernizing existing refineries and installations. Other planned large-scale industrial work in sanitation and construction also provide opportunity for tubular steel and pipes.
Ability to adapt and focus has successfully guided Apolo through seven and a half decades. Vertical integration and investment have reaffirmed the company’s world-class quality.
It is the constant attention to balancing its technical aspirations and humanizing activities (social and environmental) that has secured Apolo Tubos & Equipamentos’ undisputable lead.