HeatCraft is today the leader in commercial refrigeration in Brazil. As Luis Miranda reports, its wide range of products, recognized excellence and customer service turned a formerly owned family business into a market-wide operation.
HeatCraft of Brazil produces some of the most familiar brands when it comes to keeping everyone and everything cool: McQuay, FlexCold and Intelink for the local market; and Bohn, Intelink and FlexCold for the rest of South America. The variety of its portfolio allows HeatCraft of Brazil to supply its products to an ever growing clientèle which is cared for by a net of collaborators in all of South America. “We count on people who know their local market to provide us with a clear view of what our customers need,” says Reginaldo Viaro, Director of Marketing.
HeatCraft produces condensing units, evaporators, heat exchangers, remote condensers, and integrated systems of refrigeration that give customers maximum performance and reliability through the use of top-of-the-line technology. Its operation in Brazil occupies an area of 80,000 square meters in the city of Sao Jose dos Campos, Sao Paulo, which is known as one of the most important industrial hubs in the country. The company’s production fills the needs of customers like Pão de Açucar, one of the biggest supermarket chains in Brazil; Frigelar, a group of stores that sells commercial refrigeration products; TermoKing, a manufacturer of cooling systems for buses, containers and railway cars, and Refrimarket, a Venezuelan company that provides cooling systems for food stock. One of the advantages HeatCraft has is the way in which it uses technology to create products for the local and regional markets. According to Viaro, the company applies the latest developments to customize equipment that satisfies an always demanding list of clients who already have a good idea of what they can expect from their cooling products.
Today, HeatCraft, with its headquarters in the United States, posts sales that account for about 25 percent of the Brazilian and South American markets with the capacity to double its output should it be required. The company’s operational market is very mature. Its products are consolidated and its reputation continues to grow in all of South America. Although in the beginning the target was to attend the auto industry, which the company did up to the late 1990s, a new opportunity to fill the demand for commercial refrigeration products attracted a newly renovated enterprise.
“Since the type of equipment we had could be used to manufacture other products, we decided it was great time to diversify,” indicates Viaro. The change came about due to a technological shift in the auto industry and the move allowed the company to compete and to turn its activities to the production of cooling equipment that ended up taking around 96 percent of its labor, leaving the automotive industry to just the remaining 4 percent.
The company first launched a line of evaporators designed for commercial use which carried the name Bohn. The units were designed to cool meat chambers, milk products and frozen food. Under the name McQuay came a new line of remote condensers, which are critical for the maintenance of central air conditioning systems and refrigeration. The condensers were developed to support systems with a wide array of compressors providing capacities between 23,000 and 456,000 kcal/h. Then came FlexCold, a brand that includes fractional condensing units that not only provide the best of refrigeration in the market, but also do it quietly. The unit can be used to keep products like milk, fruits and beverages. To round out its set of applications, HeatCraft also created an Electrical Command Panel, which could be used with freezing or refrigeration products. The device allows control of components like thermostats, alarms, and fans as well as temperature and circuit breakers. The company also provides parts for third parties that manufacture air conditioning units for buses. “Our company grew faster because we were able to provide a more complete variety of services and products, while other companies only commercialized individual parts,” remembers Viaro.
On top of being a company with more diversity of products in the market, and the one that has consolidated both locally and regionally, HeatCraft also has the support of its parent in the United States that provides technical and financial support in the sale of products for commercial refrigeration. Nowadays, the company sells most of its products and services to clients that rely on a continuous influx of goods to meet international export standards. According to Viaro, the level of trust has grown exponentially due to the support the company provides and the quality that has always characterized it. The union with HeatCraft U.S.A gave its Brazilian partner an advantage to be more competitive, with better prices and more efficiency. The company also takes advantage of an exchange of experiences between its employees and those in the United States, which provides a faster, more dedicated way to create new ideas and apply them to the manufacturing process.
INVESTMENT AND GROWTH
With new investments and new ideas came new opportunities. HeatCraft uses a new process of administrative investment; some $5 million annually, which allows it to access new techniques and facilities as well as to purchase equipment that further enhances product quality and the capacity to customize. “All our projects are handled more rapidly and more efficiently. Our quality also improves because we put sufficient attention and resources to the research and development processes.” The results of these efforts are very visible today, as the company enjoys an annual growth rate of about 23 percent, and current projections determine that in three years, that rate will increase to between 60 and 70 percent. Today, HeatCraft’s sales are in the range of $51 million a year.
Those projections, according to Viaro, will come as a result of policies that are now being implemented by HeatCraft. Among them, a process of lean manufacturing to determine the trends the market. HeatCraft accounts for 70 percent of the commerce of remote condensers, 50 percent of the market of evaporators and 30 percent for sales of the condensing units. All this together along with production standards such as ISO: 9001 and rigorous administrative control will maintain the business at the vanguard and will secure a place for it in the future.
Another way in which HeatCraft promotes its products and services is through fairs and conferences all around the southern continent. The company allows current and potential customers to visualize the types of alternatives available to them for their projects. Much of the manufacturing and commercialization the company does is a direct result of ideas and requests from customers that attend these fairs.
DEVELOPMENT WITH SUSTAINABILITY
Although lower prices and efficiency are usually two of the most important considerations in business today, the continuous depletion of the environment brought another variable to the game. “Our customers continuously ask for products that are manufactured through environment friendly processes and with sustainable techniques,” Viaro adds. One of the issues
that comes up more often is the consumption of energy. Viaro believes environmentally conscious consumers will demand more policies that will push for the creation of alternative energy sources, for example, so producers will have to adapt their activities to those requests. In the case of HeatCraft of Brazil, the use of more environmentally friendly liquids and gases in commercial refrigeration is a matter of concern. Another issue that will determine the use of new, cleaner materials is the price and availability of traditional energy sources. For example, the price of copper has doubled; therefore, more companies are turning to aluminum for the production of parts and finished appliances. So, not only will materials change but also the technologies used to convert these into components. The environmental trend is already changing the type of products the industry creates and how consumers go around looking for earth-friendly production processes.
Following an environmentally aware model, HeatCraft created a statement of actions as part of its sustainability report. The company sends out waste to specific locations where it is treated through specialized techniques that meet the requirements of the Certificate of Approval of Destination of Industrial Waste (CADRI). In addition, Heatcraft promotes social responsibility by supporting causes like clothes and food programs, inclusion of people with special needs, free qualification courses for mechanics in refrigeration and Young Apprentice, a program that trains teenagers in the business of commercial refrigeration.
In short, the success attained by HeatCraft is the result of several elements. The company expanded into a market in which there was little in the way of the products it offered and then went about offering products that were high performers. With a support team that is always well trained and motivated the potential to grow internally and to extend that growth to the outside is assured.
“We are an international enterprise with expertise to reach markets around the world. In Brazil, we are the only company capable of offering complete solutions in commercial refrigeration. Our philosophy has always been to become the best choice in the market. The goal is to find what customers need and to provide it with quality and efficiency.”