Having revolutionized the market for water storage solutions in Brazil, Fortlev now dominates it with a complete mix of products that is second to none. Michael Sommers takes a look at how the company consolidated its control and leveraged spectacular growth via investments in new technology and facilities and a dedication to selling – everything, everyday and everywhere.
It’s not surprising that Fortlev is the number One producer of water tanks in Brazil; the company not only conquered the market – it created it. Of course water tanks existed in Brazil prior to 1989 – the year in which Fortlev came into being – but they were made of a mixture of fiberglass, cement, and asbestos, materials that were neither light nor environmentally friendly.
CREATING NEW PRODUCTS – AND NEW MARKETS
The founders of Fortlev saw the market opportunity for producing models made exclusively out of fiberglass. They opened a plant based in Serra, a town in interior of the state of Espírito Santo, and immediately set to work developing not only these pioneering products, but the market demand for them as well by ensuring that they found their way into construction supplies stores throughout the state. Soon after, Fortlev also began manufacturing tanks out of polyethylene. Before the company knew it, it had launched a whole new trend in water storage solutions as cement tanks were quickly replaced by those made from fiberglass and polyethylene.
To keep up with the soaring demand for its products, Fortlev invested heavily in technology and modern equipment. With the increase in units produced, it wasn’t long before the company was able to branch out beyond Espiríto Santos’ frontiers and start supplying other Brazilian regions. By 1996, it had already become a force on the national market. Over the next decade, it sought to consolidate its control.
The year 2004 was a watershed one for the company. It opened a second plant in Camaçari, Bahia, which not only upped its production levels, but gave it direct access to the growing market of the Brazilian Northeast. Even more significant was the fact that the Camaçari facility included a plant for the transformation of raw materials into the polyethylene composite used to manufacture Fortlev’s final products, thus enabling the company to exercise control over its entire production process.
Aside from the main facility in Serra, the Camaçari plant also supplied primary materials to the two new facilities that Fortlev inaugurated in 2008. Located in Cajamar, São Paulo, and Araquari, Santa Catarina, these new production units further extended the company’s hold on the Brazilian market by allowing it to set down roots in the lucrative markets of the South-East and South.
“Opening these two plants really helped us to consolidate our control of the national market,” says Wesney Araújo, national sales director for Fortlev. “The expansion of production facilities allowed us to increase our output signficantly. This year, for instance, we expect to produce 3.5 million water storage units. Moreover, the fact that we now have four plants strategically located throughout Brazil means we that we’re much closer to regional markets. Our logistics have improved enormously and we can now supply our clients with speed and agility.”
NUMBER ONE IN THE MARKETPLACE
The ongoing expansion undertaken by Fortlev over the last decade has also paid off handsomely in terms of growth; in recent years, the company has experienced average increases of 20 percent in terms of revenues. This year the company estimates revenue of approximately R$550 million. “Today we’re by far the Number One supplier in this segment, with more than a 60 percent share of the market,” says Araújo. “Although there are other serious competitors in some regional markets, only we have national coverage. Along with the fact that we’re the only Brazilian producer that transforms its own raw materials into composites, this is an important distinction.”
Equally important to Fortlev’s success is the fact that it offers a more complete mix of tanks and other water storage solutions than anyone else in the marketplace. While many of its competitors only manufacture either fiberglass or polyethylene tanks, Fortlev produces both. Currently, its 500 L and 1,000 L tanks account for 40 percent of the company’s business, but it also produces tanks that range in capacity from 100 L to 25,000 L. However, seeking to diversify, the company has invested in various other water storage lines as well. Two of the most popular have been Fortlev’s compact stations for home sewage treatment and its cisterns (5,000 L) and slim tanks (2,000 L) for capturing rainwater, both of which comprise the company’s line of environmental solutions.
The rainwater harvesting line, in particular, has being selling well in recent times. “There has been an increased awareness among Brazilians as to the environmental benefits of capturing rainwater,” says Araújo. “Moreover, using these systems contributes to less flooding in cities, which is a big problem during rainy seasons.” In fact, in an increasing number of large cities, legislation now requires that construction companies install collection systems in accordance with the area of a building. In Paraná’s capital of Curitiba, for example, any residence measuring more than 400 square meters must possess a cistern. “We launched our first cisterns three years ago,” says Araújo. “In the beginning, they were based on models produced in Austria, but we’ve since developed our own models that can be used both above and below the ground.”
CHASING NEW TRENDS
Indeed, one of Fortlev’s specialties is developing singular products driven by up-and-coming trends. For instance, in response to a growing industry-wide concern with safety, the company launched polyethylene tanks featuring threaded lids. Aside from protecting contents from dirt and other impurities – including dengue fever producing mosquitos; a major issue in Brazil – these efficient 60-cm (24-inch) diameter safety lids make it much easier to inspect and clean tanks.
Safety has also propelled the company’s experiments with new technologies that will allow it to replace its smaller tanks made of fiberglass with ones made out of polyethylene, the advantage being that the production process for fiberglass involves more human interference than polyethylene, which can be manufactured using automated equipment. Meanwhile, Fortlev is also excited about recently purchased, state-of-the-art, automatic equipment that will enable it to create vast, modular tanks capable of holding up to 25,000 L of water. Produced using a breakthrough Scottish technology that relies on sheets of polyester reinforced with fiberglass, these units can be customized to meet the requirements of specific projects.
Although water storage solutions remain Fortlev’s main focus, the company has also begun branching out into completely different markets that draw on its acquired expertise and experience with fiberglass and polyethylene. A few years ago, it introduced a line of lightweight, environmentally friendly roofing tiles made from translucent fiberglass. Designed to reduce energy consumption, and available in numerous colors, the tiles have sold well and the company plans to unveil a PVC version later in 2011. Also coming this year is the launch of an entirely new line of PVC pipes and fittings, which will be manufactured at an entirely new plant being completed in Santa Catarina.
So now that Fortlev suddenly finds itself with five plants, three major product lines, 1,600 employees, and a Number One market ranking, what’s next? “Now, we have to sell!” declares Araújo with a laugh. “Already, we’re present in all sales channels from small and medium sized hardware and construction stores to mega chains and home centers. As a result, we have direct access to 80 percent of Brazil’s municipalities. As for the remaining 20 percent, these are all municipalities in remote areas with populations of under 5,000, which are supplied by wholesalers or distributors. ‘Sell everything, everyday, everwhere’; this is our motto. And now, that we’ve covered the entire market, there’s really no escape.”