A leading Brazilian manufacturer of sprayers, and inventor of the world’s first mechanical coffee harvester, Jacto has long been a pioneering force in the country’s agricultural segment. Although it faces some daunting challenges – a strong real that’s cutting into export profits and an increasingly competitive domestic market – as Michael Sommers reveals, the company’s shrewd cost-cutting measures and big investments in R&D are yielding robust growth rates.
Sometimes there’s a lot in a name. For instance, the name of Jacto, a Brazilian manufacturer of agricultural equipment comes from the Portuguese word “jacto” (jet) and conjures up perfectly, even lyrically, the jet-like sprays of pesticides and fertilizer that emanate from the products that have earned this 62-year-old company renown throughout Brazil and the world.
INVENTIONS AND INNOVATION
Although Jacto today is an industry leader whose modern 312,000-square-foot facility employs 1,700 people, the company’s origins were about as humble as one can imagine. Its beginnings date back to the 1930s when a young Japanese immigrant named Shumji Nishimura took a train west from São Paulo to the last stop on the railway line. The town where he disembarked, Pompeia, lay 300 miles from the capital, amidst a region of coffee and cotton plantations.
Having trained as a mechanic in Japan, soon after he arrived Nishimura hung out a sign on the door of his rented cottage advertising the fact that he could “fix anything”. In truth, not only could he seemingly fix anything; he could also invent anything. Aside from repairing equipment from surrounding farms, Nishimura captivated customers by transforming tin cans into cups, adapting motors, and developing a still for the distillaton of menthol. One day, while repairing an imported Italian-made sprayer, Nishimura was struck by the fact that he could make a much more efficient model. He subsequently proceeded to do just that – and, as a consquence, an entire business was born.
Founded in 1948, Jacto produced and sold the first-ever Brazilian-made sprayers. During the company’s first year, three employees worked to produce 30 metal sprayers a month. Over time, the little company grew, evolving in terms of production and technology. For instance, in the mid-1960s, after investing in a German plastic injector, Jacto was the first Brazilian farm equipment manufacturer to incorporate plastic into its products. By then the company had many different sprayer models, including versions that could be mounted on tractors.
By the mid-80s, Jacto was already a well-established manufacturer of sprayers in Brazil when opportunity – and the government – came knocking. At the time, the coffee market was exploding, but Brazilian coffee beans were still harvested manually. As a result, the industry wasn’t able to keep up with soaring demand. In despair, the government called upon the company to develop a mechanical coffee harvester. After six intensive years of studies and prototypes, Jacto finally came up with a winning mode – the K3 – which subsequently became the world’s first-ever mechanical coffee harvester.
“Apart from the great significance of this invention for both the coffee sector and the agricultural industry at large, this was a defining moment for Jacto in that we acquired an enormous amount of expertise in new areas such as hydraulics, motors, and transmissions,” says Jacto’s commercial director Robson Cardoso Zofoli. “Subsequently, we were able to apply all this new technology to other products – such as the self-propelled sprayers we launched in the early ‘90s. We also learned the immense importance of R&D, which has since become one of the driving forces of the company. Today, for instance, 5 percent of our revenues are directed to R&D; for the agricultural equipment sector, this is a very high ratio.”
INTERNATIONAL SUCCESS – AND CHALLENGES
The launches of Jacto’s coffee harvester and self-propelled sprayers represented watershed moments for the company that sealed its reputation as a major player. These inventions not only catapulted the company into the vanguard in terms of technology, but also propelled it onto the global stage. Although Jacto first started selling products to neighboring countries such as Argentina and Paraguay in 1964, it wasn’t until the ‘90s that exports took off.
Today, the company is present in 108 countries around the globe and possesses commercial affiliates in both Argentina and the U.S. Even more impressive than the company’s global coverage is the fact that within the last 10 years, exports have doubled and now represent 30 percent of its business – this, in spite of the fact that over the last decade the value of the Brazilian real has doubled (from R$3:US$1 to R$1.7:US$1) and industrial inflation has risen by 70 percent.
“The upshot is that today we’re exporting products at lower prices while our actual production costs have increased. In terms of staying competitive, we’re in an unfavorable position” points out Zofoli. “It’s truly a big challenge just to stay in the export business. But we’re very conscious of the fact that the solution to our problems won’t come from the outside. Instead, we’re extremely committed to finding ways of reducing costs and increasing efficiency.”
With this goal in mind, the company implemented an in-house program whereby, every year, its industrial division comes up with new plans to reduce costs in terms of equipment. Concurrently, it has also focused on other successful strategies ranging from diminishing stock quantities to tightening accounting procedures so that payments are received on time.
BOOMING DOMESTIC BUSINESS
If international business has become fraught with challenges, they have been counteracted by the booming state of the domestic market, which offers countless opportunities for growth. “Today Brazil is one of the top world players in terms of agribusiness,” says Zofoli. “It’s the biggest exporter of soy, beef, coffee and orange juice and one of the biggest in terms of cotton. Brazil is a major supplier of food to the world and as the market keeps expanding, new technologies are arriving as are new companies from all around the world. In fact, all the big players and manufacturers of tractors and other farm equipment all have affiliates in Brazil now. This makes for a much more competitive market and spurs us on to be constantly looking for new technology and solutions.”
Jacto’s primary goal is to maintain its leadership in the market for sprayers and coffee harvesters, which together account for 80 percent of its business. Since 2007, the company has experienced annual growth rates of around 20 percent. Such success is in large part due to its constantly expanding product portfolio, which is matched by its constantly expanding market coverage.
“Our sprayers range from compact models that can be used domestically, in gardens, to large, precision machines that can regulate volume and keep track of information such as area covered and amount of work completed,” explains Zofoli. “Moreover, we operate in a wide variety of market segments – from coffee and grains to fruit – and we are always looking for new areas where we can contribute our technology and expertise.”
LOOKING TO THE FUTURE
One of the company’s latest product launches, for example, was a revolutionary orange harvester. Viewed that the harvesting of citrus fruits has always been carried out manually, Jacto’s new machine, adapted from its coffee harvester, represents a completely new concept. In fact, it’s so new that it will take a while for the citrus segment to catch up; in order to operate the new machines, cultivators will first need to transform the layout of their orchards.
Another brand new concept that the company unveiled at this year’s Agrishow, the industry’s biggest trade fair, was the Jacto Autonomous Vehicle (JAV). This completely automated sprayer can be programmed to carry out an amazing array of tasks – solo or as part of a group of vehicles – ranging from the documentation of operations to taking measurements and readings that can, for example, gage the soil’s fertility and signal the presence of diseases. The goal is to allow farmers to make better decisions that in turn increase productivity and efficiency.
“These are new concepts that we’re developing now, but as the technology becomes more mature, we’ll be able to apply an increasing number of them to our machines. Today, for instance, all of our machines are outfitted with GPS so that operators can spend less time steering and focus on other areas,” says Zofoli. “At some point soon, however, these vehicles won’t even require operators; they will be completely autonomous.”
In fact, Jacto views the development of precision technology as essential to the future of agriculture – and to the food chain. “The biggest question for anyone involved in agriculture right now is ‘How do we feed the world in 2050?’” says Zofoli. “With population growth, changes in diet, and rising consumer incomes in developing countries, in a few decades the world is going to need to produce 70 percent more food than it does today. At the same time, with more people migrating to cities, there will be fewer people available to actually produce this food. The only solution for meeting demand is to increase efficiency and output via safer, more productive machines and more automation – which is where we come in. Our main philosophy is to serve the agricultural industry in its noble mission to produce food for the world; this has always been the compass that has guided us.”