Many companies can brag about commercial success, and some are able to equal such success with their commitment towards workers or their communities. In Brazil, Grupo Gazin, a leading provider of furniture and appliance products, has shown that it's possible to advance industrial development hand in hand with the needs of a region or a country, as Luis Miranda discovers.
Grupo Gazin originated modestly 42 years ago in the city of Douradina, state of Paraná. The goal was to conquer a space in the retail and wholesale markets of furniture and electrical appliances. At the beginning the operation was small and based on the sales of furniture, battery powered radios and sewing machines. The business prospered and after 1974, when electricity was made available in the region, the company began selling appliances such as refrigerators, television sets, stoves, stereos, blenders, freezers and others from brands like Singer, Electrolux, Wanke, Kingston and Samsung.
The fact that it was located in a small town required the management to look for workers who could be trained to work at the furniture factory as well as in the stores Gazin opened around the region. After agreeing on a partnership with the community, the company opened a technical school to instruct workers who would later become employees.
After Gazin solidified its furniture manufacturing operation and appliance retail businesses by getting a larger share of the market, the expansion and diversification began first in the region and extended to the rest of the country. Gazin added two more furniture factories to its main Douradina facility: Rondónia and Rio Grande do Sul. The retail sale was complemented by a complete line of distribution centers first in the states that surrounded Paraná such as Mato Grosso, Bahia and Recife, and later in the rest of the country. The new structure soon included more than 130 stores distributed in the same states, which accomplished the goal the founders had in mind to bring the products closer to the customers, to shorten distances and to optimize the service. The distribution operation opened the door for a new wholesale adventure in the states of Paraná, Mato Grosso, Rondónia and Bahia that increased even more the sales of dining tables, armchairs, couches, entertainment centers and mattresses, which the company produced in its facility in Douradina. These furniture items are sold under the company’s name in its retail stores; assuring the customers accessible prices.
President Mario Gazin remembers that at the time the demand for insurance products and cell phones was big and the availability was lacking, and he saw a great opportunity to improve the company’s commercial activities. So the company founded Consórcio Gazin that added the sales of cars from Ford, Fiat, Chevrolet and Volkswagen, insurance services for homes, autos and individuals and cellular phone services.
“Perhaps one of our most important achievements was the vision to seize the opportunities we came across throughout the years,” says Gazin. “While many people believe their lives and businesses are not good enough due to lack of luck, I believe the key is to have the wisdom necessary to make the most out of the chances we have even when there is some risk associated with them.” In its history, Gazin has faced multiple obstacles including economic downturns, lack of wood for its furniture factory and extreme dry seasons that affect the development of the company and the communities that surround it. But according to Gazin, it is important to learn from those difficulties in order to foresee potential problems in the future. “For example, we solved our wood availability problems by planting 100,000 eucalyptus trees every 10 years in order to supply our factory,” says Gazin. With this initiative the company was able to maintain strong production of kitchen tables, chairs, sofas, and add other pieces like dressers, computer desks, ironing boards, beds and storage cabinets.
BUSINESS MODEL BENEFITS
Grupo Gazin made a name for itself in the retail and wholesale markets due to an endless entrepreneurial spirit and its strong partnerships with providers and customers. However, in the last few years, the company had several periods of hardship derived from the political, social and economic situation in Brazil, but that hardship was overweighed by important accomplishments, including the modernization of its installations and improving the purchase of merchandise, while decreasing operational costs. All these improvements were complemented with a broad marketing campaign
to reach populations located beyond Gazin’s reach.
The headquarters of Grupo Gazin include today a mattress and furniture factory of about 15,000 square feet, a stocking facility of 14,000 square meters, a 1,000-square-meter hotel for students, visitors and partners that come to learn about the company’s operation, a gym, a restaurant and a recreation area for employees. This locale also houses the office space that maintains the organizational structure the company depends on to carry out its activities in Parana and around the country.
A leap in Gazin’s successful pursuit of the retail and wholesale markets was the start of a distribution unit. The company carried out a broad analysis of the type of products that would be shipped, the places that would work as loading and unloading facilities, and the routes a transportation flotilla would need to cover in order to make the operation worthwhile.
The result of the continuous improvement made by Grupo Gazin could not be better. The wholesale branch of the company had one of the best periods attending customers throughout Brazil. The industries of furniture, mattresses and upholstery achieved growth that rose above the average. In 2006, the Group as a whole had an income of approximately US$420 million, an amount even larger than the previous year. Such increase represented growth of 11.23 percent.
It was also a big year for recognition for Gazin, which received endless prizes from diverse institutions; among these the selection by Exame and Epoca magazines as one of the best companies to work at in Brazil and Latin America. Of the total sales Gazin made in 2007, 34 percent corresponded to appliances, 11 percent to furniture and 7 percent to sales of cellular phones, among others. From the total profits, the company invested US$2 million in education and some US$900,000 in health related programs. In the same year, Gazin operated its distribution branch with 223 trucks more than 2,600 employees taking care of almost 600,000 customers.
In its diverse commercial activities, Gazin covers about 50 percent of the total Brazilian market, 50 percent of the Argentinean market, 100 percent of the demand in Uruguay and 30 percent in the African nation of Angola. Such significant share of the markets in which it participates is the result of its 83 percent growth rate in the last decade, which according to Gazin, will continue as strong as it has been until now. “These achievements are to a great extent due to the nature of our company,” says Gazin. “It is easier to open channels of communication at all of the hierarchical levels, and that promotes agility and guarantees unity, flexibility of projects for the long term and the implementation of new plans.”
Although many companies regard market demand or partnerships as the main reasons for their successful businesses, Gazin believes it is people who determine the level of growth a company achieves internally and then externally. The key, according to Gazin, is to improve workers’ knowledge, skills and enthusiasm. “Our vision from the start was to become a leader in the local and international markets,” says Gazin, “and the only way to achieve that is by promoting the workers’ satisfaction, commitment and loyalty.”
As part of Gazin’s worker-oriented model, the company also maintains partnerships with universities and institutes to provide academic opportunities to its labor force. The Universidade Corporativa UNIGAZIN offers programs at high levels like postgraduate and MBA degrees that are developed by professionals who work in education around the region. Internally, Gazin works with a quality control plan that guarantees high standards and the continuous increase in productivity.
Gazin’s commitment also extends to the community. Most of the benefits given are coordinated through institutions and communal groups that determine the needs that ought to be fulfilled. The company implements educational programs to promote environmentally friendly practices within and outside its installations. Gazin also supports recycling programs and management of residues that are produced as a result of the manufacturing of furniture and mattresses.
In addition, Gazin provides containers for the collection of scrap pieces of metal, plastic, glass, wood and organic waste. In the energy sector, Gazin promotes policies that reduce the use of electricity and other resources by fomenting efficiency in its industrial processes and the use of electronic equipments in the factories.
In a global economy with interconnected markets, Grupo Gazin has maintained success through a business model established than 40 years ago. “We have acted throughout the last four decades to supply the market with products and services that are deemed exceptional. We understand how important it is to maintain a motivated workforce that is qualified and committed with the company,” says Gazin. Such stability is based on the establishment of a clear goal; to become a leader in the retail sale and wholesale of furniture, insurance, cars, motorcycles and appliances in Brazil and South America. “We have reached part of this goal and we’ll continue to provide great services to our customers with innovation and social conscious on top of everything,” concludes Gazin.