A leading Brazilian manufacturer of equipment for the handling and movement of bulk materials TMSA is fortunate enough to have innovation in its DNA. As commercial director Paulo Lambert tells Michael Sommers, the almost 50-year-old company is betting on another half-century of global growth through its creation of personalized products that are equally customized and cutting-edge.
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When TMSA was founded in 1966, Brazil’s agribusiness segment was really starting to take off. This was particularly the case in the South, where since the late 19th-century, European immigrants had been purchasing small and medium-sized plots of fertile land and transforming them into highly efficient and productive farms. It was even more particularly the case in the southernmost state of Rio Grande do Sul, home to a strong agricultural and industrial equipment manufacturing tradition – and where TMSA chose to begin producing equipment for the milling and storage of grains. “The company’s founder and first president already had lots of experience in the grains segment and had built up a strong network of relations,” says Paulo Lambert, TMSA’s commercial director. “Agribusiness was growing a lot in the South and TMSA’s mission was to grow along with it by creating equipment to meet escalating demand.”
New Markets and Territories
Rio Grande do Sul was the first Brazilian state to cultivate grains on a large scale. As the market grew, producers began to seek out new land, first in the neighboring states of Santa Catarina and Paraná, then in the vast territory comprised by the Central-West states of Mato Grosso and Mato Grosso do Sul. During this time, TMSA’s robust growth accompanied that of the rapidly expanding sector. In order to meet its expanding needs, the company began producing equipment for the handling and conveying of grains and other bulk materials, which soon became its main focus.
As output soared, exporting grains overseas suddenly became a viable, and profitable, activity. When grain producers found themselves lacking loading and conveying equipment for large volumes at port terminals, TMSA stepped in to fill the demand, first at Porto Alegre’s port (the largest port in the Mercosul region) and then at others throughout the South, and the Southeast (including São Paulo’s mega-port of Santos), gradually expanding all the way up to the North.
At the same time as it was branching out geographically, beginning in the 1980s, the company also began to extend itself into other market sectors, notably heavy industry and mining. The prominence of mining in particular led TMSA to assert a strong presence in the state of Minas Gerais, traditional home to the industry’s most important mining conglomerates. Indeed, one of the company’s largest projects to date has been supplying equipment for the expansion of the famous Carajás mine, in the Amazonian state of Pará; the largest open-air iron mine on the planet, it is owned by mining giant Vale, the largest producer of iron ore in the world. More recently, in 2010, with the objective of further consolidating its presence in the sector, the company opened an affiliate based in Minas’ capital of Belo Horizonte.
Instability – and Opportunity
“Business, and profits, really depend on the state of the Brazilian economy at any given time,” says Lambert, when asked about revenues and market share. “We currently focus on three major segments; agribusiness, maritime ports and mining. Right now, we’re seeing a lot of opportunities in terms of the first two areas, while mining projects have decreased due, in part, to a reduction in Chinese demand. Ultimately, these segments rise and fall independently of each other, and at different times, and as a result our market share varies. It’s safe to say, however, that 40 percent of all grains exported from all Brazilian ports pass through equipment manufactured by TSMA.”
Such fluctuations are a strong motivating factor fueling one of the company’s major goals: to enter Brazil’s thriving oil and gas segment. “Doing so will increase the company’s resistance in the face of any crises that inevitably occur in the other segments,” explains Lambert. “Unfortunately such instability is common. Agribusiness, for example, is very cyclical. Every five or six years, there’s an enormous demand for products, which then falls. In terms of maritime ports, however, we believe that activity will continue to increase for quite some time, creating a demand for expanded capacity at ports. For this reason, it makes sense for us to break into the oil and gas field. We can take advantage of the logistics that we already have in place in terms of other segments and add high-tech equipment that has more added value and which, in turn, will lead to higher revenues.”
With this objective in mind, TMSA is investing heavily in qualified labor and integrative management software (Microsoft Dynamics ERP) as well as seeking out technology partnerships. “Our main products are ship loaders and belt conveyors with capacities of up to 20,000 tons per hour. It’s important to point out that, when it comes to equipment, the concepts are already very segmented and solidified in terms of industries. As a result, we focus less on the products themselves than their characteristics.”
In today’s global market, one of the most important characteristics is sustainability. Consequently, TMSA invests a lot in solutions that attempt to resolve three major problems; noise, particle emission, and energy consumption. Since 1998, the company has possessed a special unit at its Porto Alegre facilities dedicated to the development of environmental control equipment such as filters, dust suppressors, and fans, all of which promote health and safety.
Innovation and Customization
The ability to provide innovative solutions is what the company sees as its biggest differential – not to mention a necessity for its survival on the global stage. Aware of this need to remain in the technological vanguard, the company continuously seeks outs partnerships with world-renowned companies. Recently, for example, it paired up with Doppelmayr, an Austrian-based group that is the world’s leading producer of cable cars, but which has applied its technology to pioneering conveyor systems that TMSA has already supplied to clients in the U.S.
“Due to the ‘Brazil cost,’ exports have been a challenge,” admits Lambert. “In terms of price, it’s hard to compete with low-cost, high-volume producers in Asia and Eastern Europe. However, we constantly strive to stay in the vanguard in terms of quality and technology. As a result, we continuously sell customized equipment to clients in the U.S. Europe, Africa, and the Middle East.”
Customization is, indeed, the key to the company’s success both at home and abroad. “Our main business objective is to create personalized projects that meet the specific needs of our clients,” declares Lambert. “In fact, we produce very few standardized products. Instead, we study specific situations and then create engineering applications that offer the best cost benefit solutions for our clients. In doing so, we have carved out a real market niche for ourselves. This approach has defined us since the company’s foundation; it’s in our DNA.”