Tecnometal Engineering is the largest manufacturer of metallic cases and cabinets for ATM machines in Brazil. The company is also prominent in mechanical and naval construction, besides producing custom-made equipment for industrial plants. Gisele Ribeiro unlocks the company’s path, speaking with one of the founders.
When you put your hard-earned cash in a safety-deposit box, it better be really safe. Nobody wants to loose money, especially what is entrusted to a bank. Brazil is one of the countries that prime for excellence in security for banking automation and safety devices and this has made a company called Tecnometal the favorite supplier for power-players such as Italtec, MCR, Wincor Nixdors and Diedold.
Although only 3 percent of Tecnometal’s production is exported, these products nonetheless go to power players, who purchase the company’s ATM machines for use throughout Latin America.
Founded in the 1990s by three engineers – all college pals – Tecnometal directed its efforts towards conquering a place among giants in the segment. In the beginning, it aimed at mining projects to develop structural works for plants and industrial buildings during an economic crisis in Brazil at the time. The company anticipated a need for plants to use metallic compartments to store and transport a mixture of ore and water, including intermediate reservoirs and storage tanks. A couple of years after Tecnometal’s creation, there was a big change in Brazilian politics. President Fernando Collor de Mello gave incentive to the importation of products from abroad.
“Engineering lost its prestige in Brazil. The president used to say that the cars manufactured in the country were coaches and everything of good quality was produced abroad,” says Marcelus Geraldo de Araújo, president.
Tecnometal accepted the challenge. It decided to prove otherwise and offered unique service, overcoming the pejorative image of the segment. The company started to become mediators in the projects besides offering technical solutions and equipment. Brafrigo – BMG group – was its first client in the domestic segment, which meant the opportunity for supplying components, such as transporting mats, feeders, storage silos and metallic structures connected to these products. The project allowed Tecnometal to gain the experience it needed for larger projects in mining. After that, it started a project for the giant Vale do Rio Doce, through Samarco mining. “The projects were still running slow back then and it took one year to mature the idea into a concrete project,” adds Araújo.
The big jump happened in 1997 when the company expanded its installed capacity from the modest start of 400 to 2,500 square meters. Today, Tecnometal has two plants with 145 square meters of total area plus 4,500 square meters of administrative area. One of the plants is being updated and expanded by 4,000 square meters to 12,000 square meters, a project to be concluded in 2008. The factory in Campinas, located at via Anhanguera, has 15,000 square meters. In addition, the company is addressing expansion of the road with access to the airport of Confins, only 15km away.
Today, the plant located in Minas Gerais, only 30km from the Belo Horizonte, the state’s capital, also produces converters, pans and rolling bridges, among other components for ovens in the metallurgy segment. There are sophisticated resources for iron works and equipment. The plant is able to produce pieces measuring 7,000mm of length, 4,000mm of diameter, and weighing up to 80 tons.
In 1998 Tecnometal placed itself on a path towards major product diversification in the segment of banking automation. The company’s new product addressed safety and included closing systems, an extensive amount of sensors and monitoring above what is usual in Europe and EUA. These highly secure metallic cabinets and covers for electro-electronic and telecommunication equipment for automatic ATM safety boxes were quickly absorbed by the market.
When Tecnometal acquired APW do Brasil, its main multinational competitor, with operations in Campinas (Sao Paulo State), the company made one of the most influential moves in its history. After absorbing APW in 2005, the company intensified the diversification of its product portfolio. It has experienced a huge expansion ever since, with annual production of 7,000 to 10,000 tons in its plants. The revenues confirmed a steep growth since 2004. It grew 10 percent from 2004 to 2005. The 2006 numbers jumped 25 percent when compared to the previous year. And in 2007, the expansion of physical area plus revenues represented an impressive 90 percent growth comparatively to 2006. “It is expected that the company will continue its strong ascension, increasing its revenues by at least 30 percent next year,” says Araújo.
For the past three to four years, Tecnometal adventured towards manufacturing equipment to companies that implant hydroelectric power stations. It created a partnership with Energy Power, which utilizes Tecnometal technology in machinery for generation of electric energy. In all the fields in which it operates, Tecnometal makes sure to put into practice its mature experience, solidified with certifications, such as 9001/2000.
“Our brand is very strong in the market because our main competitors are multinationals that usually don’t have the decision center in Brazil. Therefore, one of our main advantages is flexibility and closeness to the client,” says Araújo. “The decision center is here, which allows us to innovate, offering continuous suggestions and solutions incorporated into the next shipment. We believe in cooperation with our partners and we are committed to transparency.”
Tecnometal has invested heavily in constant technological updates, forming associations with companies in other countries, such as Germany and Australia. This way, it has kept abreast of the latest developments, helping to keep its own operations consistently updated.
“We work with highly specialized workforce and we like to offer a stimulating workplace where employees are proud to be,” adds Araujo. “We plan on keeping our focus on growth with revenues of $240 to $300 million of reals for 2007.”