Belenus is a Brazilian manufacturer and distributor of industrial and construction fasteners founded by João Marcos Lucas and his son Sergio. Lee Weingast investigates how the father and son team has wisely invested to diversify and grow the company since its founding in 2002.
The Lucas family has been in the nuts and bolts business since João Marcos Lucas and his father opened a store called Sabará Parfusos (parafusos means screws and bolts in Portuguese) nearly 30 years ago. In 2002, motivated by government financial incentives, the family took the leap from simply selling industrial and construction fasteners to founding a new company that manufactures and sells steel carbon screws, nuts, bolts, washers and the like to customers in myriad industries throughout Brazil. The new company, called Belenus, brought in the next generation, with João overseeing administration and the financial side, while his son, Sergio, who has degrees in both business administration and law, takes care of all things related to sales. The father and son team are at the helm of the company but have fortified their team with qualified professionals to meet staffing demands as the company has grown and diversified over the years.
Belenus started with around 100 employees and now a staff of nearly 10 times that number carries out the processes that provide around 5,000 distributors throughout Brazil with Belenus’ products. Although Belenus generally works with distributors, Lucas explains that to be more competitive, the company does sell directly to some industrial clients in the petrochemical, beverage and pharmaceutical markets that fall outside the distributors’ reach.
Lucas boasts that his company is not standing still. “We get new machines every month and are always working on increasing production quantity and our lines of products, adding more types of fasteners.” A major coup in automation took place at the beginning of 2008, when Belenus purchased an automatic storage system. Belenus is one of very few companies in Brazil, and the only company in its industry, to make use of such a highly efficient mechanized stock storage and retrieval system. The system not only automates physical retrieval, but also enters all data related to the order, client and sale into a central database.
In 2006, Belenus began marketing other manufacturers’ tools and hardware. Major brands such as Tigre, Loctite, 3M and Tramontina, join Belenus’ own products in the company’s distribution channels. Lucas explains: “We realized that our distributors were buying these products and saw the opportunity to expand our income base.” Dealing with over 25,000 items from dozens of brands has meant hiring more personnel and creating more space. The company’s 22,000-square-meter distribution center in Vinhedo handles 2,500,000 tons of products per month and the factory in Jundai produces 1,500 tons of products per month.
BIGGER AND BETTER FACILITIES
While sales are lower this year as compared to last, the company is nonetheless aggressive and optimistic in that it will repeat its excellent performance from 2008. In fact, the company has made investments and is taking concrete steps to realize this growth. In 2008, Belenus broke ground on construction on what is to be the most modern fastener factory in Brazil. Located in Vinhedo, São Paulo, the extensive, 150,000-square-meter facilities will bring a new level of modernity, featuring specialized equipment that will give the company the capacity to produce precision fasteners for clients with highly specific and sophisticated needs, such as those in the aviation industry. Construction is taking place in two phases with the first phase, the fruit of a US$ 40 million investment, due to be completed at the end of 2009. This initial phase will provide Belenus with 27,000 square meters of space and a monthly production capacity of 3,000 tons. The completion of phase two will give the company an additional 20,000 square meters of factory space and some 600 new hires will help Belenus reach the 5,000-ton monthly capacity. The factory is scheduled to be on-line by 2011.
Business as usual at Belenus involves more than nuts and bolts. With inspiration and organization provided by Iracema Lucas, the company has a solid commitment not only to be philanthropic but to be a truly socially responsible force in the Vinhedo community. As part of this commitment, in 2004, the company created the AADC (the Belenus Athletic, Sport and Cultural Association), an organization that serves approximately 130 children in Vinhedo. Through the organization local youth can participate in soccer, track and volleyball classes all taught by highly respected and qualified coaches, most of whom donate their time. Lucas and her team, in partnership with the Santana American International School, plan to institute afterschool tutoring programs including homework help, English as a Second Language and computer classes. Of course, concern for the wellbeing of human beings would not be complete without an interest for the natural environment. Lucas confirms that indeed Belenus is “very concerned with environmental issues.” He says that all the legally required processes and equipment to eliminate pollution is being installed in new factory.
Belenus is a family business that has grown through the generations and is ready to face the challenges of today’s rocky economy. The father and son team are not retreating but rather Lucas reports that Belenus regularly invests in improvements in facilities and equipment in order to grow and better position the company in the market. “We always seek to provide the best service and to increase our stock and inventory,” says Lucas. Because distributors work with manufacturers that have available stock to promptly fill an order, Belenus makes a point of keeping up production to provide distributors with the level of service they demand and thus remain competitive. The most significant recent investment was the automatic storage system that dramatically speeds up the order process. Investments are also made to maintain and upgrade the company’s fleet of trucks that makes deliveries in a number of regions of the country. Lucas acknowledges that the recent economic crisis has caused a setback in the factory construction and a slight dip in the profit margin. He is, however, optimistic and cites the energy and experience brought to the company by his son as a driving force in the recent and future growth of the company.