The biggest poultry incubator company in Brazil, Casp has achieved its leading position thanks to quality, technology, ethics and transparency. Susana M. Boulin reports on the company’s strategies to maintain its Brazilian monopoly and to boost growth in the international arena.
Births take place every day in Brazil to the outstretched arms of many a proud parent. You could say Casp has enabled births of a different sort, and even though these can number in the thousands, the company is no less proud of the offspring it has helped to bring into the world, as the number one poultry incubator producer.
“We have a saying here in the company that more than 95 percent of chicks born in Brazil were etched from a Casp incubator,” says Casp Executive Director and President Ari Luiz Cagliali.
It is a proud statement about a company with very humble beginnings. Casp was created in 1936 by Alberto Marques, a small chicken farmer from Sao Paulo selling eggs in the local market. With an international vision he increased his egg production and began exporting to England. With the start of World War II exportation was suspended and the company targeted exclusively the Brazilian market. The end of the war brought a period of expansion and Casp began developing small manual equipment for poultry farming, increasing production significantly in the following years.
In the 1950s Casp received authorization from American company Chickmaster to be its representative in Brazil in the manufacture of incubators and from then on the company took off. The partnership was dissolved years later and both companies became competitors on the international scene.
Today, Casp not only manufactures and distributes equipment for poultry farming but has extended its machinery production to the pig segment, as well as grain storage. The family business is run with 100 percent Brazilian capital by the grandchildren of Alberto Marques.
VARIETY OF PRODUCTS
Casp’s main manufacturing facility, in Amparo in the state of Sao Paulo, measures 44,000 square meters (20,000 square meters of covered area). A second industrial unit built in late 2006 in Cuiabá, in the state of Mato Grosso has 30,000 square meters (10,000 square meters of covered area). This new facility specializes in grain storage, producing silos, dryers, gravity tables, transporters, and machines for grain cleaning and pre-cleaning.
But Casp’s main products are the incubators and hatcheries/setting sectors for the poultry farm industry, offering singlestage and multiple-stage incubator units and other incubator options. The company also sells broilers, food distribution and heating system fans for poultry sheds and other products – all with manual or automatic options.
This year’s projection for the Brazilian market is to manufacture 450 incubators and hatcheries.
“In incubation, the company is the outright leader with more than 90 percent of the market share,” says Cagliali. “In the area of aviary drinker systems the competition is tougher and our market participation is between 25 to 30 percent. Also, we’ve achieved remarkable results in the grain storage segment exceeding the market’s growth average. In storage we have 8 percent of the market share.”
POULTRY FARMING SUCCESS
The Brazilian poultry farming industry has grown very rapidly and very professionalized in the past decade. The country is the biggest exporter of chicken meat in the world and third in production, just behind China and the United States. Those results, along with the capacity to export in competitive volumes, come from reliance on quality equipment and machinery.
“For us the important aspect of our business is the growth of poultry and pig farming in Brazil and internationally,” explains Cagliali. “We do not create demand; we simply sell to companies our equipment when they are willing to invest.” With the increase of chicken and pork meat consumption in the domestic and international market, producers maintain their investments in machinery and equipment. “We participate in that growth via investment from our clients,” Cagliali says.
With synergies between the poultry and pig operation it was only natural that Casp would manufacture equipment for that industry as well. “Our pig operation only started three years ago. Our advantage was to know our client,” explains Cagliali. These clients include major players in the domestic and international market such as Sadia, Perdigão and Frango Sul.
“We’ve started to produce machinery for the pork meat producers because we believe that this market will grow substantially in the near future and we’ll be leading it in the years to come,” adds Cagliali.
HIGH SANITARY STANDARDS
The poultry farming industry had a few major setbacks in 2006 with the avian influenza, which reflected in the results of the whole industry.
“The year 2007 was an atypical year. In the first semester we had very weak results and we didn’t achieve the expected goals,” says Caglioli. “We took in 130 million reais last year and had only six millions reais of profit. It was the consequence of market conditions.” Nonetheless, the company’s average growth in the last five years has been 27.5 percent.
In the aftermath of those stormy days, a chief concern is having high sanitary standards. “This is our competitive advantage and it is of extreme importance that Brazil maintains as a priority high sanitary standards so that situations from the past won’t affect us and the growth of our presence abroad,” says Caglioli.
He adds, “Casp is always searching for new opportunities in the market in terms of cost reduction and alternative supplies and components that can better adjust to our clients needs,” explains Cagliali. “We have a permanent team that requests new materials, trains its suppliers and purchases their products. We then establish long-term partnership contracts with pre-established prices and volume programs, all to provide better quality to our clients with a more competitive cost.”
The company has 450 employees and 35 agents spread around Brazil to give it direct market contact. They are in charge of sales, distribution and set-up of machinery and equipment as well as aftercare service.
Casp’s products represent the most advanced technology on the market – the company uses on average around 900 tons monthly in metals for the manufacturing of its machinery and equipment. The volumes and ingenuity behind its production prompt an investment of approximately 20 percent of its profits in R&D. “It’s the only way to be aggressive and to maintain our position as number one. We need to continue increasing volumes in order to expand markets,” says Cagliali.
Last year the company developed a new incubator, using an innovative technology in partnership with FINEP (Financiador de Estudos e Projetos) a government organization that supports new studies and development of technological projects in the industrial area.
As a reward for its quality efforts the company earned Top Quality Premium distinction in 2003 in the category of Machinery and Equipment, in the agriculture, livestock, poultry and pig sector, by the Institute of Quality Studies and Research.
In November 2003, the company received ISO: 9001.2000 certification for the incubation division. And in 2002 Casp won Exporter of the Year from ABIMAQ (Associação Brasileira da
Indústria de Máquinas e Equipamentos) in the best performance category, recognizing its outstanding growth of 414 percent in 2000 and of 264 percent in 2001.
“In our understanding, the prize was the recognition of serious and persistent work that we are carrying out in the foreign market and, principally, eloquent proof of the capacity of the national manufacturers of equipment for poultry farming in competing with outside companies,” Cagliali says of the honor. Indeed, exports in terms of production represent 15 percent of the company’s output. The target area is mainly Latin America but CASP also dominates markets such as Peru and Venezuela.
Its machines are also present in Colombia, Bolivia, Dominican Republic, Panama, Argentina and Paraguay as well as Africa. This year’s goal and target is to enter the Mexican market.
LEADERSHIP WITH CONSCIENCE
What differentiates CASP from international incubator competitors is that CASP produces with local costs. Its competitors are producing abroad, and sending their products in at higher prices. “Until one of them installs a facility in Brazil to have access to local producers of the food industry, they are not able to be competitive,” says Cagliali.
Cagliali adds,“ If we have such a strong position in the Brazilian market in the incubator segment for the last 10 years now, it’s because we have responded to what the market needs in terms of volume, technology, price, delivery and quality. We can sustain leadership with transparency; not only internally to our employees but also to the market; and ethics in our daily commercial relations with collaborators and clients. Those are our values and the company’s guidelines, it has been so for the last 70 years.”