As the third-largest power cable manufacturer in Brazil, Wirex Cable is an important player in a specialized market. Recently named ‘Best Brazilian Company 2007’ by industry magazine Exame, Wirex is going from strength to strength. Sales Director Fernando Berardo talks to Reuben Ford about the company’s impressive progress.
Founded in 1991, Wirex Cable originally operated in the telecommunications sector and then changed direction after the privatization of the Brazilian telephone network in 2000, which focused attention on the manufacture of cables. “We already had an interest in the power cable industry as well as knowledge of production,” says Berardo, “and it was a question of concentrating efforts in one area.” The change brought about new management for Wirex, which included the appointment of Berardo as sales director. “Our first challenge was restructuring the company,” he explains. “The period from 2000 to 2003 was one of internal organization.”
Deciding to center on power cables, the company’s goal was to become a major player in the field. As Berardo says, “Wirex only participates in markets to which it can make a significant contribution.”
That contribution enabled Wirex to post sales of $70 million in 2004, a figure that has been steadily increasing by an average of 15 percent in subsequent years. A constant focus on customer satisfaction and quality, partnerships with suppliers and rigorous control of internal operations have guaranteed this growth. In 2007 sales reached $170 million and Berardo projects $210 million for 2008, although he attributes a portion of this rise to production costs. “The sharp increase in the price of copper, which is one of our primary materials, has increased costs and prices in the industry as a whole.”
Wirex purchases raw materials copper and aluminum to manufacture power cables of up to 35 kW, flexible copper braids, metallic terminals, and automotive battery cables. Despite its roots, Wirex no longer works with the telecommunications industry, nor does it supply electrical wiring for lighting. Today it produces instrumentation cables applied in industrial plants and in substation power circuits, as well as mining and movable cables used by mining and cement companies. In addition, Wirex manufactures specially engineered cables for hostile environments, including marine applications, offshore oil platforms and onshore drilling. Aluminum anti-tracking cable is also manufactured for overhead lines. A separate division supplies cables to the automotive industry and manufactures battery cables, alternator cables, grounding or negative cables, and grounding ropes for cars, trucks, buses and off road vehicles.
“The automotive industry is responsible for about 20 percent of our business,” says Berardo, “the other 80 percent is power cables.” Plastic connectors and sockets for cables and wiring in both sectors are also manufactured by Wirex.
A single plant in Santa Branca, about 50 miles from the city of São Paulo, is responsible for the high volumes of cable produced every month. Over 700 employees in the 27,000-square-meter facility ensure that 1,000 tons of cable and 30 tons of copper braid are made every month. The unit adheres strictly to ISO: 9001 standards and the main products are certified by INMETRO (a Brazilian government body that controls industrial quality). The recognition of the company’s quality and ethics is important to Wirex. “Unfortunately there are many competitors who operate illegally, to avoid high taxes, and who end up compromising quality,” says Berardo.
It is not only national companies who compete with Wirex; international suppliers also sell to the Brazilian market. Wirex however, remains concentrated on its product line, which comprises the most complete range of copper cables in the country, and willingly invests the money necessary to maintain international standards. It is a policy that is working very well for the company, which is not only the third largest power cable supplier in Brazil, but also the number one producer of battery cables for the automotive industry.
A RANGE OF CLIENTS
Wirex successfully maintains a prominent position in its field, supplying important clients in a range of areas from electrical engineering to the pulp and paper industry. “About 95 percent of our clients are industrial distributors; the remaining 5 percent is made up of consumers and construction companies,” Berardo explains. The company also provides cables to sugar mills and alcohol and biodiesel plants. “Our customer service is very important to us, sets us apart from our competition, and guarantees that our clients come back to us,” says Berardo. Among the impressive list of customers are Usiminas, Gerdau and Votorantim. “Petrobras, Sadia and Vale are also faithful customers who renew their contracts annually,” says Berardo. In the automotive division, Wirex works with Mercedes-
Benz, Ford, CNH (Fiat) and Volkswagen, which recently awarded the company Best Supplier in the Trucks and Buses category.
The recognition of the company’s quality, focus and ethics is one of the reasons for the company’s success. Says Berardo, “The visibility afforded by the award in Exame magazine has been invaluable.” The magazine named Wirex “Best Company” in the sector and cited its 57 percent growth rate, which greatly exceeded that of any competitors. However, this is not the only factor that has affected the company’s performance. “The boom in the Brazilian economy has also favored sales,” continues Berardo. “The metals and electric industries are growing rapidly in Brazil, and we specialize in these areas.” Increase in demand has also affected the automotive division, which currently generates about $30 million annually, pushed in part by a contract with Volkswagen, to make cables for the Fox model.
INVESTMENT IS KEY
Thus far, Wirex has grown in accordance with demand, investing in new machinery that will double the production of medium voltage power cables. A total of $5 million is invested every year and Berardo estimates that this number will increase to $10 million in 2008. In addition, the rigorous control of its operations, from receiving raw materials to the laboratory testing of final products, guarantees the high performance of Wirex cables.
“The research carried out at the plant is technological, not scientific,” explains Berardo. “New lines are developed according to the needs of our customers.” In this way, the company maintains flexible operations.
Wirex’s internal structure is another key to its success. “We have very little bureaucracy and a ‘flat’ management structure,” Berardo says. The solid base of the company has afforded great success in Brazil, and the company believes it will do the same abroad as Wirex expands its overseas markets. At present exports account for only 2 percent of the $170 million annual turnover. Berardo says: “Our target is that the international market will be accountable for 10 percent of total sales by 2010.”
If its current growth rate is any indication, then Wirex will no doubt continue to ride the wave of success it has enjoyed since its founding. Recognized for its quality and expertise, the company remains concentrated on its business and focused on its clients as it powers into the future.