Approaching 50 years of success in the engineering industry, Delp Engenharia of Brazil continues proving capacity for all-around engineering solutions. The country’s growing petrochemical sector provides ongoing potential, but has not restricted expansion into other markets. Coupled with important acquisitions, the company’s versatility resulted in a 70-percent sales rise over the last two years. Reuben Ford examines Delp’s increasing scope of products and services.
In Brazil’s engineering sector, Delp Engenharia is a force to be reckoned with. Having made a name in the petrochemical segment, the company provides pressure vessels, drilling guide bases, petrochemical heaters, and subsea equipment. In addition, it offers engineering services for the stages of refining, exploration and production of oil and gas.
“Although 70 percent of our portfolio of capital goods and services is made up of oil and gas projects, we also operate in the hydroelectric energy, mining, steel, and automated platform industries,” says Managing Director Marcelo Neto Botelho.
Demands present in Brazil’s growing number of refineries and offshore projects fostered Delp’s development in turbine, energy production equipment, locomotive platforms, tooling and naval crane production.
PROJECTS AND PROGRESS
Founded in 1965, Delp Engenharia began as a small family business that manufactured screws. Still family owned 48 years later, the company progressed in leaps and bounds to become Brazil’s leading supplier of offshore underwater equipment for the oil industry. Giant steps from one successful project to another, and efficient management, allowed unprecedented growth.
Taking off in the 1970s, the company was bolstered by an early venture in the metallurgy industry – a major milestone in the company’s history, describes Botelho. “Delp participated in an aluminum production plant, designing machinery and providing engineering services,” he explains.
In 1977, the company moved to its current facility in Contagem, Minas Gerais state – the heart of Brazil’s metal and mining industries. “At that time, the company’s focus shifted toward mechanical engineering services and capital goods production,” Botelho continues.
Expansion was always in Delp’s sights. Innovative vision, application of the experience, and success attained in the engineering sector led to new fields. By 1998, the company witnessed constant growth and investment in Brazil’s petrochemical industry, and it made the strategic decision to provide goods and services to oil refineries.
The oil and gas industry provides ample opportunity for on/offshore equipment and maritime engineering. Delp secured a joint venture with German engineering giant SMS Demag AG. In 2005, Delp acquired 85 percent of the share in the joint venture (it subsequently acquired the remaining 15 percent).
“The acquisition enabled us to specialize in offshore projects, increasing our offshore portfolio as we benefitted from Demag’s setup,” says Botelho. In fact, the purchase doubled Delp’s production capacity, adding Demag’s capital goods factory in Vespasiano (also in Minas Gerais) to the company’s infrastructure.
The move secured Delp’s position in the market and broadened its already extensive range of capital goods and engineering projects. Technical know-how, production capacity and supply potential opened what Botelho refers to as “a new positioning dynamic.”
Now, the largest engineering supplier to Brazilian oil company Petrobras, Delp operates extensively in all areas of gas and oil production.
INFRASTRUCTURE, INVESTMENT AND INNOVATION
Delp’s two facilities in Minas Gerais divide the refinery and offshore products and heavy tooling divisions. “Subsea and offshore equipment is produced in our 30,000-square-meter plant, which employs 400 people. Machining and industrial boiler construction takes place in another 30,000-square-meter plant that provides jobs for 600 people,” reports Botelho.
The plants are responsible for the design and processing of the products. With a team of skilled engineers, Delp is present from the concept to execution and running of its projects. “We’re able to design and deliver,” says Botelho. “We also collaborate with customers to supply complete solutions, tailored to specific needs.”
Many products are manufactured under special order, in particular for Petrobras.
The company’s scope of production and operations permits development of specific expertise in engineering. Delp is currently working in partnership with a leading Brazilian university to produce technology for the separation of oil and water. Delp’s know-how offers innovations in the petrochemical industry and in the energy and load lifting sectors.
“In 2011, we invested $7.5 million in new production machinery,” reports Botelho. “We purchased a new heat treatment furnace, vertical lathes [11 meters in diameter] and new painting equipment.”
Developing scope for innovation is not easy in an industry that requires very specific technology and projects. But Delp strategically responded to the challenge: It made the most of design orders to provide value-added services and establish partnerships (such as the university water and oil project) to create new engineering solutions. The company uses all of its resources to provide the best service possible – for example, integrating cranes into petrochemical projects. In its future, it’s looking at oil treatment and separation technology.
BETTER IN BRAZIL
Investment and strategy paid off. Delp is the leading provider of offshore underwater engineering services and in Brazil’s top five suppliers to refineries. “We are a Brazilian company, offering local solutions, which do not rely on international companies or global economics,” Botelho affirms.
His observations are particularly valid in a country that has endured the rocky ride of currency fluctuations. The present value of the Brazilian Real has seen exports drop dramatically in a country that suffered import arrival that undercut local prices. Despite these new challenges, Botelho remains confident that Delp’s tradition and competence will carry it through. “Our customers know that we will always be there,” he says. “Our goods and services demonstrate longevity unequalled by foreign companies.”
Maintaining market position has nonetheless inspired the expansion of its engineering into new sectors, and Delp’s independence is a strong asset. “Our engineers and skilled staff are available on site, and we invest in training to ensure that we can offer instant solutions to clients,” relates Botelho.
Results speak loud. From 2010 to 2011, Delp’s sales rose by 70 percent. Botelho envisions a firm a hold on this rapid expansion. “Consolidation and execution will follow our enormous 2012 growth spurt,” he observes.
Meanwhile, Brazil provides welcoming conditions for the overachievers in the engineering industry. The government encourages – even empowers – innovation as well as research and development projects. Indeed, it offers financial incentives. Delp’s participation – and success – in creating new oil and water separation technology underscores the benefit of government aid. Delp’s recent projects indicate diversification within its field. The company exceeds expectations. Its engineering capacity evolves.
The recent past (with its staggering growth numbers) indicate a promising future. Delp Engenharia seizes opportunity in current economic circumstances, engineering a differentiated range of products and services essential to its survival.