A construction company that specializes in the building of complex concrete industrial buildings and structures, Ernesto Woebcke has already consolidated its presence in the marketplace of Brazil’s southernmost state of Rio Grande do Sul. Now, as Michael Sommers discovers, armed with decades of experience and access to new technology, the company is moving into new segments and markets like never before.
With close to a century in operation, Empresa Construtora Ernesto Woebcke has certainly had ample time to build its construction business up into an enterprise as strong and solid as its primary building material: concrete. Founded in 1923 by an engineer of German extraction, Alfredo Haessler, in Porto Alegre, capital of Rio Grande do Sul, the business began life as a small construction company that built residences made from reinforced concrete. It earned its current name in 1929, when another engineer, Ernesto Woebcke, bought into the company, seduced by the massive opportunities that were accompanying the growing urbanization and industrialization of Brazil’s southernmost state.
INVESTING IN TECHNOLOGY
During the next few decades, the company carved out a name for itself, racking up a portfolio of projects in both the industrial and commercial sectors. However, major growth came in the 1960s and ‘70s, as Brazil as a whole, and Rio Grande do Sul in particular, underwent massive transformations that demanded larger and more modern industrial plants as well as key infrastructure such as bridges, water treatment stations, and hydroelectric and energy plants. During this period of mega projects, Ernesto Woebcke really consolidated its reputation through the development of cutting-edge techniques that enabled it to manufacture large-scale reinforced concrete buildings and other structures.
In full expansion mode, in the 1980s the company branched out and inaugurated a 10,000-square-foot plant (on a 82,000-square-foot site) for the manufacture of precast concrete, in Gravataí, a town located some 16 miles from Porto Alegre. “We purchased state-of-the-art German technology for movable formwork that allowed us to manufacture very heavy items,” says the company’ president, Rolf Werner Hemesath. “With this, we were able to make silos, water reservoirs, and very large stacks and chimneys, measuring 150 to 200 meters.”
More recently, the company teamed up with another German firm, Enercon, an innovative engineering, environmental, and technical products and services firm specializing in the energy segment, who supplied the technology with which Ernesto Woebcke began producing electrical energy towers out of concrete. In the years 2005 and 2006, the company produced 75 such towers and it is already at work on a second commission to manufacture 150 towers for Enercon, each with a 2 Mega Watt capacity, between 2010 and 2012.
Brazil’s robust economy has translated into a lot of new opportunities – and contracts – for Ernesto Woebcke. “The Brazilian economy grew by 6 to 7 percent in 2010 and those rates are expected to remain constant through 2011 as well,” says Hemesath. With the federal governmenthaving launched a major program for the upgrading of infrastructure, particularly urban infrastructure, there are lots of opportunities around. Water and sewage treatment plants are two areas in which Ernesto Woebcke has landed contracts. Another major source of livelihood has been the country’s booming energy sector, spurred on by Brazil’s massive offshore oil discoveries of the last several years. “In terms of the petroleum industry, the government-owned Petrobras has a lot of big projects coming up, which will mean a big demand for platforms, refineries, ships, etc.,” predicts Hemesath.
At the moment, the company is participating in a three-year project to assemble a Petrobras refinery near Porto Alegre. Moreover, as a result of Petrobras’ commitment to bio-fuels, it’s also involved in the transformation of a traditional thermoelectric plant to one fueled by gas; the second such project undertaken by Ernesto Woebcke in the last decade. Says Hemesath: “There are only two gas-fired thermoelectric plants in the South. The one we’re working on now and the other that we did 10 years ago.”
Another related source of opportunities is thermoelectric plants that are fueled by charcoal. Viewed that 98 percent of Brazilian charcoal is found in Rio Grande do Sul, Ernesto Woebcke is ideally situated to take part in projects such as the assembly of the Presidente Medici Plant owned by CGTEE, a branch of Eletrobras and located on Brazil’s frontier with Uruguay. The company is part of a consortium of four Brazilian firms taking part in this project that is already in its final phase.
“At the moment, there are a lot of such projects taking place in the South and studies are being carried out for many more,” declares Hemesath. “Our specialty is making stacks and chimneys of great heights. Of the four such charcoal-fueled plants in Rio Grande do Sul, we’ve made three.”
NO. 1 CHOICE IN THE MARKETPLACE
Ernesto Woebcke may be a medium-sized, family-owned firm, but it also happens to be one of only five players in its segment in the South. Nationally, it ranks 130th in the list of the 500 biggest Brazilian companies in all industries. In recent years, growth has been healthy with average annual rates of between 10 and 15 percent. Last year, total revenues were estimated at around R$80 million, or roughly US$ 48 million (in a given year, Ernesto Woebcke undertakes 10 projects). While precast concrete accounts for 30 percent of its business, the bulk of its activities – 70 percent – are devoted to construction for the industrial sector.
Although currently all of the company’s projects are based in Rio Grande do Sul, eventually it aspires to take part in special projects throughout the South as well as the Southeast states of São Paulo, Rio de Janeiro, and Minas Gerais. “Beyond that, due to our size, the logistics would be too difficult,” confesses Hemesath. “Meanwhile, here in the South, we’re the Number One choice in the marketplace and we’ve been so for a long time. All of the biggest and most important industries in Rio Grande do Sul are our clients.”
Hemesath points to a host of reasons to explain the company’s favored status, among them the fact that it has access to vanguard German technology that enables it to tackle special projects, involving a certain degree of customization and complexity as well as an ability to meet the specific needs of heavy industry. “Other companies in this field don’t possess the resources we do in terms of equipment and technology. Often, we’re the only ones who can execute certain projects.”
That the company is extremely verticalized – “everything from the planning and the machinery to the cranes and the trucks is all ours” – means that clients can depend upon both the high quality of Ernesto Woebcke’s projects and upon their on-time completion. “The quality of our projects is such that they almost never require repairs,” underscores Hemesath. “Our labor force is very well trained and many of our construction supervisors have at least 25 years of history at the company, which guarantees a great stability. It also reflects a great love of and loyalty to the company, which is surely one of the reasons we’ve maintained such a high degree of excellence for so long.”