INACE’s first product – an aluminum lobster boat – revolutionized northeastern Brazil’s modern fishing boat segment. As Michael Sommers discovers, today the Ceará-based shipbuilder is not only a leading player in Brazil’s naval sector, but is also poised to take on the world.
At the outset of his professional life, nothing indicated that Gil Bezerra would become the founder and CEO of INACE, one of Brazil’s leading shipbuilders. In 1965, Bezerra had just graduated with an economics degree and landed a job at the branch of an American bank located in Fortaleza, capital of the Northeastern state of Ceará. The only interest Bezerra had in boats was getting his hands on one so that he could indulge in a little recreational lobster fishing. At the time, lobster fishing was a fairly new activity in Ceará, and in order to indulge, Bezerra ended up designing his own wooden boat and having it custom-made by local carpenters. No sooner was it seaborne than local fishing companies took note and started coaxing Bezerra to make vessels for them as well. Demand was so enthusiastic that Bezerra never did end up going lobster fishing. Instead he went into the boat-making business.
Right in the center of Fortaleza was an abandoned strip of oceanfront, protected by a breakwater, that Bezerra thought would be ideal for a shipyard. He purchased the site, and after investing in infrastructure and equipment, in 1969, Indústrial Naval do Ceará (INACE) opened its doors for business. Initially, business consisted of manufacturing fishing vessels. The fishing sector along Brazil’s Northeast coast was growing rapidly as techniques evolved from artisanal to industrial, and fishermen required boats that were larger and stronger.
A pioneer from the beginning, INACE was the first manufacturer in the region to undertake large-scale construction of electrically soldered aluminum boats, and it promptly cornered the burgeoning market. The installation of an assembly line allowed INACE to build numerous vessels simultaneously, and the ingenious installation of a system of railway tracks maximized space and speed of production, resulting in boats that moved quickly and easily from one station to another. INACE was also revolutionary in developing an enormous elevator (a syncrolift) that could launch manufactured vessels into the bay. With the aid of such cutting-edge technology, over the next 20 years, INACE churned out close to 1,000 boats – the equivalent of 80 percent of the entire fishing fleet of North and Northeastern Brazil.
Having captured the fishing boat market, the moment was clearly ripe for INACE to branch out into new directions. In the early 1980s, Grupo INACE was born following the acquisition of a trio of fishing companies along with a refrigeration plant where shrimp and lobster could be conserved before being exported internationally. INACE also decided to branch out in terms of its shipyards. Tripling the length of the preexisting breakwater created a vast protected marina over whose waters the company extended its construction area by 98,000 square feet to a total of 14 hectares.
Meanwhile, spurred on by a major government incentive plan destined to encourage the entire naval sector, Bezerra decided that it was time to capture other markets as well. Such efforts began in 1983 when INACE started producing torpedo launches for the Brazilian Navy as well supply boats and offshore transportation vessels for petroleum companies. Meanwhile, after a local businessman commissioned a recreational vessel, Bezerra took a chance, and had a half dozen aluminum yachts made to be displayed at a prominent U.S. boat show. At the time, no one ever imagined that a luxury yacht could be built in Brazil, let alone in the poor Northeastern state of Ceará. However, bucking expectations, all six INACE vessels in the U.S. were scooped up on the spot, marking the beginning of INACE’s highly lucrative yacht sector as well as its breakthrough into the international market.
THE BIGGER THE BOAT, THE LOWER THE COST
“Since then, we have custom-made over 30 luxury yachts for the American market alone, as well as yachts for customers in Canada, Europe, and here in Brazil,” says Flávia de Barros, INACE’s general director and Gil Bezerra’s oldest daughter. “Overseas, people are initially surprised to see a Brazilian manufacturer of luxury yachts. But the trend right now is for boats that are increasingly large, with lengths of over 100 feet. In Europe, such yachts are absurdly expensive due to the high cost of labor, whereas here in Brazil, labor is much cheaper. As a result, the larger the ship, the more competitive we are. Depending on the vessel, our products can end up being up to 50 percent less costly. Meanwhile, our quality keeps getting better all the time. Although we adhere to MCA international standards set out by the English Coast Guard, clients can just look at our boats and see the quality in terms of materials, design, and construction.”
The Brazilian Navy certainly did. Although the Navy had purchased small launches from INACE, its larger patrol ships had traditionally been supplied by a German manufacturer. Then in the mid-1990s, impressed with INACE’s work, the Navy commissioned two patrol ships. INACE went all out, investing in new machines and developing techniques that were considered pioneering not only in Brazil, but throughout the world. Since their delivery, the Navy has made a record number of arrests in its combat against illegal fishing due to the durability and speed of INACE’s boats. As a result, further commissions have ensued. In fact, currently, five Navy launches are under construction.
Although INACE builds and repairs everything from tugs and pushers to barges, in the last few years the company has increasingly concentrated its efforts on major building projects such as yachts and patrollers. “Since 2002, we’ve had a lot of large commissions,” declares Barros. “As a result, we’ve been experiencing annual growth rates of between 30 to 40 percent.” Ultimately, it’s been the successful conquest of the large yacht and patroller segments that have transformed the medium-sized, family-owned company into an industry leader. “The truth is that in terms of these markets there are no other competitors in Brazil,” confesses Barros. “We have the field to ourselves.”
Being sole players in the field has its pros and its cons. Barros points out that the lack of rivals also means a lack of a qualified labor pool to recruit from. “We tend to favor engineering students who do apprenticeships with us while they’re still in university,” she says. “They end up learning a lot on the job.” Currently, INACE has a workforce of over 700, and openness and willingness to learn are key tenets of a corporate philosophy that applies to new recruits as well as to the most experienced specialists.
FLEXIBILITY AND STABILITY
“We’re very conscious of the fact that in Brazil we still have a lot to learn, and that awareness makes us very flexible,” confesses Barros. “We bring experts in from all over the world to teach us and are always open to new techniques and technologies. This ends up being a big plus for the company since not only is labor less expensive, but our workers are more creative and adaptable. Being open to change means we can custom build a boat exactly the way a client wants it, down to the most minute detail.”
Flexibility also means keeping up with the times and the markets. Indeed, Barros admits that the company’s long-term goal is to reach the stage where exports of larger, more specialized, and luxurious vessels account for 90 percent of its business. Already, it’s been some years since INACE ceased production of fishing boats for Ceará’s lobster industry. However, this doesn’t mean that the company has forsaken its origins. “We started out making boats required for rough work and rough sea conditions. Our original goals were very practical ones, and the components involved had to be incredibly strong and resistent,” explains Barros.
“These days we find ourselves making large yachts, where style and design are important factors,” she continues. “But we still haven’t forgotten the lessons we learned when we started out.” As Barros points out, one of the defining characteristics of INACE’s boats is that they are very stable – not unlike the company itself, which over the years, has proved masterful at navigating the tides of change.