In Brazil's rapidly expanding lower-income housing segment, no construction company is growing more astronomically than the largely unheard of family-owned firm of CASAALTA. Co-founder and president Juarez Wieck explains to Michael Sommers why business - and buildings - are booming like never before.
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In 2013, CASAALTA, a family-owned civil construction company based in the southern Brazilian state of Paraná grew more than any other construction firm in the country – by 127 percent (in terms of square meters constructed). As astounding as its performance is the fact that, despite having been in existence for 35 years, CASAALTA is completely unknown to most of its peers in Brazil’s construction segment.
A Focus on the “Popular”
In truth, for much of its history, the company was a modest-sized player whose activities were limited to Brazil’s small southern states and the interior of São Paulo. Indeed CASAALTA’s president, Juarez Wieck, grew up and began his professional life as a civil engineer in the town of Bauru, São Paulo before moving to the Paranaense capital of Curitiba where, along with his brother, he founded CASAALTA in 1978.
In the beginning, the company focused on small residential projects in Curitiba. By the 1990s, however, the projects had expanded into large condominium complexes throughout Paraná and the neighboring states of Santa Catarina to the south and São Paulo to the north. Then, in 2009, everything changed.
As part of the governing Workers Party’s commitment to improving the lives of Brazil’s vast number of poor and working-class citizens, the government launched the ambitious social housing project known as Minha Casa, Minha Vida (My House, My Life). While providing financing for many Brazilians to purchase their first new homes, the project gave serious impetus to the already hot civil construction market.
While CASAALTA had experience building high-end residential complexes for Brazil’s so-called A and B socio-economic classes, from the start, the firm’s specialty had been constructing dwellings for the so-called “classes populares.” “Today, the market for upscale residences is in strong recession, but homes for the poor and working classes comprise a major growth opportunity; there are many Brazilians who are looking to buy their first home.” says Juarez Wieck. “Lower income housing has always been a major focus for us. Long before ‘Minha Casa, Minha Vida’, we were strategically preparing for this moment and when it arrived we were more than ready to take advantage of it, whereas many of our competitors were left trying to catch up.”
As a result of its preparedness, CASAALTA won many government contracts to build low-income housing, so many in fact that today the company is Minha Casa, Minha Vida’s Number One construction firm. Its success in the residential sector has been such that, two years ago, the company migrated into the educational sector, when it was hired to begin constructing government-funded day-care centers.
The results have been nothing less than staggering. In the five years since CASAALTA entered the public sphere, it has grown by a whopping 1,500 percent. While in 2009, the company took in revenues of R$30 million (roughly US$13 million), this year’s earnings are expected to top R$580 million (US$ 258 million). Along the way, the firm has expanded exponentially. Today, it employs more than 4,700 workers and maintains seven regional engineering support offices throughout Brazil in addition to its administrative headquarters in Curitiba.
As a result of joining forces with the government, CASAALTA has also seen its activities expand throughout the country’s far-flung regions. Currently, it’s involved in projects in 14 states, covering 55 percent of Brazil’s vast territory. “Growing so quickly, and on such a large scale, has not been without its challenges,” admits Wieck. “This is why we opened the regional offices; to support our engineers while providing them with autonomy. Many of our competitors aren’t able to maintain control over their distant projects. However, we have implemented our own management system that really sets us apart from the pack.”
An Easy Sell
Wieck is referring to what is known as the “control tower,” an internally developed system that allows the company to monitor the three essential factors that determine the successful outcome of all its projects – “cost, deadline, and quality” – on a 24/7 basis from its Curitiba headquarters. “From the ‘control tower’, we can respond to and resolve any problems with great speed and ensure quality and security,” explains Wieck.
Cutting down on both delays and costs is key when dealing with the low-income housing market. “To own one’s own home is a dream for all Brazilians,” says Wieck. “Selling this dream is easy. The difficult part is to build a product that meets consumers’ needs at a price they can afford. In order to do this, we have to construct rapidly and cheaply. In fact, when we first got involved with Minha Casa, Minha Vida, we researched other construction methods and techniques for lower-income housing projects in many countries, including Canada, the U.S., Mexico and even China. Then we adapted these solutions to Brazil.”
An example is building concrete walls using aluminum forming systems, a technique that CASAALTA introduced to Brazil three years ago. “Today it’s already become a norm, but at the time, we were at the vanguard,” says Wieck, adding that the company’s determination to stay ahead of the curve is what accounts for its longevity – and for its success, which is such that the company has no need to tout its own accomplishments.
Indeed, one of the reasons for CASAALTA’s incognito status in the marketplace is that for 34 of its 35 years, the company has relied on absolutely no marketing. “when there’s a product that everyone wants, the customers come to buy it, making unnecessary huge spending with marketing,” declares Wieck, explaining why the firm has never resorted to traditional tricks of the trade such as advertising and decorated model homes.
Although earlier this year, Wieck finally relented and hired his 27-year-old son, Pedro Wieck, as the firm’s marketing director – “due to growth and expansion, some marketing became inevitable” – he insists that the money otherwise spent on media space translates into more cost benefits for its customers. Indeed, the fact that there are currently 2,800 Brazilians on a waiting list to purchase a CASAALTA home is ample proof that the company has its own house in order.