Brazil’s top manufacturer of porcelain and polymer insulators, PPC Santana is highly resistant to loss, but certainly not to change. President Arthur Lavieri spoke to Michael Sommers about the company’s latest products, innovative new service division, and its strategic partnership with global leader ppc insulators.
It’s ironic that PPC Santana, a company that boasts an unbreakable 70-year record of success creating products known for their resistance, started out manufacturing products synonymous with fragility. Based in the town of Pedreira, São Paulo, Santana is the number one manufacturer of low voltage insulators in all of Latin America as well as the number one manufacturer of polymer and high voltage porcelain insulators in Brazil and the Mercosul countries. However, when the company first opened its doors in 1941, its goal was to manufacture decorative porcelain for household use.
INNOVATION DRIVEN BY NECESSITY
The outbreak of World War II radically altered the fledgling company’s business plans. By 1943, the war had seriously hampered international trade, forcing Brazil’s nascent industries to find innovative ways of supplying their own needs in lieu of depending on imports. One of the most important concerns was the creation of an efficient power supply that would serve the nation’s growing industries. It was in response to this demand that the company came up with the radical but inspired idea of putting porcelain to new use by producing insulators for Brazil’s electricity lines.
Over the next decades, Santana grew along with Brazil’s burgeoning cities and industries. Determined to stay at the vanguard, from the ‘50s up until the ‘80s, the company entered into a series of key technology sharing partnerships with major European and American insulator specialists that proved extremely important. As a result, Santana became a fundamental player in Brazil’s electric industry.
“We had started out making very low voltage insulators capable of handling up to 15,000 and then 25,000 volts,” recalls Arthur Lavieri, president of PPC Santana, “But with these technology transfers, we were able to increase voltage capacity significantly. By the end of the 1970s, we were making insulators that could resist 800,000 volts.” This period coincided with the construction of the Itaipu Dam, the world’s largest hydroelectric plant.
For Itaipu, Santana created new solutions for high resistance insulators for application at direct and alternating currents and were unprecedented at the time. “We supplied 95 percent of all the project’s needs for insulators,” says Lavieri. “Itaipu was a milestone that made us the biggest electrical insulator manufacturer in the Americas.”
Not content to rest on its laurels, Santana set to work building a new plant in Pedreira dedicated exclusively to high voltage insulators. Inaugurated in 1982, the 98,500-square-foot facility was able to meet the growing demand for large insulators both within Brazil and beyond its borders. Indeed, as a consequence of Itaipu and the opening of the Brazilian economy, in the 1980s international trade really took off. Within the next 10 years, the company signed contracts with major electrical suppliers throughout the Americas, including Florida Power, Hydro Quebec, Colombia’s Isa and Chile’s Chilectra. Meanwhile, in Brazil, Santana branched out into nuclear energy when it was chosen to supply insulators to the Angra I and Angra 2 nuclear plants, located on the coast of Rio de Janeiro.
In the 1990s, Santana branched out even more by constructing yet a fourth plant in Pedreira – aside from the high voltage plant, the company also has two units where low voltage insulators are made; the total area of all four plants currently adds up to 263,000 square feet – where it began producing its own line of polymer insulators. Made from a composite of silicon and fiberglass, the polymer insulators were launched in 1999. Shortly afterward, spurred on by growing demand, in 2001, the company invested in a new oven. The investment allowed Santana to produce insulators measuring six meters in length and capable of handling 550,000 volts. PPC Santana already had a 341 foot long kiln, the biggest of its kind in Latin America. A major breakthrough, it permitted the company to further ramp up exports. Before the recent fall of the U.S. dollar against the Brazilian real, exports accounted for 35 percent of Santana’s business (in 2008, the number had dropped to 20 percent).
Meanwhile, as a result of these bold strategies, by the early 2000s, Santana had captured 60 percent of Brazil and Mercosul’s insulator market. The domestic market in particular – where Santana is the sole manufacturer of high voltage porcelain insulators – has been booming as a result of “Luz Para Todos” (Light for All), a federal government incentive dedicated to bringing electricity to millions of poor Brazilians who live precariously amid sprawling city suburbs. As a result of its participation in this project, by 2008, Santana had captured 75 percent of Brazil’s polymer insulator market. Currently, the company produces between 1 and 1.2 million polymer units a year. Its total annual production capacity is 22,000 tons.
PART OF A GLOBAL GIANT
Numbers such this as proved attractive to the Italian group SEVES, a leading world manufacturer of glass products made for industrial use. In 2007, the group decided it wanted to become a major global force in the insulator market. As such, it made two strategic purchases: PPC Insulators, an Austro-American company that is the world’s largest manufacturer of porcelain insulators, along with Santana, which had become the leading manufacturer of polymer insulators in the Americas. In purchasing Santana, SEVES not only strengthened its position in the Latin American market, but it also became the only company in the world that specialized in three main types of insulator: glass, porcelain, and polymer.
As a result of the integration of the three companies, Santana became known as PPC Santana. It immediately received a massive injection of capital of $10 million that went towards upgrading the company’s technology and production processes, much of which are adopted from PPC. One of the most important investments was in wet turning technology that allows products to be produced in 45 days as opposed to 120 days or more. “Drying is much quicker and the process itself is much more economical, not to mention more environmentally friendly,” explains Lavieri. “When the upgrade is completed in mid-2010, we’ll see enormous benefits.”
Meanwhile, this year Santana is launching its first hybrid insulators. Capable of handling up to 145,000 volts, the company’s patented invention combines silicon and porcelain to create highly resistant insulators geared to meet the changing demands of the market. “Today, electric systems are getting bigger and voltages are growing higher. As a result, the quality and capacity of insulators is a real concern,” explains Lavieri. “Unfortunately, the reality of the world is that both cities and industrial zones are increasingly polluted and this creates a lot of strain on transmission lines. In order to avoid problems, the safety of insulators is of the utmost importance.”
QUALITY PRODUCTS – AND SERVICES
“Very few manufacturers can make insulators that combine high voltage with high quality and resistance that clients demand,” continues Lavieir. “PPC already makes insulators of up to 1.3 million volts. Although our limit is currently 800,000 volts, we’ll soon have access to their technology. In the meantime, we’re creating hybrids that are ideal for polluted areas because they combine a more compact size (protects against contaminants) with excellent resistance and increased insulation.”
Santana spares no expense when it comes to quality. Its products undergo rigorous visual, electrical, mechanical, and thermic testing at its various labs. Unlike most of its competitors, the company makes a point of destroying any flawed products. However, as Lavieri emphasizes, what distinguishes Santana from its competitors is not only its quality inside the plant, but outside the plant as well, a reference to the highly personalized range of services the company offers its clients.
“For 30 years, we were always selected as one of the top businesses in Brazil in terms of customer satisfaction surveys,” explains Lavieri. “And until 2007, we always repaired products for clients as a courtesy. However, in truth, doing these repairs on-site caused problems at the plant, since sometimes even small repairs entail taking pieces apart and this can be very complicated. Instead we came up with the solution of creating a whole new division – Santana Services – consisting of a group of specialists that repair insulators that eventually break or are vandalized. Because our technicians travel to the substation itself, there is no need to remove the insulator. Other services we offer are to custom-make a product according to a client’s specific need and to test products at our labs in the event the insulator is to be used in an area with very specific conditions. Since we launched Santana Services in January of 2009, we’ve already received 200 requests in only seven months.”
While these service technicians receive special training to operate in the field, all of Santana’s 1,000 employees are taught that their prime mission is to create insulators that are the most dependable in the world. The emphasis on trustworthiness has never before been as crucial as it is today. “Right now there is an invasion of products from China and India. They’re beginning to compete throughout Latin America,” says Lavieri. “What guarantees our survival is the fact that we make the most reliable insulators in the world. Our clients know this. They know that our insulators last for 40, 50, even 60 years. And believe me, we actually have clients who have been with us that long. After all, we’ve been around for 70 years;” proof that, like the products it makes, Santana is incredibly resistant.