This leading producer of refractory lining and thermal insulation material and services keeps its stronghold despite a downturn in one of its most important markets. Reuben Ford describes a strategy and structure that sustain success.
Reframax specializes in refractory materials which retain extremely high temperatures (above 1,000 °F), and provides new installations and support or overhaul services for existing systems such as in kilns, furnaces and reactors. The company is an important partner for Brazil’s steel, cement and paper industries.
Also offering thermal and acoustic insulation, Reframax is an established name among industry frontrunners and is recognized for expertise, meticulous attention to detail and high safety standards.
As Brazil’s steel industry faces one of its worst crises in years, the company’s flexibility has been put to the test. The country’s mills are drowning in global steel over-supply, low prices and high raw material costs (such as coal) and suffering a flooded domestic market.
Company figures for 2013 prove the company worthy of its reputation and leadership. Reframax is investing in new technology, related divisions and diversification. “We have always covered a wide range of complete insulation services. Investment in overhaul, demolition and protection services are a logical step in our segmented business,” elaborates Nelson Guimarães Gorgulho, COO of Reframax.
Mix of Services
The company’s relationship with the steel industry dates back to its inauguration in 1999, when one of its first contracts was agreed with the world’s leading integrated steel company, ArcelorMittal. The success of the work rapidly brought in new refractory projects both in the steel industry (including the Brazilian National Steel Company) and other areas such as paper and cellulose, glass, metallurgy, cement, petrochemical, ceramic and ferro-alloys.
“In the first three years we carried out more than 350 projects for 71 different clients – the market gave us a very warm welcome,” Gorgulho says.
Reframax undertook a wide range of different contracts, large and small, including starting furnace and kiln overhaul services in 2002. At the same time, the cellulose industry was taking off in Brazil and since 2002 more than 18 factories have been opened in the country – Reframax present in all of them.
In 2004, the company became certified by ISO:9001, inspiring international projects in countries such as Argentina, Colombia and Peru, often in branches and subsidiaries of Brazilian clients (such as Votorantim in Colombia).
Overhaul and maintenance projects were also a success. “Retrecovery (repair and updating) of coke ovens and kilns opened a new array of opportunities,” Gorgulho confirms. In particular, the company’s largest contract to date for Sol Coqueira – a joint venture between ArcelorMittal and Sun Coke International in Vitória, Espírito Santo state, in 2007. The project involved 70,000 tons of refractory material.
“The steel industry consumes 70 percent of refractory material produced in the market, but we have many different sites and each one tells a story that adds more to our company and our diverse services,” Gorgulho says.
Reframax offers a complete service in all contracts. In addition to construction, demolition, overhaul and maintenance, as well as rammed, poured and gunning mortar. To cover the range of services Reframax also supplies ceramic fiber, basaltic mineral wool, polyurethane, electrometric foam and metallic plates for specific projects.
Training & Technology
Gorgulho immediately associates the company’s professionals with innovation and technology: “We have a very practical approach to business management and processes. Staff training and selection is important. We operate Good Practice Programs that encourage the input of all personnel in the implementation of quality policies and reward suggestions for improvements or developing standards,” he explains.
Reframax has developed its own concrete mixes for bricks and construction. According to Gorgulho existing formulae “do not meet the needs of the market.” The composition of the concrete benefits from the opinions and experience of the staff.
In terms of technology the investment is ongoing. Recent changes include remote controlled production machinery, including several robot-operated machines, which eliminates the need for hands-on labor and increasing safety in the workplace. Remote, computer controlled cutting equipment for bricks, parts and refractory material maintains technicians at a safe distance as well as improving precision and quality.
“Our investments focus on a move toward automated processes. Demolition, for example, which in the past comprised primarily manual labor now incorporates more machinery,” Gorgulho says. Aerial platforms and pneumatic lifting equipment increase security, efficiency and speed of service.
Robotic technology is also used to repair the internal lining of reactors. Developed together with the clients, the technology is the result of extensive research and investment.
Close relationships with its clients are an integral part of Reframax’ service. “Our professionals are on-site from the beginning to end of projects – in the case of Sol Coqueira, this was a team of 1,000 Reframax full-time employees.
While the two main areas of business are refractory applications and thermal insulation, Gorgulho explains that within these sectors specific projects are segmented. Demand for new services such as demolition, robot-operated repairs, tank installation and fire protection is rising. Reframax is undertaking new services in Suzano’s paper and cellulose plant in Maranhão state.
Down to Experience
The dynamic nature of the company also contributes to the extensive and growing experience of the markets in which it operates. “Our directors have more than 40 years experience and our services cover a large variety of important industries. We have created a name through respect and trust and this has offered a platform for diversification,” Gorgulho says.
Both the company strategy and his words are backed up by Reframax’ financial reports. Gorgulho estimates that 2012 annual revenue of $110 million will be maintained this year, despite the steel crisis, and annual growth is set to rise.
“Not only the difficulties in the steel industry but also the reduction in capital investment in new projects have been detrimental to our business,” he states. The apparent malleability Reframax shows is clearly vital in overcoming obstacles. Gorgulho explains that the fall in value of the Brazilian real against currencies worldwide, while negatively affecting over-seas business, has incited foreign investment in Brazil.
Identifying challenges and finding solutions is part of the company’s success. Investing in staff training, including a partnership with the Dom Cabral Foundation for executive training, has helped resolve the lack of qualified labor in Brazil.
“The organization of our company has received much acclaim. Foreign visitors have often commented on our level of professionalism and expertise and even asked themselves why such company organization does not exist in their native countries! This sort of compliment makes us truly very proud of our achievements,” Gorgulho says.
With the steel industry on the slow road to recovery, Reframax has protected itself from any damage by careful management, strategic development and integrated investment. Constantly offering more to its clients the company not only maintains commercial interest but ongoing success.
Gorgulho does not rule out the possibility of further diversification or even partnerships in the future: “We look to be always prepared for all situations and if we identify lack of market growth in one, we focus on another.” Together with experience and excellent service, the strategy is a winning formula.