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As the value of the Brazilian real falls against the dollar and inflation and unemployment rise, confidence in South America’s biggest economy is suffering a turn for the worse. However, ITW Food Equipment Group do Brasil thinks differently. Instead of backing out of the market, the group is stepping up activities based on its longstanding experience and adpatablility.
ITW designs and produces complete commercial food equipment systems, from storage to preparation and is the parent organization of the independent brands Hobart, Bonnet, Vulcan and Perfecta.
Acquisitions have catalyzed growth of the group worldwide, bringing expertise and investment in diverse areas of the food industry. “We focus equally on our markets and prioritizing knowledge of each specific area to offer the best and latest technology to clients. Brazil is not like other countries – it is not just a question of importing or developing new products, but understanding the local business ethic and market conditions,” says Country Manager, Luca Boselli.
Land of Opportunity
ITW (Illinois Tool Works) was founded in Chicago in 1912. Byron Smith, a financier placed an advertisement in the Economist looking to provide capital to a “high class business (manufacturing preferred) in or near Chicago.” He chose a group of inventors with an idea to improve gear grinding and from these humble beginnings, ITW expanded into businesses across the globe, transforming entire industries through simple but ingenious solutions.
The company embarked on Brazilian territory in 1996, when it acquired Hobart, the national leader in development and supply of commercial dishwashing, preparation, waste disposal and butcher’s equipment. “The acquisition was part of ITW’s worldwide diversification of food services,” Boselli explains. It also paved the way for the American group to introduce other brands to Brazil.
“ITW immediately noticed potential in Brazil and looked for other acquisitions and opportunities,” Boselli continues.
In 2000, the company launched Vulcan industrial ovens and hotplates in Brazil and in 2010 Bonnet combination ovens. “Bonnet has over 100 years of experience in combination ovens. As a specialist brand in quality professional, it uses steam systems to cook food without leaving them dry like models previously available in Brazil,” Boselli exemplifies.
An equally important step was the purchase of Brazilian baking, patisserie and confectionary equipment manufacturer, Perfecta in 2012. Perfecta was a family company that had been founded in 1973. It is the established domestic market leader and the largest company of its kind in Latin America. Based in the southern city of Curitiba, Perfecta added valuable expertise to ITW’s Brazilian market presence, as well as another strong brand.
“Perfecta was an addition that ITW assumed in Brazil. Vulcan and Bonnet were already a part of the group and imported technology,” Boselli clarifies. “The latest ITW brand in Brazil has consolidated 360º customer service and established a new division in our broad food services.” Perfecta supplies national and international supermarket chains, Walmart, Carrefour, Pão de Açucar and restaurants such as Outback.
ITW looks for brands that lead in their respective markets. Products include warewashing equipment, cooking equipment (including ovens, ranges and broilers), refrigerators, freezers and prep tables. The group has a healthy approach to competition and views new technology as an important part of achieving competitive edge. Managed individually, the brands focus on providing customers with technological innovations that facilitate operations.
Hobart dishwashers now consume less water and energy. “New market developments move toward semi-economical and ecological features,” Boselli comments. Other developments include wireless Bonnet combination ovens, which allow remote control via flash drive; the ovens can be regulated and programed, switched on and off to run more efficiently.
“Constant evolution is important– small modifications may not seem like much, but they make the difference and improve overall quality,” Boselli says.
For Brazilian brand Perfecta, investment in new technology has expanded market lead. With a 50 percent domestic market share, additional developments have added value to the country’s best-selling food services equipment. Boselli emphasizes that especially over the last two years, “ITW has invested in the Perfecta factory and equipment lines–introducing electronic touch-panel controls and innovative modifications, while maintaining competitive pricing.”
Buying the leading brand, not only increased ITW’s diversification but also marked the start of nationally produced products (Vulcan and Bonnet are imported). Perfecta’s Curitiba factory covers 23,000 square meters and develops an average of two new pieces of equipment a year. The brand opened a new factory in São Paulo in 2014. Hobart has technical headquarters in Germany and in the United States. ITW employs 300 people in Brazil.
Moving forward, company investment strategy falls into two areas: engineering and infrastructure. The team of 20 engineers work on the structure and production of new equipment as well as the tools and machines needed for manufacture. Following the presentation and approval of a prototype, innovations can enter the production line.
“Heavy investment in the Brazilian factory characterizes how much ITW believes in the Brazilian market,” Boselli reiterates. The company spent $500,000 on state-of-the-art painting technology last year alone. The machine has dramatically increased quality and reduced production time. It constitutes one of ITW’s first big investments in Brazil. According to Boselli an additional $2 million of cutting, folding and tooling equipment is scheduled for the near future.
Research and development of the market involves clearly defined analysis. “ITW has a defined and definite approach, which is market segment focused and aims at steady growth,” Boselli says. Part of this research involves interviewing existing clients, to improve equipment currently in operation and understand local industry needs. Ideas for products are collected and analyzed systematically. Qualified professionals can take up to six months to evaluate and re-work new projects to ensure that they meet clients’ expectations and rigorous quality control standards.
This is one of the many differences identified by partners and client alike. Boselli cites after-sales service, technical assistance and close relationship with customers as strong differentials: “We sell solutions,” he affirms.
ITW’s confidence in Brazil is clear. Despite economic crisis and political uncertainty, the group is focused on development. “We are always looking to simplify business. Brazil is not growing at the same pace as the past but we believe in recovery in the mid-term,” Boselli says.
There is no doubt that the Brazilian market can expect great things from ITW. The international group has stepped up its involvement in the emerging market through acquisitions and investment. Boselli is emphatic in his conclusion: “Trust in us, we are here to stay.”