It’s been quite some time since Brazil was synonymous with inexpensive products of dubious quality. In fact, with the Brazilian real currently one of the world’s most valued currencies, the economy booming, and costs and wages rising along with industrial inflation, Brazilian producers of goods and services find themselves in the interesting position of being hard pressed to compete – either abroad or at home – on the basis of price. Instead, they have been betting on ensuring high quality and meeting increasingly demanding standards of safety, service, and sustainability – which is where TÜV Rheinland comes in.
EXPANSION AND ACQUISITIONS
Founded in 1832, the German multinational is one of the world leaders in the testing, evaluation, and certification of products, services, and systems. Founded in Cologne, Germany, where its headquarters are still located, the company got its start when a group of local entrepreneurs, seeking to ensure the safety of their own operations, created an organization whose mission was to inspect steam boilers. Over the following decades, the company expanded into new industries (such as automotive, mining, and energy) and adding testing and certification to its inspection activities.
Today the TÜV Rheinland Group is the fourth largest supplier of certifications in the world and a proud member of the UN’s Global Compact for sustainability. Last year, the group racked up1.5 billion Euros (roughly US$ 2 billion) in revenues; it currently possesses over 500 offices and 15,000 employees working in 63 different countries worldwide. Among its most important operations is its Brazilian affiliate. Although TÜV Rheinland Brasil officially came into being in 2000, the company’s initial contracts for product certification date back to 1990. In 1997, the company opened up a small office in the southern city of Curitiba, where it certified products for the National Institute of Metrology, Quality, and Technology (Inmetro), a government organization devoted to guaranteeing quality of Brazilian goods and services. Later, in 2001, it scored an important coup when it opened up another office in Brasília, in order to service Anatel,the national telecommunications agency.
Despite its roster of important clients, TÜV remained a relatively modest operation – with only 20 employees – until 2003, the year in which it opened offices in both Rio de Janeiro and São Paulo. While it subsequently closed its original Curitiba base, it further extended its coverage throughout the country with the opening of another office in the Amazonian capital of Manaus. However, what really spurred major growth was a series of strategic acquistions that took TÜV from a small player to market leader in the field of product certification.
The buying binge began in 2006 with the purchase of a pair of major companies in the certification and inspections sector – União Certificadora (UCIEE) and Orplan Inspeções – which gave TÜV a significant edge in the electro-electronic market and provided it with added expertise in inspections. The following year, the company acquired control of Ductor Implantação de Projetos, one of Brazil’s leading engineering and project management consulting companies, which allowed it to take on a new role as project and management consultant (an area of expertise that TÜV Rheinland already possessed internationally). Most recently, in 2010, TÜV took a giant step forward with its purchase of Geris Engenharia e Serviços, a specialist in project management in the critical and currently booming areas of housing, energy, and transportation.
As a result of these acquisitions, the company now has offices all over Brazil. Moreover, it’s now involved in an enormous number of industries – from food, toys, and construction to telecommunications, energy, and mining. Among its 6,000 clients are various major government organizations (Inmetro, Anatel, Detran) as well as some of the country’s, and world’s, largest corporations, among them Petrobras and Vale.
Although the market is extremely pulverized, in a short period, TÜV has already consolidated its position as the Number One provider of certifications in Brazil. Aside from certifications, the company also has a strong market presence in the areas of inspection, management and training. Excluding growth from acquistions, organically the company has been experiencing annual growth rates of around 20 percent. And it’s preparing itself for even more growth via a series of bold strategies.
The first involves flexibility and is apparent in TÜV’s willingness to set up offices throughout Brazil, wherever its clients might need them. The second involves partnerships. While TÜV has its own state-of-the-art laboratory in São Paulo, where it carries out tests for safety certifications, it also has partners it can contract to carry out testing in areas where it lacks the necessary equipment or know-how. With the same aim, the company also maintains key partnerships with auditing and management consulting firms.
“One of the big differences that sets us apart in the market is the extremely wide scope of services and solutions we offer in so many areas,” confesses company director Regina Toscano. “As a consequence, we can create an entire package for clients that offer them not just one service, but an entire solution incorporating everything they need.”
“As an example of this ‘package’ approach, I may have a client in the building sector who needs ISO-9000 certification. So I’ll go and provide the ISO, but I’ll also offer sustainability certification and energy certification and I’ll offer product management services and inspection of all equipment (from the factory to the construction site). Because we have specialists in all areas of expertise, we’re able to provide a one-stop solution for all of a client’s possible needs – including those the client might not always be aware of.”
INVESTING IN PEOPLE
When it comes to expertise, TÜV Rheinland Brasil is fortunate in being able to draw from the long and broad experience of its German parent company, not to mention all its global susidiaries. “Sometimes our contracts even come directly from Germany,” says Toscano. “When a company that already uses TÜV’s services in Germany or another country decide to set up shop in Brazil, they automatically seek us out.”
At the same time, however, TÜV Brasil is acutely aware that with regards to certification, despite increasingly international standards, each country has its own realities that demand specialized solutions for its specific markets and business needs. With this in mind, TÜV Brasil places enormous emphasis on the hiring and training of employees. Currently numbering 1,500 people, the company’s staff is highly specialized to address all its clients’ needs. Declares Toscano: “We don’t invest in equipment, we invest in human beings.”
Indeed, viewed the importance it places on the human factor, it’s not surprising that one of the solutions that TÜV sells is training. The company has its own TÜV training center in São Paulo where it offers courses for everything from auditing to technical specialties. It also provides in-house courses to companies across the country and has forged partnerships with various Brazilian universities. “We qualify people to work in all industries, but we also train them for ourselves,” admits Toscano, adding that often the best students enrolled in TÜV’s programs often end up working for the company.
If TÜV is investing heavily in people, it’s because the company is also banking on playing an ever increasing role in Brazil’s rapidly expanding markets. “When we first began operating in Brazil, only around 15 to 20 percent of certification norms were obligatory; the rest were voluntary,” recalls Toscano. “Today, the situation has changed dramatically and 90 percent of certifications are now compulsory.”
“These days, it’s rare these days to find cheap products of dubious quality and origin made in Brazil. There’s a much greater concern with uniformity and quality. Consumers want to make purchases with confidence, knowing products have been tested and are safe and durable. And increasingly, not even quality is enough; people also want to know that the products they buy and the companies that make them are socially responsible and have strong environmental records.” As an essential, 100-percent independent and impartial link between suppliers and consumers, TUV’s mission is to make sure that they do.