March 26, 2010 From Clay to Kiln

Volume 13 | Issue 2

The Embramaco Group, made up of five separate companies, including its own mining business, is a leader in ceramic tile production in Brazil

It is said that two heads are better than one, and it appears that four or five ceramic tile companies are better than one, at least in the case of Grupo Embramaco. Embramaco is the result of the vision of one man, Antonio Carlos Rodrigues, who aimed to offer the highest quality ceramic tile. He did so, in 2004, by joining three separate, competing ceramic tile businesses: Cerâmicas Acro, Cepar, and Smaltcolor. The acquisition of Tute Mineração, a mining company, gave Embramaco self-reliance in terms of the raw material for its production. Nowadays, Embramaco has expanded beyond its original base to include a total of five tile companies in addition to the mining concern. Grupo Embramaco’s progress over the years has included not only growth in size but in important advances in technique.

LOCATION, LOCATION, LOCATION
Embramaco is situated in the heart of the ceramic region in Brazil. Nearly 70 percent of all ceramics made in Brazil comes out of the town of Santa Gertudes, in the middle of the state of São Paulo, where the Embramaco Group built its industrial park in 2004. Four years later, the company was so successful that it built bigger facilities. The clay for the tiles comes from the Tute mine, located in Ajapi, only 30 kilometers from the factory. The site, confirms Embramaco’s marketing analyst Robson Bonaldo, is stocked with enough clay to furnish raw material for the company’s tile production for the next 100 years. In fact he boasts that the mine holds the second-largest source of clay after China.

It was back in 1974 that the seed for Embramaco was planted, when Rodrigues’ partner left and took charge of Cepar. That was just the beginning: In the 1980s he acquired the Acro ceramic company’s factory (renamed from its previous name Santa Rosa, with the founder’s initials). Shortly thereafter the Embramaco umbrella took in another member when Rodrigues transformed a glaze factory, Smaltcolor, into yet another tile plant. In 2006, Esther tiles joined the group. Sadly, Rodrigues passed away that same year, but Embramaco has continued to live and thrive and in 2007, Duramax was added to the Embramaco family.

A COMPANY FOR EVERY CLIENT
Having a number of separate companies under one umbrella allows Embramaco Group to be competitive in a range of markets. The group’s five companies, Acro, Esther, Duramax, Smaltcolor and Cepar each have ample lines of tiles to please every taste and budget. Indeed, Bonaldo notes that Embramaco targets sales to all economic levels, although the focus is on the large and growing Brazilian middle- and lower-middle socioeconomic classes. The Esther line is the higher-priced line aimed at a more demanding clientele while Duramax’s lower priced lines of tile are just right for those whose budgets may be tighter. Consumers can purchase Embramaco’s tiles at construction supply stores because the company does not sell directly to consumers. Bonaldo says that sales are focused on medium and large companies, those with approximately R$60 million in annual gross profit. He explains that this type of client allows for “a better profit margin with less negotiation.” The company’s commissioned representatives arrange for sales to stores such as Home Depot and other major home repair and construction outlets. Embramaco does make sales to smaller businesses throughout Brazil, mainly in the São Paulo area. But consumers outside Brazil’s borders also have access to Embramaco’s tiles. Bonaldo says that the company exports to over 55 countries, mainly in Central America and the United States. He notes that exports account for approximately 15 percent of sales and highlights that this number has remained essentially stable despite the economic crisis that affected overseas sales for many businesses. Embramaco understands the value of keeping clients coming back, so it strives to maintain good relations and to provide excellent service to all of its approximately 4,000 clients.

COLOR THAT WON’T RUN
In addition to producing and marketing a wide array of high quality products, Embramaco distinguishes itself from the competition through its emphasis on innovation. Ceramic tiles may have ancient origins and contain basic material, but Embramaco’s research led to the development of improved techniques that in turn have led to a better product. In fact, in 2006 World Ceramics Magazine recognized Embramaco with awards for Company of the Year and Ceramist of the Year. That same year, Embramaco made use of technology and was the first company to use a red clay base whose color won’t run when in contact with moisture. Despite some disdain for red clay, coming from the tile makers in southern Brazil, where white clay is more common, Embramaco’s red clay-based tiles have proved themselves to be of superb quality, in the company of the prized red clay tiles made in Spain and Italy. In fact, nearly all the technology and equipment at Embramaco’s facilities is imported from these two countries.

Embramaco’s facilities are well-located not only in terms of access to raw materials, but also to facilitate distribution of products. Tiles can be transported easily to the state’s main railroad line for delivery to stores throughout the country. The team of 800 Embramaco employees works in the company’s two factories, mine and the administrative headquarters, located on the site of the former Smaltcolor plant. Construction of the company’s newest facilities was begun in 2004 and was completed in 2008. Acro 3, as the site is known, is part of ongoing expansion to accommodate increased demand for Embramaco’s tiles. A new assembly line and kiln are due to go on line at the beginning of 2010. This growth represents steps toward an important company objective: By 2012, Embramaco plans to be the largest ceramic company in Latin America. Reaching this status would classify the Brazilian business as the second-biggest ceramic company in the world.

RESPONDING TO A BOOM
Currently, Embramaco produces 7 percent of all tile made in Brazil. The company’s plants have the capacity to turn out 3,500,000 square meters of tile per month. Bonaldo reports that the company’s goal is to up monthly production to 4,500,000 square meters by 2010. The expansion of Acro 3 will facilitate this objective. The concentrated effort to boost production capacity comes in response to what Bonaldo says is, “an increased demand that exceeds our capacity to supply.” Some of this boom in demand is an indirect result of a large-scale government initiative called the PAC, or Accelerated Growth Plan. The PAC funds government construction projects throughout the country and Embramaco’s tiles are being purchased to cover walls and floors in these new buildings.

Increased efficiency is also part of the growth at Embramaco. The company is making investments in improved technology that will facilitate higher production capacity, and will hire additional personnel, though the number of new jobs will be lowered somewhat due to better technology. This group of companies is a real success story: an up and coming company in an up and coming country.

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