Volume 15 | Issue 3 | Year 2012

The growing industry and infrastructure of one of the world’s most important emerging economies offer endless opportunity for industrial construction. With national gas, oil, mining, steel, ethanol and cellulose industries booming in Brazil, investors need engineering partners equipped to cope with the magnitude of any project – seeing it through from concept to functionality.
Jaraguá Equipamentos Industriais is prepared to fulfill this role. The company supplies plants under a turnkey system. This contract model involves Jaraguá taking full responsibility for all stages in the implementation of the project, transferring to the customer a plant fully built and ready for operation.

The turnkey contract involves activities from basic engineering, through materials purchasing, production and installation of equipment, quality control, site erection, maintenance, technical assistance and operational training. Every stage of this process is supported by the appropriate technological resources, as well as by a modern project management system and a team of technical experts highly qualified to meet client needs.

Founded in 1957, Jaraguá Equipamentos Industriais was born – as a Brazilian company with German capital – in Vila Leopoldina, Sao Paulo. For more than 25 years, Jaraguá produced all kinds of equipment for base industry, supplying the largest Brazilian companies, such as Petrobras. During that period, Jaraguá developed pari passu, its design engineering and construction area.

Following the tracks of Brazil’s industrialization during the 1960s and 1970s, the need for physical expansion of Jaraguá became essential. In 1973, the company acquired land in Sorocaba (São Paulo) where it constructed a new plant in 1981.

Parallel to the success of Jaraguá, another company – Garcia Engenharia, located in nearby Osasco – also grew and excelled in the segment of manufacturing industrial equipment. Garcia Engenharia was founded in 1968 for the production of machinery and special equipment, parts and components for industrial application, machining services, plate bending and manufacturing and marketing of pneumatic conveying systems. Besides manufacturing of equipment, Garcia could also develop complete industrial systems and processes for its customers.

In 2000, Jaraguá and Garcia joined. The merger sparked unprecedented growth. The Garcia Group took over Jaraguá Equipamentos Industriais and, since then, Jaraguá Garcia Group has been a leader in the Capital goods market. The merging of Jaraguá and Garcia offered the market a wider range of equipment and services, five industrial facilities (in Sorocaba, Osasco and Itapevi in São Paulo state; and in Marechal Deodoro in Alagoas state, and Ipojuca, in Pernambuco state) and three administration offices (Alphaville, in São Paulo state, Rio de Janeiro and a recently acquired in spot in Orlando, Fla.) totaling more than 600 thousand square meters.

In the year following the merger, Jaraguá grew by 120 percent. Revenue increased from $10 million in 2000 to $60 million in 2003. These figures increased steadily year after year. In 2011, sales hit $350 million and, according to Vice President Nasareno das Neves, Jaraguá predicts income of $500 million (one billion Brazilian reais) in 2012.

“Our growth has been the result of strategic planning and goal setting goals,” Neves reports. “Every November, we meet to establish growth objectives for the long term, focusing on growth management.”

In 2006, targets set for 2010 were achieved in 2008/2009.

“That’s due to our relentless drive and ambition,” adds Neves.

Fully aware of its market potential and constantly learning and extending the possibilities of its projects, Jaraguá Equipamentos’ growth had pushed it into the lead in the sector. “All of our work is undertaken considering growth, accepting a challenge, valuing partnerships and focusing on staff,” says Neves. “Our philosophy is to improve our competencies, and to maintain the best professionals in the area – leadership is a consequence.”

Jaraguá is able to satisfy its clients’ every need because it is unlike the majority of construction equipment and project planning and execution companies. The company not only provides a complete service of planning, implementation and maintenance, but also manufactures its own equipment. “Our strong differential is that we have an equipment factory and engineers who can apply our machinery to our projects,” continues Neves. As the only company to produce its own equipment, Jaraguá has complete control over the functioning and efficiency of its clients’ projects, from installation, operation and financial planning.

The advantages of having everything in house are undisputable. Jaraguá’s largest market is petrochemical projects for the Brazilian oil giant Petrobras. With the increasing number of installations, modular construction concepts are becoming more popular, allowing the company to maximize production at its facilities and minimize work in the field.

“Some projects can leave the factory complete, with greater quality, reduced delivery time and more efficient execution in terms of labor costs and man hours,” confirms Neves.

An overview of every project has permitted Jaraguá to create a synergy between engineering, electrical installations, tooling and equipment that wins over clients in different sectors. In addition to the petrochemical sector, Jaraguá is also working on onshore and offshore projects as well as mining, paper and cellulose and steelworks projects. The expansion of the client base includes companies such as Votorantim, Vale, Braskem and ThyssenKrupp. “Diversification of our services is another one of our strengths,” Neves affirms.

The company participates in the project both in downstream and upstream phase, supplying high-tech equipment such as heat exchangers, reactors, oil and water separators, purifiers, steam generators, heaters, columns, spheres, and furnaces. Jaraguá also has experience in petrochemical furnaces overhauling, increasing their capacity and adjusting them to the demands of environmental standards.

Its production range from ovens, condensers, evaporators, heat exchangers, coolers, pressure vessels, plates, distillation columns and reactors, operating in the processing of raw materials, which then have the most diverse applications such as plastics, paints, solvents and perfumes.

The company has supplied highly specialized reactors, manufactured using high alloy material, and participated in international biddings. In fact, the list of mechanical innovations and equipment available is extensive and is the object of continuous investment for Jaraguá.

The acquisition of Jaraguá Equipamentos by Garcia Engenharia significantly increased the company’s infrastructure and it has never looked back. The plants have been extended and two new facilities have been opened in the north east of Brazil. The 20,000-square-meter plant in Alagoas and 4,000-square-meter factory in Parnambuco are conveniently close to the coast for transport accessibility.

“In addition to the new units, which cost $45 million, we have financed $8 million of improvements to our Sorocaba plant and invested a further $5 million in assembly equipment,” Neves says.

All of the investments have been made in the last five years and are part of Jaraguá’s constant and aggressive growth strategy. Clients’ projects are studied in detail and assessed for the most direct and responsive solutions. “We have developed a specific management model for the execution of our work – one of our employees is designated project manager. This person will be the point of contact for the client and will be responsible for the proposal, construction, installation and operation of the site,” Neves explains. The project manager participates in every stage of the work and is always available to assist the client.

The development of this customer service system is another reason for Jaraguá’s leadership. Other companies in the sector outsource equipment rental or manufacture and mean several points of contact for the client, who is viewed by Jaraguá as a partner.

The measures taken by Jaraguá translate into a healthy growth rate in excess of 30 percent annually for the last six years. Neves attributes constant growth and development to “the combination of the management model, philosophy, company values, competence and vertical integration” of Jaraguá.

Growth comes in spite of internal market oscillations, which have pushed competitors over the edge. During the international crisis, Jaraguá maintained growth and adjusted sales strategy and service where necessary to account for clients who may have been experiencing difficulties. The overwhelming success of Petrobras, Jaraguá’s largest client, has also boosted development.

A strong history in the industry, consistency and constant pursuit of excellence have made Jaraguá Equipamentos the Brazilian market leader. With plans to extend operations to the US, the company continues its ambitious endeavors, which have proven successful time after time. Equipped for all eventualities in industrial projects, Jaraguá upholds the principles of the Garcia Group. “At the heart of our success is our staff, whose constant efforts for improvement emulate our company vision and guarantee our future,” Neves concludes.

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