March 26, 2009 Grob do Brasil | Industry Today

Volume 12 | Issue 2

Like its international parent company, Grob Brazil looks to the future and available expansion opportunities. Driven but not daunted

An integral branch of a larger international organization, Grob Brazil is a single-source supplier that offers integrated machining and assembly equipment. Specific activities include design and development of horizontal machining centers, flexible machining systems, transfer machines and automated assembly systems.

The 33-year-old enterprise attaches these capabilities to the needs of the world’s leading automakers including Ford, General Motors, Mercedes, Volkswagen and John Deere, among others. “Essentially, we work with companies that place their own technology upon a set of wheels, whether it be a car, truck, tractor or highly specialized piece of equipment,” describes Christian Muller, Grob Brazil’s vice president in charge of sales and project management.

Established in 1956, the company is the Latin-American extension of the Germany-based Grob organization, which was founded in Munich in 1926 and subsequently engineered innovations such as thread-milling and thread-rolling machines, special machine tools and transfer lines.

Contributing to the parental corporate mission, this Brazilian enterprise provides critical elements that comprise highly engineered systems that demand optimal levels of flexibility and productivity.

SOUTH AMERICAN EXPANSION
Today, the larger Grob operation – a family operated business with nearly 3,000 workers – extends its reach across continents. “There’s no region where it hasn’t established customer contact and solidified its reputation as one of the world’s finest machine tool builders,” relates Muller.

Managed by third-generation owners, Grob boasts an extensive portfolio that ranges from production systems, universal machining, stand-alone machines, complex flexible machining systems, assembly and automation systems, to complete production system solutions.

At about the mid-point of its 83-year existence, Grob decided to invest in international production facilities, a direction that led to Grob Brazil’s creation. “Specifically, Grob expanded into South America to address the growth and emerging needs in the automotive sector in that region of the world,” says Muller.

Now, the Sao Paulo-based Grob Brazil is a well-muscled arm of this sweeping operation that includes another satellite production site in Bluffton, Ohio which, along with Grob’s Brazil plant, complements the main plant in Mindelheim, Germany. Combined, the German, Brazilian and U.S. plants enable Grob to offer customers, wherever they’re located, the best possible prerequisites for part production.

Grob’s organizational structure also includes sales and service offices in China (Beijing and Shanghai), South Korea (Seoul), Wellesbourne (Great Britain) and Saltillo (Mexico). In addition the company has representation in France, India, Italy, Sweden, Spain, the Czech Republic, Slovakia and Turkey.

A MORE VIABLE OPTION
While major components are produced in Germany, Grob Brazil designs, engineers, manufactures and tests flexible machining systems at its own facility. “We try and match the right equipment with a customer’s specific requirements as it relates to automation,” describes Muller. “Typically, the kinds of companies we work with can either produce everything on their end manually or they can work with an outside organization that provides automation. But we offer a second option that provides everything and, in turn, is less expensive and labor intensive.”

Grob Brazil’s Sao Paulo production facility is a 25,000-square-meter plant, staffed by 730 employees and comprised of engineering, fabrication, assembly, planning and purchase, and sales areas, reports Muller. “We’re particularly focused on machining competence related to various components for cars, trucks, tractors and special equipment,” he adds. “Essentially, we offer a variety of solutions that meet customers’ specific requirements.”

Further, the Brazilian branch is vertically integrated. “We don’t purchase anything from the outside. All of our activities, whether involving design or fabrication, are completely accomplished in house,” Muller points out.

The facility’s core competencies related to the most important manufacturing tasks – and applicable to cast or forged components for the automotive industry – include metal cutting operations, partial and complete assembly and inspection operations for quality assurance.

As far as products and services, its machining centers provide individualized solutions for flexible manufacturing tasks, modular design and dynamic design (that is, high velocities, high accelerations, high spindle speeds). Moreover, in the area of modular transfer, Grob Brazil provides its customers with the parent company’s newly developed, integral modular system that enables transfer line flexibility as far as height and expansion.

GROWTH SPIKE
Because of its regional activities and position within the global structure, Grob Brazil was confronted with the challenge to grow at a substantial rate, and it responded well. According to Muller, the company experienced reasonable growth levels in the 6- to 8- percent range until 2007. Then, last year, the business witnessed a spike of 37 percent, a rocket-shot fluctuation that Muller attributes to regional industrial market circumstances. “Expectations and sales in the automotive industry in our region increased so rapidly that we invested in new equipment,” he explains. “In addition, because of our size and unique structure, we were able to attract about 75 of the region’s largest projects.”

Realistically, the company understands that it can’t see a repeat spike. Still, when you crunch the numbers, as Muller has, the future looks promising. “While we’re looking at a 10 percent decrease in 2009, the overall numbers reveal a 27-percent increase over what we were doing in 2007 and in previous years,” he indicates.

He attributes the decrease to the global financial crisis and its enormous negative consequences to the international automotive industry. “In Brazil alone, the number of cars sold in recent months decreased by 30 percent,” he reports. “As a result, our auto manufacturing customers curtailed or re-arranged their investments and aren’t making equipment purchases. Basically, they’ve assumed an ‘on hold’ status and are waiting to see how things will play out in upcoming months.”

Grob Brazil remains optimistic. “We anticipate increased activity by May of 2009, with companies returning to investment levels that will be relatively normal,” says Muller.

Still, the current economic situation and, in particular, the South American market situation compelled Grob Brazil to modify company strategy. “We’ve increased our focus to not only include the major automotive manufacturers but also the tier one to three automotive industry suppliers, to offer them our stand-alone machines as well as smaller machines, which we will sell at competitive prices to gain entrance into this market. This movement will help reduce our risks relating to fluctuation in automotive production.”

A FULL GLASS
Optimism is further bolstered by the fact that the company recently reached the upper limits of its sales capacity. “Looking at 2009, we see that we’re completely full, and that’s very reassuring,” says Muller. “Despite a crisis situation, where automotive companies have placed themselves on hold, we’re well positioned to wait out the storm. Full capacity provides us the cushion to work on our new strategy. Also, it won’t force us to reduce product turnover or reduce our staffing levels. We won’t have to lay off anyone.”

In the meantime, Grob Brazil is seeking to expand its production activity from Brazil and Mexico to other areas in the world. “We’re currently engaged in proposals for projects in France and India,” Muller reports.

Indeed, befitting its position within an international organization, Grob Brazil will assume a more global perspective. Subsequent efforts will be enhanced by its location. The Sao Paulo production facility is situated close to Atlantic Coast seaport centers, which provides a significant advantage as far as product exportation, indicates Muller. Whatever shores the company touches, customers will be assured the most reliable and innovative product characterized by the highest levels of quality.

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