In the late 1960s, during a time when Brazil was experiencing an explosion of new businesses competing for public infrastructure investment capital, a small entrepreneurial group in Campinhas, Sao Paolo took a risk: They borrowed money for a truck, a compressor roller, and an asphalt boiler and bid on a city construction contract. They landed it – and ended up completing all the earthwork, construction, and paving for the sewage system of the city of Florida Paulista – and thus began what is now Equipav S.A. Pavimentação, Engenharia e Comércio (Paving, Engineering, and Trading).
Now, 48 years later, that small venture has grown from a handful of partners with three pieces of financed capital equipment, to a conglomerate that is one of the main providers of infrastructure services in Brazil with more than 6,500 employees. Today, the Equipav Group is a private well-funded company comprised of 12 diversified companies including agricultural food products, and services ranging from paving and mortar work, to private road operators, environmental landscaping, and sanitation companies operating all across the country. Equipav’s first major expansion in 1974 created Concrepav, a separate unit to produce the company’s own concrete. In 1980, Equipav broached the agribusiness sector opening up the Equipav Sugar and Alcohol Limited Corporation in Promissao, Sao Paulo. In 1988, it opened Minerpav in Piracicaba to oversee mining exploration and perform earth tremor monitoring in rock explosions, and in 1991 it started another company called Sarpav in Barueri, SP. In 1997, with the development of PavMix mortar, the Pavmix Mortar Factory was born in Compinhas.
In addition to producing the energy needed for its operations, Equipav sells sugar, alcohol, and yeast products throughout South America and the Caribbean, as well as actively exporting to the European Union, the Middle East, Asia, and West Africa.
FLEX-FUEL DRIVES COMPANY GROWTH
“One of the major advantages of growing a company in Brazil at this time was the support of the government.” says Newton Salim Soares, Equipav’s Chief Executive Officer. “For Equipav, this meant getting their help procuring much needed flex-fuel equipment trucks (carro flex) to do their electrical work. With technology advancing so quickly in the country, 200,000 carro flex are manufactured every month, and now 85 percent of the vehicles made in Brazil have the ability to run on either gas, alcohol, or both together.
“This fact opened other doors for Equipav in terms of ethanol production from our factories.” says Soares. “With growing technology, we are faced with the constant need for ethanol fuel. And with car engines able to work on all gas or all alcohol or any mix of the two, if a customer could ask for his own mix, he might be happier. Ethanol has an advantage for the consumer.”
New companies were originally created to meet the needs of Equipav’s paving company, however operations showed such a consistent pattern of excellence that each of their fledgling business units catapulted from small start-ups to quickly profitable independent companies now serving some of the largest private and municipal enterprises in Brazil. Currently, the Equipav Group is comprised of Equipav Paving, CBC (formerly Concrepav), Pavmix, Minerpav, and Sarpav. In 2011, the group is planning to inaugurate two new management offices, one in Chapadao do Sul in Mato Groso do Sul and the other at 2012 Chapadao do Ceu in Goiás.
The Equipav sugar and alcohol factory has expanded into new markets, establishing production records in animal feed ingredients, renewable fuels, and biomass and carbon energy sources. When the factory began producing crystallized sugar from raw sugar cane in 1993, its output for the year was 250,000 50-kg sacks. This quadrupled to one million sacks the following year, requiring major expansion and investment in more grinding equipment. By 2006, production reached five million sacks of sugar and market transportation methods were revised that cut total costs by 15 percent.
In 1997, Nutripav, a dry yeast supplement for animal food made from sugar cane, providing protein and healthy trace nutrients, was added to the product line. The factory conforming to ISO: 9002 and acquiring PDV certification in 2003 enabled Nutripav’s exportation to the European Union, which contributed significantly to sales. Yeast harvest is expected to reach 6,000 tons for the 2007/2008 season.
The factory also produces alcohol from sugar cane for ethanol fuel. The factory’s first harvest in 1982 produced 28 million liters of alcohol. The following year, production more than doubled, and by 1992 had reached 160 million liters. With consistent annual growth, the 2007/2008 harvest is expected to be approximately 240 million liters.
A second large alcohol and sugar unit, BioPav, is being built in the city of Brejo Alegre, about 70 kilometers from Promissão, and will provide output from its first grinding process in 2008. It will be equipped with the very latest technology and machinery and within a few years will be capable of processing 6.2 million tons of sugar cane annually. Both factories together will be the largest energy producer in Brazil by 2009. Equipav will be investing US$600 million ($R700-800 million) into BioPav. Together, projections indicate, both factories will make that investment back within three to four years.
Expectations include processing 4.5 million tons of sugar cane into approximately 214 million liters of alcohol. This places the factory in seventh place for total alcohol production and second place for total anhydrous alcohol production in a national ranking of all alcohol and sugar producers in Brazil. Soares explained that since this year was Biopav’s first harvest, future harvests would be much larger.
Brazil suffered a memorable “apagão,” or blackout, in 2001. Shortly afterward, in 2002, Equipav ventured into renewable energy by building a thermoelectric plant at the sugar and alcohol factory in Promissao. Only the third factory in Brazil to do cogeneration, this would produce heat energy for the cane mill, and electricity, where excesses are typically sold onto the consumer electric grid. Co-generation is considered “greenhouse gas-neutral” since the CO2 emissions are generally equal to the amount of CO2 that sugar cane draws from the atmosphere during growth.
The factory produces sugar cane biomass as a residue from crushing the stalks into “bagasse” to extract their juice. While providing an environmentally friendly solution to residue disposal, this move resulted in long-term energy security and additional income as well.
In 2006, having become energy independent, the factory generated 270,000 MW of energy. This provided all the factory’s energy needs with a margin of 160,000 MW that was marketed. The results proved so favorable that construction valued at R$107 million began on a second co-generation plant that same year, rated to produce 400,000 MW in the next two years.
Colepav’s buildings and facilities occupy a 3,000-square-meter area in Campinas containing garages, storage buildings, maintenance boxes, washing containers for compactor vehicles, and management infrastructure. It was started in 1993 in Barueri to handle industrial waste management and collection in much of the state of São Paulo. In 2005, Colepav collected 120,000 tons of waste. Adding environmental preservation to its roster of services in 2006, it was then maintaining more than 450 industrial contracts in metropolitan São Paulo, Campinas, and São José dos Campos. Contracts involve collection and transportation of industrial and hospital waste as well as residues from the Sewage Treatment Facilities (STF) of Sanasa, and basic sanitation in Campinas. Colepav is the first company of its type to develop and introduce automated data gathering of client information.
Since 2006, Colpav has contracted with the Campinas city hall for all urban maintenance, including conservation of green areas and vehicles and equipment maintenance. Other environmental work may mean probing contaminated areas, providing risk analyses of contamination degree/type, and proposal/administration of treatment plans. Renewal of environmental conditions can involve restoring native vegetation after contamination removal. Solution options include “in situ” treatments, which address contamination without removing residues, allowing clients to maintain control on their property.
Colepav prides itself in its occupational health, safety, and environmental policies, which are integrated into the principles of the “Ação Responsável” (Responsible Action) program stressed in all units of the Equipave Group.
The Equipav Group manages four public franchises providing services (highways, water, basic sanitation) throughout Brazil. By 1999, it was revving up to take on highway concessions, the first of which was Rodovio das Colinas in Itu, SP, with a company that would focus exclusively on construction and maintenance, signal design/installation, and well-engineered traffic flow and crossings.
Rodovia hit the ground running and today shoulders responsibility for 299 kilometers of roadways spread over four major highways in 17 cities in the southeast of Sao Paulo state. It has also worked in Univias, located in Rio Grande do Sul, Caxias do Sul, Lajeados, and metropolitan Porto Alegre; Águas Guariroba, which supports the residents of Campo Grande in Mato Grosso do Sul, and Caminhos do Sol, which is managing construction of the Araguaia River bridge in Goiás. Among the franchise companies that serve Brazil, Equipav’s construction can be found on such main Brazilian highways as Marechal Rondon, Castelo Branco, Washington Luís, and the bypasses in São Paulo and the Viracopos Airport.
Equipav also manages a number of 25-year franchises such as Nascentes das Gerais, a partnership with Minas Gerais state for highway operation and administration and the first Public-Private Fellowship on Brazil highways. Another is Prolagos, begun in 1998, which covers five cities in “Região dos Lagos” (Region of the Lakes) of Rio de Janeiro: Cabo Frio, Búzios, São Pedro da Aldeia, Iguaba Grande, and Arraial do Cabo. Intended to increase the quantity and quality of the water, it now provides potable water for 91 percent of the population (the 1998 index was 30 percent) and is constructing a supply and treatment sewage facility that will serve 46 percent of the population when completed.
All of this activity has led to explosive growth. Up to now, says Soares, that growth has been organic but recently Equipav has studied the possibility of a merger with another company. “Our priorities,” says Soares, “are the environment and our employees. We have changed our processes to eliminate the burning of the sugar cane and much of the heavy labor by providing latest technology heavy machinery instead to accomplish the harvest. Factory residues are recycled, and we’ve added modern water reutilization systems and systems that monitor and control launching of particulate matter into the environment. In addition we are constantly investing in technology, training, and attracting and hiring the best professional workers, assuring that the workplace is the best it can be to develop their skills, and that they use the most modern equipment. Equipav now has the highest level of mechanization, used with great respect for the environment and the community.”