January 26, 2009 Rise of the Machines

Volume 12 | Issue 1

Almost six decades after Newton Emelino Masutti built his first shears and press brakes, Newton LTD is today one of the most important

In 1950, at only 18 years of age, Newton Emelino Masutti opened his first shop to begin developing his own machines. After working at an uncle’s business, Masutti learned how to fix and put together commercial machinery and decided to begin building industrial level machinery himself. As business grew stronger, he sold his machines to machinery distributors across the state of Sao Paulo. All the profits were reinvested to buy more raw materials to build more machines. By 1953, Masutti had already developed a complete line of machinery that would later form the core of a solid enterprise.

As the business diversified Masutti started production assembly in the city of Limeira, where he also produced drills, and in 1962, his first mechanical shears, selling both to Brazilian customers as well as to customers in Chile. His first client abroad was a machinery distributor called Sande. “This company is our commercial partner up until today,” says Newton Eduardo Masutti, the son of the company’s founder and today’s Newton’s Commercial Director. The doors continued to open for Newton, as Sande had branches in other countries such as Argentina and Mexico.

Although most of its sales were still made in Brazil, the amount of mechanical shears and press brakes sold increased exponentially in other countries such as Uruguay, Venezuela and Peru, where the sales were counted by the thousands, considered quite an accomplishment at the time. Most of Newton’s business was driven through machinery distributors both in Brazil and abroad up until 1990. “In 1990, most commercial partners stopped buying our machines and we were obligated to try to reach out to the actual companies and individuals who used our product,” remembers Masutti. This was a big deal for Newton because it was an opportunity to learn what its clients actually needed. “We went from selling our machines to distributors who always bought the same equipment, to actually asking our clients exactly what their needs were.” It was a big shift and later proved essential to retaining a place in the market and also to consolidate Newton’s position as one of the most important manufacturers of shears and press brakes in Latin America.

THE CLIENT IS ALWAYS RIGHT
As soon as the company restructured itself to fully meet its customers’ needs, it was clear it had to enhance its operation. “Our vision changed 360 degrees,” says Masutti. “The machines we made up to that point were modified and new models were created in order to satisfy our new business partners.” Because clients needed a product that was more sophisticated and that provided more flexibility, Newton began producing a new line of shears and press brakes that incorporated new features such as hydraulic systems and numerical controls. These products sold well among old and new clients in the auto, railroad, bus and oil industries, as well as some machinery distributors.

Newton then went beyond the new features and decided to customize the machines on a client by client basis, which enabled it to satisfy a big chunk of the market demand. Newton listened to clients’ needs and started building machines that fulfilled expectations 100 percent of the time. Along with this level of attention, Newton built and maintained a complete inventory of spare parts. The company also trained technical assistants and, as an option, the service of having a mechanical, hydraulic or electronic technicians traveling to their site to instruct workers on how to fix and operate the equipment. In the past, when a client bought a machine, he would have to follow the manual in order to learn how to use it, because the distributors had no operational knowledge. The level of commitment the company acquired with its clients prompted Newton to look beyond borders in order to improve its technology and even to purchase equipment in countries such as Turkey and China, and thereby adapt it to the local and regional markets. “Although most of our sales were made in Sao Paulo, our product soon found more demand in states like Rio Grande do Sul, Santa Catarina and Rio de Janeiro,” says Masutti. Each of these regions meant different clients and different needs and that is why Newton looked for ways to apply its technology to meet those new expectations. At the time hydraulic press brakes as well as shears were more popular than their mechanical predecessors, so Newton started to shift towards that side of the business.

A PRODUCT THAT MAKES THE DIFFERENCE
According to Masutti, once Newton became the leader in the production of shears and press brakes in Brazil, the next step was to maintain such leadership against foreign companies that arrived in the country after the government opened the local market to international enterprises. The fact that Newton had partnerships with companies in Europe allowed it to cope better with its new rivals. Newton imported electronic components, some hydraulic systems and special parts in order to offer equally sophisticated models. Newton specialized in hydraulic shears with fixed angle with minimum value that reduce the distortion in small dimensions cutting; as well as those with variable angle. These machines incorporated swing bean cutting systems, frontal support arms, proportional padded cutting boards, electrical cabinet, high quality blades, emergency stop button and numerical controls. The numerical control allows operation in manual or automatic mode and controls the back gauge positioning, cutting length and blade gap adjustment, providing cuts with a small margin of error. Overall, the new hydraulic shears made the work safer and more precise.

On the other hand, the new hydraulic press brake offered a new level of precision while making its operation simpler. In this new model, the press was driven by hydraulic cylinders attached to the machine’s main structure, which provided more control to the operator. The press also allowed the metal sheets to be bended using manual, semi-automatic or automatic cycles. These three systems made it possible to bend the sheets “on air” as supposed to bending them against the angled frame. “It was a great option we added,” says Masutti. “The mechanical properties of metals such as steel or aluminum are variable, and so is the purpose each of the clients want to use it for; therefore, it is important to facilitate that choice to them.” The new presses were finished with details such as optical laser sensors, LCD screens to visualize the processes of bending and programmable tasks, which are implemented through an easy to use key-pad. The other line of press brakes, the SYNCHRO, adds the capability to perform off-center bending. The SYNCHRO system works through a series of valves and measuring elements which are guided by a computerized numerical control (CNC).

THE BENEFITS OF HIGH QUALITY
Although the goal of most businesses is to make a profit, in the case of Newton it was not the only one. In fact, in order to assure significant revenues, the company looked at itself inside out and made it its goal to fill the market’s needs. After 2000, when Newton had already adopted ISO standards, the company began to experience the greatest growth in years. The initiative to import components such as safety and hydraulic systems from Europe paid off significantly. Newton’s client list expanded to companies that fabricated metallic structures, agricultural machinery, trucks and others.

While the last two decades of the 20th century were very profitable for Newton, sales were brought to a new level after the turn of the new century. “Due to circumstances of the market our exports diminished from 35 percent in the ‘80s to about 25 percent in the ‘90s, and we saw this fact as a new opportunity to reinforce our position in Brazil,” says Masutti. “We paid even more attention to delivery times and better technology.” Newton soon added business partners the likes of Embraer, Marcopolo, Petrobras, Usiminas, CSN, Vale and Volkswagen to its list. The company’s sales increased greatly, especially after 2005. While in 2004 the growth rate hit 15 percent, it reached 35 percent from 2006 to 2007 and 40 percent from 2007 to 2008. Currently, Newton produces some 400 units annually, utilizing only one working shift per day. According to Masutti, if necessary, the company is capable of tripling that number.

Investment is another reason why Newton held its place in the market. The company uses some $3.5 million a year – or about 8 percent of its sales – to maintain and update infrastructure in its 18,000 square meters. The money is also channeled into training its 250 workers Masutti believes that the upgrades along with great customer service and the use of the latest technology are the reasons for the company’s increased revenues. In 2005, for example, Newton had $12 million in sales. In 2006, it increased to $14 million, jumping to more than $26 million in 2008.

Newton continues to build on its legacy as it searches for new ways to deliver a better product. Currently, the company is trying to develop a more compact assembly line that improves quality, profitability and reduces operating costs. “Our success is really a statement of what one can achieve when determination and good business practices are applied,” says Masutti. “We are lucky my father had both things in mind when he started this business in 1950 and now the fruits of his vision have materialized.”

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