A late-comer to the global crisis and one of the first to emerge from the economic slump, Brazil is now the world’s tenth biggest economy. With GDP that has grown on average of four percent this decade, its natural resources, low production costs and well-trained workforce attract foreign investments.
These are facts that few have managed to transform into economic reality with the same impact as Metso, a global supplier of technology and services to industries such as mining, pulp and paper, construction, energy, oil and gas. The multinational, originating from Finland, employs around 2,300 people in Brazil, which is its third largest market in terms of net sales. Brazilian operations recorded net sales of €591 million ($762 million).
Doing Business in Brazil
With roots dating back to 1919, Metso has an extensive knowledge of the Brazilian mining industry, supplying comprehensive process lines for copper, gold, iron ore and bauxite production. Since the start, the company’s history has been defined by the constant improvement of its crushing equipment, which led to the inauguration of the crusher manufacturing plant in Sorocaba, São Paulo in the 1960s. Today, as well as mining applications, mobile crushers are used in infrastructure and building projects in the construction industry.
In the automation sector, Metso’s main customers are in the paper, pulp, energy, oil and gas industries. The development and increase in ethanol production offers promising potential as an alternative fuel and a growing national industry.
Metso’s customers include major local and global producers of paper, board and pulp. Brazil’s abundance of fiber raw materials makes it one of the fastest growing pulp industries in the world. In the 1970s, Metso set up its first fiber technology representative office and subsidiary.
The expansion of operations in Brazil established Metso as a strong brand in the country. “Brazil continues to be a growing market with great potential for us,” says Celso Tacla, President of Metso South America. More than making the most of Brazil’s natural and economic advantages, multinational Metso is committed to local communities and has achieved excellent results for the country.
References and Results
Since embarking on its fruitful journey throughout Brazil, Metso has supplied more than 9,000 rock and mineral crushers and over 200 grinding mills for coal and minerals. The list of mines that have relied on the company’s equipment is extensive and includes projects for some of Brazil’s largest mining and engineering giants such as Odebrecht and Vale.
The Serra de Sossego Mine in Pará state, operated by Vale, is the largest copper mine in Brazil and processes 15 million tons of ore and 462,000 tons of copper concentrate annually, constituting 140,000 tons of copper and 3.5 tons of gold. Metso is one of the most important equipment suppliers to the mine. A specialist in bulk material handling, Metso provides feeders, pumps, conveyor systems, crushers and mills.
Since 1975, the company has also produced more than 100,000 valves and 100 analyzer installations for the pulp, paper, energy, oil and gas industries. The number of systems installed increased from 21 to 52 between 2003 and 2006. Metso has been supplying Suzano e Votorantim since the 1980s and 1990s, respectively, with valves and quality control systems. It provides pulp and cellulose processing equipment to most of the other major producers in Brazil.
In the northern state of Maranhão, Suzano Maranhão is currently one of Metso’s largest projects in the paper and cellulose sectors. “We are supplying equipment for every area of cellulose production,” confirms Tacla. The technology and services include wood handling machinery, pulp drying and baling, evaporation and a power boiler, recovery boiler and causticizing kiln.
The project, due for completion in 2013 is the largest ever received by Metso in the world and one of several that it has undertaken for Brazilian customers. Since 1980, the company has supplied a further three wood yards, seven fiber lines, two additional pulp drying lines, one board machine, one MDF plant, recovery boilers, two evaporation and six recovery boilers to the country’s growing industry.
Participating in important mining, paper and cellulose and construction projects, Metso has experience in working all over Brazil. By the turn of the century, the company identified a need to centralize production and operations and were united under one roof in Sorocaba, São Paulo. The manufacturing facility also houses the first technology center supporting fiber and paper industries, a new rubber and polyurethane plant and a foundry. “The Sorocaba plant is Metso’s largest in Brazil, and manufactures our equipment as well as maintenance workshop and distribution center,” says Tacla.
Metso’s products include jaw and cone crushers, vibrating screen and screening media, mobile crushing plants, wear products, mill linings and pumps. The foundry produces steel components, low alloy steel and high-chromium white iron used for specific parts such as earth moving equipment.
In addition, Metso operates regional units in Belém, Belo Horizonte, Parauapebas, Rio de Janeiro, Aracruz, Curitiba, Araucária and Guaíba in the mining, automation and pulp, paper and power industries.
Together with the sales outlets and representative offices, Metso’s headquarters in Sorocaba marks the company’s formidable presence in Brazil. Coupled with a strong commitment to a growing customer base and excellent references, Metso remains a leading brand.
However, the company is far from resting on its laurels. “We anticipate strong growth potential in Brazil in the coming years. The country is a regional powerhouse with strong demand for infrastructure. The power generation is expected to grow. Biomass will replace coal and mining and is predicted to increase by 13 percent per year, or by $35 billion,” explains Tacla. His outlook is positive for the company, which initiated many important projects in 2011, due for completion in 2013.
In 2012, Metso opened an engineering service center in Araucaria, constituting an investment of approximately $20 million, and in 2013 a new center costing around $10 million is planned in Maranhão. “Covering all of Brazil, our investments here follow global trends of increased confidence in the performance of the emerging markets. Today, more than 50 percent of our global revenue is generated by developing countries,” Tacla explains.
Especially in the paper and cellulose sector, there has been migration of the industry from the northern to southern hemisphere (from the United States, Canada and Scandinavia to Brazil, Chile, Indonesia, India and China). In particular in Brazil, experts estimate an investment of $20 billion in the nation’s forest base and in the construction of new mills. Brazil has the third largest paper industry in the world.
Despite favorable conditions, resources, climate and economy, making it in the emerging market is not easy. Brazil wrestles with complicated and high import duties, and companies suffer at the hands of taxation and fluctuating exchange rates. Furthermore, restricted logistics in harbors and terminals hampers distribution. The obstacles however, are a credit to Metso’s success.
On the subject of success Tacla is resolute. “Even though we have the best technology for mining, paper and power industries, our biggest differential is our staff.”
Multinational Metso’s engineers and specialists attend clients locally, speaking their language and understanding their culture. The heavy investment in South America has been successfully implemented by the company’s people, who categorically epitomize the company’s competence.