The global financial downturn of 2008/2010 drove many automobile manufacturers into the curb, simultaneously running their suppliers off the road. The increase in fuel prices, and raw materials resulting from the credit crunch forced companies to implement creative marketing strategies to entice reluctant consumers as most experienced double-digit percentage declines in sales. As major manufacturers, including the US Big Three (General Motors, Ford and Chrysler) and Toyota tightened their belts, offering substantial discounts across their lineups, and engine parts suppliers inevitably felt the pinch.
For Metalúrgica Riosulense S.A, Brazil’s leading supplier of valve guides, valve seats and mechanical valve tappets the crisis inspired strategic planning that steered the company through difficulty without losing ground. “Operating in the domestic and external aftermarket for automotive parts and in both the domestic and international OE market, we looked for ways to improve our performance to maintain success,” explains CEO Luis Antônio Stramosk.
The company’s main product is valve guides, with more than 2,000 different varieties for almost every vehicle manufactured in Brazil, including heavy-duty applications, the versatile component is found in millions of engines.
Valve seats are also an important component manufactured by the company. More than 1,500 varieties of valve seats are used by customers in Brazil and abroad and are supplied in both semifinished and raw states.
Production methods and materials for tappets (the opening and closing mechanisms for valves), and cylinder liners, which are also leading products, are similarly important in the efficiency and success of Riosulense’s machined parts. Tappets made from iron that is chilled over a metallic surface to create the desired shape and tempered to achieve the correct hardness are considered a benchmark in the industry and the technique of coating the inner part of the cylinder makes the parts extremely resilient. “We are constantly updating our lines, production methods and improving the materials we work with,” Stramosk says. “We are currently investing in a line of intake manifolds (pipes that carry fuel to the engine) as a means to increase our participation in that area of the market,” he adds.
Over 500 different parts are produced at Riosulense’s 10,000-square-meter factory in located in Rio do Sul in Santa Catarina. “The extent of our lines means that we do not depend on one component for sales, neither are we defined by a specific part or project,” Stramosk explains.
Investment at Riosulense is directed at balancing the income from the respective markets with innovation and new products. Research for new products and materials is carried out in conjunction with clients as a part of the partnerships that the company enjoys and promotes. At present, an engineering department at the facility is responsible for the design and composition of any additions to the product lines. However, due to the consistent expansion of the company, a new research and development center is scheduled to open this year. The center constitutes an investment of between $5 and $10 million and will further amplify the main plant in Santa Catarina.
Also added to the company’s infrastructure this year is a second foundry. The state-of-the-art facility, which adjoins the existing factory, has a production capacity of 2,000 tons per month and increases total staff at the plant to 1,200.
The improved infrastructure has allowed the company to meet the requirements of the domestic market, which has compensated for the sharp decline in exports caused by the devaluation of the US dollar.
FOUNDING THE FUTURE
A tremendous track record and sound infrastructure sets Riosulense in excellent stead for the future. A strong after sales service shows the company’s concern for repeat business and the importance of quality.
The replacement parts industry is also booming due to increased maintenance on existing diesel vehicles. Government incentives and a booming economy are promoting the car industry in Brazil, which is also good news for Riosulense.
“The new foundry will also open more opportunities for us in the future. It is our intention to break into the rail and naval industries – manufactured cast and machines components for ships, trains and cargo equipment,” explains Stramosk. The efficiency of the processes permits the production of new parts at lower costs, which will transfer to more cost effective components for the clients, who are primarily manufacturers of diesel engines.
With 100 percent Brazilian technology, Metalúrgica Riosulense S.A has emerged from the automotive crisis a clear front runner. An increased infrastructure and international partnerships have helped maintain the lead and reinforced the company’s status as a reference in cast and machined diesel engine components. Whether for the OEM or after market industry, Riosulense has shown the world time and time again that it is an important and integral part of modern motoring.