May 26, 2012 Top Management

Volume 15 | Issue 2

Although it’s only in its “adolescent phase,” in a short time, Brazil’s Guimar Engenharia has managed a lot of important engineering project

In the late 1980s, Cyro de Oliveira Guimarães Filho, engineer and director of development at Aracruz Celulose, the largest cellulose manufacturer in Brazil, was given the task of managing the expansion of the company’s main facility in the Brazilian state of Espírito Santo. At the time, the US$1 billion dollar undertaking constituted the largest project of its kind in Brazil. To carry it out, Guimarães Filho assembled a top-notch technical team that brought together talented engineers and project managers from various backgrounds, many of them with over 30 years of professional experience.

Upon the project’s completion, the new plant was deemed such a success that the team that had made it all happen couldn’t stand the thought of breaking up. So they didn’t. Instead, in 1990, Guimarães Filho, together with 14 key team members, pooled together their talents and started up a company of their own, in Rio de Janeiro, dedicated to management of large-scale industrial and construction projects. Fittingly, the new company’s name and logo, Guimar Engenharia, paid homage to both its founder team (“GUIM” of Guimarães) and the original project that the team was formed (“AR” of Aracruz).

COMPETITIVE ADVANTAGES
“Guimar came into being at a very propitious moment,” confesses the company’s president, Heródoto Monte. “During the late ‘80s, Brazil had been suffering under the weight of massive inflation rates – of up to 28 percent a month – which had a crippling effect upon investments for large public construction projects. At the time, many of Brazil’s largest consulting engineering companies that rendered services predominantly to such public projects were floundering due to the stagnant market and the subsequent loss of the highly specialized professionals that worked for them.”

In the early ‘90s, when big projects in the private sector began to proliferate, some of these traditional companies tried to migrate into the private sphere. However, they found themselves confronted by a fiercely competitive market in which clients were investors with concrete ideas who demanded rapid responses, rigorous meeting of tight deadlines, and strict adherence to tight budgets. While many of them were not prepared to meet such demands, Guimar was. Fresh off its Aracruz success, from the outset the company focused exclusively on private sector projects. Despite its small size, Guimar was primed to take on new challenges.

Fortunately, such challenges appeared almost immediately. The company’s first contract was managing the building of a plant for Bahia Sul Celulose (today Suzano Papel e Celulose and one of the largest producers of pulp in the world). No sooner had it completed this project when it was hired by Brahma (today Ambev), one of Brazil’s largest breweries, to expand its production facility in São Paulo – and then to manage the construction of brand new plants throughout the country.

By the late ‘90s, Guimar was branching out both territorially and in terms of new market segments. In search of new opportunities, the company signed contracts to manage projects in both Argentina and Venezuela. It also took advantage of the beginnings of what would, in the 2000s, develop into an unprecedented civil construction boom, by creating Guimar Empreendimentos Ltd. Specializing in the development and construction of residential buildings and condominium complexes, in 2002, this company was fully incorporated into Guimar Engenharia.

In the 2000s, in an attempt to consolidate its presence in the market, Guimar made a serious effort to expand its range of activities. Aside from offering integrated engineering services – EPCs and EPCMs – the company sought to operate as both a business developer and investor as well. With this goal in mind, Guimar invested heavily in both its in-house team as well as in external partnerships with companies that could offer added value to its products. In 2006, it was also one of a host of other Brazilian engineering companies that teamed up to offer EPC and EPCM solutions by creating a new company Tridimensional Engenharia.

“Integration and cooperation between multiple companies is key to meeting the new demands of an increasingly complex market,” says Monte. “We put a lot of effort into creating networks of suppliers and partners that are highly dynamic and allow us to offer our clients differentiated, high value services that, while they involve higher risks, also allow for greater profits.”

IMPORTANCE OF HUMAN RESOURCES
In terms of profitability, Guimar has done remarkably well for itself over its two decades of activity. Currently, the youngest player among the top 15 biggest engineering consultant businesses in Brazil, in recent years, the company has enjoyed robust growth rates; between 2010 and 2011, revenues increased from R$145 million (roughly US$ 84 million) to R$200 million (US$ 116 million).

Meanwhile, opportunities for future growth certainly aren’t lacking. Despite global instability, Brazil itself possesses an important consumer market that continues to drive demand in commercial, agri-business, and construction segments. The country’s hosting of the 2014 World Cup and 2016 Olympic Games have translated into an unprecedented number of infrastructure projects. The mining industry is doing well and the discovery of pre-salt petroleum deposits off Brazil’s coast promises a boom in the oil and gas segments.

And yet, despite all the potential for growth, Brazil faces a big challenge; the scarcity of qualified labor, particularly engineers. “This state of disequilibrium between supply and demand translates into increased salaries and higher costs for engineering firms, which in turn can compromise competitiveness, not to mention quality and growth,” says Monte.

In this context, Guimar’s absolute commitment to building and maintaining a strong team of professionals has proved to be a valuable trump card. Today, the company employs a staff of 1,200, distributed between its headquarters in downtown Rio de Janeiro and 13 commercial and technical support offices scattered strategically throughout the country. Consisting of engineers, economists, administrators, and specialists in diverse segments, Guimar’s collaborators undergo constant training, particularly in terms of project management skills, based on the Sistema Guimar de Engenharia (SGG), a project management system developed by Guimar with a view to capital projects. Incorporating the most advanced – and constantly updated – methods practiced around the world, the SGG provides a detailed framework for the management of the most diverse projects.

And, indeed, in recent years, Guimar has managed projects ranging from oil and gas giant Petrobras’ Brazil-Bolivia Gasoduct and media giant O GLOBO’s newspaper plant to the construction and expansion of various facilities owned by Brazil’s largest steel mills, petrochemical, pulp and paper, and mining companies, including VALE, which in 2011 honored Guimar with a “Best Management Supplier” Award. In the same year, Guimar was also elected Engineering Company of the Year (in the Project and Consulting category) by the industry magazine, O Empreiteiro.

Big contracts and important accolades aside, Guimar is not one to rest on its laurels; instead the company has its vision firmly focused on the future. “In chronological terms, Guimar is still only in its adolescent phase,” points out Monte. “In the last 21 years, we’ve overcome a lot of the normal difficulties encountered by fledgling companies, not to mention the consequences of ‘miraculous’ national economic plans and international financial crises. Nonetheless, we’ve not only survived, but thrived – as always, due to our team of highly specialized professionals, our commitment to results, ethics, and the quality of our services. We never lose sight of the fact that our human resources are responsible for our success and for ensuring that we remain at the vanguard of the engineering segment.”

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