March 26, 2009 Wheels of Fortune

Volume 12 | Issue 2

MWL Brasil has been producing wheels for the locomotive industry for 10 years.

The railroad network in Brazil is significantly more limited than in more developed countries. It is used primarily for the transport of commodities and cargo to the country’s various ports for shipping overseas. Historically, the railroads were maintained by the Brazilian government until 1997 when the decision to privatize the network changed the business dynamic for companies linked to the industry.

The sale of stretches of railroad to private investors and the subsequent improvements generated a surge in the locomotive industry and many companies were created to satisfy the new demand. MWL Brasil was founded in 1999, benefiting from the increased number of trains, to manufacture forged wheels, axles and blanks for gears. In the following years the company grew successfully together with the private railway investors.

Today, MWL is the only producer of forged railway wheels in South America, fulfilling international standards ISO: 9001: 2000 and AAR M-1003 (standard issued by the Association of American Railroads).

MWL’s products are separated into two divisions: railroad and industrial products. In addition to railroad wheelsets, forged wheels and railway axles (manufactured under the railroad line), the company produces crane wheels, sheave wheels, gear blanks for locomotive engines and ingot carbon steel (the industrial line). However, according to Company Director Samuel Gambier Neto, MWL is most recognized for the forged railway wheel. “The forged wheels for passenger and cargo trains are undoubtedly our flagship product,” he says. “Every project is different, as the wheels are manufactured exclusively to the specifications of the locomotive.”

UNIQUE DESIGNS
The company does not develop or create new product ranges, as each wheel-set is manufactured exclusively for the client. “Producing wheels independently would mean also manufacturing the railcars themselves,” explains Gambier. MWL engineers work on projects provided by the customer to supply solutions in accordance with particular requirements.

Production itself is a complex process. The exact diameter and model of the wheels depends on the car, its use (whether for passenger or cargo transport) and the tracks on which they will be operating. Raw materials, design specifications and customizations of special pieces and projects must consider a variety of other factors, including the travel speed of the locomotive and international trading norms such as those laid down by AAR.

MWL’s products are manufactured at the company’s 48,000-square-meter facility in Caçapava, in the state of São Paulo. The factory, which employs 498 people, is on the Presidente Dutra Highway that connects Brazil’s two largest cities; São Paulo and Rio de Janeiro. The site also has an internal link with the national railroad system, providing access to São Paulo’s international port.

At present 60 percent of the company’s products are exported. “In Brazil we still need to invest considerable sums in our rail network. A lot of our internal transport requirements are carried out by trucks and coaches. This is because roads are seemingly cheaper to maintain, requiring maintenance approximately every five years. Although the investment in railroads is much higher, maintenance is needed every 25 years – making it a more interesting investment. Things are improving, but slowly,” explains Gambier. Even Brazil’s subway networks are much less developed than in its European and North American counterparts. MWL exports wheels for subway trains, including to the London Underground network.

INTERNATIONAL TECHNOLOGY
With a high quantity of products destined for the international market, MWL invests heavily in technology and processes to ensure that its products are of the best possible quality. The company recently invested $10 million in Swiss-designed machinery that improves the quality of the steel and uses a revolutionary pump pressure system to forge the wheels. MWL Brasil is one of the few companies in the world to possess such technology and is a pioneer in its use in South America (countries such as USA and Italy also use this system).

The levels of investment in technology, expertise in the field and exclusive nature of MWL’s projects mean that the company has little concern over competition. “No other company in Brazil produces forged wheels, which can be used for passenger and cargo trains alike. There are companies manufacturing cast wheels, but these are not suitable for passenger cars, and cannot compete,” explains Gampier. With the majority of MWL’s exports being for passenger locomotives, the company is unshaken.

MWL has always been more focused on its business than on its competitors. “We have grown steadily over the years, through investment in our infrastructure and our products,” says Gambier. The company has averaged a 5 percent growth rate for the last 10 consecutive years.

SUSTAINED DEMAND
Despite the international economic crisis, MWL does not expect business to slow down. In the railroad division, the company supplies all types of passenger locomotives in Brazil and overseas. As the need and use of public transport systems continue to increase, so does MWL’s business. The continued demand for railroad products is expected to more than compensate for the fall in the industrial sector, which supplies mining companies such as Vale do Rio Doce that have been affected by a reduction in demand.

Passenger locomotives account for 80 percent of MWL’s exports to the USA, Canada, Mexico, United Kingdom, Germany, Saudi Arabia, India, Egypt and the rest of South America. “In the future we plan to develop the international market further. This was one of the reasons for our investment in new production technology,” explains Gambier. The company director is also confident that the domestic market will recover in the medium term, following the necessary government investments and the passing of the crisis. In the meantime the strengthening of overseas sales is a welcome solution.

MWL products have equipped the most modern trains and subways all over the world. Technology, quality and qualified professionals are key factors in the company’s high sales volume and excellent reputation, and as the world’s economy faces tough times, a well-planned international sales strategy guarantees that MWL Brasil remains on the right track to continued success.

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