January 26, 2010 Winning Washers

Volume 13 | Issue 1

In its sixth decade of business, Mueller Electrodomésticos is Brazil’s leading manufacturer of semi-automatic washing machines. Associated w

When Walter Mueller, founder of Mueller Electrodomésticos S.A, manufactured Brazil’s first washing machine, he appropriately named the model Pioneira (Pioneer). The machine was the first in a series of models that marked not only the development of the Mueller brand but of the industry in South America. The design and performance of Mueller’s washing machines has gained acclaim in the market ever since. Thanks to constant innovation, in recent years the company has launched products such as the Diva (its first automatic washing machine), the SuperPop and the SuperPop Glass: the only transparent washer in the Brazilian market.

The SuperPop model was awarded a silver IDEA award from the Industrial Designers Society of America. The concept behind the washer was to create a low-cost, easy-to-use machine that reduced waste and was easy to transport. The SuperPop leaves the factory and the store in a partially assembled state, making its packaging 40 percent smaller than that of conventional models and reducing distribution costs. With four different wash cycles and a drum capacity of six- and a-half pounds of clothes, the individual design of the lightweight plastic SuperPop was praised by the New York Times in 2008.

These revolutionary and reasonably priced products have helped to cement Mueller’s market leadership and also earned the brand other design awards such as the Casa Brasileira Museum Design Prize and the Top of Marketing title awarded by ADVB (the Association of Brazilian Sales Managers and Marketing).

CHANGES AND NEW RANGES
The success of its washing machines provided the perfect base for new advances and coupled with recent changes to its management structure, Mueller has diversified its product line. Today, in addition to automatic and semi-automatic washing machines, the company also produces dryers and spin dryers, and in 2002 launched Mueller Fogões Ltda: manufacturer of gas stoves, cook tops and electric ovens.

The expansion was a natural progression for the company. “In terms of developing our technology, we have always followed the demands of the market,” explains Adalberto Roeder, CEO of the Mueller Group. “We are always updating and improving all of our products.” The changes have also increased the scope of Mueller’s market. Initially the washing machines were aimed at the lower social classes. In 2007 the newspaper Valor Econômico described the brand as “attractive and functional, which is rare in the sector that sells to the bottom of the pyramid.” Nowadays the client base is more varied. As well as producing popular washing machines, the company’s automatic washers are aimed at clients with greater purchasing power. The cooking line also offers a range of high quality products for all customers. “The success of these products is the reflection of several factors, one of them being that we look for details that make a difference to all of our clients,” says Roeder.

The company’s top selling product is the Super Pop, an economical water tank for washing clothes. Sales of the more simple lines however are not growing as fast as the automatic machines, and more sophisticated models. Daily, Mueller manufactures 3,500 washing machines, 1,600 ovens and 300 cook tops.

All of Mueller’s products are manufactured at three industrial parks in Timbó, Santa Catarina state. With the opening of Mueller Fogões, the company constructed more units on its 193,000-square-meter site. A total of four facilities cover an area of 37,400 square meters and are responsible for producing most of the parts for the products. “Our operations are almost completely virtually integrated, and very few components are outsourced,” says Roeder. Mueller even has injection molding equipment and purchases only raw materials like tempered glass and sheet steel for production.

INVESTING IN THE FUTURE
Although its award-winning washing machines are the company’s leading product, Mueller’s team of engineers are also working on new products. The most recent additions include the range of motors for washers and a facility for the manufacture of wires and cables. The manufactured parts are used in Mueller’s own appliances and also intended to be sold separately. This latest development led to the launch of Hercules Motores, the third division at Mueller’s facility. Hercules has been the focus of investment, as a strategic step toward vertical integration (these parts were previously purchased); its creation has allowed the company to reduce prices and increase quality management. The company is currently producing 4,000 motors every day and will start selling to third parties in 2010.

All-round investment in technological, economic and design factors has involved working with Chelles and Hayashi Design in São Paulo, the agency responsible for the design of the SuperPop. “Our stoves are also noted for their design,” explains Roeder. “The cook tops have a highly developed system that steadies the pans during use and our ovens have a special three-flame function for greater efficiency.” Mueller also invests in its future through the participation in national and international trade fairs. Next year, the company plans to exhibit in Brazil’s largest domestic appliances trade fair in the state of Paraná and also participate in international events in Angola. This year the company plans to exhibit in the Movelsul domestic appliances trade fair in the state of Rio Grande do Sul.

An awareness of developments on the international market is an important focus for Mueller. Around 20 percent of its ovens are exported to Africa, Central and South America. The market for washing machines is concentrated in Latin America, with approximately 6 percent of production destined for countries like Paraguay, Uruguay, Venezuela and Argentina.

In addition, the company has also recently acquired Hercules Motor Electric, focused on the manufacture of single-phase and three-phase electric motors, developed through the most modern technology. In existence since 2004, Hercules has already achieved the distinction of producing three million motors.

MARKET GROWTH
“The difficulties met by Mueller have been no different from those that affected the majority of Brazilian enterprises. We are part of a competitive market, with high taxes and logistics difficulties. Despite these facts, we have achieved a marked growth in recent years,” says Roeder. The economic crisis has actually benefitted the company, as the Brazilian government reduced IPI (taxes) on white goods, which boosted sales. Coupled with the quality and success of Mueller’s products, the company has remained stable and even exceeded expectations in the throes of tumultuous times. “To a certain extent sales are seasonal: in the rainy months from March to July we sell more dryers and washers, and at the end of the year more ovens,” Roeder explains.

Mueller’s annual revenue of $150 million in 2009 reflected this considerable growth. In the washing machine division, sales have risen by 18 percent and Mueller Fogões has experienced 30 percent growth. The increase in sales in ovens shows Mueller’s rapidly increasing market share, and the results of its labors. Already the top manufacturer of semi-automatic washing machines, the company is confident that the other divisions will also occupy leading positions in their respective industries.

“We differentiate ourselves from competitors in more than quality, price and reliability. Technical support is seen as an investment and not a cost, which guarantees that more and more customers turn to us,” says Roeder. Commitment to maintaining the lead and striving for excellence is paramount to Mueller. The facilities are equipped with INMETRO (Brazilian Trading Standards) certified laboratories to constantly evaluate the products and carry out energy efficiency tests.

Mueller adopts a management system based on a lean manufacturing program, which targets high performance from production to retailer and consumer. It also implements sustainability measures such as recycling of water used in production, and treatment of effluents. “Every little counts, and even paper consumption is minimized in our offices, reflecting our attention to detail and dedication to the environment,” Roeder says.

Mueller’s constant attention toward maintaining its goals has helped it to clean up in the market and earned the brand leadership status. The company adds the concepts of quality, durability, innovation and design to accessible pricing: a mission that it has proven to be both possible and successful. As Roeder concludes, “Mueller is increasing its visibility more and more everyday because of these values.”

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