Romi aiming at the automobile market
Valor Econômico - 11/12/2007
Indústrias Romi, a traditional Brazilian manufacturer of machinery-tools and plastic injectors, is willing to take advantage of the bottleneck found in the large foundries of the country to increase its presence also in this sector, which is mainly focused on the car makers. For such, the company already has approved investments of R$ 230 million (US$ 130.1 million) in the expansion of its capacity of machined parts, from 25 to 40 thousand tons per year, and in the doubling of the production of cast components, currently at 40 thousand tons per year. In his first interview since he became Romi's Chief Executive Officer in August, Livaldo Aguiar dos Santos revealed that the acquisitions, informed when the company migrated to the Novo Mercado (New Market) of the São Paulo Stock Exchange (Bovespa) last March, will be focused on the foundry and machining areas. At that time, the move into the Stock Exchange's most demanding segment in terms of corporative governance was done by the primary and secondary issuance, which brought nearly R$ 230 million (US$ 130.1 million) to the company's cash. "Our focus on the acquisitions will be companies with revenues between R$ 70 million (US$ 39.6 million) and R$ 300 million (US$ 169.7 million) that work in the area of metal castings and machined parts", affirmed Aguiar. The forecast, according to the executive, is to close at least three acquisitions in next the six months. Seven companies with operations in this segment and five others in the area of machinery and equipment are under analysis. 50% of Brazil's car making industry is supplied by Tupy and Teksid, with participations of 31% and 19%, respectively. The data are in the latest survey from the Brazilian Foundry Association (Abifa). WEG has 7%, Thyssen, 6%, Schulz, 5%, Fund Luk, 4% and Romi and Tecumseh, 3% each. The other 22% are pulverized in smaller capacity foundries. Among the parts provided to the car makers are the gear housing, exhaust manifolds, and brake drums. From January to September, the casting and machining area represented 18.5% of Romi's net earnings, compared to 16.3% in same period of 2006. In the same period, the revenue increase was 27%. The most relevant market segments of this sector are the average and heavy vehicles (42%), followed by the light vehicles (18%), and the generation of energy (16%).