Aiming at C class, Deca increases production of sanitary fixtures by 100%
Valor Econômico - 06/25/2008
Leader in the Brazilian market of sanitary plumbing, Deca, a Duratex's business division, now gets ready to fight for the first place with Spanish Roca in the segment of sanitary fixtures After acquiring Ideal Standard and Cerâmica Monte Carlo, from the State of Pernambuco, for R$ 60 million (US$ 36.8 million) each, the company says it is ready to increase the annual production of sanitary fixtures from 3.6 million to 7.2 million of parts. Owner of 19% of the market of sanitary fixtures, Deca decided to bet on a fast expansion of this sector in the beginning of last year, when access to real estate credit to the C class would become wider and the rates of real interests would stay at a one digit level. The company considered the idea of building new production units, but since it is operating close to its capacity, it opted for the acquisitions. With the acquisitions Deca incorporated three new plants. One in Jundiaí (SP), one in Queimados (RJ) and a third one, that belonged to Monte Carlo, in Cabo de Santo Agostinho (PE). Together, the three plants have productive capacity for nearly 3.2 million parts a year. At this moment, the old Ideal Standard factory located in Queimados (RJ) is not in operation. As it happened to the other Deca units in the last three years, a great deal of what will be produced in the ovens of these new factories will be focused on C class consumers, who are responsible, according to Raul Penteado, for the improvement in the profitability Deca had in the past years. Since it noticed there was a boom in consumption in the economic segment, Deca started a large process of renovation of its mix of products. The company invests nearly R$ 25 million (US$ 15.34 million) in development every year and, in the last three years, more than 50% of such value has been intended to the economic segment. From the more than 200 new products it placed in the market since 2006, more than 70% of them were aimed at the C class. Besides the R$ 120 million (US$ 73.6 million) it invested in the acquisition of both rivals in the segment of sanitary fixtures, Deca is investing another R$ 120 million (US$ 73.6 million) in the increase of the productive capacity of sanitary plumbing. In this case, the company chose not to go shopping. It is building a new unit in its complex located in Jundiaí (SP).