Brazil gains relevance in SKF strategy
Valor Econômico
For the first time in the 97-year history of the Swedish SKF, Brazil will host the annual meeting of the International Board of the group, one of the largest global manufacturers of bearings. The choice of the country to host the meeting in 2011 did not take place by chance: This year, the earnings of the Brazilian subsidiary should get near R$ 1 billion (US$ 588.2 million) and the operation will be confirmed as the multinational largest platform of production of gear bearings, wheels and steering wheels intended for low income vehicles. The moment is also completely different from that lived by SKF in the country in the 1990s, when the opening of the market brought serious consequences to the domestic sales and the company ended up closing one of the two plants it operated in Brazil. At that time, the Brazilian operation was considered the "ugly duckling" of the group and the investments were reduced.
After the 1990s, the most recent economic crisis and after the relevant role of Brazil was consolidated for the businesses of the multinationals, the SKF arm in Brazil resumed growing. Until the middle of the second half, the group will invest R$ 13.5 million (US$ 7.9 million), in own resources, to install another line of bearings in the plant of Cajamar, increasing the productive capacity by 20% - today, the unit can produce 32 million parts a year. "We want to keep up with the force of the domestic market", explains the President of SKF do Brasil, Donizete Santos. When he mentions the heated domestic demand, the Executive refers both to the excellent moment of the car industry - that breaks successive records of production and sales - and to the businesses in the areas of infrastructure, mining, agriculture and transports.
Last year, the industrial area, responsible for the delivery of bearings and other components for capital goods and products of the white line, grew 25% in the country, fairly close to the level of 28% seen by the automotive area. According to Santos, nearly 60% of the earnings of the Brazilian operation, of R$ 800 million (US$ 470.6 million), was generated by the car area. Besides supplying bearings directly to the four largest automakers in the country - GM, Fiat, Ford and Volkswagen -, SKF supplies parts for the aftermarket through 65 distributors, with presence throughout the national territory.
The improvement of the businesses in the country reflected in the relevance of the operation for the international earnings of the group. In 2010, Brazil was responsible for 4% of the global sales, with growth of one point percent compared to 2009. By 2015, according to Santos, such participation should get to 10%. During that time, the entire corporation should grow: the goal set by the Council, according to Santos, is to double in size within five years as of 2011. Thus, the earnings of SKF worldwide should get to US$ 19 billion at the end of the period - in 2010, it was US$ 9.5 billion - and, in Brazil, the earnings should grow to R$ 1.6 billion (US$ 941.2 million).
The investment in production will be followed by the diversification of the portfolio. Currently, part of the components SKF sells in the country is imported and some of those parts can be produced in the country at some point by 2015. The group has five global business platforms and not all of them are available in the national market. Besides bearings, the largest area of business in the world, the group operates in the segments of seals, lubrication systems, Mechatronics and industrial maintenance. "But we can't say what are the plans in that regard", says Santos.