Cummins improves projection for 2010
Valor Econômico 07/20/10
Cummins, one of the largest independent manufacturers of engines in the world, increase its estimate for the production in the plant of Guarulhos (SP) this year, in view of the expressive improvement of the market throughout the first half. The company produced more than 44.2 thousand engines in the country until June, more than the 42 thousand units made during the first six months of 2008, considered the best year in the history for the car industry. The good performance so far led to the company to increase its projection for 2010, from 82 thousand to 95 thousand units produced in Brazil, the equivalent to a 58% increase compared to last year and at least 10% more than the 86 thousand units of 2008.In such context, the sales of the multinational should tag along the improvement of the production and it may return to the levels of the historic year, when it reached US$ 1.3 billion, taking into account the sales in the Latin American market exclusive of Mexico. In 2009, the engine business was responsible for 56% of the income in Latin America, followed by distribution (20%), energy generation (17%) and components (7%).
According to the Managing Director of the Cummins business unit of engines in Latin America, Luis Afonso Pasquotto, the plant of Guarulhos, the only of the multinational in the country, is ready to cater to the increasing orders for the next two years, so that there is no need for investments in the increase at the moment - investing in productivity, he points out, is a recurring item in the annual budget. "What may slow down such (growth) process is the capacity of the suppliers. That is what we are most concerned", he adds. Even though there are no plans to direct funds towards further improvements (the latest round of investments occurred between 2007 and 2008), in 2011 Cummins intends to inaugurate a plant of catalysts, next to its current facilities of Guarulhos.
Besides the improvement in the engine business, which was driven by the segments of trucks, construction and agriculture, the sales in the area of energy generators have shown improvement and the unit should gain more room in the income of Cummins in the region. "The infrastructure projects being performed and those expected due to the FIFA Soccer World CupTM and the Olympics also demand energy", stresses out Pasquotto. In the assessment of the executive, it is possible that the area of engines may represent, ahead, something between 45% and 50% of the sales of the company, whereas energy generation may get to 25%.
The business of replacement also shows growing results. Today, Cummins has already produced 800 thousand engines that may generate a demand for replacement, explains Faraj. In 2009, the sales of the area amounted to US$ 40 million, compared to US$ 52 million a year before. Last year, Cummins registered global earnings of US$ 10.8 billion, compared to US$ 14.3 billion in 2008. 52% of the total was generated outside the United States. Cummins Brasil was responsible for 9.6% of the earnings, compared to 9.4% in the prior year.