Eaton Hydraulics expands operation in Brazil due to pre-salt and construction
Valor Econômico
Eaton's Hydraulics Division, one of the largest independent producers of auto parts in the world, will start, in 2011, a new cycle of investments in the country, with an eye on the businesses that should be generated by the exploration of the pre-salt layer of oil and the need of investments in infrastructure, with an eye on the holding of the 2014 FIFA World Cup and 2016 Olympic Games in Brazil. The goal for the next five years is double the size of the operation, by means of the expansion of the plants in the country. Eaton Hydraulics produces, in 56 units installed around the world, engines, valves, hoses and cylinders, among others.
According to the President of Eaton Hydraulics for the Americas, José Vicente, there are US$ 10 million for the adaptation of the products to the domestic market and expansion of the productive capacity of two Brazilian plants, both in the State of São Paulo. The plans for the coming years were presented to the nearly 50 distributors of the company, at an event held between Monday and yesterday in Campinas (SP).
"In 2010, the revenues in the country should grow 70%. To continue growing, we have to invest", said Vicente, who took the control of the operation for the American continent in July. Worldwide, the earnings of Eaton Hydraulics exceeded US$ 2 billion last year and 60% of the amount was generated in the Americas. According to the Executive, the share of South America in the business is still not significant. Nevertheless, he emphasized, the growth is remarkable, especially in the agricultural area - in the country, the company has outstanding position in the delivery of components and engines for harvesters.
In the medium term, explained Vicente, with the growth of the businesses in the industrial, infrastructure and oil areas, the contracts in the agricultural segment should lose relevance in the composition of the earnings of Eaton Hydraulics. The expansion plan that will be executed in the next three to five years reflects the relevance of those sectors of the economy. One of the products that should be adapted as early as next year, explained Vicente, is a hydraulic cylinder used in the oil industry, which is still unavailable in the domestic market.
In the assessment of Vicente, the greater competition in the domestic market - after all, the other multinational groups bet their chips in the potential of the Brazilian economy - does not poses obstacles to the execution of the investment plan. According to Vicente, both the plants of Guarulhos and of Guarantiguetá have an area available for the setting up of new lines of production and they may receive future investments.