EMC includes Brazil in global expansion plan for 2011
Valor Econômico
In the second week of February, William Teuber, Vice-Chairman of the Board of Directors of EMC Corporation, American data storage company, lands in Brazil with a group of vice presidents of the company to define the strategies of expansion and investment in the country. In the agenda of the meetings are included projects of acquisition of companies and the construction of a center of excellence for research and development. The projects are part of the plan of the company to double in size in the country until 2013.
"We have already received visits of several executives of the company to understand the country and one of its plans is the acquisition of a company in Brazil", says the CEO of EMC Brasil, Carlos Cunha. The analyst of the consulting firm IDC, Waldemar Schuster, says the local market is relatively small for the storage companies and it is dominated by multinationals. "It's hard to know what kind of acquisition EMC would be interested in making in Brazil", says Schuster.
EMC Brasil has a 32% share in the Brazilian market of storage and its main rivals are IBM, Hewlett-Packard (HP), Hitachi Global Storage (HDS), Fujitsu, Dell, Huawei Symantec and NetApp. "EMC achieved the leadership in Brazil focusing on the large companies. Recently, with the release of products for small and medium-sized companies, the growth rate has sped up", says Cunha. The company had announced in November it would start the export of products from Brazil to countries of the Southern Cone in the second quarter of this year - this region is currently supplied by the plant of EMC in Ireland. But, because of the accelerated growth in Brazil, the subsidiary should postpone, to the second quarter, its export plan, says Cunha.
The executive does not disclose the sales data in Brazil. But he highlights the country is responsible for much of the businesses of Latin America, which today represent 3% of global revenue of EMC. He also says the company grew 35% in sales in 2010. "In 2011, we will for sure have a two-digit growth", he says. The performance of the subsidiary was faster more accelerated than the overall growth of the company. EMC ended last year with growth of 21.3% in global sales, and earnings of US$ 17.015 billion. The net income grew 75%, amounting to US$ 1.97 billion.
EMC Brasil operates in the country for 15 years and since 2008 it has local production, through a partnership with the Taiwanese Foxconn, which has a plant in Jundiaí (SP). The company also produces in plants of Foxconn in China. Worldwide, EMC has its own plants in the United States and in Ireland. Worldwide, the company employs nearly 33 thousand people, 358 of them in Brazil.
Schuster, of IDC, says the Brazilian market of storage is small if compared to the global market but it grows rapidly. In 2009, the sector sold US$ 265 million in Brazil and last year it registered growth of 45% until September (to US$ 216 million). The consulting firm estimates the growth rate reached 50% in the fourth quarter. "The Government increased the purchases and the small and medium-sized companies increased the demand", he says. The main demanding sectors are telecommunications, oil and gas, and finances.