Innovation is the hallmark of Suzano
Suzano Petrochemical, with remarkable discretion, shall respond by controlling stake in Polibrasil. With the end of the joint venture, the company maintains its leadership in the production of polypropylene resins, ranks second in the thermoplastic resins market and announces continued investments in new factories.
For Wagner Belmonte
The pursuit of excellence in management Suzano surrendered to the 2005 National Quality Award (NQA), on November 28, São Paulo. Conceived by the National Quality Foundation (FNQ), the award recognizes companies that have obtained prominence in their processes, but more than that: reaching excellence. The deed deserves for being so recent. These corporations are valued awards, among other factors, for systems quality of their products, just as happened with Suzano.
largest producer of polypropylene in Latin America, the Suzano is the second thermoplastic resin production in Brazil and the third largest producer in Latin America. Since 1974, when he entered the petrochemical sector, the group has strengthened its strategic planning for growth, both in October this year it bought 50% of the shares belonging to Basell Polyolefins Group, which corresponded to Polibrasil. "Now is Suzano 100%," boasts the CEO José Ricardo Roriz Coelho. Other companies are affiliated to Suzano, Rio Polímeros - the first gas-chemical complex in Brazil - and Politeno Petroflex. The intention is to make the production of polypropylene, today at 625 000 tonnes, reaches 900 000 in 2007, ie 40% more than the current capacity. Suzano's revenue in 2004 was R $ 2.3 billion. The estimate for next year is a growth of over 10%. The thermoplastic resin has grown each year, during a period of 10 consecutive years, equivalent to 10%. The reason? The product itself.
According Roriz Coelho, the spread of polypropylene is its versatility, besides being a highly competitive market for packaging, automotive, among other areas. And most important: "It is a product that acts as a barometer of the economy," he says.
Forty countries around the world receive the proceeds of Suzano, including China, considered as always, a good buyer. However, more than a good buyer, Roriz Coelho notes that the most important is the constancy of the purchase. "We want customers who have committed to medium and long term, be they in China, the United States, Europe or here in South America," he says.
The consistency of growth always sought by Suzano was consolidated with the purchase of shares of Basell and today it is one of the largest petrochemical players in Latin America. Another factor that denotes its strength is the reward received from FNQ. It shows Suzano that is moving fast in the right direction. "The award came in motivating and ensure that the decisions we have taken over time, with regard to quality management, are appropriate. That, in a way, gives us peace of mind in knowing that we are on track, "boasts Roriz Coelho. Of the eight criteria for the award, two of them were scored by the petrochemical company, leaders and people. For the executive, leadership is key, "after all, is that it promotes changes that aligns strategy. These two questions provide the company that she can change and that changes with agility, " highlights
José Ricardo Roriz Coelho is a mechanical engineer, postgraduate in Marketing and also in finance. In addition, an MBA from Harvard and the Fundacao Dom Cabral. Seven years ago at the Suzano Group, he speaks to the Manager, among other things, on the main challenges facing the company: "Agility and at the same time, innovation."
Manager - Nearly two years have been here, and this company was called Polibrasil (read the story in http://www.manager.com.br/reportagem/reportagem_1216.htm .) What has changed?
Roriz Coelho - The company is growing. Today, we participate in Suzano, which is a larger company and there are some related companies are also involved. They are: Rio Polímeros, Politeno and Petroflex. Our challenge was to grow. So we're growing in the area of polypropylene and at that time we were inaugurating a new plant, which was the largest polypropylene plant in the world. Now we are opening in Rio de Janeiro, Rio Polímeros, which is the first gas-chemical complex in Brazil. The aim was to grow and we did.
Manager - At the time, you were opening a factory in Maua, in Greater São Paulo. How many millions have been invested?
Roriz Coelho In-Maua, in total, was invested $ 217 million.
Manager - For an annual production capacity of ...
Roriz Coelho-A capacity of 300 thousand tons of polypropylene, which are expanding to 450,000 tonnes by 2007.
Manager - The production of polypropylene is concentrated in Camaçari (BA), Duque de Caxias (RJ) and also in Maua?
Roriz Coelho In-Duque de Caxias, we produce 200 000 tonnes; Camaçari are 115 000 tonnes and in Maua, over 300 000. And what's the positive? At that time, that plant was new and was already the largest in the world. Today we are making a new investment in that plant to increase from 300 to 450 000 tonnes, in 2007. In Rio de Janeiro, we are expanding from 200 to 300 000 tonnes. Camaçari, we invested in improvements to industrial processes and are now producing a special resin pipe for oil exploration. This application is of high value.
Manager-In 2007, you will produce many tons?
Roriz Coelho-We will close the 900 thousand tons of polypropylene.
Manager-Today, in 2005, which is the volume?
Roriz Coelho-Today there are 625 000 tonnes.
Manager-How many were in 2004?
Roriz Coelho "They were 625 000, since the plant was already done. When he entered the factory Maua, passed the 625 000. Now we are adding more than 40% of existing capacity.
Manager-I mean, compared to last year the volume of production of polypropylene ...
Roriz Coelho-are equal. We had just finished building the largest plant of PP (polypropylene) in the world. It worked well. Operated so well that we are expanding to new facilities.
Manager-This growth of 50% was intended to cover a range of market which is sought?
Roriz Coelho: Yes, the plastics market, the polypropylene resin is the fastest growing in the world. Then, in Brazil, there must be a new plant every two or three years, depending on market growth. We are market leaders in Latin America, we are the largest producer. What are we doing this is to monitor market developments so that we can keep us as leaders.
Manager, Suzano's revenue last year was that order?
Roriz Coelho, from $ 2.3 billion.
Manager-What is the outlook for growth?
Roriz Coelho-undoubtedly grow over 10%. In sales, not volume.
Manager-When you grow revenue and volume remains the price increases ...
Roriz Coelho-This year, our raw materials soared, as they are derived from oil and oil had a big boost.
Manager-In general, do you have the plant in Camaçari, Duke of Boxes, Maua and the new investments announced are ...
Roriz Coelho-Increasing the production of Rio de Janeiro, a maritime terminal for receiving raw material also in Rio de Janeiro, and increase production at its plant in Maua.
Manager-Why the company was renamed Suzano?
Roriz Coelho-Before, Suzano group was 50% and Basell Polyolefins held the remaining 50%. In February this year, Suzano has acquired 50% of Basell, and since then has become Polibrasil call Suzano.
Manager-There is a pent-up demand in the market? What is leading you to, in nearly six years, jumping from 250 000 tons to 900 tons?
Roriz Coelho-This resin has grown over the past decade close to 10% per annum. The average annual growth over the past ten years was 10%. The major advantage of polypropylene is that it is a very versatile resin and at the same time, it is a competitive option for the packaging market, the automobile industry, among other areas. Packages of pasta, cereal barrinha, chocolates, sweets in general have our product. To give you an idea of the participation of polypropylene in the auto industry, small cars carry an average of 40 pounds of our product per unit of output. The market for packaging, bottles of cleaning products, cosmetics, soft drinks - Covers - textile industry, toy industry, fertilizer bags, bags for chemicals, cement bags, they all, without exception, use what produce. There is a tremendous versatility and is a product that acts as a barometer of the economy.
Manager-What has changed from the moment they took part Suzano Basell?
Roriz Coelho - Suzano Petrochemical project is to become one of the largest petrochemical players in Latin America, what it is today. So the fact that she acquired the shares of Basell was able to flesh out this strategy. Today, our company is the largest producer of polypropylene in Latin America's second largest producer of thermoplastic and Brazil's third largest producer in Latin America.
Manager-The share in the area of polypropylene is much?
Roriz Coelho, is 45%.
Manager-How did the staff since the Suzano assumed?
Roriz Coelho-Industry petrochemical industry is highly automated and generates a lot of jobs downstream. For each ton petrochemical product produced it generates 55 jobs in the next link in the chain of production (this is called manufacturing firms: buying a thermoplastic resin and transform them into final products manufactured). Generally, it attracts to the region that is located other companies who use satellites as polypropylene for other purposes. As for employment generation, it occurs during the construction phase of projects, but not mean, necessarily, that will increase the number of people in the same proportion, but it will generate many jobs downstream.
Manager IT You said that revenue grew 10% this year. There is already drawn some perspective to the year 2006?
Roriz Coelho-For next year, we are very optimistic. With interest rates falling, the international market remains at the level of the economy with strong growth in countries such as China, India etc. This assures us that we have a year 2006 is very positive in terms of increased demand.
Manager-Do you have on your bookshelf, a book that shows the profile of the Chinese economy. Why?
Roriz Coelho-Today, China buys 40% of the thermoplastic exported worldwide. You can not make a plan that excludes foreign market to China.
Manager-Lords exporting to China?
Roriz Coelho-export. We work with a lot of innovation in plastic and, being a very cheap product, it is a choice - the cost-quality balance sheet - which means we win and advance into new markets. And today, the big innovations are no longer in developed countries, but they come from China, countries that saw very strong growth in recent years.
Manager-Suzano aims to enhance the development of trade with China?
Roriz Coelho-We currently export to over 40 countries. China is a big buyer, but what is important is that whatever the area where the customer is, we work with clients who have regular customers who know how to recognize the difference of our product. The new plants, such as Maua, are the most modern in existence. We want customers who have committed to medium and long term, be they in China, the United States, Europe or here in South America
Manager-Suzano Petrochemical won the National Quality Award. What does it mean?
Roriz Coelho "What we are on track, we are working on process management excellence. He came to motivate us and ensure that the decisions we have taken over time, with regard to quality management, are appropriate. That, in a way, gives us peace of mind in knowing that we are on track. Otherwise, we know that the prize is one thing off and the market is dynamic. This increases our challenge to take it forward and always work harder using the best practices, working with management excellence and the company is prepared for this increasingly hostile environment, a competitive situation has become more aggressive.
Manager-This situation has been seen?
Roriz Coelho: Yes, here in Brazil we have serious problems. For example, the cost of capital, interest rates, the high tax burden, the highly valued U.S. dollar, poor infrastructure, etc.. For industry, the environment is very hostile. All this increases costs, reduces the opportunities and deters investors - that is not our case because, as I said, we are investing. However, competition is a race and we have to move faster than its competitors. That's the concern we have to produce in Brazil, but not what will separate us from our goal to grow further.
Manager-How many employees the company has today? We
Roriz Coelho-460.
Manager-E for 2006?
Roriz Coelho - Like I said, is increasingly automated, more competitive does not mean that this number will increase much, no.
Manager - But there is a trend?
Roriz Coelho - No. The plastic is a generator of jobs downstream. The fact that we have more product on the market is always an opportunity for new jobs.
Manager - Regarding the transition, the Suzano assumed full control of the company - which was Polibrasil, a joint venture?
Roriz Coelho - Yes, it was a joint venture with Basell and Suzano. Suzano is now 100%.
Manager - There was some internal shock? As you led the process?
Roriz Coelho - No, just because we won the National Quality Awards, which are eight criteria, two of them we had the highest score: the leadership and people. So, leadership is crucial after all she promotes changes that aligns strategy. These two questions provide the company that it can change and change quickly. The change did not create any start, instead, the project was going to meet Suzano Polibrasil, which was to grow. And the company Suzano was a rapidly developing both in the paper - which has announced it will double the production of cellulose in the next three years - as the area petrochemicals. Besides having made all investments in Polibrasil, she is part of the largest gas-chemical complex, in fact, the first in Brazil. It is an investment of U.S. $ 1.1 billion in Rio de Janeiro, inaugurated this year.
Manager - What has happened to justify this investment, what is the reason?
Roriz Coelho - Suzano, in the short term, the strategy has focused on working with products that have high growth, product demand from Brazil indicate that you will be well into the future that will have these high growth rates. So, her strategy is to focus in the short term, resins and fastest growing in the market from here southeast region. In the medium and long term, it has a very well established strategy for growth in areas of paper and petrochemicals, which greatly strengthen the company and probably in 2015 will be one of the largest business groups in the country.
Manager - Suzano has made application to machinery industry?
Roriz Coelho - Yes, of course. Last week, we bought two. We have to continuously invest and grow, watching the numbers carefully and with responsibility for management.
Manager - What are the management challenges at the moment?
Roriz Coelho - This time it is agility. We have to learn to walk stronger than competitor because the changes are increasingly in a shorter period of time. So the company must be agile and at the same time, innovation. With globalization, the world is, every minute, inventing products, alternatives and opportunities to grow the market. There must be an environment conducive to innovation - within the company - and a leadership that adapts to changing economic, market, environment etc.. These are the two major business challenges.
Manager - And the dollar at $ 2.20?
Roriz Coelho - It discourages exports and encourages the client to buy Brazilian products abroad. In the short term, it can not even help to increase inflation, but in the medium term will be extremely harmful to the growth of Brazil. It will also discourage new investments.
Manager - In the market as a whole, the petrochemical industry has had a value above the GDP (Gross Domestic Product)?
Roriz Coelho - The growth of the petrochemical field is well above the GDP, is growing three times above polypropylene and polyethylene twice to two and a half.
Manager - Why?
Roriz Coelho - These products, as I said earlier, they have excellent balance between price and quality. So it's cheap, has quality, it is a good alternative and spends little energy. By turning the plastic, it uses less power than the metals: iron, steel, aluminum, glass, etc..
Manager - You would export more if the dollar was at a level more acceptable?
Roriz Coelho - Without a doubt.
Manager - Nearly two years have been here, and this company was called Polibrasil (read the story in http://www.manager.com.br/reportagem/reportagem_1216.htm .) What has changed?
Roriz Coelho - The company is growing. Today, we participate in Suzano, which is a major undertaking and there are some related companies also participate. They are: Rio Polímeros, Politeno and Petroflex. Our challenge was to grow. So we're growing in the area of polypropylene and at that time we were inaugurating a new plant, which was the largest polypropylene plant in the world. Now we are opening in Rio de Janeiro, Rio Polímeros, which is the first gas-chemical complex in Brazil. The aim was to grow and we did.
Manager - At the time, you were opening a factory in Maua, in Greater São Paulo. How many millions have been invested?
Roriz Coelho - In Maua altogether invested U.S. $ 217 million.
Manager - For an annual production capacity of ...
Roriz Coelho - A capacity of 300 thousand tons of polypropylene, which are expanding to 450,000 tonnes by 2007.
Manager - The production of polypropylene is concentrated in Camaçari (BA), Duque de Caxias (RJ) and also in Maua?
Roriz Coelho - In Duque de Caxias, we produce 200 000 tonnes; Camaçari are 115 000 tonnes and in Maua, over 300 000. And what's the positive? At that time, that plant was new and was already the largest in the world. Today we are making a new investment in that plant to increase from 300 to 450 000 tonnes in 2007. In Rio de Janeiro, we expanding from 200 to 300 000 tonnes. Camaçari, we invested in improvements to industrial processes and are now producing a special resin pipe for oil exploration. This application is of high value. Manager
- In 2007, you will produce many tons?
Roriz Coelho - We will be close to 900 thousand tons of polypropylene.
Manager - Today in 2005, which is the volume?
Roriz Coelho - Today there are 625 000 tonnes.
Manager - How many were in 2004?
Roriz Coelho - 625 000 were because the plant was already done. When he entered the plant in Maua, we come to 625 000. Now we are adding more than 40% of existing capacity.
Manager - I mean, compared to last year the volume of production of polypropylene ...
Roriz Coelho - are equal. We had just finished building the largest plant of PP (polypropylene) in the world. It worked well. Operated so well that we are expanding to new facilities.
Manager - This 50% increase was intended to cover a range of market which is sought?
Roriz Coelho - Yes, the market for plastic, polypropylene resin is the fastest growing in the world. Then, in Brazil, there must be a new plant every two or three years, depending on market growth. We are market leaders in Latin America, we are the largest producer. What are we doing this is to monitor market developments so that we can keep us as leaders.
Manager - Suzano's revenue last year was that order?
Roriz Coelho - from $ 2.3 billion.
Manager - What is the outlook for growth?
Roriz Coelho - undoubtedly grow over 10%. In sales, not volume.
Manager - When you grow revenue and volume remains the price increases ...
Roriz Coelho - This year, our raw materials soared, because they are derived from oil and oil had a big boost.
Manager - Overall, do you have the plant in Camaçari, Duke of Boxes, Maua and the new investments announced are ...
Roriz Coelho - Increase production of Rio de Janeiro, a maritime terminal for receiving raw material also in Rio de Janeiro, and increase production at its plant in Maua.
Manager - Why the company was renamed Suzano?
Roriz Coelho - Before, Suzano group was 50% and Basell Polyolefins held the remaining 50%. In February this year, Suzano has acquired Basell's 50%, and from Polibrasil then went on to be named Suzano.
Manager - There is a pent-up demand in the market? What is leading you to, in nearly six years, jumping from 250 000 tons to 900 tons?
Roriz Coelho - This resin has grown over the past decade close to 10% per annum. The average annual growth over the past ten years was 10%. The major advantage of polypropylene is that it is a very versatile resin and at the same time, it is a competitive option for the packaging market, the automobile industry, among other areas. Packages of pasta, cereal barrinha, chocolates, sweets in general have our product. To give you an idea of the participation of polypropylene in the auto industry, small cars carry an average of 40 pounds of our product per unit of output. The market for packaging, bottles of cleaning products, cosmetics, soft drinks - Covers - textile industry, toy industry, fertilizer bags, bags for chemicals, cement bags, they all, without exception, use what produce. There is a tremendous versatility and is a product that acts as a barometer of the economy.
Manager - What has changed from the moment they took part Suzano Basell?
Roriz Coelho - Suzano Petrochemical project is to become one of the largest petrochemical players in Latin America, what it is today. So the fact that she acquired the shares of Basell was able to flesh out this strategy. Today, our company is the largest producer of polypropylene in Latin America's second largest producer of thermoplastic and Brazil's third largest producer in Latin America.
Manager - share in the area of polypropylene is much?
Roriz Coelho - is 45%.
Manager - How did the staff since the Suzano assumed?
Roriz Coelho - The petrochemical industry is highly automated and generates a lot of jobs downstream. For each ton petrochemical product produced it generates 55 jobs in the next link in the chain of production (this is called manufacturing firms: buying a thermoplastic resin and transform them into final products manufactured). Generally, it attracts to the region that is located other companies who use satellites as polypropylene for other purposes. As for employment generation, it occurs during the construction phase of projects, but not mean, necessarily, that will increase the number of people in the same proportion, but it will generate many jobs downstream.
Manager - You spoke that revenues grew 10% this year. There is already drawn some perspective to the year 2006?
Roriz Coelho - For the next year, we are very optimistic. With interest rates falling, the international market remains at the level of the economy with strong growth in countries such as China, India etc. This assures us that we have a year 2006 is very positive in terms of increased demand.
Manager - Do you have on your bookshelf, a book that shows the profile of the Chinese economy. Why?
Roriz Coelho - Today, China buys 40% of the thermoplastic exported worldwide. You can not make a plan that excludes foreign market to China.
Manager - The Lords exporting to China?
Roriz Coelho - export. We work with a lot of innovation in plastic and, being a very cheap product, it is a choice - the cost-quality balance sheet - which means we win and advance into new markets. And today, the big innovations are no longer in developed countries, but they come from China, countries that saw very strong growth in recent years.
Manager - Suzano aims to enhance the development of trade with China?
Roriz Coelho - We currently export to over 40 countries. China is a big buyer, but what is important is that whatever the area where the customer is, we work with clients who have regular customers who know how to recognize the difference of our product. The new plants, such as Maua, are the most modern in existence. We want customers who have committed to medium and long term, be they in China, the United States, Europe or here in South America
Manager - Suzano Petrochemical won the National Quality Award. What does it mean?
Roriz Coelho - That we are on track, we are working on process management excellence. He came to motivate us and ensure that the decisions we have taken over time, with respect to quality of management, are appropriate. That, in a way, gives us peace of mind in knowing that we are on track. Otherwise, we know that the prize is one thing off and the market is dynamic. This increases our challenge to take it forward and always work harder using the best practices, working with management excellence and the company is prepared for this increasingly hostile environment, a competitive situation has become more aggressive.
Manager - This situation has been seen?
Roriz Coelho - Yes, here in Brazil we have serious problems. For example, the cost of capital, interest rates, taxation high, the dollar is much valued, poor infrastructure, etc.. For industry, the environment is very hostile. All this increases costs, reduces the opportunities and deters investors - that is not our case because, as I said, we are investing. However, competition is a race and we have to move faster than its competitors. That's the concern we have to produce in Brazil, but not what will separate us from our goal to grow further.
Manager - How many employees the company has today?
Roriz Coelho - we have 460.
Manager - And for 2006?
Roriz Coelho - Like I said, is increasingly automated, more competitive does not mean that this number will increase much, no.
Manager - But there is a trend?
Roriz Coelho - No. The plastic is a generator of jobs downstream. The fact that we have more product on the market is always an opportunity for new jobs.
Manager - Regarding the transition, the Suzano assumed full control of the company - which was Polibrasil, a joint venture?
Roriz Coelho - Yes, it was a joint venture with Basell and Suzano. Suzano is now 100%.
Manager - There was some internal shock? As you led the process?
Roriz Coelho - No, just because we won the National Quality Awards, which are eight criteria, two of them we had the highest score: the leadership and people. So, leadership is crucial after all she promotes changes that aligns strategy. These two questions provide the company that it can change and change quickly. The change did not create any start, instead, the project was going to meet Suzano Polibrasil, which was to grow. And the company Suzano was a rapidly developing both in the paper - which has announced it will double the production of cellulose in the next three years - as in petrochemical area. Besides having made all investments in Polibrasil, she is part of the largest gas-chemical complex, in fact, the first in Brazil. It is an investment of U.S. $ 1.1 billion in Rio de Janeiro, inaugurated this year.
Manager - What has happened to justify this investment, what is the reason?
Roriz Coelho - Suzano, in the short term, the strategy has focused on working with products that have high growth, product demand from Brazil indicate that you will be well into the future that will have these high growth rates. So, her strategy is to focus in the short term, resins and fastest growing in the market here in the Southeast. In the medium and long term, it has a very well established strategy for growth in areas of paper and petrochemicals, which greatly strengthen the company and probably in 2015 will be one of the largest business groups in the country.
Manager - Suzano has made application to machinery industry?
Roriz Coelho - Yes, of course. Last week, we bought two. We have to continuously invest and grow, watching the numbers carefully and with responsibility for management.
Manager - What are the management challenges at the moment?
Roriz Coelho - This time it is agility. We have to learn to walk stronger than competitor because the changes are increasingly in a shorter period of time. So the company must be agile and at the same time, innovation. With globalization, the world is, every minute, inventing products, alternatives and opportunities to grow the market. There must be an environment conducive to innovation - within the company - and a leadership that adapts to changing economic, market, environment etc.. These are the two major business challenges.
Manager - And the dollar at $ 2.20?
Roriz Coelho - discourages exports and encourages the client to buy Brazilian products abroad. In short term, he can not even help to increase inflation, but in the medium term will be extremely harmful to the growth of Brazil. It will also discourage new investments.
Manager - In the market as a whole, the petrochemical industry has had a value above the GDP (Gross Domestic Product)?
Roriz Coelho - The growth of the petrochemical field is well above the GDP, is growing three times above polypropylene and polyethylene twice to two and a half.
Manager - Why?
Roriz Coelho - These products, as I said earlier, they have excellent balance between price and quality. So it's cheap, has quality, is a good alternative and spends little energy. By turning the plastic, it uses less power than the metals: iron, steel, aluminum, glass, etc..
Manager - You would export more if the dollar was at a level more acceptable?
Roriz Coelho - Without a doubt.
Manager - The port issue also weigh?
Roriz Coelho - The infrastructure inefficiently, that it increases their costs and lost competitiveness.
Manager - And yet the sector is growing at about twice the GDP?
Roriz Coelho - Still.
Manager - E is not good?
Roriz Coelho - could grow. As I said, is a competitive race. You can run at high speed, but if your competitor is going at a speed higher than yours, is losing the race.
Manager - The expectation of the Lord towards common markets, for example, Mercosur is strong enough?
Roriz Coelho - Yes it is. We have regular customers who buy products for over 20 years. The global market is already a reality in our area. Barros Machado Walter
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