P U B L I C I D A D E

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P U B L I C I D A D E

ABRIR
FECHAR
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Lessons from the crisis

Pointing paths for the future, players of different productive areas show the strategies adopted by them to face the more restrictive economic scenario of the country’s economy

As shown by the results of the Sobratema Study of the Market, Brazil is starting a year that—as occurred in the last two years—will bring strong challenges not only for the equipment industry but also for all industries involved with strategic areas such as infrastructure, transport, logistics and energy.

Foreseeing a new reduction of the GDP, what means recession over recession, the profit margins of the companies just disappeared. In this situation, all players agree that this is the time to put order in the house, to survive in a scenario that tests the action power of the companies. But there is also space to dig some opportunities, as pointed out by some persons interviewed.

At the beginning, it is important to context the scenario where another turbulent page of the contemporary history of the country is going through. To see the dimensions of the financing gap, we have to consider that Brazil is living its worst moment of the last 20 years since the start of the Plano Real, when all historic series were restarted. With the inflation and the unemployment (nine consecutive months of resignations) going quickly to a two-digit figure, the decrease of the GDP in  2016 may stay between 1.5 and 3.5 percent (in this case, the worst in the last 25 years), as estimated by the Bank of America Merrill Lynch.

Public expenses increased 3.6 percent in the last four years and the gross debt of the country may reach 70 percent of the GDP in 2016, with a unique deficit of 30.5 billion in the budget. In the industry, the decrease was of 6.5 percent in 2015. If 11 years ago this area represented 19.2 of the GDP, currently it represents only 9 percent. To close this poor performance, the country had its investment grade lowered by Standard & Poor’s, what may be followed by other agencies. “How can we get credibility of external evaluators in this situation?”, asks Dony de Nuccio, economy editor of the Jornal das Dez (Ten o’Clock News) of GloboNews, pointing a contingency scenario in the country, with rising labor costs and continuous decreasing of productivity that may also lead to a “natural selection” in the market. “And moments such as this demand strategic adjustments inside the companies”, warns him.

TIGER EYE

Such adjustments are in accordance with what Nuccio calls “tiger eye”, which may—among the ashes of the economy—change opportunities in businesses. “A good businessman does not throw away a good crisis”, says the newsman. For him, even with the current difficulties, some factors show why it is possible to believe in the country’s recovering. “We are a democratic country, with no armed conflicts, with favorable exchange and a huge internal market with growth potential”, says him. “In addition, we have unexploited markets with lower competition and attractive profitability, with a GDP 78 percent above that of Mexico, for example.”

In fact, opportunities exist. This is shown by the projections of UNCTAD agency, which puts Brazil among the five main destinations for foreign investments till 2017. According to Focus Bulletin, since 2011 the direct investment in the country (new capital) was always above the total of 60 billion dollars per year. “There was no capital flight and this will be maintained through the next years”, says de Nuccio.

In this scenario companies have to adjust their strategy and search for efficiency increases, looking for investment opportunities and breaking expectations, thinks the economic newsman. “It is not possible to determine the scenario around you, but only your reaction to it”, says de Nuccio.  And in fact this is being searched by some companies of construction equipment in the country.

The Grupo Orguel, for example, is restructuring its administration since 1999 and this is bringing it to a new step in the rental industry. After a detailed analysis carried out by the Fundação Dom Cabral, the group—composed by the companies Orguel, Locguel and Mecan—adopted a new operating model, with standardized processes and indicators. “After the analysis, we ordered an auditing of PwC to know better our business”, points Sergio Guerra, member of the executive committee of the Grupo Orguel.

In 2011, the search for synergy caused the sharing of subsidiaries between the companies of the group and even the fusion of some of them in 2014. Meanwhile, the Carlyle Group entered as investor, buying 25 percent of the business. After new analyses carried out by organisms such as Bain & Company, Totvs and Acqua, the adjustments also included client mapping, team integration, centralization of backoffice and supplying activities, use of ERP and adjustments of portfolio. The peak was the professionalization of management and the reduction of branches. “The way of attendance is more important than the presence”, says Guerra.