GlobalUpdate

BRAZIL
Saint-Gobain, NSG and Viracon All Increase Presence in Brazil
Saint-Gobain, NSG Group and Viracon are the latest companies to announce expansions into Brazil, proving that this is indeed a growing market.

Cebrace, a joint venture between Saint-Gobain Glass and NSG Group in Brazil, announced in early December 2010 plans to build a new float glass plant in Bahia State, in northeastern Brazil. The new facility, to be the sixth float line owned by Cebrace Cristal Plano Ltda., will enable Cebrace to serve its customers more effectively in this fast-growing region, according to the company. The plant will be capable of producing 600 tons of flat glass a day to supply the Brazilian construction and automotive markets. It’s scheduled to come on stream in first-quarter 2013.

Viracon, meanwhile, in November 2010 acquired 100 percent of the stock of GlassecVidros de Seguranca Ltda, an architectural glass fabricator in Brazil. Glassec will become part of Viracon and be called GlassecViracon.

“Glassec has built a tremendous business in Brazil, and its business strategy aligns closely with that of Viracon—serving complex commercial projects with high-quality, energy-efficient glass,” says Greg Silvestri, Viracon’s president.

Founded in 1991, Glassec’s 100,000-square-foot fabrication facility is located 90 minutes outside of Sao Paulo, Brazil, and has 250 employees. The existing management team will continue to lead the company, with general manager Dario Farhat reporting to Silvestri.

Guardian Industries has been heavily involved in the Brazilian market for the past 12 years and added a new coater at its Porto Real, Brazil, float glass plant in May 2010. The company also opened a second float glass plant in Brazil in 2010 in the city of Tatui near Rio de Janeiro.

Earnest Thompson, director of corporate marketing and brand management for Guardian Industries says the company identified Brazil as a growth market more than ten years ago when it built its first plant outside of San Paulo.

Russ Huffer, former chief executive officer of Apogee Enterprises (see page 52), says that Viracon has always had a significant international presence, although until now not in Brazil.

“We have glass on eight or nine of the tallest buildings today located around the world,” Huffer says. “To remain competitive we knew we had to look at having operations overseas. Brazil has one of the best economies—and it’s a market that likes to have value-added glass on tall buildings.” Guardian commented on this fact as well.

“During the past ten years we began to see that the majority of our customers are investing in value-added processes, fabricating, laminating, etc.,” Thompson says, adding that the company works to meet the needs of those customers. “We make a variety of products at our plant there including low-E and solar control for both residential and commercial applications.”

In the case of Viracon, Huffer says, “It’s a market we had no ability to enter due to duties, etc. … We knew we had to do an acquisition because we didn’t have a presence there.”

As the company searched for the right opportunity it came across Glassec, which was interested in selling, making the timing perfect.

Thompson adds that Guardian’s “global strategy has helped us overall” and that Brazil is “definitely a growth area.”

Earlier in 2010, GIMAV, the Italian association of suppliers of glass processing machinery and accessories, reported that the Brazilian glass industry has been experiencing a surge in growth and glass consumption has been rising steadily, growing 37 percent in 2008, 2009, and is tipped for 22 percent growth in 2010 overall.

A representative for Saint-Gobain told USGlass that the new Cebrace float in Brazil will meet the domestic demand for flat glass which is growing in Brazil at a rate of 7 percent a year.

“With this float, the sixth for Cebrace in Brazil, Saint-Gobain will reach a new milestone in its growth strategy in emerging countries,” says William Seiberlich, communications manager for Saint-Gobain North America. “The flat glass business of Saint-Gobain aims to achieve 46 percent of its sales in emerging countries by 2015, compared to 40 percent in 2010, and intends to earmark to them 75 percent of its capital expenditure over the next five years.”

Thompson points out that growth in this region will definitely continue through the next several years as many high profile events will be taking place there—namely the World Cup in 2014 and the Summer Olympics in 2016.

“We are pleased to be able to be involved in those projects, and all the infrastructure that goes along with those events,” he adds. “We already have customers there and they know us pretty well so we look forward to working with them on various projects.”

USG
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