Growing in the land of superlatives

January 2012 Brazil is a land of superlatives and one of the fastest growing economies in the world. As a development partner of many key industries, ContiTech is purposefully developing its presence in this dynamic country.

Brazil – the largest country on the South American continent. When tourists hear the word Brazil, they often think of Sugar Loaf Mountain and the Rio Carnival. For politicians and managers it is an emerging country full of contrasts. Above all, Brazil is a driver of economic growth. It has huge raw materials rexources, is fully self-supporting in terms of energy, and young and buzzing, with an average age of the population of only 27 years. Together with India, Russia and China, Brazil is among the fastest growing economic markets worldwide.

So Brazil meets all the conditions to be perceived as a highly interesting market by multinational corporations such as ContiTech. Initially, the company focused on the automotive industry with their Brazilian operations, but there is an increasing shift toward fast industrial development.

Today, Ponta Grossa is also the production site for the ContiTech Conveyor Belt Group, which makes conveyor belts for mining and other industries.

Ponta Grossa is situated in the state of Parana, which is best known for its world famous Iguacu Falls – as well as for one of the world’s largest hydropower plants that highlights Brazil’s economic strength. After all, Brazil draws about 90 per cent of its energy demand from hydropower. The South East of the country has long become an important industrial region. This is why ContiTech as a development partner in many key industries is strategically expanding its presence in the area.

What are the reasons for the enormous upswing?

Brazil has a population as large as Italy, Germany and France combined. The country plays an indispensable role in the world economy, most importantly as the supplier of raw materials. It is the number one provider of iron ore, with supplies lasting for at least another 500 years. About 60 per cent of all precious stones processed worldwide, apart from diamonds, are Brazilian in origin. Manganese, coal, bauxite, nickel, tin, silver, gold and uranium are further treasures hidden in abundance in the Brazilian soil, which industrial production urgently requires. Anticipated investment in mining is enormous: 350 billion US dollars by 2020.

The most important mining company is Vale S.A. based in Rio de Janeiro, the key partner of ContiTech Conveyor Belt Group. Formerly a public enterprise, the now private company is among the world’s three largest mining companies. As the number one specialist in raw materials extraction in huge mines, Vale is also among the country’s leading transport companies. Brazil’s natural resources are transported via routes that stretch several kilometers. “Our conveyor belts are the perfect solution for Vale as they work quickly, efficiently and reliably. Besides the conveyor belts’ high quality, there is also another crucial aspect: our competence as a global partner with its worldwide know-how in product applications, as well as technical support in the field,” comments Paulo Martinez, Managing Director of ContiTech Conveyor Belt Group in Ponta Grossa, on the cooperation with the mining company.

Companhia Siderurgica Nacional (CSN), which is the country’s largest steel producer, Samarco, which is a joint venture between Vale and BHP Billiton and the world’s second largest iron pellets exporter, as well as the Australian nickel extractor Mirabella Nickel Ltd. are among ContiTech’s other customers. In mining alone, there are 1,200 kilometers of conveyor belts installed that need to be exchanged at regular intervals. The industrial sector has another 1,100 kilometers of conveyor belts that offer interesting business opportunities. All of this is enough reason for Paulo Martinez to feel optimistic and he plans to expand the company’s market share in his area significantly in the years to come.

Oil delivery hoses for Petrobras

Tapping the large crude oil and gas reservoirs discovered at the South Eastern Atlantic coast in 2008 complements the image of Brazil as th world’s number one raw materials provider. This discovery has made the country almost completely independent of oil imports. Consequently, a new addition to the site at Ponta Grossa is the ContiTech subsidiary Dunlop Oil & Marine Ltd. The reason: Petrobras (Petróleo Brasileiro S.A.), the semi public Brazilian oil company founded in 1953 with headquarters in Rio de Janeiro, is among the global market leaders in this industry as well as technology leader in off shore production. The company also operates one of the world’s largest fleets of floating platforms.

Huge gas tank membranes for steel plant

Back in 2008, the business unit ContiTech Elastomer Coatings mastered a monumental undertaking in the industrial sector – with Germany as the starting point of the operation: At a steel plant in Sepetiba, Brazil, the company installed the world’s largest gas tank membranes. The facility, which is used to store converter and furnace gases, is 181 meters in perimeter, with outer walls only 2.2 millimeters thick and 22 meters long and weighs 12 tons.

Growing sustainably due to an economic stimulus package

Currently, there are no limits to further development. The dynamic economic growth is supported by investments of private as well as public companies amounting to the hundreds of billions. A highlight in this field is the programme to accelerate economic growth (PAC – Programa de Aceleração do Crescimento) set up in 2007. The economic stimulus package derived from this programme for the years 2011 to 2014 focuses on energy, infrastructure and urban development. In addition, ongoing investment in education is another guarantor for the nation’s future successful growth.

Top sporting events

And finally: Brazil expects the 2014 FIFA soccer world championship, which it hosted for the last time in 1950, to be another growth driver. The passion for soccer is the great integrator in the country of the five-time world champion. It also serves as a link between people in the far-off country to others all over the world. Furthermore, sports-passionate Brazil has been nominated host of the 2016 Olympic Summer Games.

Meanwhile, ContiTech continues to grow along with its partners in this country of superlatives.