Insights

Brazil: Strong Businesses in Difficult Times 

Latin America's economy is suffering. Yet it also has some bright lights. Porsche Consulting's office in São Paulo supported two Brazilian corporations that posted record sales in 2020—despite the pandemic. Or precisely on account of it.

01/2022

Brasal Incorporações
Impressive: The Brasal Incorporações construction company sets new residential standards in the city of Uberlândia with its innovative Sense Vertical Living apartment building.Brasal Incorporações

Working with experts from Porsche Consulting, we gave our new-construction division a more professional structure.

Sebastião Longuinho de Jesus Sebastião Longuinho de Jesus
Director of the Brasal branch plant in Uberlândia, Brasal Incorporações

The new apart­ment build­ing shines in Brasília’s evening light. Brasal Incor­po­rações, a Brazil­ian con­struc­tion com­pa­ny, com­plet­ed the Reser­va Urbana edi­fice and its 24 lux­u­ry con­do­mini­ums in 2020. The high-end units come in dif­fer­ent sizes, all fea­ture panoram­ic windows—and all are sold and occu­pied. “The Covid-19 pan­dem­ic stim­u­lat­ed our busi­ness,” says Sebastião Longuin­ho de Jesus, who over­sees new con­struc­tion projects for Brasal. Investors see the mer­its of con­crete in Brazil as well, also and espe­cial­ly dur­ing the pan­dem­ic. “Work­ing with experts from Porsche Con­sult­ing, we gave our new-con­struc­tion divi­sion a more pro­fes­sion­al struc­ture, filled our orders, and used what we learned to advance our com­pa­ny further.”

Brasal

The Brasal Incorporações construction company is a member of the Brasal holding, which has been active in Brazil for 55 years in five different sectors. It is headquartered in the capital city Brasília and employs 850 people. The company has built more than a million square meters of housing in the country, and in 2020 posted sales of 98.6 million euros (110.4 million USD). Brasal has completed three projects with Porsche Consulting. The first two focused on lean construction, planning, and logistics. In the third project the Porsche experts supported the company in its transformation to a high performance organization. The results: overall construction costs were lowered by 4 percent and working time was shortened by six months, for savings of around one million euros (1.1 million USD). The project work has been instrumental in making the company resilient through the pandemic and fit for the future.

Brasal is an exam­ple of the rapid recov­ery in cer­tain sec­tors of Brazil’s econ­o­my. Like many other coun­tries with high pop­u­la­tions, the world’s fifth-largest nation faced eco­nom­ic and polit­i­cal crises in con­nec­tion with the Covid-19 pan­dem­ic. While most of the country’s employ­ers lost con­sid­er­able rev­enue on account of hav­ing to sus­pend pro­duc­tion or close their plants for safe­ty rea­sons, sec­tors such as online sales and con­struc­tion enjoyed good results. Accord­ing to Ger­many Trade and Invest, an infor­ma­tion ser­vice for the Ger­man gov­ern­ment, six months after the pan­dem­ic broke out 80 per­cent of all con­struc­tion site oper­a­tions in Brazil were back to nor­mal lev­els, where­as only 20 per­cent had been active in the spring of 2020.

The team at Porsche Con­sult­ing also had to respond imme­di­ate­ly to the new sit­u­a­tion. Con­sul­tants tra­di­tion­al­ly work at their respec­tive sites and rarely from their offices. They need prox­im­i­ty to their clients. “We like to be where our cus­tomers are and pre­fer to speak with them in per­son, but unfor­tu­nate­ly that was hard­ly ever pos­si­ble,” says Rüdi­ger Leutz, the Man­ag­ing Direc­tor of Porsche Con­sult­ing in Brazil upon describ­ing the dilem­ma he and his forty-mem­ber team faced for an extend­ed peri­od dur­ing the pan­dem­ic. Many com­pa­nies had to stop pro­duc­tion and many employees—including those of Porsche Consulting—had to work from home. While the lock­down boost­ed the busi­ness of online food deliv­ery ser­vices like iFood and Rappi, it brought dra­mat­ic loss­es for most parts of the econ­o­my as large parts of the pop­u­la­tion were com­pelled to remain with­in the four walls of their homes.

Brasal Incorporações
Sweeping views: The Reserva Brasília construction project is one of the luxury apartment buildings set on solid economic foundations by Brasal in 2020. Brasal Incorporações

But this coun­try in the south­ern hemi­sphere has expe­ri­ence in deal­ing with crises. Leutz, who was born in the south­ern part of Ger­many, prais­es the Brazil­ian approach to life. In Brasília, Rio de Janeiro, São Paulo, and the entire nation for that mat­ter, “Peo­ple are not known for stick­ing their heads in the sand, but instead for pulling togeth­er.” He could there­fore apply new strate­gies in respond­ing to the pan­dem­ic. In place of the pre­vi­ous focus on reduc­ing clients’ costs and increas­ing their effi­cien­cy, a dif­fer­ent strat­e­gy rose to promi­nence in 2020. It took an ad hoc form in answer­ing the ques­tion: “How do we and our clients joint­ly chart a course through the storm?” Cash flows were scru­ti­nized and the employ­ees were close­ly involved. A pre­mi­um was placed on clear and direct com­mu­ni­ca­tion. Leutz and his team achieved this with the help of a hybrid con­sul­tan­cy model. For safe­ty rea­sons they ini­tial­ly held all work­shops and meet­ings online. In late 2020, they began hold­ing some client con­sul­ta­tions and work­shops reg­u­lar­ly on site with the appro­pri­ate health pro­to­cols. “That’s part of the Porsche spir­it,” notes Leutz. “It’s also a reflec­tion of our sports­man­like approach. We’re no ivory-tower con­sul­tants but instead pre­fer to work close­ly togeth­er with our clients. We want to under­stand their employ­ees and build trust. That’s one of the things our clients appre­ci­ate about us.” The strat­e­gy suc­ceed­ed, and Porsche Consulting’s teams worked with their cus­tomers even more effec­tive­ly and rapid­ly than before the pandemic.

The Porsche con­sul­tants in Brazil prompt­ly put their newly gained expe­ri­ence into prac­tice in devel­op­ing a new busi­ness model tai­lored specif­i­cal­ly to the Latin Amer­i­can mar­ket. All projects have to yield mon­e­tary value and the costs for con­sult­ing on strat­e­gy are linked to a suc­cess fee. Or in other words, to mea­sur­able results. That helps the con­sul­tants in their talks with new clients, who can now com­mis­sion Porsche Con­sult­ing with a lower finan­cial out­lay. Aside from com­pen­sa­tion for expens­es, they will only be billed for suc­cess­ful results. Leutz is “absolute­ly con­vinced” that these results will come. “Oth­er­wise we would­n’t ven­ture to make that kind of offer.”

The project not only exceeded our expectations. Porsche Consulting also changed our mode of work.

Marlos Santana de Almeida Marlos Santana de Almeida 
Industrial Engineering Manager, Brametal

Change of scene to anoth­er of Porsche Consulting’s clients in Brazil. Mar­los San­tana de Almei­da, indus­tri­al engi­neer­ing man­ag­er for Bram­et­al in Lin­hares, has good rea­son to view the future in opti­mistic terms. In the tough year of 2020, his com­pa­ny post­ed the best results since its incep­tion in 1975, pro­duc­ing 200,000 tons of steel struc­tures for appli­ca­tions such as trans­mis­sion lines. He, too, put two suc­cess­ful projects with the Porsche con­sul­tants into prac­tice. One was a sales and oper­a­tions plan­ning (S&OP) pro­gram to syn­chro­nize the company’s sales, pur­chas­ing, and pro­duc­tion plan­ning activ­i­ties. It yield­ed an increase in plan­ning pre­ci­sion of 21 per­cent, in raw mate­r­i­al stocks of 25 per­cent, and in pro­duc­tion of 9.3 per­cent. “We are now work­ing in a much more struc­tured and tar­get-ori­ent­ed way,” says San­tana de Almei­da. “The project not only exceed­ed our expec­ta­tions. Porsche Con­sult­ing also changed our mode of work with the cul­ture and dis­ci­pline it brought.”

Brametal
Success at dizzying heights: In Linhares, Brametal can test high-voltage pylons at a height of 80 meters. This is only possible at four locations worldwide. Brametal

Brametal

The Brametal steel producer employed 1,500 people and posted sales of 106.5 million euros (119.3 million USD) in 2019. It is the largest manufacturer of metal structures in the Americas, with a product range including lattice steel towers and steel poles for electric power lines and, telecommunications, and — more recently — solutions in fixed-tilt and solar tracker structures for ground-mounted solar power systems as well. With more than 46 years of successful performance and an average annual production capacity of 200,000 tons, Brametal is also one of the great steel companies in the world. Its production facilities are located in the state of Espírito Santo (north of Rio de Janeiro), in the city of Linhares and further south in Criciúma in the state of Santa Catarina.
Brametal
Heart and source of growth: The Brametal steel producer uses solar power for its largest plant, located in Linhares, where its own solar power station covers a quarter of the energy needs. Brametal

Both Brasal and Bram­et­al suc­ceed­ed in grow­ing even dur­ing the pan­dem­ic. Luiz Gar­cia, a part­ner at Porsche Con­sult­ing who super­vised work with the com­pa­nies, relied unswerv­ing­ly on the inim­itable Porsche spir­it. “We always col­lab­o­rate close­ly with the indi­vid­u­als on site and under­stand how they work. That’s the best way for us to show them new ways and con­vince them of the ben­e­fits.” Despite the Covid-19 pan­dem­ic and peri­ods of strict health pro­to­cols, that proved the for­mu­la for suc­cess with these two com­pa­nies too.

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