Univar Targets Brazilian Coatings Growth
With expectations
of growth rates
in excess of
the country’s
expanding
economy, Univar
plans to focus
its Brazilian
operations
entirely on
domestic growth,
while serving
the remainder
of Latin America
from its Mexico
operations.
36 | Coatings World
by Charles W. Thurston
Latin America Correspondent
thurstoncw@rodmanmedia.com
Global distributor Univar Inc. is plan- ning to broadly expand its recently- acquiredchemicaldistributionnetwork
in Brazil, which includes all segments of the
paint and coatings industry. With expectations
of growth rates in excess of the country’s expanding economy, the Redmond, Washington-based distributor plans to focus its Brazilian
operation entirely on domestic growth, while
serving the remainder of Latin America from its
Mexico operation.
“We serve all main segments of industry
in Brazil, including the automotive, construction and white goods industries,” said Marco
Antonio Quirino, who was appointed as the
president of Univar Brazil in early May. “Within
the paint and coatings market, we are not yet
selling to the ten biggest international companies that control about 75 percent of the market, but we currently do serve the ten percent
share of the market which is supplied through
distribution,” said Quirino, based at company
headquarters in Osasco, Sao Paulo state.
The company provides close to 200 individual products to paint and coatings formulators,
of which approximately 60 percent are specialty chemicals and 40 percent are commodities,
Quirino said. Univar produces polyurethane
manufacturing systems in Osasco, along with
warehousing and laboratory facilities. The
company also has two regional warehouses, in
Recife, Pernambuco state, in the north, and in
Itajaí, Santa Catarina state, in the south.
“The north is a very important growth area
for us because the regional economic expansion is faster than that of the country overall,”
noted Quirino. “Over the past decade, government policies oriented at low-cost housing and
poverty eradication have resulted in a growing
consumer class there,” he added.
Univar imports most of its products through
the port at Itajaí and then trucks the goods to
Osasco or the other warehouse centers, rather
than using the Sao Paulo port of Santos. “The
www.coatingsworld.com
Univar’s Sao Paulo State distribution headquarters in
Brazil; source: Univar.
cost of importation at Santos is prohibitively
high,” he said. Itajaí is the second-largest container port in Brazil today.
The company began operations with the purchase of Arinos, a foam and mattress manufacturer in 2011. At that time, the company was
acquiring approximately 40 percent of its distribution stock from domestic manufacturers and
60 percent from imports. Today the ratio is approximately 50-50, Quirino said. “Our goal is to
further displace imports to a 40 percent share, so
that local acquisitions will represent 60 percent
of purchases,” he added. Brazil is among those
countries with a strong history of local content
requirements, typically set at 60 percent or more.
Challenges to growth in Brazil include the
need for a culture change in the role of distribution, suggested Quirino. “The old distribution
model in Brazil was based on small- to medium-sized companies that were perceived as an
added cost to the supply chain. Our proposal
is to serve with additional value through our
broad portfolio, inventory controls, and logistics optimization,” he said. “One very big potential customer we recently met with is willing
to allow us to supply 50 percent of the total
universe of products they now buy from many
different suppliers, so one-stop shopping is of
great value to them,” he noted. “This concept is
not new in the United States or Europe, but is in
Brazil,” he explained.
Other key challenges to distribution in
Brazil are the poor state of the transportation
infrastructure system overall, and the complex
design of taxation, which varies state by state,
Quirino pointed out. CW
