Company projects to increase its market share to 30% from current 13%
06/28/2022
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The new furnace will have the capacity to produce 1,000 tonnes a day — Foto: Reprodução/Vivix
Flat glass manufacturer Vivix, owned by the Cornélio Brennand group, will invest R$1.3 billion in a new plant in the municipality of Goiana (Pernambuco), where it has been installed since 2014. With the investment, the company projects to increase its market share to 30% from the current 13%, expanding distribution outside the Northeast region.
The construction of the unit will begin in December and the start-up is scheduled for mid-2025. The new furnace will have a production capacity of 1,000 tonnes per day. Currently, the capacity of the company, which grossed R$900 million last year, is 900 tonnes/day.
The company signed on Monday a memorandum of understanding with the state government of Pernambuco to implement the venture. According to Henrique Lisboa, Vivix’s CEO, the project’s financial equation is still being closed. He says that the plant will have the contribution of shareholders’ own capital, resources from the company’s cash flow and a funding capture in the market.
The flat glass market is currently dominated by three multinationals (Cebrace, Agc, and Guardian). With the new plant, Vivix, the only 100% Brazilian, expects to become the second ranked company in the country.
Vivix’s expansion was planned since its implementation eight years ago, with investments of about R$1 billion. Mr. Lisboa says that the glass consumption per capita in Brazil is still low if compared to the United States and Europe, which indicates a great potential to expand the demand for the product, used mainly in construction, furniture, and decoration.
At the moment, the sector is going through a slowdown phase after the peak of the pandemic, following the oscillation the real estate market suffers directly the effects of high interest rates. “When we talk about high interest rates, we are talking about short term. The plant takes about 30 months to be ready and the furnace operates for 18 years,” says Mr. Lisboa.
According to the executive, the flat glass market may experience a slight contraction in volume this year, around 5%. The years 2020 and 2021 together add up to an increment of 14%.
Currently, Vivix commercializes half of its production outside the Northeast region, with road and sea distribution. With the new factory, the company wants to expand this share to up to 70% by road and sea.
The furnace will be practically all imported. It will be fueled mostly with natural gas. A residual portion will use electricity. The group has ore mines to supply the plant in a nearby region.
The unit currently employs 360 people. When it is fully operational, the workforce is expected to exceed 600 people.
*By Marina Falcão — Recife
Source: Valor International