Brazil: Cement manufacturers prefer direct distribution

Brazil: Cement manufacturers prefer direct distribution
Published: 24 July 2007

Holcim is reorganising distribution channels in Brazil seeking to be present in selling points targeted to individual consumers, which commercial manager Eduardo Garrocho, sees as the fast growing segment in the market nowadays. Actually  Holcim competitors use to earmark 70% of sales to these selling points and  Holcim only 50%. The move is accompanies by a new visual communication in the cement bags earmarked for individual consumers and a renewed R$5mil marketing & advertising campaign. Garrocho expects  Holcim to increase sales by 20% and most from the individual consumers segment. A growing number of Brazilian corporations is paying attention to small retailers, which have enlarged their share in the retailing from 49% in 2003 to 53% in 2006, while large chains squeezed from 30% to 26%. The trend involves all manufacturing industry.  
 
Votorantim Cimentos, for instance, has outsourced the delivery of cement to small retailers, but has 300 employees to take care of timing orders from its 35 cement plants and 62 distribution centers in Brazil. Currently Votorantim has enrolled 24,000 deposits and 6,000 construction companies to which it sells directly, without the role of wholesalers that in 2000 handled 40% of orders and now have only 15%.