Votorantim changes strategy for growth

Votorantim changes strategy for growth
Published: 09 March 2006

Cement, aluminium, steel, zinc, nickel, pulp, paper, chemical products, energy and orange juice accounted for more than 90 per cent of the Votorantim group net turnover of almost R$19bn in 2005. Banking and new businesses, including biotechnology and information technology, accounted for the rest. The group has grown significantly over the last fiver years, under the management of the family’s third generation. The growth can be attributed to a more unified management and to constant reinvestments of resources in expansion projects. Investments jumped from a little more than RS$800m in 2000 to an estimated R$5.5b in 2006. The company has grown through a mixture of organic growth and acquisitions both in and out of Brazil. It has acquired rival companies in the zinc, nickel and paper and pulp segments and entered the North American cement market in 2001, in which it has already invested US$1.5bn. 
 
The group currently has five per cent of the US cement market (27 per cent of the cement market in the Great Lakes region). Votorantim leads the Brazilian cement market with a 40% share. Nine other groups share the remaining 60 per cent. The group’s operating results have been growing at annual rates of 14%. Votorantim Celulose e Papel (VCP), the paper and pulp division of the group, has its shares listed on the Sao Paulo Stock Exchange (Bovespa) and on the New York Stock Exchange. Votorantim also holds stakes in other listed companies, including Aracruz, Usiminas and CPFL Energia. The family’s third generation has created Votorantim Participacoes, a holding company for the group’s businesses, with the aim of designing strategic plans for the group as a whole. Votorantim is one of Brazil’s largest exporters, with exports of US$1.5bil in 2005. Its main exports are aluminium, zinc, nickel, pulp and orange juice. The group expects domestic demand for cement and steel to rise in 2006. It also expects its 2005 operating profits to have fallen by about 13 per cent compared with 2004, when ebitda totalled R$6.34bn.  (Valor Economico)