Doing Business in Brazil with
State-of-the-Art Precision Grinding Systems
Dwight Myers
Cinetic Landis Corp.
Cinetic Landis Corp.
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Fives is an Industrial Engineering group which
designs and supplies equipment and plant facilities
for major industrial players
Cinetic Landis Corp.
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Group expertise
Our know-how: management of large projects, whatever their sizes, all around the
world.
Our added value: our ability to develop tailor-made manufacturing systems for each
client.
We work in partnership with all the leading groups of the industry : Arcelor Mittal,
General Motors, Alcan, Lafarge, Toyota, Tata-Corus, Renault-Nissan,
Total,ThyssenKrupp, Areva, Alstom, PSA, Cemex , EDF, Chrysler, Michelin, Alcoa,
Honda, La Poste, Holcim, BHP Billiton, Rusal, Hydro, Posco, Ford, Baosteel,Tisco,
Saint-Gobain, Outokumpu, Air liquide, Tereos, Caterpillar…
Leading manufacturing positions in aluminum, steel, glass, cement, energy,
sugar and automotive & logistics
Cinetic Landis Corp.
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An international organization
based on a worldwide network of subsidiaries
5,700 employees around the world
$1.5 - $2.0 Billion Annual Sales Globally
Cinetic Landis Corp.
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New Facility = Green Opportunities
Our new facility is situated on a 26 acre “green-field” site
Lean processing in both Manufacturing and Supply Chain is our focus
Energy & Utility consumption reduction from 2007 to 2008:
•
•
•
•
Electricity by - 15.7%
Natural Gas by - 84%
Water by – 87.5%
Manufacturing Waste by - 26%
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Cinetic Landis History
1897
1950
Cranfield
Acquired
1995
1991
1983
Cinetic Landis Corp.
1958
John Lund Co.
Acquired by Landis
Gardner Machine Co.
Established
Pratt&Whitney / Besly
Acquired
CITCO Acquired
by Litton
1968
1905
Landis Co. Founded
by A.B. & F.F. Landis
•BESLY
Gardner and Landis
Acquired by Litton
Gardner Acquired by
Landis Tool Co.
Landis Tool Co.
•Incorporated
1994
Litton’s Commercial
Businesses
Spun-off to Form
Western Atlas
1996
Landis & Gardner
Consolidated
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Cinetic Landis History
Landis Celebrates
100th Anniversary
Goldcrown Acquired by
Landis Gardner
1997
1997
1997
UNOVA Spun-off
From Western Atlas
Landis, Landis Cincinnati,
Landis Gardner,
CITCO & Gardner Abrasives,
Acquired By Fives
•LANDIS GRINDING SYSTEMS
1999
Global Reorganization
Landis Moves Into New Facility
Hagerstown, MD
2008
2005
2001
1998
Cincinnati Grinding
Division Acquired
Landis & Hebron
Consolidated
Develop New Line of Flexible
And Eco Friendly Grinders
2010
2006
Gardner Abrasives
Consolidated
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Facility Locations
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Product Line Summary “Built in the USA”
Precision Cylindrical and Disc Grinding Machines
Cinetic Landis Corp.
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Product Line Summary – Consumable Products
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Market Segments
B
e
a
r
I
n
g
s
Auto/Diesel
Internal Combustion Engine
Transmission/Chassis
Small Engine/Compressors
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Global Customer Base
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World Wide Service, Support & Agents
BERGANDER
CLC
KARLSSON
WEST YORKSHIRE STOCKHOLM
FORMA
POLAND
MOSCOW
CIM
CZECH
REPUBLIC
FREESON
BEIJING
SCOTLAND
CLC
BEIJING
KIECO
Korea
CLC
CHICAGO
CLC
Maryland
CLC
JAPAN
CLC
Milford
CLC
SOUTH
BELOIT
FREESON
SHANGHAI
CALCUTTA
CLC
INDIANAPOLIS
MADRAS
MEPRO
MADRID
SIMSA
SALTILLO
PUNE
MTI:
NEW DELHI
BOMBAY
HIRZ KRAEMER
GERMANY
CLC
FARMINGTON HILLS
CLC
BAY CITY
MARRO
BRAZIL
EMANUELE
MASCHERPA FLAME SPRAY
ITALY
MILANO
EQUIP
INDUSTRIES
PARIS
Cinetic Landis Corp.
ERNST
POLACK
STUTTGART
AIMS PTY
MELBOURNE
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This is what we do!
Precision Grinding Solutions
Cinetic Landis Corp.
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And We Do It Big
(Up to 12 M in Length)
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What Are the Opportunities in Brazil?
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Past & Present Opportunities
Cinetic Landis’ main concentration was around the light transportation
industry
Many of these Brazilian companies are based out of Europe or business is tied
to Europe
Parents companies have saddled Brazilian subsidiaries with their production
Brazilian companies are now driving global decisions and installations
Aggressively expanding Sales focus into the Agriculture, Construction, Mining;
Aerospace; Oil & Gas and Heavy Transportation industry segments
Past revenues generated from Brazil ranged from $5 to $10 million annually
2011 Sales projections driven from Brazil are forecast at $20 - $25 million and
growing
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How Are We Executing this Opportunity?
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Sales Channel & Service Network
Americans are perceived as arrogant by the Brazilians. You have to overcome
this initial perception
It’s critical Brazilian nationals are involved with initial customer introductions
and guide you through relationship management
This can be done either through an agent network or direct Sales / Service
employees
Cinetic Landis will continue to develop agent network supported by direct
Brazilian employees working from Fives Sao Paulo office
A Cinetic Landis Regional Manager will have Sales & Service oversight in this
region
Product Specialist will travel from US to support all imminent Sales
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What Are the Likely Problems in Brazil?
Cinetic Landis Corp.
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Problems to Keep in Mind
During the Sales process, understand your Brazilian competitors. If you have
internal competition, your customer will have a 40% duty added to your price
If you have no internal competition, your customer can get duties dropped to
as low as 2%
Internal competition may dictate your product entrance into this market
Keep track of currency fluctuations as you would with all global sales. The
dollar exchange rate is swinging wildly
Taxes and duties are hard to understand especially when applied to Service
and Parts business. We’ve had no problems with some customers and had
40% duties applied to others
Map out your spare parts strategy with your customer and vendors. Critical
components should be stocked either by your customer or vendor managed
inventory (VMI) in Brazil
Spare or warranty parts can have close to a 100% duty applied if not handled
correctly
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Problems to Keep in Mind
During the Sales process, clearly define the INCOTERMS and where transfer of
title will change
Ideally, it’s best to have your customer take control of trucking / shipping after
equipment is packaged for overseas shipment
Proper packaging is critical
You don’t want to be chasing ships up and down the US coast
Carry insurance on all shipments for damage once equipment leaves your
facility (if you’re responsible for shipping)
Work closely with your customer to have the proper customs paperwork for
your equipment. If it’s not right, it won’t move out of customs
Clearly define during the Sales process who is responsible for rigging,
placement of equipment and connection to plant utilities
It takes up to 2 months for work visas! Work this out ahead of installation
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2009 Shipment into Brazil
Customs will open your
machine packaging for
inspection
Consider sealing all critical
component boxes individually
Even though ownership has
transferred, you’ll still be
responsible
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Things to Remember!
Dress well, Americans are stereotyped as being too casual
There will be fierce opposition from European competitors. Remember, many
of the Brazilian companies have ties to Europe
As in all global regions, it’s best to have a local presence in both Sales &
Service. We’ve done well in China and India with this strategy
Understand Brazilian labor laws. Hire employees through a local Brazilian
company. Cinetic Landis will have direct employees at our Fives Sao Paulo
office that’s a registered Brazilian company
Develop a trusting relationship with your customer. This can be hard when
asked to proceed on a project without a Purchase Order or payment
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Conclusion
The Chinese and Indian markets have grown as predicted
Brazil has lagged but investment is growing
Understand local competition, taxes and duty laws
Get your Sales and Service strategy in place
Target specific industries, it will not be easy. There’s a relationship building
period but this can be overcome
Plan for the hidden costs with doing business in Brazil
Competition will be fierce but once relationships are established, you’ll be
given the opportunity to loose all future orders
Enjoy the challenge of doing business in Brazil!
Cinetic Landis Corp.
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