Isaura Daniel*
São Paulo – A merger with the Spanish textile company Tavex is going to bring the Brazilian Santista Têxtil, which operates in the same sector, closer to Morocco. Tavex has a production unit in the Arab country, to where Santista, one of the three largest denim producers in the world, has been exporting for eight years.
“Santista will have greater knowledge of Morocco and there will be greater exchange in business between the two countries,” says the exports manager at Santista Têxtil, Fernando Beer. Santista and Tavex announced in March the merger, which should be concluded this month, and are studying how to integrate the operations.
According to Beer, the possibilities of exchange are being analysed in all levels, from production of thread to the finished material, from the Brazilian factory, the Moroccan unit and other Tavex factories. The Spanish company produces in Spain and Morocco and Santista in Brazil, Argentina and Chile.
As well as Morocco, Santista has been exporting denim for eight years to Lebanon and Tunisia, and to Egypt since 2005. Tavex also sells fabrics in the Arab world. Even with the merger, however, each one of the companies should maintain exports to the countries they already sell their own brands to.
With the merger, Tavex and Santista take over the world leadership in denim production. The production capacity of the two together will be of 150 million metres per year and revenues exceed US$ 500 million. Denim is the material used to make jeans.
According to information released by Santista when the merger was announced, the union opens greater perspectives for expansion in Central America and, in the future, in Asia. The companies’ plans include doubling the production to 300 million metres of material per year up to 2010, according to the president of Santista Têxtil, Herbert Schmid, who will be the CEO of the new company.
Tavex and Santista
Tavex was established in 1846 and has 1,200 professionals. As well as denim, they produce materials for sportswear, technical materials, which represent 18% of sales. The company had revenues of US$ 150 million last year. It supplies to international brands of clothes such as Zara, Diesel, Miss Sixty and Blue Cult.
Santista has 4,700 workers and had income of US$ 360 million in 2005. The Brazilian company also manufactures canvas for sportswear and materials for professionals’ clothes, which respond for 25% of sales. The company is an open capital stock company. Control is in the hands of São Paulo Alpargatas, in the garment sector, and construction company Camargo Corrêa.
Santista has seven factories, five in Brazil, and exports to over 50 countries. Of total revenues for last year, 46% came from foreign sales. Of the R$ 883 million exported (US$ 390 million, at current exchange rates for comparison purposes), R$ 160 million (US$ 71 million) left Brazil, R$ 137 million (US$ 61 million) the Argentine subsidiary and R$ 105 million (US$ 46 million) left Chile.
The company invested R$ 64.9 million (US$ 29 million) last year. Since 1994 investment in Santista Têxtil has already exceeded R$ 550 million (US$ 243 million). The company is one of the main consumers of cotton in the Mercosur, the economic bloc that includes Brazil, Argentina, Paraguay and Uruguay, and answers to 10% of the regional use of the fibre. The company sponsors research for the development of cotton production in Brazil.
*Translated by Silvia Lindsey and Mark Ament
