Porto Alegre – The activities of Brazilian company Randon in Egypt, where it maintains a semi-trailer assembly unit since last year, are being resumed, according to information supplied by CEO David Abramo Randon at a press conference in Porto Alegre this Wednesday (16th). The company halted operations at the unit, where it works in tandem with Egypt Power, because of the wave of popular protests in the country that led to the resignation of president Hosni Mubarak.
"Our Egyptian unit is very small. We kicked off the project in mid-last year. Due to the events in Egypt, there was a quick interruption in production. Some of our personnel there had to be moved to other nearby countries until the turmoil was over. Right now, however, they are already beginning to work again," claims David, stressing that the project will continue and the projected production for 2011 – approximately 500 units – still stands.
However, the company – which manufactures vehicles, road equipment and auto parts – is reassessing its plans to establish an assembly centre in Libya. According to information supplied by the company’s manager for North Africa, Moacir Zanini, Randon was planning to open its unit in the country before the end of the year, but should postpone the project and redesign some of its details. Libya is experiencing a strong wave of protests and clashes are taking place between rebel forces and the government of Muamar Kadafi.
In other Arab countries, such as Algeria, where protests have also taken place, the company is operating normally, according to Zanini. Only one office that sells the company’s products was shut down after protesters broke in. The office belongs to Randon’s partner company in Algeria, ACTS.
In the country, Randon has its main assembly centre in the Arab world. Last year, the centre sold 900 units. According to Zanini, operations in Algeria are expanding. In 2011, 1,400 units should be manufactured.
Both in Egypt and Algeria, the Brazilian company operates in partnership with local companies to assemble semitrailers from completely knocked-down (CKD) kits shipped from Brazil. The project in Egypt provides for production to reach 1,000 units in the fifth year of operation. The investment was made by Egypt Power and Randon was in charge of providing the technology and the knocked-down vehicles.
Exports going strong
During the press conference, Randon announced outstanding figures for its 2010 performance, which surpassed the company’s projections. The company posted US$ 240 million in export revenues last year, whereas by mid-2010 the forecast was US$ 220 million. In late 2009, the estimate was even lower: US$ 190 million. Foreign sales grew by 46.5% in 2010 compared with the previous year, when export revenues reached US$ 164 million.
The Mercosur and Chile accounted for 36% of Randon’s exports, followed by the Nafta countries, at 31%, and Africa, at 15%. The remaining 6% were shipped to Europe, 5% to South and Central America, and the remainder to other regions. The share of exports to Africa, where some Arab countries are located, has dropped compared with 2009, when it reached 22%. The company forecasts export revenues of US$ 250 million in 2011. "Our most important markets are South and North America," said Astor Milton Schmitt, Randon’s corporate and investment relations director.
In 2010, Randon recorded a 51.4% increase in gross revenues, which reached 5.6 billion reals (US$ 3.3 billion); a 50.6% increase in net revenues, which totalled 3.7 billion reals (US$ 2.2 billion); and a consolidated net profit of 249.5 million reals (US$ 149 million). Production reached a record, at 23,862 vehicles, a 40% increase over 2009; investment reached 190.5 million reals (US$ 114.1 million) and 1,906 new jobs were created.
"The year of 2010 was wonderful for us," said David. In 2009, the company was faced with some problems stemming from the economic crisis, but was able to retain its personnel, which enabled it to respond quickly as business picked up again last year. "In late 2008, when we had to adapt to a new level, we were stubborn about retaining our workforce, so that once the crisis was over we would be able to react as fast as possible," said Schmitt.
The company’s performance also benefited from the recovery of Brazilian economy through increased consumption, lowered taxes for purchase of the company’s end products, and the resumption of business foreign markets, as countries that Randon does business with exited the crisis.
For 2011, the company expects continued growth, though at a more moderate pace. According to Schmitt, certain factors, such as depletion of consumer credit capacity, require caution in projections, whereas others, such as good projections for infrastructure investment. Imply optimism. Thus, Randon forecasts gross revenues of 5.9 billion reals (US$ 3.5 billion) in 2011, consolidated net profit of 3.9 billion reals (US$ 2.3 billion) and investment of 270 million reals (US$ 161 million).
*The journalist travelled by invitation of Randon. Translated by Gabriel Pomerancblum
