Executive Insight Back

Gilmar Lima, CEO MVC & President ABMACO, Brazilian Composite Materials Association " High Tax Burden and Credit Limitations Crippling Composite Industry in Brazil"

MVC Solutions, a Brazilian leader in the production of plastic components belongs to groups ARTECOLA and MARCOPOLO. Backed by a solid innovation concept, it combines experience and technology with the purpose of developing products with high added value aimed at different markets. Operating in the plastics processing segment since 1989, MVC employs over 600 professionals in two factories in Brazil, and is renowned in the world market as one of the most important companies in its segment. MVC supplies VOLVO, SCANIA, IVECO, MERCEDES BENZ, MITSUBISHI, RENAULT, GENERAL MOTORS, NAVISTAR, NISSAN, RANDON, CARRIER, AGCO, JOHN DEERE, NEW HOLLAND, MARCOPOLO, POLOMEX, AYCO, ETERNIT and DENSO with thermoplastic and thermo fixed components manufactured by Extrusion, Vacuum Forming, RTM and Continuous lamination, ensuring agility, flexibility and low investment for the development of products and solutions.

In an exclusive interview CEO, MVC and President of ABMACO (Brazilian Composite Materials Association) Gilmar Lima shares his experience with Editor, Lucintel, K. Venkateshwar. Rao. Excerpts:

1. What are the key drivers for composite consumption in Brazil?

Gilmar Lima: The main reason for the increased consumption of composites are their own characteristics, such as design flexibility, reduced weight, strength, durability and the variety of possibilities for creation. The applications for composites are almost infinite, allowing us to transform ideas and dreams into reality.

2. What are some of the key challenges faced by your company in the composite market?

Gilmar Lima: Our Company operates in the transport, construction and light industry markets. These markets were strongly affected by the economic crisis, thus hindering our growth for 2009. Our great challenge is to grow 12% in 2009, despite the drop in demand from our major customers and reinvent our management and performance ways.  In light of this scenario we have intensified new developments and innovations in the segments we operate in and also in entirely new markets.

3. Tell us about the impact of government policies on composite industry?

Gilmar Lima: Presently, what mostly affects us is an extremely high tax burden that undermines our very competitiveness in domestic and foreign markets. Another factor is the limitation of credit and high interest rates, despite the fall in recent months.

4 Key challenges faced by composite end-users?

Gilmar Lima: Two critical points in my view are recycling and surface finish of some products, especially those parts that will be painted later.

5. Government support and policies change that is required to encourage exports of composite components?

Gilmar Lima Mostly tax reform and create lines of credit.

6. Emerging applications that you foresee to have a significant bearing on the composite consumption?

Gilmar Lima: In Brazil's case the impact of consumption will be in the building segment, especially in light of governments' social programs for housing, as well as investments in infrastructure.

7. How has global slowdown affected the market? How has been your organization's growth in the last 2-3 years and how do your foresee the growth forward?

Gilmar: As I have mentioned above we were affected by this slowdown. It didn't affect us more significantly due to our strategy to reorganize and focus on new markets and innovation. Our company has grown an average of 25% per year over the last three years and because of a first half of retraction we are expected to grow around 12% in 2009.

8. Do you see high potential for composites in the market? If yes, what are some of reasons for the same?

Gilmar Lima: Surely, and why has been answered in the first question: because of its endless benefits. The only point that could reduce this potential is if we cannot find a viable recycling system in the coming years. I am not talking about allocation of waste, but recycling and reuse in the process itself. In this sense ABMACO's Recycling Program, which is being created together with the IPT (Institute for Technological Research) and several Brazilian companies throughout the production chain, is an example to the rest of the world.

For further information on Brazil Composite Industry please click on the link "Growth Opportunities in the Brazilian Composites Market 2008-2013, September, 2008, NEW "

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