Latin America Reports

Suvinil Invests Nearly $100 Million in Brazil Positioning

By Charles Thurston, Latin America Correspondent, | January 19, 2012

Abrafati says Brazil’s architectural segment will double expansion this year.

BASF’s Suvinil architectural line in Brazil recently announced plans to invest 180 million reais, or about $98 million, into product improvement, new products and market positioning, according to end-of-year statements by Antonio Carlos Lacerda, senior vice president for BASF in South America.

“With these investments and actions, we expect to hold a 40 percent of the market share during 2012, and to increase that to 50 percent by 2020, Lacerda was quoted as saying in late December. Suvinil is targeting the premium architectural sub-segment, which has been growing more rapidly than lower-value paint lines, thanks to increased consumer income and credit lines.

A year ago, Lacerda made comments to local press suggesting that Suvinil would grow by eight percent during 2011. Suvinil is basing its undefined, but faster-than-market growth projection for 2012 on a prediction by the national paint association Abrafati, or the Associação Brasileira dos Fabricantes de Tintas, that the architectural segment in Brazil will expand by four percent during 2012, or twice as fast as 2011.

Among production investments, Suvinil is now in its second year of a four-year plant to boost production by 70 percent. Much of the new production was predicted for a new plant at Guaratinguetá, in Sao Paulo state. Suvinil production is now centered at the company’s São Bernardo do Campo location, near the city of São Paulo, the largest production site for BASF paints and coatings in Brazil, the company said. Capacity at the site is 330 million liters of coatings, paints and resins, including automotive OEM coatings, automotive refinishes, industrial coatings and the Suvinil brand.

Similarly, modernization at the São Bernardo do Campo plant, also in Sao Paulo, and the Jaboatão dos Guararapes, in Pernambuco state will contribute to the capacity expansion which is aimed at 500 million liters per year. Last year, Suvinil also claimed a 90 percent capacity utilization rate, compared to only about 85 percent for the Brazilian paint industry as a whole.

Among new products Suvinil is touting in the market is its Acrylic Antibacterial line, which was launched in July 2011. Other marketing moves include a six-part website series produced by TV1, which features three minutes each of upscale home painting information and demonstrations. Suvinil has posted the series on its campaign website, as well as on YouTube, Twitter, Facebook, Fan Page and Orkut.

Another area of marketing Suvinil is pursing is university research for innovation. A group at Universidade Estadual Paulista, at Sorocaba, in Sao Paulo state, for example, recently won a prize from Suvinil for a project dedicated to utilizing the urucum tree for natural color ingredients. Urucum, or Bixa orellana, is best known as the source of the natural pigment annatto, produced from the fruit. Annatto is less expensive to produce than the competing pigment beta carotene.
Apart from domestic sales, Suvinil also exports to Paraguay, Venezuela, Cuba, Bolívia and several African countries.

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