Quimisa is a distributor of about three dozen basic chemicals used in the paint and coatings industry, ranging from rutile titanium dioxide to propylene glycol methyl-ether acetate (PMA).
Quimisa, based in Brusque, Santa Catarina State, is the largest tank truck distributor of caustic soda in Brazil and is one of the largest distributors of chemical products of Latin America with a staff of 300 in the country.
The company has branches or offices in Itu, Jundiaí and Sao Paulo, in Sao Paulo State; in Sapucaia do Sul and Esteio, in Rio Grande do Sul State; in Nova Esperanca in Parana State; and in Joinville, Santa Catarina.
Brenntag’s Brazilian subsidiary, Brenntag Química Brasil Ltda., is based in Guarulhos, Sao Paulo State, and made a prior acquisition in 2014 with Gafor Distribuidora, active both in Brazil and in Argentina. The Quimisa acquisition received advice from the Brazilian law firms of Advogados and Veirano Advogados.
The Essen, Germany-based Brenntag parent company said in the company’s third-quarter 2019 report that sales in Brazil exhibited strong sales growth during the first six months of this year, but thereafter sales softened. The company was not able to respond to a press query by deadline.
Brazil is typically supplied from the Brenntag Latin America branch in Houston, which purchases containerized chemicals in bulk from suppliers globally to later sell to company subsidiaries in 17 countries in Latin America.
Cumulative Latin America sales amount to an estimated €800 million (about $880 million) per year, generated by 1,600 employees.
Strong Sales in Brazil and Latin America
Brenntag’s Q3 2019 report said that Latin America represented six percent of Brenntag’s 2018 global sales of €2.7 billion, and that “Volatility and uncertainty remain high in the region.”
Within the estimated €17 billion overall global chemical distribution business, Brenntag detains 5.9 percent, according to the report.
Operating gross profit for the company in Latin America in Q3 2019 was up 5.7 percent to €44.5 million, from €42.1 million in Q3 2014. Adjusted for foreign exchange, the increase was 3.5 percent.
Over the first nine months of 2019, operating profit was up to €131.9 million or 9.3 percent from the prior nine-month period.
Adjusted for foreign exchange, the increase was still 6.4 percent. This compared with a global 7.1 percent increase for the nine-month period of 2019, adjusted to 4.1 percent for foreign exchange.
Wide Country Network in Latin America
Brenntag has been expanding its Latin America network beyond Brazil for over a decade, with notable acquisitions in Mexico, Colombia, Argentina and elsewhere.
In Mexico, Brenntag Mexico S.A. is based in San Martin Obispo, in Mexico State, and has branches in: Guadalajara, also in Mexico State; in Monterrey, Nuevo Leon State; in Tijuana in Baja Norte State; in Ciudad Jurez in Chihuahua State; and in Querétaro, in Querétaro State.
Brenntag Mexico in 2008 acquired BASF’s Mexican distribution center in Querétaro, to which it moved its national distribution center from Tultitlán, in Mexico State.
Thereafter, the company in 2009 acquired Austro Corp, and in 2012 acquired Amco International.
The company said at the time of the BASF acquisition that key suppliers included Dow, Wacker, ExxonMobil, BASF, Inneos, Stepan, Rhodia, Cognis, Celanese and Chemtura.
At the time of the BASF Mexico unit acquisition, Steven Terwindt, then regional manager of Brenntag Mexico said, “The site, which clearly enhances Brenntag’s logistics position in Mexico, will enable us to bring in liquid bulk and dry chemicals in a very efficient and safe manner by rail and truck from the US and control the quality of our storing, drumming and dispatch processes in a much better way than before, which will benefit customers and suppliers alike.”
In Colombia, Brenntag is based in the capital of Bogota, with a primary location in Mosquera, in the Cundinamarca Department.
The company also has distribution centers located in Barranquilla, in the Atlántico Department; in Medellin, in Antioquia Department; and in Cali, in the Valle del Cauca Department.
Brenntag in 2014 acquired SurtiQuímicos S.A., a $16 million per year distributor of specialty chemicals headquartered in Bogotá, with facilities in Medellín as well.
At the time of the acquisition, then-COO of Latin America, German Torres, said “The acquisition is in line with our strategy to increase the specialty chemicals market penetration in Latin America. With SurtiQuímicos we will acquire a well-established business platform for the further development of our current portfolio in Colombia. Brenntag thereby expands its supplier relations and strengthens its position as an important player in the paint and food ingredients markets notably.”
In Argentina, Brenntag in 2008 acquired the Argentine chemical distribution assets of Inquimex S.A.C.I., a distributor of polyurethanes and industrial chemicals. Among clients at the time was Dow.
At the time of the acquisition, Peter Staartjes, then president of Brenntag Latin America, said, “The acquisition of Inquimex strengthens our presence in the Argentine chemical distribution market. Together with Inquimex, we broaden our existing product portfolio, our services and our know-how in the polyurethanes, personal care, paints and coatings market. Brenntag Latin America has been looking at expanding its presence in the major Latin American markets, and Argentina is considered an important cornerstone of this strategy for growth. Through this acquisition, we will be a very attractive partner for customers and suppliers in an important economy of Latin America.”
Sustainability a Cornerstone in Latin America
Brenntag has a long and committed history when it comes to being a good corporate citizen in Latin America. For example, water use, a key Green focus of its operations, dropped from 70.1 million liters in 2017 to 56.9 million liters last year in the region, the company reported in its latest sustainability report.
In another local project, in February of last year, Brenntag employees took part in a beach-cleaning initiative organized by Ecuador’s Ministry for the Environment in the provinces of Guayas and Santa Elena.
The Brazilian operation is representative of Brenntag’s efforts elsewhere in the region. In Brazil, the company carries out a “Comprehensive approach to quality, safety and the environment; we are certified under ISO 9001, ISO 14001 and OHSA 18001 standards, which endorse us as a reference company in sustainable requirements,” it said.
The company’s approach in the region is also tailored to the local language.
“Our comprehensive standards-based management system is CASA, which stands for Quality, Safety Health & Environment. We assess prospective CASA impact of all activities to guarantee that they are carried out in a safe, clean and effective way throughout the organization. We adhere to the highest safety standards in all work practices and strive for zero accidents and incidents. Thereby we ensure not only the protection of our people but also the partners we serve,” the company said.