01.01.07
Location: Parana, Brazil
Sales: $225 million
Description: Plant Location
São Jose Pinhais-Paraná, Brazil
Key Personnel
Herminio Freitas, CEO; Rubens Sardenberg, CFO; Cleber dos Santos, sales and marketing director, Romeo Bregant, industrial director
Processes
Spunbonded, SMS, meltblown, laminated nonwovens, printed nonwovens
Brand Names
Kami
Major Markets
Hospital, agriculture, bedding, towel and coverlet, table mat, hygiene, baby diapers
Under new ownership is Companhia Providencia, Parana, Brazil. In February, the maker of spunmelt nonwovens was purchased by a group of four equity funds led by AIG Capital Partners, Inc., a member company of AIG Global Investment Group. The purchase price was reportedly $433 million (R$930 million) Other investors included Governança e Gestão (“GG Investimentos”), Banco Espírito Santo (“BES”) and the Constantino Family.
“Providência is a first-rate company with state-of-the-art technology and superior product quality. We recognized the opportunity to partner with a successful organization that is on the forefront of expanding internationally by increasing its exports to several markets in the U.S. and Latin America,” said Fernando Borges, CEO of AIG Capital Investments do Brazil. “AIG Capital Partners believes that with the expected industry growth and Providência’s dominant market position and share of the market, the company will be able to achieve strategic vision, bringing it to an even higher competitive level.”
Following the ownership change, Herminio Reitas was named CEO of the company, replacing a member of the Starostik family who previously owned Companhia Providencia. Other than that, according to executives, few changes have been implemented at the company, which is anticipating the start up of its ninth line in December 2007. The new line, based on Reicofil 4 technology, will add 15,000-20,000 tons of new capacity to the operation, bringing its total output to 70,000 tons, according to sales director Cleber dos Santos.
Like Providencia’s eighth line, which came onstream in mid-2005, the new line will mainly target the hygiene market but its flexibility will enable it to also expand the company’s role in other technical markets such as medical, filtration and automotive.
In addition to this new construction, Providencia is also expanding through the purchase of Brazilian competitor Isofilme in June for an undisclosed sum. The acquisition included Isofilme’s 3.4-meter Reifehauser Reicofil 4 SSMS line, which is located in Pouso Alegre, Minas Gerais, Brazil. The line was started by Isofilme in May 2006.
During the past decade, Providencia has been growing its sales enough to add a new line every two years and currently has its entire base of operation at its Parana, Brazil headquarters.
Currently, Providencia’s sales are split equally between its local Brazilian market and the remainder of the Americas and the majority of its business is conducted in the hygiene segment. Despite problems facing hygiene such as competition, pricing problems and raw material increases, the company has been able to maintain sales growth by focusing on value-added products. For example, the company operates lamination and printing lines to offer diversified products to its customers that they are willing to pay a premium for. “Product development is very important to us,” Mr. dos Santos said. “We are trying to stay away from the commodity markets.”
Additionally, Providencia finds success by forging strong relationships with its customers. “We have long-term relationships with a big base of customers to keep our share in the business,” Mr. dos Santos said. “We make sure we don’t do anything wrong. We are very selective when it comes to new product development and we work hard to keep our costs down.”
With about 70% of its sales in hygiene, Providencia also takes advantage of Reifenhauser technology’s attributes for industrial, medical and agricultural applications. Here the company is also able to apply value-added features to its products.
Recently, Providencia has been taking these efforts a step further by focusing on new product development, not only based on customer demands. “Our latest initiative is to develop specific new products to follow market trends instead of just responding to the needs of our customers,” Mr. dos Santos said. “We want to provide products before our customers realize they need them, this is a process that will take time, a new way of thinking inside the company.”
And for now, Providencia’s number one mission is to transition itself from a family-owned company to a professional one. “The new owners saw us as a strong company, a leader in the region, a good investment, and that is what they are getting,” Mr. dos Santos concluded.
Sales: $225 million
Description: Plant Location
São Jose Pinhais-Paraná, Brazil
Key Personnel
Herminio Freitas, CEO; Rubens Sardenberg, CFO; Cleber dos Santos, sales and marketing director, Romeo Bregant, industrial director
Processes
Spunbonded, SMS, meltblown, laminated nonwovens, printed nonwovens
Brand Names
Kami
Major Markets
Hospital, agriculture, bedding, towel and coverlet, table mat, hygiene, baby diapers
Under new ownership is Companhia Providencia, Parana, Brazil. In February, the maker of spunmelt nonwovens was purchased by a group of four equity funds led by AIG Capital Partners, Inc., a member company of AIG Global Investment Group. The purchase price was reportedly $433 million (R$930 million) Other investors included Governança e Gestão (“GG Investimentos”), Banco Espírito Santo (“BES”) and the Constantino Family.
“Providência is a first-rate company with state-of-the-art technology and superior product quality. We recognized the opportunity to partner with a successful organization that is on the forefront of expanding internationally by increasing its exports to several markets in the U.S. and Latin America,” said Fernando Borges, CEO of AIG Capital Investments do Brazil. “AIG Capital Partners believes that with the expected industry growth and Providência’s dominant market position and share of the market, the company will be able to achieve strategic vision, bringing it to an even higher competitive level.”
Following the ownership change, Herminio Reitas was named CEO of the company, replacing a member of the Starostik family who previously owned Companhia Providencia. Other than that, according to executives, few changes have been implemented at the company, which is anticipating the start up of its ninth line in December 2007. The new line, based on Reicofil 4 technology, will add 15,000-20,000 tons of new capacity to the operation, bringing its total output to 70,000 tons, according to sales director Cleber dos Santos.
Like Providencia’s eighth line, which came onstream in mid-2005, the new line will mainly target the hygiene market but its flexibility will enable it to also expand the company’s role in other technical markets such as medical, filtration and automotive.
In addition to this new construction, Providencia is also expanding through the purchase of Brazilian competitor Isofilme in June for an undisclosed sum. The acquisition included Isofilme’s 3.4-meter Reifehauser Reicofil 4 SSMS line, which is located in Pouso Alegre, Minas Gerais, Brazil. The line was started by Isofilme in May 2006.
During the past decade, Providencia has been growing its sales enough to add a new line every two years and currently has its entire base of operation at its Parana, Brazil headquarters.
Currently, Providencia’s sales are split equally between its local Brazilian market and the remainder of the Americas and the majority of its business is conducted in the hygiene segment. Despite problems facing hygiene such as competition, pricing problems and raw material increases, the company has been able to maintain sales growth by focusing on value-added products. For example, the company operates lamination and printing lines to offer diversified products to its customers that they are willing to pay a premium for. “Product development is very important to us,” Mr. dos Santos said. “We are trying to stay away from the commodity markets.”
Additionally, Providencia finds success by forging strong relationships with its customers. “We have long-term relationships with a big base of customers to keep our share in the business,” Mr. dos Santos said. “We make sure we don’t do anything wrong. We are very selective when it comes to new product development and we work hard to keep our costs down.”
With about 70% of its sales in hygiene, Providencia also takes advantage of Reifenhauser technology’s attributes for industrial, medical and agricultural applications. Here the company is also able to apply value-added features to its products.
Recently, Providencia has been taking these efforts a step further by focusing on new product development, not only based on customer demands. “Our latest initiative is to develop specific new products to follow market trends instead of just responding to the needs of our customers,” Mr. dos Santos said. “We want to provide products before our customers realize they need them, this is a process that will take time, a new way of thinking inside the company.”
And for now, Providencia’s number one mission is to transition itself from a family-owned company to a professional one. “The new owners saw us as a strong company, a leader in the region, a good investment, and that is what they are getting,” Mr. dos Santos concluded.