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horizons Aworld ofnew Now may not seem to be the best time to embark upon ambitious expansion plans into the US market, but that is exactly the goal of Danica Corporation, which has become an old hand at meteoric growth in a short space of time A heady mixture of high energy, aggressive strategy and low-cost, high- quality production has primed Danica Corporation for its biggest challenge to date. Danica Corporation is a family- run European and Latin American construction company investing in commercialization, manufacturing, and the erection of turnkey thermal insulation buildings. Steffen Nevermann, managing director and shareholder, explains how this success story started from humble beginnings. " We first purchased the Joinville site in Brazil in 1998 from a Danish refrigeration company called Sabroe, which made industrial compressors and thermo- insulation products, because we saw potential for rapid growth. " We are an investment company," he continues, " and we look at what interesting ventures are out there and where we can invest in sustainable business and emerging markets. We basically have two key objectives: to set- up low- cost manufacturing bases in emerging markets to capitalize on a growing middle class, and once we have achieved the quality standards we want, to supply into developed markets at a more competitive price." Brazil in particular appealed as an emerging market where there was measurable middle-class growth and potential for a growth in demand for the factory's products. Since that initial purchase, growth has been astronomical, and having started out with 50 employees, the corporation today has 850 workers and achieves annual growth in the region of 35 percent. August 09 www. bus- ex. com 139 Danica Corporation

140 www. bus- ex. com August 09 Danica's expertise at producing high- quality products from a low- cost base meant it could enter new markets with a competitive pricing structure, allowing it to quickly establish itself. " Our original two divisions contribute only around 40 percent of what we do today, and the three other divisions are currently booming and diversifying, which has enabled us to spread our risk globally," explains Nevermann. The low- cost approach relies on automation at the shop- fl oor level, and Nevermann says this has greater focus on high- scale, high- quality products. " Today we make 31 million square feet of construction per year. Our processes are fl exible too, and all our products are tailor- made using our wide portfolio of modular products, including 35 types of steel, fi ve types of thermo- insular material, 700 different standard profi les and more than 1,000 door options." An employee bonus structure ( right down to the cleaning lady's performance) is very much linked to Danica's set of annual key performance indicators- a system that is continually evolving. " As the business changes, it's important for us to re- evaluate," says Nevermann. " If we can't evolve, we have no chance of entering the North American market if we can't keep our overheads down and compete on prices." Part of the system of evolution is to eliminate waste, and each factory is highly visual, with performance displays through the Danica Management System, headed up by Nevermann's colleague Julio Armstrong, who comes from the Canadian automotive sector, where lean is the norm. Having conquered Mexico and opened a The organization operates four factories in Brazil and another one in Chile, which supply the Spanish- speaking Western market. The most recent, and possibly most signifi cant, new factory was opened in Toluca, Mexico. Its initial aim for success in the Mexican market was quickly achieved, and from this low- cost base, Danica is now entering perhaps its most ambitious phase- conquering North America. Danica Corporation operates in several markets, a diversifi cation ploy that has helped the business to overcome the downturn in the economy. " Today we focus on fi ve divisions," says Nevermann. " Our two original divisions focused on industrial cold storage, primarily constructing large refrigeration for the larger slaughterhouses in South America and the supermarket and commercial cold storage market." The company has become a leading player in both markets and currently delivers South American solutions for suppliers like Tyson Foods and Wal- Mart, who themselves are opening around 35 supercenters annually in Latin America. Over time Danica has started to develop into the civil construction marketplace, building any type of site that may require thermal construction, including terminals at Rio de Janeiro's airport. This has become a particularly lucrative market, given the warm climate in South America and the fact that thermal insulation reduces air conditioning costs. The manufacture of cleanrooms for the pharmaceuticals industry is also taking off for Danica, which can boast patrons such as Pfi zer and Abbot Pharmaceuticals. This market represents an exciting opportunity for the corporation, given its technology and the need for FDA- approved, bacteria- free environments in the North American pharmaceuticals market. " We already supply all the major pharmaceutical companies in South America," Nevermann confi rms, " and we are currently in the process of building two seven- story towers in Rio for a client, with each fl oor storing different types of product." The newest division is the naval and offshore business market, where Danica's technology and competitive pricing means it is ideally placed to manufacture living quarters on oil platforms and ships for prestigious corporations including Chevron and Petrobras, using thermal panels. By focusing its entire development and engineering expertise on the manufacturing of one core product, the Italian Industrie Pu. ma Srl has gained recognition as a leading player in its industrial niche. Pu. ma's Technoplant line represents a complete solution that includes the entire panel production cycle, and is designed as turnkey solutions for complex polyurethane panel production processes. Industrie Pu. ma has positioned itself as the undisputed market leader, commanding 90 percent market share in Italy and 70 percent market share in Europe. Industrie Pu. ma Srl