Brazilian Road Equipment Maker Growing Exports 33% a Year

Brazilian company Randon Brazilian road equipment maker Randon exported US$ 138.4 million in the first half of this year, an increase of 37% over the same period last year, according to figures disclosed by the company headquartered in Caxias do Sul, in the southern Brazilian state of Rio Grande do Sul.

The corporate and investor relations director at the group, Astor Milton Schmitt, said that Africa and the Middle East answer to almost 25% of exports. The African continent alone absorbs 20% of foreign sales and the company has assembly lines in Algeria and Morocco in partnership with local companies.

"North Africa is very important to us," said Schmitt. Other heavyweight markets on the continent, according to him, are Kenya, Angola and Nigeria. Africa and Latin America lead imports of trailers and semi trailers produced by the company.

The growth in Randon exports has exceeded the average growth of Brazilian exports in the first half of the year, 23.8%. This comes at a moment in which the Brazilian real is appreciated against the dollar, which supposedly makes Brazilian products more expensive abroad in the US currency.

"Exchange rates that devaluate fast undoubtedly affect company competitiveness, requiring a great effort to stay on the market," stated the executive. "We, specifically, are doing well," he added.

According to him, Randon exports have been growing on average 33% a year over the last five years, with the expansion in the first half of this year having been at the same level.

According to the executive, the company has taken a series of measures to control exchange rates, like expanding the import of inputs – as imported products are cheaper in reais -, making a larger volume of loans abroad, operating intensely with financial derivatives, optimizing the production process – which brings productivity gains and reduces cost -, and adjusting product prices.

In the latter case, the executive recalls that the depreciation of the Brazilian real against the dollar is a global phenomenon. This allows the company to increase prices in the North American currency without representing excessive price hikes in the currency of the importer country.

"This allows us to export more while maintaining or improving our margins," pointed out the executive. In the first half, the company earnings before interest, taxes, depreciation and amortization (EBITDA) were 243.2 million Brazilian reais (US$ 154.1 million), with 16.7% margin."

In the first six months of 2008, Randon had revenues of 2.12 billion reais (US$ 1.3 billion), an increase of 25% over the same period last year. The net profit obtained was 121.6 million reais (US$ 77.5 million), growth of 45.8% in the same comparison.

Apart from trailers and semi-trailers, Randon produces train passenger cars, special vehicles, auto parts, automotive systems and also services.

Anba – www.anba.com.br

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