Álamo Engenharia: Overview of the Maintenance Sector in Brazil

What is your evaluation of the maintenance sector in Brazil?

The maintenance sector is very important here in Brazil. Usually when people talk about engineering their first thought is regarding construction. However after construction you have to keep things in good shape, so that the building can continue a good lifetime for the tenants.

When Álamo started, it started with projects regarding electricals, heating, air conditioning, ventilation, hydraulics, etc., and during construction we used to follow up to see whether everything was done using the specs and the right quality. Thirty years ago, one of the owners invited us to do the maintenance and the operation of a building. That was when Álamo started working with maintenance rather than projects.

When you talk about maintenance in this sector, it is not only linked to commercial buildings but it is much broader than that, you can look at hospitals and warehouses for example. Particularly warehouse maintenance is a segment that is being developed a lot and we have a maintenance project with warehouses for DHL. We also work with some utility companies, for instance we have a contract with Vivo, which is a telecoms utility company. Even some condominiums hire our services too.

Can you tell us the key information about the company?

Regarding the areas in which we perform our work, we can say that we work in electrical maintenance, civil engineering, maintenance repairs, hydraulics, heating and air conditioning, ventilation and some other small repairs. We also do some small construction projects. It is not our target to construct a whole building but sometimes we have a client who wants to remodel their house or building and we can do these kinds of projects that deal with some areas or rooms. We perform our work in Brazil, from Rio Grande do Sul to Piauí. We work in some main capitals like Porto Alegre, Rio de Janeiro, Sao Paulo, Belo Horizonte, Salvador and the whole north east of Brazil. All of our projects are regarding the same scope: maintenance.

How many years have you been in the market? How many employees do you have?

Álamo has been in the market for the last 44 years. Regarding maintenance I believe Álamo has been active for 30 years. I have been part of this company for the last 19 years. We have almost 2,000 employees right across the country.

The quality of labour is something that is a problem for us in Brazil. We try to give our employees whenever possible some courses concerning the activity that they are involved in, especially in air conditioning which is something that is constantly being updated. We have to keep our staff up to date regarding all of these new technologies.

How would you define the company’s philosophy?

The scope of our activities is maintenance. Our target here is of course firstly to try to make our clients happy with the service we provide. Secondly our targets are regarding the profits for the company. If you don´t have profit, you don´t have work. Whenever I talk to the managers or to the directors, something that is always highlighted as being important is being in touch with the client. Even if the client is busy and cannot talk to you, it is important to just say hello. If the client has a problem he will talk to you the moment they can. The recommendation that we give to our managers is to always stay close to the client and to listen to the client. This is very important. That is the reason why we have maintained some contracts for ten or fifteen years. For example, the World Trade Centre in Sao Paulo is a building where we have been working for the last 12 years. Every two or three years they do put the contract out for bidding because this is the policy that they have, but whenever they do this they talk to us and we negotiate and we stay in the contract. I can name many such contracts.

Can you tell us about some more success cases?

The World Trade Centre is one of them. I could easily say that the World Trade Centre is my favourite building because when I was involved in construction before maintenance, the last building I worked on was the World Trade Centre. After accomplishing this, I joined Álamo and two or three years later we started working on the maintenance for the World Trade Centre. Thus, it is something that is in my heart and that I appreciate very much.

Another case that I can mention is Contax, a help centre company. When you think you are talking to Net from Globo, you are actually talking to Contax. They are a help desk. We have worked with them in several sites in the south, in Minas Gerais, Salvador, Rio de Janeiro, Sao Paulo, etc. It is a contract that demands a lot and we try to do our best for them. We have had contracts with them for the past 6 years. They have changed the way that they provide their services and we have changed with them. It is a very good company to work with. They demand what they want to receive from us. We have to meet their expectations.

Another success case that I can mention is our work with Vale. They are a very important client for us. We perform the maintenance for them in the port of Tubarão in Vitoria. It is a very big contract. The size of Tubarão in Vitoria is 14 square km, the size of downtown Paris. When people mention this port they don´t normally have an idea of the size of it. It is a challenge for us because we have to perform maintenance, not only preventive maintenance but also corrective maintenance. When you talk about 14 square km, it means you have a lot of buildings spread all over the place. So they send us their demands and we have to accomplish whatever they require us to do inside these 14 square km. We have around 170 staff working on this. We have a lot of vehicles just to be able to do whatever they ask us to do in this area. It is difficult to accomplish everything because of the size of the area but also the amount of demands coming from them. We call them service orders and we have about 2,000 service orders per month, which if you divide by 22 because they don’t work on weekends comes to about 100 per day in 8 hours a day. Obviously we have a service level agreement with them that means we have to accomplish these demands within the deadline according to the urgency rating that they give us. If we don’t comply with this there are penalties of course. These are three success cases, there are several others of course; I am not trying to say that these clients are more important than any others.

With Vivo, the telecom utility company, we face another challenge because we have to perform the maintenance from Rio de Janeiro to Piauí, not only in the buildings that they have and they have some branches spread out in plenty of small towns and cities. We don´t have staff that stay on site where these contracts are; we have staff who receive the call for maintenance and have to travel to these places whenever they are called. Thus this contract is challenging because of the distances. It is challenging but they are a good client of ours.

Could you tell us more about your strategy? You mentioned that you are present in other states?

We are present in Rio Grande do Sul, Paraná, Sao Paulo, Minas Gerais, Rio de Janeiro, Distrito Federal, Espirito Santo, Bahia, Sergipe, Paraiba, Pernambuco, Rio Grande do Norte, Piaui, and Alagoas.

What is your next step? Is your plan to maintain what you already have or to expand outside of Brazil?

Firstly we want to maintain what we have. It is a challenge because the companies re-bid every two or three years so we have to show them that we can perform a very good job at a very good price. We are also trying to achieve work in other segments for instance hospitals and schools. We do the maintenance work for the Mackenzie University here in Sao Paulo. We are about to have a contract with a school that has several branches in Sao Paulo.

There are many segments that require the work that we provide. Thus, a challenge regarding the commercial side of the company is to identify in Brazil where they are, and to try to get in touch to sell our services. That is easier said than done. For instance we now perform maintenance for Peugeot and Renault. I once took part in a conference and a manager from Renault was giving a speech, at the end I got in touch with her and six months later we were part of the bid and we won the maintenance contract for the office here in Sao Paulo and their distribution centre nearby. We also have a contract with Peugeot in Rio.

You have to always pay attention to what is going on around you, and look for opportunities. This is something we try to tell our managers and directors.

Regarding investment opportunities and partnerships, is the company interested in finding partners? If so, what kind of partner would you be looking for?

Up to the moment, we haven’t been looking for a company with whom we may share this kind of opportunity. We are open to it. For instance, a few years ago we provided our bid to the Dell computer company. We provided our bid with Cegelec, which is a French company here. We did not win the contract but if we had won, we would have provided our services in agreement with them. If we had started working with Cegelec, for sure we would have had some larger opportunities not only in Brazil but in other segments of work. We are open to partnerships. Sometimes we try to talk with companies that provide some janitor services, which is something we don’t do as it is not our target. These are companies that don´t do maintenance and we don’t do janitor services. We try to work together; not always happily so far but we are trying. We know that we have to grow and have to be open to partnerships to do so.

How do you see the evolution of the sector in three to four years? What is your vision for the company?

When you talk about evolution, we have to implement technology in the company. When you talk about maintenance, you have service orders which you perform. We now have software linked to tablets, so when the workers are out doing their job, they register their work on the tablets which is sent here to the office by this software. So we have all of the information about what they have done electronically. We have several contracts now using this technology. Another example is that with the contract with Vale in Espirito Santo, we have started operations with a drone that allows us to take footage and photos of the roofs of several buildings. This means we can do our job faster. It is especially good for some buildings where you have no access to the roof because the drone can fly over to take a picture and do whatever has to be done. It also eliminates any safety problems regarding workers because you don’t have to put an employee on the roof to take a picture.

These are two examples of technology that we are improving. They aren’t implemented in all of our contracts but we are starting with these projects. The tablets are being used here in Sao Paulo and they also mean we can do our job faster which is very good for the client.

I imagine that in three years this technology will be spread all over the company?

Yes and used in all of our contracts. The more you work with it, the less you pay for it because when you hire a company to do this for you for just 50 workers it comes at a high price, however when you are talking about 1,800 workers the price comes down.

We need to be bold and try new things, new branches, new segments, etc. We do need to be sure of the steps we are taking but it is important to make these moves.

What message would you like to leave to a foreign investor interested in coming to Brazil?

For an investor coming to Brazil, the first difficulty they will encounter is gaining market ground. We have already done this, for 40 years we have been in the market so we know a lot of clients, and our brand Álamo is well known when you talk about maintenance. If a foreign investor wants to establish and open a new company, it will be quite difficult for them. However, if they partner with a company like ours it will be much easier for them to start work here, especially when you take into account the Brazilian laws and regulations, which are complicated for us – just imagine for foreigners. We must always be open to growth and to enlarging our horizons and it can be done.

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