Industry Sector in Mato Grosso: Milan Moveis Furniture Company

Interview with Gilmar Milan, Owner of Milan Moveis

First of all I would like to know about how your company was created.

Milan Moveis is from Mato Grosso. We began to make furniture items, and still today we mostly make desks. It’s a family business. We make furniture mostly for corporations and schools.

Why did you decide to make this type of product?

We saw that the market was open and there was a niche for this product in the state of Mato Grosso. We felt that we could add value to this product.

Were there no other companies producing this kind of product? How is your product different?

You couldn’t get this type of product here in Mato Grosso, everything was brought from the south and the south east. So we decided to enter the market here and it worked for us.

Did you start with the local public market?

It was mixed, private and public companies, we sold about 30% to the state companies and the rest was to private companies. Later we were able to expand from the Mato Grosso market and also sell to the national market.

Bit by bit you came onto the Brazilian market and now what level of distribution would you say you have?

We started doing business in the central western states such as Mato Grosso do Sul, Goiás, Rondônia, Acre and Pará and now we are doing business all over the country. We are in every state of Brazil.

How do you differ from your competitors?

I would say what makes us different is our flexibility, our ability to change and improve our products; we make a product that the client wants.

You have to be quick and adaptable.

Yes, you have to be fast. You have to be researching products, developing and diversifying them. You need agility to change and develop. We have engineers, architects and designers who are always working with design programs to develop product designs that then go to the machines.

What technology do you use?

The equipment we have is Italian and German. The production site is all computerised. You do the design for the project of a desk and the machine makes the product depending on the program design.

What are the great challenges you face?

The largest challenge is to keep up with the new technology, equipment, raw materials, investments, techniques and finishes. We have to make sure we are always training, and going to trade fairs, for example in Italy, Poland and the USA. We go to the Highpoint tradeshow in the USA and the trade fair in Milan. We must always develop in terms of materials and finishes. This is our challenge. Everything is so fast, communication today is so fast that we have to make sure we keep up.

What are your future plans?

We want to continue growing and begin to export our products.

You say you are going to trade fairs in other countries. What is happening in the foreign markets? What are the trends?

The foreign markets are growing, there is lots of investment from the Chinese in every sector including the furniture market. We are seeing the demand for producing more regional products; the USA uses dimensions that are different from ours here. Germany tends to have quite straight products. We have to think about designs in this way, incorporating these differences.

What about the Chinese? Are they a threat?

Yes, they are a threat but they have different tastes from us in Brazil. They have a different infrastructure which is much more developed for international commerce than our infrastructure at the moment. We are doing very well in our internal market and we want to get onto the international market but we have to compete with their development.

Wouldn’t be the regionalism you speak of is a disadvantage then?

Not necessarily, it is just that the Chinese have the power to adapt so easily. You can show a product design to them and within no time at all they produce it.

So how come they haven’t come to Brazil yet?

I think this is mainly due to the fact that it takes about 100 days for a Chinese product to get here. Here we need things much faster. Brazilian companies want things immediately. It’s not the same as in countries like the USA and in Europe where companies have plans for 5 or 10 years. Here it is much faster.

Can you talk about what certifications you have achieved?

We have the ISO 9001, 16001 and the 14001 certifications for social and environmental management. We also have the Environmental Designation Rótulo Ambiental, which means our products have to follow regulations whereby they don’t damage the environment and are sustainable.

In terms of investment, do you have purchasing power or are you interested in foreign partners?

I have not thought of having partners at all.

What is your future strategy for the next 5 years?

The plan is to continue growing at the rate of 10% per year which has been our growth so far.

That’s amazing! How have you achieved such great growth?

We have 10% growth per year because we have been expanding so much from state to state and now we do business all over Brazil.

For selling on a national level, do you need a commercial network or do you manage everything from here?

As we work with state companies, commercially everything is done electronically. In terms of logistics and mounting the furniture that is when we have to work off site.

Do you mount on delivery?

We just have to send the merchandise to our other locations and then we can mount the furniture there. We are selling to the Amazon area and in this case our merchandise travels by boats to Manaus and from there on other boats it goes to all areas of the Amazon.

Do you have a business in the free zone in Manaus?

No, we do not. We have a large lot in Mato Grosso do Sul.

To finish I would like to know about the state of Mato Grosso. It’s not known for its industry, so what can you tell us about industry here? Is it a good place to do business?

It is a state that is implementing incentives to bring in industry, to encourage companies to do business here. The biggest difficulty is the logistics; bringing in and out raw materials. We don’t have railway transport, everything is transported by road. It is very expensive and distances are so big.

Where do you get your raw material from?

Most of the raw material comes from the south and the south east. This increases our costs. It means here we have to do the whole productive chain, for example we make furniture but we also paint it, etc. whereas in the south, a company would have a third party do this. It means we have to invest in the equipment to be able to do all these other phases. There are no industrial estates here, we do everything, we have to specialise in all aspects of the productive chain.

What are your advantages?

Our advantage here in Mato Grosso is actually the logistics. There are rainy seasons that only we and the indigenous people here understand. At these times we transport merchandise by boat. We are in our dominium here. This gives us a competitive edge. The freight for us to get our raw materials from the south is not too expensive because it comes to us and goes back to the south full of soybean or cotton. But for those who want to transport a product from here to the south the freight is very expensive because most of the transport that comes into this state returns full already.