Office Furniture Sector in Brazil: Overview of Flexform

Could you please start the interview by telling us about the furniture sector in Brazil?

Our sector is the furniture sector. Within this sector, we operate in office furniture that represents around 20-30% of the main sector and office systems specifically represents also 20-30% of the office furniture sector. This is a sector that grows around 5% per year, it generates strong labour, but it has few official statistics. This is our sector and we are happy with it.

Could you tell us a little bit about the company’s history? Could you also mention a few of the key data?

Flexform is a national and family company. It is a capitalized company, my father is the founder, and it will complete 50 years of existence next year. Today we have 500 employees.

Our company is a very innovative and courageous one. Throughout its history the company made big changes like, for example the change in the components production, the change into finished systems (we went up a degree in the production scale) – we were courageous enough to face our competitors. Entering this market was very difficult. We had some difficult years but then we were able to achieve the expected result.

In 1998-1999, we were a family company that had good results, but it was worth 25 million Reals. In 1999, we created the finished systems and began very slowly in 2000. In 2005 we already were a company that was worth 50 million Reals. In 2006, we restructured the company once again in the commercial area with new executives entering into the commercial area. From 2006 to 2012 we more than triplicated our earnings. We reached 2012 with earnings of 165 million Reals.

Changing moments are always difficult moments mainly in Brazil. To run a company here is difficult enough, but we have our courage due to our strong team. Leadership here is the essence of management. Management is based upon the team, on the participation, mainly in 2010 when there were changes in terms of management – we opted for a very participative management, a connective leadership, a leadership based upon personal values – a management totally supported by people that has been achieving great results. From 2010 on, we have advanced a lot.

This company innovates and creates a lot, and is courageous enough to change whenever it is needed.

Having those numbers in sight, how would you define the company’s philosophy?

As a leader, all my inspiration and courage come from my team that is a high performance team. I value culture a lot. According to Peter Drucker, our guru, culture is the most important thing a strategy can have. Companies with a strong culture are winners. We value respect, honesty, righteousness, transparency: that is the base of our daily work. This culture guides us in everything we do. This dictates our excellency in terms of products, assistance, service. This is the essence of our company.

Do you have any kind of social responsibility projects?

Of course we do. We are a certified company. Our strong feature is documentation and certification. We were the first company of the sector to have the quality management certification 9001. We were one of the first companies in the sector to have an internal laboratory certified by IMMETRO; we were the first company in the sector to have a certified line of products (13962). Today we have all the certification required: 14000, 16000, 18000.

Within the social area, we have a very beautiful project, which is called “Projeto Educare” that trains more than 200 children in foreign languages and computer science, from a very young age until the basic training and the placement on the first job as an apprentice. We already won several awards, and all we do here in terms of programs and certification, has to be very well done.

In everything we do, we have to win prizes, because we excel in everything we do.

In the HR area, until 2010, management was very autocratic. In 2010, my father stopped working in the company and we opted for this totally participative management that is democratic, flexible, and open. We changed the HR area in 2010, 2011 was a transition year and in 2012 we already were one of the best companies to work in. In 2013, we were able to classify as the 12th best company to work in Brazil.

Let’s discuss the different segments that exist within Flexform products and maybe even mention some success cases that can represent the company.

Flexform opted for the auto-specialization. We are on the office furniture segment. Within this segment, we opted by the “sitting” segment: office chairs, auditorium armchairs, sports seats, airport chairs, etc.

We dominate this segment and have some international partnerships: Irving (for auditorium armchairs), Okamura (office chairs) and Arconas (airport chairs).

All this helps us to have a perspective in terms of future growth.

As an example of success case, I can mention our participation in the World Soccer Championship stadiums in terms of seats, in the Very-VIP area of the WSC opening ceremony.

What kind of products are you currently developing?

Our core is the office chair. Traditionally, the development of one new line of office chairs occurs every two years. In Flexform we develop 4, 5 and even 6 new lines every two years: this is a high speed development rhythm.

We were in a fair called “Office Solutions” in September and we showed 6 new product lines. Most part of our products are designed in Italy, we also have a partnership with Holland’s great designer Thomas Haas: so, our products have an international scope. We want to become known at an international level, but our main market is still the Brazilian market.

To which countries do you wish to expand?

We want to consolidate as the national leader, of course. That is our main corporate objective.

We wish to participate strongly in South America, Latin America and, as a 3rd objective in terms of territory, we want to reach Africa that is a country constantly being rebuilt.

In terms of percentage, how much does the Brazilian market represents in terms of revenue?

More than 90%. We are still much focused on the national market, but we are initiating the project to export and give international visibility to the brand. We already have a team of executives working on that international expansion.

Are you looking for partners to help you with that international expansion?

Normally we do things through local partners. We choose a local partner to make the operation easier. Our expansion project is always based on the “Local Partner”.

Do you also have technological partnerships?

We already have an important international partnership with American Now, which is one of the most prestigious designers in the world in terms of chairs.

We only assume technology-transferring partnerships.

We also have a partnership with Arconas for airport chairs, with Now for Auditorium armchairs and with Okamura, a much known Japanese company with high performance chairs.

Which are your daily challenges?

We have so many! We have the daily challenge to excel in everything we do, to impregnate this culture at all management levels, to pursue growth, to consolidate every management lines that are already set-out, and to overcome the challenges of running a company in a country that has so many difficulties as we can watch on the news (I’m not going to say what problems are those, because they are known to everybody).

With our culture, we try to create internal optimism, our own optimistic future scenario. We develop products, work hard and enjoy working, trying to pursue growths that are above the GDP growth.

What is your vision for the sector in 3 years and your vision for the company specifically?

We have great dreams and a lot of ambition. We also say we are not greedy but we have ambition.

The sector was a little bit stagnated due to political problems. Having that in mind, we predict high growth after the real estate boom. The sector is going to grow a lot with high investment from the public sector. World-class events, like the Olympics is a very strong leverage.

We can predict an optimistic scenario for the sector. For our company specifically, we make our own scenario independent from the GDP or the national metrics: we look for a higher growth line and are expecting to close 2017 with 300 million reals in earnings, which would represent a 90% growth rate in comparison with the current earnings.

We want to consolidate our leadership, to develop products that mark a presence in the national and the international market.

Would you like to mention anything else?

Yes, our company is a family company that is small but has great value. The company has the structure needed to become a big company at all levels. This company is going to grow a lot, because it invests strongly in people, the work environment is marvellous and, according to that old saying: “Take care of you Human Resources, because they will do everything else.” This will be a very successful company, because we work very hard to make it a reality.

 

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