Brazilian aluminium extruder Sapa laid off its management and staff last week, as the firm’s sales continued to drop. This also comes amid staff cuts and other measures meant to ease the company’s overhead.
Finance director Roberto Silva and commercial director Erivam Boff have left the company. Other management positions have been eliminated, and the responsibility for those positions have been distributed among the remaining managers.
“The restructuring is basically over and it is a response to the [extrusion] market’s contraction,” Sapa’s incoming Vice President for South America Sergio Vendrasco indicated. He replaces Ivar Venås, who has taken a role as a director at Sapa Extrusions North America.
“Sapa’s [sales] volumes have decreased a lot in Brazil, and the changes were made to adjust our structure to the new size of the company,” Vendrasco continued.
The sales volumes posted by Sapa have been falling to the tune of 20% per annum in recent years, he indicated.
“Everybody knows how much the extrusion market in Brazil is suffering, given that the installed capacity in the country is much higher than the demand and there is unfair competition due to fiscal benefits and people that are active in the informal market,” he explained.
“This is a combination that challenges companies, such as Sapa, that are only active in the formal market and is strongly committed to its values.”
Sapa Aluminium Brasil has been running at reduced capacity in recent times, currently down by 70% to 2,000 metric tons per month.
“We expect to see a process of natural selection in the industry next year, as for many it will not make sense to continue operating,” Vendrasco said.
In addition to trimming down management and manpower, Sapa has also been working to cut down expenses and sell more of its product abroad.
“We are convinced that the [Brazilian] market will return to growth, but until then we are developing new opportunities and getting involved in new markets, especially now that the currency is very favorable for exports,” Vendrasco explained.
“Demand in the US market has been strong and we have started exporting some profiles for the industrial sector there.”