Wagner Dantas (Vulcabras): Technology and High Performance

Wagner Dantas, Chief Financial Officer of Vulcabras

More than 320 million invested in the last four years, a modern and sustainable factory and a constant generation of jobs make Vulcabras one of the most important companies in Ceará. In this interview, Wagner Dantas, Chief Financial Officer, Vulcabras, reveals how it was possible to nationalize the manufacture of technological footwear, which was previously imported, and why Ceará is the best place for shoe production in Brazil.

How was the last year for Vulcabras in Ceará?
We have the company’s largest and most modern plant in Ceará. The last 12 months were successful for Vulcabras in Ceará. The results obtained in the last 12 months (October 2021 to September 2022), when compared to the same period of the previous year, demonstrate that. The revenue from the plant in Ceará grew 36%, we generated more than 700 new jobs, and expanded production by 6%. In the last four years we have invested about 320 million Reals (about 60 million dollars) in fixed and intangible assets in the Ceará plant.

Recently, Vulcabras enlarged its factory in Ceará, with an investment of 120 million Reals (about 22.6 million dollars), an expansion of 7 thousand m² and latest generation machines. What are the factors that led the company to make this investment?
In 2017 Vulcabras decided to focus its business on the sporting goods segment, its flagship being the sports footwear division. Implementing this strategy, the company sought to strengthen its portfolio of brands and in 2018 became the exclusive licensee of the brand Under Armour and, in 2021, of the brand Mizuno. These new brands, together with the Olympikus own brand, now represent a relevant share of the sports footwear market sold in Brazil. Since 2018, major investments were made in the modernization and expansion of the manufacturing park in Ceará. Expansions were carried out and new equipment with new technologies was incorporated. All these investments allowed for the expansion of the installed capacity and enabled the nationalization of the production of several footwear models of the UA and Mizuno brands, which were previously imported.

In 2020, the company announced the transfer of part of its operations from Sergipe to Ceará. What led the company to take this decision?
With the strategic decision to focus on the production and commercialization of sports footwear, we started to put the plan into practice. In 2020 we sold the Sergipe plant, which was focused on the production of Azaleia brand footwear. The Azaleia brand portfolio consisted of shoes, women's sandals, and casual tennis shoes. The production of shoes and sandals was discontinued, and the production of casual shoes was transferred to Ceará. The decision to take the sports footwear production from Sergipe to Ceará was due to the greater vocation and preparation of the Ceará plant for the production of this type of footwear.  

How are the new technologies impacting production in Ceará?
The investments made in the modernization of the Ceará plant raised our production capacity for products with a high level of technological complexity, to a new level through innovative production processes. Today, the Ceará plant is on a par with the most efficient factories in Asia. With the new technologies and processes introduced, we could nationalize the production of the most technological footwear of the brands Under Armour and Mizuno, which until then were only imported. Olympikus, taking advantage of these new technologies, launched high performance products for running, which are equal in attributes and quality to the best products of international brands and, still delivering competitive advantages much more attractive to consumers.

Which countries do you export to from Ceará and what are the facilities and advantages of being in Ceará for the export operation?
Footwear produced in Ceará is exported to around 20 countries, mainly countries in South and Central America. The extensive logistics network and the speed of documentation procedures make Ceará an excellent focal point for the export of products. 

How does Vulcabras evaluate the quality of local labor?
The labor force that we have in our factory is highly trained and attains excellent productivity levels. The turnover is low and the degree of commitment on the part of employees is very high. Continuous improvement courses are given. We maintain a technical school within the industrial park to train young apprentices who, in the great majority, in the future will have their first opportunity of employment at Vulcabras itself.  

What are Ceará's strengths as a state that help the company achieve good results in terms of revenue?
As well as having an up-to-date plant with the most modern technologies applied to the production of sports shoes, we have the very important support of municipal and state governments, The incentives granted provide essential conditions for us to compete with international competition. Without them, no matter how efficient we are, it would be even more challenging to face Asian producers, who have access to much lower costs than those in Brazil.

Vulcabras is a company committed to the environment and sustainability. It was the first to receive the ESG-Fiec Seal for its work towards sustainability from an environmental, social and corporate governance point of view. Ceará is also moving strongly in this direction with important strategies such as the energy transition, among others. How does Vulcabras deal with this issue of sustainability in Ceará and what projects exist in this regard?
Vulcabras's purpose is to build a better country based on sport, generating a positive impact for society through its activities in the sporting goods market. Our pillars for socio-environmental action are supported by the use of clean energy, promotion of the circular economy, reuse and saving of water, as well as responsibility towards the communities where we operate. These are actions that, added to responsible management, have sustained growth with a view to the future and benefits for all: consumers, investors and the environment. In fact, we recently launched Esporte pelo Brasil 2030, an action plan focused on building a better country, with goals to be worked on by Vulcabras until 2030. The company intends to further increase the purchase of inputs and services from national companies, in addition to other socio-environmental work intentions: waste reduction in operations; reduction of CO2 emission; celebration and promotion of diversity and equality in operations, as well as encouraging the practice of sports. The detailed plan can be found in our Sustainability Report.

What are the major challenges for Vulcabras in Ceará, looking to the future?
Vulcabras' challenges in Ceará are similar to the challenges that the Brazilian footwear industry faces in competition with Asian-produced products. Despite us being more efficient, Asian costs are much lower than Brazilian ones, especially the cost of labor, which does not follow the same regulations and charges that we have here. Vulcabras remains firm in its goal of building a better country based on sport, through innovation, the strength of its brands and with a winning team, capable of making real a goal of transformation, through the locations where we are installed and reaching every consumer of our products.