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Jose Batista de Andrade, CEO, Fibermaq, "Rationalization of Government Taxes will Greatly Boost Composites Industry in Brazil"

Established in 1978 in the city of Sao Paulo (Brazil), Fibermaq is a pioneer in manufacturing composite processing equipment, polyurethane, epoxy and general adhesives. Along the last thirty years, more than 1,500 spray-up machines and gel coating dispensing systems, RTM and filament winding equipments, among others, were sold by the company in Brazil and all Latin America. In an exclusive interview CEO Fibermaq, Jose Batista de Andrade, shares his experience with Editor, Lucintel, K. Venkateshwar. Rao. Excerpts:

1. What are the key drivers for composite consumption in Brazil?

Jose Batista: In addition to civil construction, transportation and wind power - three main composites consumers in Brazil - there is a great demand in sports and entertainment segments, especially ships and pools.

2. What are some of the key challenges faced by your company in the composites market?

Jose Batista: The key challenge faced by Fibermaq is the lack of technical information by some manufacturers, which brings a certain predominance of disqualified labor. It is a complicating issue for an equipment manufacturer company as ours. Through a more qualified workforce, Brazilian composites industry shall have means to develop new products and participate in a market currently occupied by competitor materials, such as thermoplastic and metal.

3. Tell us about the impact of government policies on composites industry?

Jose Batista: Despite the Brazilian demand for composites ships and pools, both are excessively taxed by the government. For instance, approximately 50% of the pools and ships prices relate to taxes. On the other hand, the federal government has recently created stimulation programs to build popular houses, which indirectly benefited the composites industry.

4. Key challenges faced by composite end-users?

Jose Batista: Dishonest price fight of composites components manufacturers leads to product quality reduction. For times, it becomes an obstacle that end users cannot surpass, which leads them to the choice of purchasing a competitor material. Unfortunately, such quality decrease due to dishonest competitiveness negatively affects the composites image in general. Another concern is related to the environmental issue. As an equipment supplier, we are doing our job, with technical support to the National Recycling Program, developed last year by Abmaco - Brazilian Association of Composites.

5. Government support and policies change that is required to encourage exports of composite components?

Jose Batista: The price of Brazilian paperwork is too high, which decreases the competitiveness level of companies within Brazilian market. Another issue temporarily related to this is the appreciation of Brazilian currency compared to USD, which makes our products way more expensive than those manufactured in Asia, for instance.

6. Emerging applications that you foresee to have a significant bearing on the composite consumption?

Jose Batista: There are a hundreds of composites applications throughout the world still not seen in Brazil. If I have to mention just one, it is the fuel tank.

7. How has global slowdown affected the market? How has been your organization's growth in the last 2-3 years and how do your foresee the growth forward?

Jose Batista: Traditionally, equipment manufacturers are the first to notice the effects of economic crisis. As for Fibermaq, we shall end 2009 with a 40% decrease compared to sales of 2008, when we grew 15%, against 10% in 2007 versus 2006.

8. Do you see high-potential for composites in the market? If yes, what are some of reasons for the same?

Jose Batista: Looking at North American and European markets, we notice thousands of composites application opportunities that had not yet arrived in emerging countries as Brazil. In view of our economic growth, Brazilian demand for new products made from composites shall surely increase.

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