The Votorantim Group

The Votorantim Group, headquartered in São Paulo, is amongst the largest business groups in Latin America with total revenues exceeding US$ 6 billion. Its companies are leaders or have large shares in all the markets in which they participate, such as in cement production, cellulose, paper, aluminium, zinc, nickel, long steel, polypropylene bio-oriented films, chemical specialities and orange juice. It also has an important share in the financial sector through Banco Votorantim. The Group has an active participation in the energy sector, both in self-generation destined to supply its productive units, as well as in the public sector for which it distributes and markets electricity. Votorantim operates nine different business sectors, employs 30,000 professionals and has three production units abroad (USA and Canada).

Early history

Votorantim was founded by Antonio Pereira Ignacio, who emigrated with his father in 1884 from Portugal to Brazil. He started a factory for edible oils in 1905, and in 1918 he purchased a small textile factory. His son-in-law, José Ermírio de Moraes, joined him and working together, they took their small textile firm to new heights. They had a vision for Brazil, believing their country was at the edge of impending industrialization, when significant investments in infrastructure would be undertaken. The first strategic move was entry into the cement industry. During WWII, Votorantim expanded its cement and metals business. In 1951, Antonio Pereira Ignacio died and José Ermírio assumed the presidency of the Group. By the 1950s, in tandem with the rise of the second generation of the family into the management of Votorantim, the Group began producing aluminium and hydroelectric power as well as refining sugar.

Next generation

In 1960, José Ermírio transferred control of the company to his three sons and his son-in-law, Clóvis Scripilliti. José Ermírio’s successors began a strategy of both related and unrelated diversification for the Group by expanding into new lines of business, as well as other regions of Brazil. In the 1970s and 80s, the Group entered into zinc and nickel mining and smelting, as well as plastics and film wrapping. The 1980s also marked the arrival of the third generation of family managers. In 1990, Brazilian President Collor introduced major market reforms, eliminating or significantly reducing almost all import tariffs overnight. Suddenly, Votorantim had to compete with the best and most efficient producers on its own home turf. Votorantim as a Group took the decision to focus on businesses in which it could leverage the richness of Brazil’s natural resources to compete effectively in international markets. The Group shed operations in industries in which it had ceased to have a competitive advantage, such as textiles, rayon and sugar refining - businesses that had large emotional value because of their history within the Group.

Evolution

For most of its history, the Votorantim Group was structured around independent business units, each of which was run by a different family member. However, it became apparent that with the transition to the cousin generation a considerably larger number of family members would arrive and a new corporate governance structure would be needed. Thus, in 2001 the 23 members of Votorantim’s third generation broke with eight decades of tradition in response to changing circumstances. In total, 13 cousins who worked throughout the Group removed themselves from direct management positions. Their places were taken by non-family managers. A family board was created to oversee family matters and social investment, and it actively incorporates the family’s beliefs and values throughout the Group’s strategy and operations. An executive board has oversight over the day-to-day business operations of the companies under Votorantim Participações SA.

Alessandro Sofia
IMD Media Relations
Tel: +41(0) 21 618 0636
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