VULCANO PORTUGAL

A Global Reach

Technology, flexibility and cost give this company an advantage

Until fairly recently, Portuguese companies with a worldwide presence were relatively rare. One of the first such firms to go global was Vulcano Termodomesticos SA, a manufacturer of natural gas water heaters and related products which is now known as far away as Australia.

Mr. Pais de Sousa "Investing in their own R&D is the only way forward for companies if they want to develop their own technology and stay ahead of the game."

Started in 1975 by a group of Portuguese engineers, the company is now owned by the German group Bosch which provided Vulcano with access to international markets and lent the Portuguese company the cache of a name already widely respected in technology.

And Vulcano executives admit that the company´s fortunes began turning around in 1993 when Bosch acquired control. In that year, turnover was around $10 million, a figure which jumped to some $180 million last year.

"I believe this success can be attributed to a mixture of German technology, Portuguese flexibility and production in a country with one of the lowest labor costs in Europe," says former company president Mario Emanuel Hermann Pais de Sousa.

"We now have about 45 percent of the European market for our type of water heaters and Vulcano is the growth leader in volume as well. And we are also a leader in the U.S. niche market which we have carved out after deciding we needed to be a presence in the world´s biggest economy."

Vulcano managed to enter the American market through its connections with Bosch. Once established in the United States permanently, the company concentrated on providing excellent customer and after-sales service. "That niche market had always been there, we just served it in a more professional and more thorough way," Mr. Pais de Sousa explains.

"The future for us in the United States is to continue increasing our share in the market, but I dont´ think we´re going to see a clear shift in performance over the short term. Eventually, we´d like to see our sales there double or triple. That´s our strategy for the United States."

Along with its global reach, Vulcano is also unique among Portuguese companies because of its investment in research and development. The firm earmarks a full three percent of its annual turnover for R&D while the average among Portuguese business in general is a scant one percent.

Most Portuguese companies subcontract their R&D which Mr. Pais de Sousa argues is a mistake. "Investing in their own R&D is the only way forward for companies if they want to develop their own technology and stay ahead of the game," he says.

back to the top