Number of equipment parts stores in Brazil shows significant growthInfrastructure
In recent months, there has been a great movement of new stores and resellers opening in different regions of the country.
The sector of spare parts for heavy construction and mining equipment is experiencing an important moment in Brazil. In recent months, there has been a great movement of new branches opening, which join the existing traditional companies to meet the demand of new machines production.
“The number of parts resellers has increased so exponentially that it is impossible to measure without a more in-depth analysis how much this trade has grown”, observes Euler Miranda, director of Fênix FPS. Although there is no standardized research or survey to specifically account for this market movement, this scenario is a response to the growth in equipment sales observed in recent years, which has expanded opportunities to undertake in this sector.
Fênix is a specialized distributor of ground penetrating tools (FPS) for use in construction and mining equipment, focused on supplying only resellers and parts stores, not the end customer. “We are in permanent contact with these companies, most of them are our customers, and we found that since the pandemic beginning, none of the ones we serve have been in bad financial conditions, nor have there been closures of activities. On the contrary, they are doing very well”, says Euler.
The parts market is vital for equipment operation and maintenance, directly influencing the productivity and efficiency of construction and mining sectors. Companies in this market are numerous, given the large number of different machines and models in operation, in an industry made up of both national manufacturers and importers of international items. The sector is well structured, has an efficient supply chain that goes from the manufacturer to the final consumer, through distributors and resellers.
Due to political and economic issues, the first half of 2023 was one of adjustments, that led to a investment containment in works and machinery purchase. Founder of Get Tractor, Eber Miranda informs that in this first semester sales did not reach the company’s expectations, probably due to the adjustment period to the new federal government. “However, as a good entrepreneur, I believe in an improvement over the next 12 months”, says Eber.
The company supplies FPS for all machines in the yellow line, from mining, quarries to construction. “The construction sector is going to see great growth, with good prospects for infrastructure in a country where the challenge is providing good conditions to sustain economic growth. This area is also a job generator and a great showcase for politics”, he evaluates.
In comparison with last year’s first semester, the period from January to July 2023 kept the demand for Get Tractor.
On the other side, Euler says that Fênix grew considerably in the compared period, mainly because the company included blades and undercarriage in its product portfolio. “Due to new items, we grew approximately 20% in the first half of 2023. We have the best prospects because sales are good and within the expectations,” he says. Euler also bets that the construction sector will continue to grow, with investments in new works and continuity of paralyzed projects.
Both the Fênix and Get Tractor directors share the same opinion on the importance of M&T EXPO for companies in the parts sector. About to leave, Eber says that the fair is the most necessary and important showcase for a sector linked to the country’s development, but still does not have the due value. “We are a segment where all the transformation for a better future begins. So, the expectation of better days is what makes us wake up every day motivated”, he believes.
Euler mentions the expectation of sales growth increase for the coming years. “M&T EXPO was very important commercially to consolidate our brand with the public. We will present the competitive benefits of establishing a long-term partnership with Fênix, in terms of product mix, availability, assistance and partnership. In 2024’s edition, we will exhibit the entire FPS line, tines, bucket guards, blades and undercarriage”, says Euler.
For him, the fair is the meeting point of all stores in Brazil, an opportunity to meet new customers, find the best buyers and build their loyalty in a moment of service and relaxation. “For 2024 we have already booked a larger space than 2022’s edition, a necessary upgrade to provide a positive experience to those who visit our stand”, he says.
Strong demand in the industry
Although the first months were atypical for machines commercialization, the parts manufacturing sector is going through a really special moment. This is the diagnosis made by Jefferson Luis Amorim, director of PIM – Palmares. The company manufactures axes, bushings, pins, gears, washers, cast and forged parts, for excavators, backhoe loaders, wheel loaders and motor graders of all brands available in the Brazilian market.
The director’s expectation is positive, since there are many works to happen. “We have to work hard and hope for the government to have good results in reducing the tax burden for industries, so that we become more competitive on the international scene”, he bets.
Jefferson’s positive words are motivated by the good results that PIM – Palmares has been achieving. “We are above our planned sales targets. The perspective is very great for the coming months, as we understand that several infrastructure works will be carried out”, explains Jefferson. According to him, in many infrastructure sectors the demand for parts is heated now, whether emergency works or others carried out in different Brazilian cities. However, the director’s expectation is high in relation to works in the sanitation and road rehabilitation sector.
“The first half of 2022 was very good and even exceeded expectations due to the scenario that the country was going through because of the pandemic. In this first half of 2023, with all the adaptations and strategic changes by the government, we have a 4% increase in revenue compared to the same period last year. This percentage is also above our forecasts, because at first, we expected a small drop, considered normal when you change leadership in the country”, says Jefferson.
He believes that M&T EXPO is Brazil’s largest fair in the sector. Being present alongside suppliers and major equipment manufacturers is a unique opportunity, that happens with this event every three years. “We can update ourselves and see loved ones again. The fair is the sector’s showcase, incomparable in terms of structure and opportunities”, he concludes.
By: Santelmo Camilo