Business Strategy
In order to accomplish our objectives and promote growth, we intend to advance the implementation of the following strategies:
Optimize our technological know-how by seeking innovative and increasingly sustainable solutions. The development and utilization of our technology center for the automotive industry, located in the city of Jundiaí in the State of São Paulo, has provided us with significant competitive advantages with respect to the improvement and development of components for internal combustion engines, as well as for automotive and industrial filters. We intend to continue investing in research and development through our technology center in Jundiaí, in an effort to anticipate market trends and needs, and create customized sustainable technology solutions for our customers, which we believe will allow us to further leverage our growth and increase our productivity and profit margins. In addition, we offer our customers advisory and consulting services in automotive engineering. Through our MPT division, we offer our customers, particularly automakers, a complete infrastructure for the research and development of engines and components through both: (1) integrated solutions with the development of virtual projects, using full simulation engine programs, simulation of specific components including valve train, crankshaft dynamics, and thermal management of engines and injection systems and (2) knowledge and analysis, not only of autoparts, but also of entire solution packages, thereby expanding our competitive advantages and those of our customers by predicting potential problems affecting their engines and the autoparts used in them and anticipating solutions.
Continue seeking productivity gains and cost efficiency to maintain our margins. It is common in our industry that autoparts supply agreements provide for the gradual decrease of the price of supplied products over the years. For this reason, we intend to continuously modernize our production processes by constantly reducing our costs and increasing our productivity in order to maintain and increase our margins. As a result of increased labor costs, we plan to intensify the use of automated production processes as they become economically feasible. We systematically monitor the evolution of our competitiveness through the quantitative analysis of our production process, as measured by productivity per employee, revenue per employee and labor costs versus revenue, which has given us the ability to increase our revenue without significant increases in costs and operating expenses. In an effort to achieve additional cost reductions and make environmentally conscious decisions, we continue to implement permanent corporate programs to reduce the cost of electricity and water, and to manage the solid waste resulting from our production processes.
Develop opportunities in the automotive industry and in complementary industrial sectors. We are constantly seeking opportunities for acquisitions and strategic partnerships in the markets where we operate with a view to achieving scale and productivity gains, particularly in Brazil and the Mercosur region, where we will continue to strive to expand our market share by capitalizing on the anticipated growth trend projected for these markets. We continuously analyze the automotive industry to benefit from any opportunities in connection with products that may complement our activities and diversify our current product portfolio. We believe that opportunities for strategic acquisitions and partnerships may allow us to rapidly achieve further growth. For example, in the past four years we completed the acquisition of (1) the bearing business of Dana Indústria Ltda. in the city of Gravataí in the State of Rio Grande do Sul; (2) EDIVAL Establecimientos Metalúrgicos S.A., or EDIVAL, a valve manufacturer in Argentina, and, more recently, (3) the Brazilian piston rings business formerly conducted by MBR. We also entered into a significant joint venture in the forged components segment, resulting in the establishment of our joint venture company MAHLE Forjas. We also believe that our ability to benefit from synergies resulting from the acquisition of new businesses and the formation of strategic partnerships will contribute to the growth of our activities and our margins. In addition, we seek opportunities outside the automotive industry, in industries where we may have applicable product technology and know-how. As such, we have entered into a partnership with MIBA Sinter Holding GmbH, or MIBA, an Austrian company, for the production of sintered components, thereby contributing to the increase of our share in the Brazilian market for sintered components.
Develop customized and integrated solutions seeking to strengthen our customer relationships. We intend to strengthen our relationships with our principal customers through the development of customized and integrated solutions, maintaining the technological excellence and confidentiality of our projects. As a result, we will seek to expand our range of products specially developed and supplied to individual customers, thus significantly contributing to the growth of our results and customer loyalty. In addition, we will continue to benefit from the business relationships of the MAHLE Group on a global level for prospecting new customers and strengthening our relationships with our current global customers.
