Strategy and Competitive Advantages

Estratégia e Vantagens Competitivas

Furniture Industry

In the furniture industry, Eucatex operates on an integrated basis with its clients, in accordance with the scenario in Brazil’s furniture and wood reselling industry.

The relationship between Eucatex and its clients is marked by a continuous production process, given that its clients in this segment are furniture retailers or manufacturers to which Eucatex supplies the raw materials to be transformed into furniture.

In addition to locating clients close to its facilities, Eucatex also supports them in the process of designing new products for consumers and by providing services to complement the MDP/T-HDF/MDF products it makes.

The special treatment given by Eucatex to furniture makers is considered a significant competitive advantage in this segment, where there are fewer than 500 manufacturers of significant scale and direct relations with clients is often a determinant factor in closing sales.

Construction Industry

The main products sold by Eucatex in the construction segment are: architectural paints, wall partitions, laminate flooring and doors. Its flagship products are laminate flooring and architectural paints.

Eucatex believes that its operations in the construction industry enjoy competitive advantages, which include its large sales team, with some 200 professionals providing nationwide coverage, who are supervised by regional managers strategically located in the country’s major cities.

Export Market

Eucatex has been exporting products for over 40 years with wood panels representing its main export product. The surfaces are treated for the application of high-quality paint-based or resin-based paper finishings to enable their use in the construction or furniture industries.

Eucatex’s wood panels are produced using a wet lap process in which only eucalyptus wood is used. This production process gives the panels exceptional performance in terms of resistance and surface quality, which, combined with the Company’s tradition in the international market, enables higher penetration in developed countries, such as the United States, Germany, Austria, France, as well as in parts of Africa, the Middle East, South and Central America and Australia. To serve its main market, the United States, Eucatex has a subsidiary in the country, Eucatex North America (ENA), which is headquartered in Atlanta, Georgia.

In recent years, the Company has invested in reducing its costs and improving the quality of its products to make them even more competitive in international markets. It also maintains partnerships with foreign companies, including the U.S.-based Home Depot, to resell its products, such as tile board panels, which imitate tiles and are well accepted in the U.S. market, and perforated panels, as well as its traditional export products, standard door covers and panels.

Production Units

Production units, main products, capacity, utilization rate and markets served

Unit Location Products Annual Capacity Utilization Finishing Rate* Annual Finishing Capacity Markets
Hardboard Salto, SP Hardboard 240,000 m3 69% Paint80 million m

Paper Printer

45 million m²

Furniture and Construction Industry and Export Markets
Panels and Doors 4.8 million units 70% Construction
T-HDF/MDF Panels Salto, SP T-HDF/MDF Panels 275,000 m3 86% Lacquer10 million m² Furniture and Construction Industry and Export Markets
MDP Panels and Flooring Botucatu,SP MDP Panels 430,000 m3 82% Finish Foil, BP and Lacquer 40 million m² Furniture Industry
Laminate Flooring 12 million m² 43% Construction Industry
Paints and Varnishes Salto, SP Paints and Varnishes 36 million gallons 52% Construction Industry
Seedling Nursery Bofete, SP Eucalyptus Seedlings 10 million units
The processes hold ISO 9001 certification
* Second quarter of 2014