The story of a boy who sold meat on the street in the interior of Ceará and became a steel giant without giving up his talent for calculating costs and benefits, at work and in life.
Vilmar Ferreira, 65, runs a company with estimated revenue of R$1.9 billion this year and a target of reaching R$2.4 billion in 2017. He has approximately 4,000 employees and operates nationwide. He is expected to close 2016 with revenue of 705,000 tons of steel (5% imported). He is a leader in the North and Northeast regions. In total, the Aço Cearense Group has five units: Aço Cearense Comercial (CE), Aço Cearense Industrial (CE), Sinobras Siderúrgica (PA), Sinobras Florestal (TO), and Instituto Aço Cearense (CE/PA/TO). It was a stroke of luck. The scythe that made his leg bleed at age 15 ended up foreshadowing what would surely happen later. Vilmar, a boy from Marco, CE, ended his farm work there, never to return. His father's decision, a sacred voice for him even when he ended up leaving the beverage business and beginning his transition to steel decades later. In his early days, he left farming to become a trader. He slaughtered and sold a pig by himself, piece by piece. He already applied his talent for math and practiced basic reasoning for everything he does in life to this day, leading Aço Cearense, a leader in the North and Northeast steel industry and distribution: cost and benefit. In this interview, recorded in his office at the company's headquarters for about an hour and a half, he talks about his biography, the current situation, and his dreams. His dreams have changed, and he has a daughter as his successor.
O POVO – You're known as a low-profile businessman. You don't like to be seen much and are very discreet in your relationships. What led you to accept this interview?
VILMAR FERREIRA – Look, first, we have to have good relationships with people, especially the press. I try to contribute a lot to society. The press enlightens. I think the work of the press is beautiful, and I think it's beautiful that we collaborate.
OP – Given the size of your business, to what extent does your business acumen from the beginning still influence your decisions?
VILMAR – I say that professionals are born professionals. And many professionals don't thrive in just one field. We have to believe; we've been determined. Especially when we come from the backlands, uneducated, when we start to achieve success in the business world. This excites, especially my spirit. I'm now learning the "We." Because many people only defend "I." Many people put a politician in charge of defending their sector, their class. I find this extremely disloyal to oneself. I think that, to be loyal, one has to look at society, look at others, and even because when you have the competence, the capacity, or are blessed to live better, why not think of others? You're already confident, so let's think of the most vulnerable. This philosophy gives me the energy to be an entrepreneur, to undertake, to generate income, to generate taxes for the government as well. We are the largest tax collectors in Ceará. Federal. State, not so much, because there are benefits.
OP – How have you faced this economic crisis?
VILMAR – This has hurt me, hurt me so much. A political crisis driven by greed for power. Those below want to overthrow those above, and society pays the price. Society doesn't understand much, doesn't really follow what an economy is, what economic indicators are. Today, my fight is for you young people to be interested in seeing the reality of the facts, so as not to be deceived by someone who promotes their contradictory interests and generates a crisis as serious as the one generated in these last three years.
OP – Are you one of the businessmen who believed in that PT way of governing in the beginning when everything was going well?
VILMAR – I didn't just believe in, I still believe in, not in a Workers' Party economic model, but in any economic model and any party that has a model that generates jobs and income and is good for everyone. One of the things I wanted society to understand and for business owners to understand is that we depend heavily on workers. Workers consume 100% of what they earn. They don't save. We business owners, people who earn well, don't spend 5%, 3%, 10%, 15%, 20%. We have to be aware of working for those who consume more. Why has our economy grown in recent years? Why do I defend this economic model? First: real wage increases, which I've advocated for over 30 years. I advocate a strong currency. A country with a strong currency is a country with credibility. And whenever the currency has been strong, we've grown, and inflation has been weakened. What weakens inflation is a strong currency. You saw the example from March onwards. From March onwards, the currency began to strengthen, inflation began to decline. In September, we had inflation close to zero, at 0.8%. I don't agree with the government wanting to weaken the currency to be able to export. This weakens the government too, because we generate very high unemployment and inflation, as has happened in the last two years, with the currency devalued. Everything is dollarized; everything you import is in dollars. You see that a loaf of bread that cost X reais when the currency was strong has doubled in the last three years. So, now it could be falling, but business owners hold on a little, keep the price higher, because they want to make money and seize opportunities. I passed through Itapipoca the other day. Before, there were a lot of donkeys and bicycles in those squares; today, you see motorcycles and cars. I saw a study showing that cities with fewer than 6,000 inhabitants saw a 1,50% increase in vehicle sales, while in cities like São Paulo, with over 10 million inhabitants, the increase was only 6%. The poor now buy refrigerators, stoves, cars, and motorcycles. I don't advocate corruption, nor do I advocate unethical practices, but I also don't jump on the bandwagon of speculation to overturn a thriving economic model.
OP – You don't agree with the scandals involving the government that was removed, but you fear a setback?
VILMAR – It's a reality. The government was ousted due to fiscal pedaling, a fiscal deficit of R$1.5 billion. This year, a deficit of R$1.5 billion was approved, four times more, and Congress approved it. It was a failure of the previous government not to approve the R$1.5 billion. She (Dilma Rousseff) hadn't taken the country to the streets and harmed society as a whole by paying such a high price. What's going on? This year, it's already R$1.5 billion. It seems to me that R$1.5 billion won't be enough. The press is saying it won't be enough, that it's more than R$40 billion. You see, in 2013 the government spent R$163 billion on interest; this year it will spend over R$600 billion, plus the fiscal deficit, which will jump to almost R$150 billion, compared to R$40 billion in 2013. In other words, in 2013, the Social Security deficit was R$0.961 billion, compared to R$3.81 billion in 2002. See how much the Social Security deficit fell with the growing economy. I have so much data that I even want to release it next year. I'm working on economic data. In 2013, we reached the peak of Brazil's economic strength, the lowest employment rate since they began measuring. The Selic rate was the lowest since the rate was created. Everything was going great, then our president simply went crazy, influenced by the government's negative speculation. She accepted it, and society is paying, the productive sector is paying.
OP – Don’t you think that bitter, unpleasant medicines are necessary at this time?
VILMAR – There's no doubt that adjustments are necessary, but we couldn't pay so dearly for the adjustments we did, because it wasn't just adjustments. It was adjustment and maladjustment. Because they made adjustments on one side and more maladjustments on the other. The adjustment began during Dilma's administration, with Levy (former Finance Minister Joaquim Levy). But Levy made some adjustments on one side, positive, and the negative was absurd, the cascading effect that also generated the maladjustment. The Selic rate was too high, the currency was too devalued. That's how we lost credibility; the productive sector stopped producing to invest money. Those who had money and those who didn't were going bankrupt, generating these millions of unemployed. In 2014, when I saw the madness, this speculation, so many lies and exaggerations, that I saw that Brazil was in crisis, I wrote two articles in Valor Econômico, spending a lot of money on the publications.
OP – How did you spend money?
VILMAR – Paying. I paid the amount. About R$$ 300,000 in one publication, R$$ 200,000 in another.
OP – Advertisement?
VILMAR – Yes, an announcement. To show what would happen in Brazil with that economic model the market was speculating about. I said that model they're speculating about: raising interest rates, that is, devaluing the currency to combat inflation, to export, and generate jobs—that's an aberration, an absurdity. On the contrary, it generated unemployment, because they raised interest rates to combat inflation of 5.7%, which jumped to 11%, 12%. That was clear to me: devaluing the currency is inflation, it's blood in the veins. Look at the contradiction: you devalue the currency to combat inflation and raise interest rates to create a recession to combat inflation. What happened? Did one neutralize the other? On the contrary, it was a negative cascade effect; inflation rose even further, generating all these negative cascade effects we're experiencing today. So it was crazy, and I was desperate. I was disappointed with my colleagues in the production sector who didn't see it. The financial sector applauded because that was all they wanted to make money. This created this whole situation, this whole stress that we're paying for in the market.
OP – There's a desire among businesspeople for the government to interfere less in the economy, giving the Central Bank more autonomy. You advocate for a stronger currency, lower interest rates... do you believe the government should intervene?
VILMAR – Look, I have to intervene with my company's directors. If my director is doing something wrong, that is, something that's not healthy for the company, I intervene. What is the president? The president is supposed to intervene in whatever is harming society. If he lacks competence, the people have to understand and hold him accountable. So, if you see a minister, a Central Bank president doing something that will create stress for the market, that is, the productive sector... Because the productive sector is what generates wealth. The financial sector is of paramount importance, for supply, for financing. But it has to finance with competitive interest rates. I'm not even talking about the negative interest rates in Europe, or the cheap interest rates in the US, but here we have a real interest rate of 14% Selic, that's an interest rate of 14% real, and that 14% real doesn't even exist at 1% in Europe, or 1% in the US. In Brazil, with real interest rates at 8% since June, there's no economy in the world that can sustain this, that can grow at this rate. So the government has to intervene. If it doesn't intervene, it's not defending society. It's not defending workers. This is absurd, honestly. Society has to understand this, it has to follow suit.
OP – By foreseeing the crisis beforehand, did you have time to prepare the company to face it?
VILMAR – I didn't believe the president would be so, I would say, naive, I don't know, to accept what she did. Because I believed she wanted to win the elections and she would come back, so much so that I ended up voting for her, because I had voted for her in her first term. I never voted for Lula, but this time I voted for her because I believed in her. I even spoke to her last year when she was here. But of course, she was already deteriorating, psychologically devastated, no longer emotionally stable, so her mistake was her fragility, which was so strong, but became too fragile. But I knew it was coming, and because of that, I didn't believe this crisis would get to the point where it did. I thought the productive sector wouldn't allow it, that is, they would scream, but it seems to me that the productive sector is still deluded by the new government, but we'll see now.
OP – Are you calm?
VILMAR – Since April, when inflation began to fall, I've been having labor contractions. I've been begging and praying. Not only for myself and my company, but for the business owners who are bankrupting Brazil, who are wasting Brazil. When I remember that there are millions and millions of fathers paying the price, desperate mothers, children dropping out of school because their fathers can't afford a book, it hurts me deeply because I'm an extremely human person, as well as religious. It makes me nervous. Uneasy.
OP – Do you believe that impeachment was good or bad for the country?
VILMAR – There's one good thing. If society understands, knows the truth, it was good. What was it good for? To reduce corruption. I believe that from now on, corruption will truly have limits. Corruption exists all over the world, but in Brazil, it's been rampant in recent years. Corruption wasn't limited to one party. Society is aware of the facts, knowing what caused the crisis. If you look at the figures from 2013 and see 2014 onwards, it's dwindling, dwindling. The press, the Public Prosecutor's Office, and the Federal Police did excellent work. In fact, we can't help but understand that President Dilma also contributed to this. Because at no point did she intervene to stop Lava Jato, and she saw her colleagues go to jail, people from her party being indicted.
OP – Your discourse on the Workers' Party government, led by President Dilma Rousseff, is more lenient than what we usually hear among Ceará's business community. You even voted for her reelection. Do you feel a bit alone among your fellow businesspeople?
VILMAR – Not just my colleagues, but even my children, even my directors here, even those at home, I feel alone (laughs). Now they're listening to me, they're able to hear me. But the media is very powerful, that's why it's important, because it's so powerful, and people trust the media more. But I work with facts, I analyze the facts, I don't look at them, I don't get involved in speculation.
OP – Speaking of high prices, we know that Aço Cearense is a company very sensitive to exchange rate fluctuations. Was this the worst moment in its history?
VILMAR – Look, this question is timely because we really suffered a blow in 2014 and 2015 due to the currency devaluation. Our debt is heavily in dollars, but today our debt is mostly in reais. We also have a steel mill, with over 50% of our steel. As the currency devalues, the price of steel rises more. So I'm not suspicious of defending a stronger currency. Especially since two years ago, my debt has become 80% in reais. Another thing: we have this steel mill, and the steel sector is seeking a devalued currency. But that's a mistake. First, the government doesn't collect taxes, so you don't export. Brazil isn't competitive in exporting steel, so even if it did, it's not in the government's best interest because the government doesn't collect taxes on exports. It collects taxes from domestic consumption, and it's domestic consumption that generates jobs and wealth. It's where everyone wins, workers and the government too. And the government is society, you know that.
OP – Was it the worst moment in your history?
VILMAR – No, it wasn't. I went through several crises, we've all been through several crises, and we've all overcome them.
OP – Many companies have resorted to judicial recovery (RJ), but you haven't gone that far. Although you engaged with the market, engaged in conversations, and leveraged your credibility, how did you react when faced with this terrible crisis? Can we call it informal recovery?
VILMAR – No, I didn't do informal RJ. I didn't. First, with RJ, you don't pay interest for so many years; we're paying interest normally. I'll tell you what my spirit is, what I learned, and what I seem to have been born with, I don't know: consistency and justice. What's mine is mine, what's others is others. So, what's the government's is the government's, what's my creditor's is my creditor's. Our greatest asset isn't physical, it's not selling almost a million tons like we did in 2014 and 2015, nor, in other words, the revenue volume, which, you know, our company is one of the largest in Ceará. Our greatest asset isn't physical, it's credibility. My credibility, ours, my team, a team that wears the shirt, that gives its all for this company. Prepared, a team of 35 years, this team provides this synergy, this energy, and generates strength for us in times like these, you don't weaken. It takes blood from our veins, milk from stones, as I say, and we get there, but credibility is very important. It was the credibility of over 50 years as a businessman, since I bought eggs in the countryside, killing goats at 5 a.m. at the age of 15. I would go out selling on a donkey. We created this structure, and today this structure's most important thing is credibility, with the client and with our creditors. Our creditors believe in us.
OP – Aço Cearense is a large company, and in its early days, at least, it was heavily attacked by the major steel groups. Do you consider yourself a player in this group of steelmakers today?
VILMAR – No, it's very normal today. It was in the past. We spent about 30 years suffering. Not 30 years, the first six years were just—I would say, the first few years were very pleasant. More kissing. Then, a lot more beatings, when we started competing with our own suppliers. We started to become a nuisance, we grew a lot in the first six years, and in that growth, we bothered the big guys. At the time, there were many state-owned companies in Brazil, so they helped me. The private steel companies started to get annoyed and squeezed me, throwing millions out the window. They threw millions out the window, but there were the state-owned companies. They stopped being state-owned, they were privatized, and the situation became more complicated. What was our attitude that helped us grow even more? It was starting to import. Importing, leaving the domestic market. Since there were many barriers to importing in Brazil, we broke them all, that was our success.
OP – This was the big inconvenience.
VILMAR – Millions, I'd say billions, were thrown out the window. I won't say many billions, but a few billion, adjusted for today's price.
OP – Throw it out the window because they dumped it to fight?
VILMAR – They lowered prices, they wouldn't serve me here in the domestic market, they competed with me to suffocate. But that gave me energy. Now I also have a lot of faith in God. I don't have anything that I don't do through prayer and believing in my prayers. I pray at night, in the early morning, during the night, in the morning, on my way to work, I get here, my little shrine is here, the one next door is for social purposes, trophies, I don't know what, orders, but...
OP – Do you pray here?
VILMAR – A little prayer here every day when I arrive, there's some holy water here. I got all this here, I treasure it. There's a prayer here, the Divine Jesus Prayer. I've written this prayer down for over 20 years. Every time the candle runs out, I change it. I have a prayer I learned in a dream about 10 years ago. Coincidentally, someone picked up this prayer from my book, I learned it in a dream.
OP – Did you dream about this text?
VILMAR - No, I was in a dream, afraid of meeting someone from the countryside. Something was telling me: My Jesus, I trust in you, I am saved by the grace of God, in the name of the Father, the Son, and the Holy Spirit. So I put it in a book. Six years ago, my wife wrote a book about my story, and I put this prayer in it. A bank manager came to me for my birthday last year with a gift. I thought it was a book, but then I saw this prayer in this picture. I found something, a message.
OP – Didn’t she know you had dreamed?
VILMAR – It said so in the book. But she found it in the book, why didn't she give me a book, something else? She gave me this painting, she gave me the painting...
OP – Are you still at this bank today?
VILMAR – No, I go to every bank (laughs). But the important thing is that I continue to pray this prayer several times a day. That's the important thing.
OP – You are the epitome of the hard-working Ceará native, who didn't grow thanks to public contracts, etc. You grew on your own. I'd like you to tell that story.
VILMAR – I was a child of very poor parents in Marco (North Zone of Ceará) with 13 children…
OP – What did they live off?
VILMAR – From farming. My father was able to reasonably support his children through farming and up to eight children. Then the drought of '58 (1958) hit. I was eight, I was 50 (1950), so the drought took two-thirds of his savings: a small herd, the little he had, sheep, and all that livestock. When I was 11, I already disagreed with my father about planting cassava. At 11, I already knew how to evaluate. Cassava is only harvested after two years, and the cost was very high. When I did this calculation, more or less, that cassava cost more to harvest than to sell the flour, it wasn't worth it. I've always been very good at math. My grades were top-notch. I was always the best math student.
OP – Until what year did you study?
VILMAR – Until seventh grade, which was the second middle school at the time. I even joke about it because my math teacher once gave us a problem, and no one got it right. So when he said he'd named the problem, I convinced myself he was right because he was the teacher, but then I called a classmate of mine, who was actually his brother, and said, "My problem is right, Professor Airton isn't right." Then he was convinced. Not even the teacher got the problem right, and I got it right, and that was just to confirm my conviction. I used to do a lot of math in my head, so I think my reasoning is pretty good. I'm terrible at speaking. My reasoning is very quick, but I have a lot of difficulty expressing it.
OP – When did you leave the farm?
VILMAR – At 15, I was working in the fields, including with my father, with a scythe, clearing the land, when the scythe slipped from my hand because of the morning dew, at 9:30 a.m. The smooth handle slipped and cut my leg. Blood gushed out, so my father made a tourniquet and put it on my arm. That's it, my brother, that's why I'm religious, and my father is very religious too. He said, "May Our Lady bless you, and I'll never send you to the fields again." It all happened because my father was in a tight spot at the time. He always sold a horse or cow to pay the bills. I had a cow my godfather gave me when I was a child; it gave me a calf, and then it became a cow, and someone wanted to buy it. He sold it and gave me the value of the cow, about a quarter of the cow's value, perhaps around R$1,400 today. With that money, I started buying chicken eggs, a goat, and a pig. When I was 15, I would slaughter a pig by myself, cut it into pieces, 1 kg, 2 kg, put it on a donkey, and sell it.
OP – With those boxes on the side?
VILMAR – Yes, cambito. Or caçuá, as they called it. I would sell within an 8 km radius. I already knew who was buying, who liked the liver, the pig's head, who liked the snout, and I would go out and sell. And I would buy scrounges, chicken eggs, whatever I could afford. And I would sell in the town. I lived 2 km from the town. And that's when I started raising some pigs, saving money. At 18, I sold my pigs, paid my father's bills, and came to Fortaleza to look for a job.
OP – Did you have family here?
VILMAR – I had some cousins. Then my mother's cousin gave me a job. And this cousin of my mother's ran a grocery store. He didn't have a job for me, but he coincidentally had three employees, and one had asked to go on vacation that very day. So he said, "If you want to take his vacation... And how much do you want to earn? Do I pay you anything?" I said, "No, I don't want to earn anything, I just want to work." So I started working. After two or three days, he started calling me "Pimenta" (Pepper), because whenever a customer arrived, I would run to serve them. Then when the other colleague came back, it was fine. He came back, but he didn't fire me. On the contrary, I became his manager, but he started paying me 10 cruzeiros.
OP – Did you really live there in the grocery store?
VILMAR – I lived there, I spent a year and six months living there. Where Leste Oeste is today, near the old IML, Braga Torres Street, I don't remember the number. And he lived on Senador Alencar Street, my boss. So I used to carry bundles of clothes, when I was 18, 19. I'd carry bundles of dirty clothes from Senador Alencar Street on my head to take to his laundromat. He'd go grocery shopping, and I'd go deliver the boxes with my colleagues on my head. Where Marina (Park Hotel) is today, there was a prostitution ring; we'd deliver there. I earned only a third of the minimum wage. The salary was 123.80, but he only paid a third of what was on my paycheck, and I accepted. Six months later, I became his manager. He didn't raise my salary, I never asked for it, and he never diminished my work potential or my responsibility. When I started sleeping there, the sacks were five feet high. When I left, the renovations had already been done. Our hammock was on the roof, flush with the ceiling. I woke up at 5 or 6 a.m. and only closed at 8 p.m., meaning I worked 10 or 15 hours a day. So I went to the countryside a year and six months later. I asked permission to sell a small cow I had left there. My older brother had more savings than me because I always helped my father, and my brother didn't help as much. What happened was that we both got together and set up a small grocery store on the hill. There was a lot of prostitution, and we lived with it, but I started bringing my family here. My brother broke up with me; he didn't want to work with me anymore. So I just kept bringing my family here.
OP – Why didn’t it work?
VILMAR – One day he got upset with me because I went to the countryside against his wishes; he was my older brother. When I arrived, the partnership was broken up, so I started bringing my family. Anyone who had money to start a business started their own. Some of my brothers-in-law and some younger brothers stayed with me, and then a crisis hit, which was exactly when Leste-Oeste was established and took my clientele. Before I knew it, it had gone bankrupt. I left my father in charge of the grocery store and opened a liquor store two blocks from Aço (across from Mercado São Sebastião, in Bezerra de Menezes). I've been here in this market since 1975. Today, we've been here for 41 years, and in the steel business for 37, 38 years.
OP – And how did the drink turn into steel?
VILMAR – Beautiful, that alcohol transition was great. Because alcohol was what saved the day. When I saw things weren't working out, I learned there were people who were drinking and making a little money. Since I have little money, I can't start a big business, so I'll sell alcohol. So I started this alcohol business, but after four months I was already fine. I simply had an accident that broke my pelvis, fractured my arm, and my collarbone, and I spent almost three months in the hospital. When I came back, the doctor said, "You're going home and you still have to rest for a month." But when I got to the liquor store my sister, a 16-year-old girl, was looking after, and two employees had already plundered the store, there was nothing. A title deed at the notary's office was about R$1,400,000 today, so I had to take out a loan from the bank. My brother guaranteed the loan, but then, when I saw this situation, I didn't even spend a month, I only spent one day off work. I took my Kombi, which looked like a passion fruit, and drove around the street buying drinks, selling beer, and that was it. It was a success, but not that great. In 1979, after four years, we had assets of US$1,400,000. That's when I switched to the steel business. It was the second best part of my life. First, he had said, "Our Lady bless you, I'll never send you to the fields again," when I was 15. That day I went to visit my father. He was already married in 1979, and had a son, and he said, "My son, I'm not happy with you selling drinks, because drinking is bad for a man." That was beautiful. Then I took that as an order. One week I was renting a neighboring space a block away and opened a construction materials warehouse. Within a week, I analyzed everything and saw it was a good business. But then a drinking buddy of mine, a competitor, said, "Vilmar, why don't you sell steel? This guy did it two years ago and he's rich." I'm not one to pull strings, not to be influenced by others, but that caught me like a blessing, it really fit, so I started selling steel.
OP – And how did you manage to migrate?
VILMAR – It's a beautiful story too. The people at Gerdau (a Brazilian multinational in the sector, headquartered in Porto Alegre, Rio Grande do Sul) couldn't open any more clients. I went to the representative and he said, "No, we're prohibited from opening new clients." So I went to Recife, put everything I had in a bag, sold the warehouse, about US$1,400,000. I had already rented the space, under the name Ferro OK. Why that name? Because at the time, Pneus OK was there, and at the time, there was a lot of television advertising. I wanted to capitalize on Pneus OK.
OP – Which later burned down.
VILMAR – Yeah. After a while, it burned down, but Ferro OK stayed. Steel doesn't catch fire, so I was happier (laughs). But I thought the name was still weak, so I changed it to Aço Cearense, and then I had this idea, because in Brazil everything was Ferro, Ferro Norte, I don't know what, so I had the idea that steel is stronger than iron, so I chose Aço Cearense, and it's been a success to this day.
OP – You are, in essence, a businessman. Do you consider this business acumen to be your greatest professional attribute?
VILMAR – I think it's the cost-benefit. Doing the math. That's important. You first have to be determined about what you do, everything you do. An entrepreneur is like any other professional; they have to enjoy it, be determined in what they do, always strive to do better, and carve out a niche for themselves. So, a soccer player is like a visual artist, a doctor, a lawyer who becomes famous. I wanted to be famous not just for myself and my family, but to be useful to society, and that was my strength. My reasoning is very sharp, and I'm also very quick in mathematics, so I decided to do the cost-benefit analysis. One day, when I was starting my first industry, a friend of mine said, "You're very good at commerce; you're standing out, everyone praises you. Industry has nothing to do with commerce." And I said, "No, for me, it's just adding another service, because it's just adding. I saw the cost is good, so why wouldn't I do it?" It's just adding the service to the raw material, producing, and seeing what the profit is. That's what I did very well at.
OP – How do you recognize the "Peppers" in your company? Talented people, how do you identify them?
VILMAR – In our daily lives, we identify our children, we know who our children are, our friends, we know who's who, so that's it. Those who are here can consider themselves the "peppers," because if they weren't, they wouldn't be here. Of course, sometimes when the company grows, like we reached 4,800 employees last year, it's difficult to know everyone, but there's always the team that knows them. The team is very much like you. You learn a lot from the team, I learn a lot from my employees, from workers, from humble people, because that's the most important thing. What I say: we are only competent by recognizing our limitations. I have limitations here, and there are workers here who give me the slipper. Our vice president (Ian Correa) is a genius. He contributed a lot to our company, so he brought a lot of energy to the company's governance. When I started Sinobras (a steel mill in Marabá, Pará), I was desperate because of the distance. I couldn't leave Aço Cearense to manage Sinobras, so that's when he was hired. He was a huge help in professionalizing the company. Little by little, you recognize the weakest and remove them. Today, thank God, I'd tell you that it's just lacking money, but it's a very professional company.
OP – Conventional wisdom dictates that you shouldn't hire someone you can't fire. How do you handle the family component within your company?
VILMAR – First, when I had seven brothers in the company, it was really difficult. My brothers wanted to be in charge and be my employees. But one day, I slammed my fist on the table and said, "From now on, I'm the owner of this company." Because I was really struggling. We started building businesses for them and professionalizing the company. Today, we only have our director, a sister (Maria Ferreira, known to everyone as Maju), because she earned her place. And a daughter. I wasn't the one who gave them space. And those who were there out of emotion, all left.
OP – How are you handling family succession in the company? Is your daughter your natural successor?
VILMAR – Look, it was like I said. Aline earned her place. She's been earning it. For my oldest son, yes, I gave him more space and offered him many conditions, but then I realized that entrepreneurs really can't rely on emotion. A father is a father, business is business. Today, my son, who owns a company in São Paulo and manages it, has one that lives in the US, and Aline earned that place. And I thought it was cool about Aline, because about four or five years ago, I said, "My daughter," people started praising her, even Ian himself. "Look, Aline is developing well, it seems like she has what it takes to be your successor and all that, it's good that we work on giving her more attention and all that." So I called her (sic) to talk and said, "My daughter, our director and colleagues here are saying that you have the profile to win this position." Then she won me over when she said, "No, Dad, let me analyze us, the three children, when the time is right." I hire a company, they analyze it, maybe none of the three, if none of the three are competent, you hire someone from outside to continue the company's succession. From then on, she won me over even more. I started paying more attention to her and letting her win her over. Now I'm calling her more to talk, but I let her win her over. Ian (Correa, vice president) and the other directors have been very supportive, and I'm always looking for more. Her time is short, and I say, "My Daughter, listen to your father, come to the meetings, so you can learn more." I'm 65, going on 66, and even today I learn from my employees, friends, I learn to listen, from the press, I learn by observing the political issue. This crisis is helping me even more because I like economics.
OP – Aline once said she overheard a conversation when she was 8 years old. Do you remember?
VILMAR – Well, she kept it a secret. She suffered for many years and I didn't know she suffered. She had a complaint about me. I think I said she wasn't the daughter I loved most, something like that. I don't remember exactly. And she was the youngest. Actually, in 1990, I had a very serious accident, and she, at about 10 years old, gave me so much support. Of the three, she was the most supportive. She won my heart right then and there, and I'll tell you. My children are blessed. None of them have disappointed me. They are wonderful children. Later, I found out she had a complaint, that I was more attached to the other two (laughs). And now she's won me over, and I think that gave her strength. I even saw her cry when she mentioned it during a talk.
OP – The succession depends on her, on the moment she is ready or when you feel it is no longer your time to be here, to dedicate so much time to the company?
VILMAR – I'll only have one more security guard, and that's her, and I'm even more convinced that it's her because the other two have already supported her and recognized that she's more prepared. If the others and her mother also recognize it, then I can't judge; I can only hope that she gains more space. It depends on her.
OP – What is still a dream for someone who has reached where you are? Do you still have dreams?
VILMAR – I have!
OP – What are they?
VILMAR – My biggest dream is to see society thrive. My family is already well, thank God. And that's why we'll work, keep working, to see the Northeast thrive. A Northeast that in recent years was growing faster than the Brazilian average. My dream is this: to see the Northeast grow faster than Brazil. Now, if we're not careful, we could return to being the Northeast of the past, continuing to earn a per capita income 50% higher than the Center-South. That's my dream, may it come closer. Even if it's in a century.
OP – But business-wise, what do you dream of?
VILMAR – Continue growing, but with more caution now because we can no longer trust the government. Our goal now is to reduce our financial liabilities so we can continue growing. I was very bold, and I think this boldness helped us grow, but it also brought me headaches and crises. I truly believe that Ivens Dias Branco and the Edson Queiroz Group are two very important and valuable lessons for building a more solid, better-capitalized, and liquid company.
OP – Speaking of the Northeast, Ceará, and Ivens himself, he said that in the beginning he had to hide the company's origins. He put BR-116 on the packaging, omitting the name Ceará. And you have "Ceará" in your name. What does that mean?
VILMAR – You just asked me a wonderful question, because it was a huge surprise for me. And I was really disappointed in 1990 when I suffered a lot from competition. At the beginning of the decade, this fierce competition started in 1986. I said, "I'm not going to open a company in São Paulo, in São José dos Campos." That was in 1990, 1991. Within two years, my company, if I hadn't left, would have gone bankrupt. But I'm determined, I did, but after two years it didn't work out, I left, and they squeezed me, so much so that I had to leave. Then I realized that a Northeasterner was discriminated against back then. Not anymore; on the contrary. Today I'm proud. Northeasterners are already respected, and thanks to Aço Cearense, they're even more respected in the steel industry. Because no one believed in Aço Cearense. Today, we've conquered Brazil and sell from Manaus (AM) to Porto Alegre (RS). We have credibility in the market. They say our logistics are the best in Brazil. Even major competitors, large steel mills, recognize this, and our customers recognize it. Sinobras steel, which they said wasn't good, became the steel of Brazil as soon as we launched. And it started in São Paulo. It was the people of São Paulo who valued our steel. The certification attests that it's one of the best steels they had certified in Brazil.
OP – What does a giant steel mill like CSP in Ceará mean for your industry?
VILMAR – For Ceará, CSP was of paramount importance because, even more important, is the rolling mill we were going to build, but the crisis interrupted it. So, only God knows if we can continue the project when the crisis passes. But CSP is incredibly important for Ceará; it's generating jobs for Ceará, but in triplicate, there needs to be rolling. Rolling because this steel is produced in slabs and is being exported. Aço Cearense could even absorb 30% of its capacity today. We already have the installed capacity for 30% of all slab production, but we lack rolling, and we currently don't have the capital or credit to provide it. It would cost a billion dollars for the 30% slab capacity to absorb this slab. But if we work hard, we'll continue, and who knows, we might even realize this dream of the people of Ceará. In the North and Northeast, there are no rolling mills or flat steel mills. Only in the Center-West and Center-South. Even if it's not Aço Cearense, it could be anyone. When the time comes, when the plate is rolled in Ceará, you'll see how the economy of Ceará and the Northeast will explode.
OP – Would this lamination project be with Posco?
VILMAR – It would be. But this project has been aborted. Especially since the steel crisis isn't just in Brazil, it's global. But it's improved. China has already decided to raise prices. I think China will continue to raise prices, and that will make this project viable.
READER'S QUESTION
VALDELÍRIO SOARES
Businessperson
On your journey from poor boy to great industrialist, you learned many lessons. What's the most valuable one you'd share with young people embarking on the entrepreneurial journey?
I say Valdelírio, I know him and like him, that you do everything with pleasure. First, enjoy what you do, have fun. Some people enjoy sports, things like that, games, but I don't. I enjoy working. And I think those who enjoy working tend to grow more than their competitors because today we live in a locomotive behind us and we're ahead. If you slip up, the locomotive passes and crushes you. You have to strive to do your best. Anyone who wants to be an entrepreneur must analyze because not everyone is born to be an entrepreneur. Sometimes you have the desire, but it's not your calling. You have to be open-minded, think well, and gain credibility. These days, you can't be adventurous, just trying to make a living, leading others. No. My goal was to be honest with my client and supplier. I treat my supplier as well as my client. There's no point in saying, "Oh, my client is in charge." The client is in charge as long as they make a profit, but I have to have the right price, quality, and service to serve you well.
Source: The People
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