Insight

Here we speak to Jorge Cámara, export manager at CHAVESBAO, part of the Lontana Group, who outlines how CHAVESBAO is ‘directing the bow of the ship’ towards a more reasonable course of stability, by focusing on the performance and operative side of a new automated warehouse.

What are the benefits for CHAVESBAO’s customers of the new automatic warehouse and what other recent investments have been made? 

“The facility transfer to a new automatic warehouse has increased our capacity to more than 25,000 euro pallets. We’ve also been able to apply new technologies within that environment with six robots for euro pallets, as well as robots for miniloading. It has taken time for us to understand the performance and operative side of things, however the huge investment has been necessary to greater our efficiency throughout the whole distribution process. 

The investment has also put us in a better position for the future by helping us be more adaptable as the industry evolves. We are currently living in a tough era to find or retain skilled, talented people across our industry so we need to adapt and customise our service accordingly. We can do this through training our teams, but digitisation is key. Automation is improving processes, as well as Artificial Intelligence, which is already disrupting data management in our sector. Robots are slowly becoming our companions; it’s better to get used to them and be friendly. 

Competition has never been higher. Standards are also getting higher and higher and with that, expectations are constantly rising. Whether that’s in added services or product quality, those companies that do not align their strategies to match and exceed the trend will sooner or later lose business. That’s why we recently improved our quality laboratory by renewing the load, tensile, hardness and X-ray testing devices – to provide consistent high-quality products. 

We all must grow up and diversify our strategies, our products, our business. It’s just a matter of time – we must evolve.

We therefore have integrated a welding consumables range into our company to offer a different perspective. Welding with other technical nuances, although easily synergistic with fasteners, support each other and enhance the strength of our brand. The welding range was already an existing division within Lontana Group and now means we at CHAVESBAO have a bigger product offering.”

As a fastener distributor, what have been the biggest challenges over the past twelve months impacting the markets you operate in?

“Every market we cooperate with has its own idiosyncrasy, where a diversity of countries and realities coexist within each country. Common factors such as facing phases of a historic pandemic with worldwide consequences, as well as new European anti-dumping in carbon bolts and washers from China’s origin, have disrupted the supply chain – impacting markets and their consumption demands.

We have all been sailing through unbalanced stocks and inflation in product price terms waters, from crazy volumes to weaker demand currents. Huge purchases to feed the supply chain trend led to heavy extra logistics and costs, colliding last year with a cooling in the demand.  

We have been managing high-levels of everything – inflation, prices, margins and now a reduction of margins in order to stay alive in the market. Unfortunately, I would say we are back to harmful habits of the past. How do we deal with that as a business? Through stock capacity, reliable processes, reliable delivery times, quality products, quality packaging, and most importantly, communication. Good communication with your suppliers, as well as your customers, is paramount to business. Just like in a marriage or friendship, businesses need to know their strengths – and must know their weaknesses too. What I mean by this is – be transparent and share everything. If an issue is identified by a customer, have a contact for them to call directly. Overall reliability and willingness to reach agreements is crucial. 

This is the focus of CHAVESBAO, we are not perfect and have to keep on respecting and learning from the thousands of customers who place their confidence in us. They are our boss, who deserve gratitude. People make the difference and I feel our house is recognised in this sector as a home. We want to continue to compete in the ‘Champions League of European Fasteners’ – in what league do you want to play?”

Another big topic is the Carbon Border Adjustment Mechanism (CBAM) regulation. How will this impact you as a business and what measures are you putting into place? 

“Firstly, it must be said that the objective here is positive. For businesses to improve their standard of care and commit to taking care of the world by being mindful of carbon emissions is admirable. That being said, we need time to understand and adapt to the requirements of the European Commission. It’s very difficult to get the data from suppliers in the Far East. 

The regulation has had a huge impact in our purchasing departments, with the process itself needing a huge investment of time and resources from our side to follow regulation and registration. The issue is that this time and effort cannot be recuperated in the price of the product. Customers do not seem to be aware of these costs, so they are absorbed by importers. 

Whilst it’s a tough challenge for us, we must be open to change.”

Looking ahead, what do you think the future for CHAVESBAO holds? 

“CHAVESBAO is a family company with a history and values that are good foundations to face present and future challenges. Our sustainable growth strategy seeks to balance economic progress with social, environmental and governance responsibility to help improve the industry and the world a little more. We are marathoners. Can we last in the future if we do not take care of our house, our garden, our partners? Which is the perfume you want to leave in the sector?

As we look to the future, we are sure unexpected events, geopolitical issues, macroeconomics, regulations, mergers and acquisitions, as well as industry changes, will continue to frame and condition our route. As we look at tariffs and regulations, will customers and suppliers become more selective, and will the European industry have enough competitiveness on a worldwide stage? 

To better adapt CHAVESBAO to whatever scenario happens, I call upon César Luis Menotti, an Argentinian football coach, who famously said: “Don’t betray the idea, play well to win. The only thing you can’t stop doing is thinking.”