The end of the road
A 20-minute ride in a van takes you from the air-conditioned ABB offices in Osasco, São Paulo to the dirt-track heart of Canaã: a vast, plywood slum where the homes are mostly cobbled together from scavenged scraps of old lumber, and topped with rusty corrugated metal or cheap fiberglass roofs.
It’s not uncommon for eight people to share one or two tiny, cramped, bulb-lit rooms where sunlight (and rain) pour through the cracks in the walls. Outside, a thick knot of tangled power cables droops from each utility pole along the rutted, dirt roads, feeding the battered appliances which share space with human occupants.
Children still play in the streets, like children everywhere.
Drugs and violent crime are standard in the favela; disease and illiteracy are expected. Osasco’s social service department estimates more than 120,000 families in the area live in poverty, and 50,000 are under severe stress due to drugs, violence, illness, overwork and the absence of one or both parents.
And yet even in this bleak place, there is still hope and happiness. Children still play in the streets, like children everywhere. Most parents are proud and worried, like parents anywhere.
A little boy bounds up the dusty street wearing a clean ABB t-shirt, and shyly but proudly asks: “What is your name?” in English. Asked for his own, he responds: “My name is Luis.”
Luis is learning English and other subjects at the ABB-sponsored school in Osasco.
ABB working on the home front
Sponsoring programs that help improve the society where it does business makes perfect sense, says ABB’s group representative in Brazil, Benny Olson.
ABB supports a number of local social projects with facilities and money.
ABB supports a number of local social projects with facilities and money, but also by encouraging employees to get involved in projects. ABB spent about 950,000 Reals (US$ 300,000) to help more than 2,000 children and adults in 2001.
“The objective is not to be satisfied only with living up to our part defined by laws and conventions, but in doing the utmost within our reach, be it for employees, family members or society at large,” Olson states in Brazil’s most recent sustainable development report.
“Not being involved isn’t really an option," says Carlos-Roberto Hohl, ABB’s sustainability controller and communication director in Brazil.
Hohl says if a developing society like Brazil stagnates, and ceases to progress socially, business cannot prosper. More than 53 million people – one-third of the population – live below the poverty line. GDP per head in 2001 was about US$ 3,300.
Trying to rebuild
Brazil is in the process now of recovering an education system stagnant from decades of neglect, but that will probably take several more generations to accomplish.
In the meantime, companies like ABB are stepping into the gap to help educate and socialize young Brazilians, and most importantly, to impress upon them that there is more to the world than the hovels and dirt-track limits of the slums.
Recently a national conference for socially responsible companies convened in Sao Paulo, attracting about 1,000 business people representing the heavy hitters in the Brazilian economy – ABB, Fiat, IBM, Nestlé, BASF, Boehringer, among others.
Osasco skyline - sans slums That assembled group represented about 60 percent of Brazilian GDP, an indication of the importance businesses here place on improving the society where they operate.
ABB sponsors and partners a variety of social programs in Brazil aimed at the very young who can’t protect themselves, and those who live beyond the fringe of society – recovering drug users and alcoholics who are often infected with HIV.
Building a business, too
While the company and ABB employees are deeply committed to improving their society, there is still a business to run and jobs to do.
ABB operates eight plants in Brazil, manufacturing transmission lines, substations, water and gas meters, high-voltage transformers and switchgear, power distribution transformers, energy meters, industrial maintenance, offshore oil and gas platform maintenance and repair, oil and gas production equipment and automation technology.
The plants are strung near the coast in the south and northeast, and employ about 6,500 people.
ABB Utilities is involved in huge hydroelectric projects in Brazil, including a 1,300-kilometer long high-voltage power line in northern Brazil. ABB’s fieldbus and automation technology and expertise is becoming part of a new iron ore palletizing plant owned by the Brazilian mining giant, Companhia Vale do Rio Doce (CVRD) in the northern city of Sao Luis.
In 2000, ABB booked one of the biggest automation orders received from CVRD to install to convert, upgrade and unify the management of control equipment and systems for seven iron ore pelleting lines of varying ages in the city of Vitoria. Started in August, 2001, with a budget of US$ 23 million, it is one of the biggest process automation projects ABB has ever undertaken. The challenge is to unify the control systems of all seven plants without disrupting production.
As in the rest of the company, full service contracts are a now major component of sales and marketing strategy. Brazil has just won a major new full service maintenance contract for the steel-maker SIMTA.
Everyone is awaiting the outcome of the presidential and legislative elections in October, and the fallout from the recent US$ 30 billion loan from the International Monetary Fund, wondering how business will be affected. No matter what happens, though, no one in Brazil ever loses sight of the human factor.
Vital Statistics
Area: 8,547,403 sq km
Language: Portuguese
Capital: Brazilia (1.8 milion)
Other major centers: Sao Paulo (16.4 million) and Rio de Janeiro (9.9 million)
Population (2000 est): 161.1 million; annual growth rate 1.1 percent
Gross Domestic Product (2000 est): US$ 595.4 billion
GDP per capita (1999 est): US$ 3,585
Currency: Real (R$)
Major Export Products (2000): Manufactured prducts, 57 %; coffee, 5 %; iron ore, 6 %
Major Import Products (2000): Raw materials/industrial imports, 33 %; capital goods, 43 %; petroleum and other fuels, 10 %; consumer goods, 13 %
Top Trading Partners (2000): United States; Argentina; Japan, Germany; Italy
ABB Plants in Brazil: 1.
Betim (transmission lines, substations); 2.
Montes Claros (water, gas meters); 3.
Guarulhos (transformers, switchgear, substations, products and systems for industry and utilities); 4.
Cachoeirinha (energy meters); 5.
Camacari (industrial maintenance provider); 6.
Macae (maintenance, repair and technical assistance for offshore oil and gas platforms) 7.
Osasco (Group administrative headquarters, products, systems and services for industry, oil, gas and petrochemical sector) 8.
Blumenau (distribution transformers)
ABB Employees in Brazil: 6,500
In the beginning: In 1912, one of ABB's founding companies - Brown Boveri - supplied electrical equipment for the Sugar Loaf cable car in Rio de Janeiro