Strategy
Growth
We made great strides in our three strategic pillars–growing both organically and through mergers & acquisitions, expanding internationally and increasing our operational efficiency, defined in 2013, throughout 2014.
4G
We expanded our business by obtaining a 4G license
OPTICAL FIBER
We signed an agreement to lay a submarine cable connecting Brazil and the United States
ALGAR FARMING
We invested in the professionalization of agribusiness
In the ICT segment, we increased Algar Tech’s presence in Latin America after acquiring Asyst. In addition, we expanded Algar Telecom’s business by obtaining the 4G license and signing an agreement to install a submarine fiber-optic cable between the United States and Brazil. We have identified opportunities to expand telecom services provided for MSME (Micro, Small and Medium Enterprises) clients by tapping into our existing operation and started offering customized products and services to these clients.
In the Agribusiness segment, we are considering opportunities within our industry. We believe in the potential of crop/livestock farming in Brazil; therefore, we decided to specialize in this business and turned ABC Agricultura e Pecuária – A&P into Algar Farming.
Overall, we increased our ability to work together with customers, suppliers, communities and institutions to develop new businesses, as well as innovative services and products. Moreover, we raised more funds and obtained incentives to promote innovation. The newly-introduced InnovationLab and Espaço Inovação [Innovation Space] at Algar Telecom will reinforce this possibility even further.
We created CSC (Centro de Soluções Corporativas, or Corporate Solutions Center), which started to centralize the Algar companies’ backoffice activities–related to Human Talents, Procurement, Finances, Controllership and IT – to support sustainable growth and improve efficiency by standardizing processes. CSC will allow each company to focus on its core business and add new business with more quickly.
Also in terms of efficiency, Algar Telecom analyzes its structure and processes with the help of a specialized consulting firm to increase productivity. The results achieved in 2014 exceeded our initial expectations and accounted for 13% of the Company's EBITDA in the year. We will continue these initiatives throughout 2015 to build a leaner Company prepared to adapt to market changes swiftly.
Business Culture
Our close relationships and the Algar way of serving customers are key distinguishing features of our businesses, regardless of market performance. The “People serving People” vision goes both ways. We fulfill our purpose by strengthening relations of trust and commonality of purpose among internal teams; in addition, we gain the trust of, and become closer to, our customers, whose perception of value in business relations is enhanced. Accordingly, our Procurement Club, a cross-selling and up-selling facilitator, became a reference in Brazil by capitalizing on the relationships among our consultants and customers, thus allowing the different Algar companies to do business among one another. For example, this synergy made it possible for Algar Aviation to boost sales of the TBM 900 aircraft in 2014.
The Procurement Club led to R$30 million gains by capturing commercial synergies in 2014.
The Algar brand
The Group conducts a study about the Algar brand image every two years to assess and classify the results of our relationships and communication initiatives among our key stakeholders. Innovation, commitment to serve, Human Talents and sustainability are the Algar companies’ strategic drivers, and the 2014 survey, conducted by Instituto Expertise, indicates that respondents already mention these attributes spontaneously, which shows that Algar’s positioning is being perceived by our main stakeholders. The survey also reveals respondents perceive the companies with which they have ties as having are the same attributes as the Group. This led us to see the importance of corporate alignment for our customers, associates, partners and others to perceive the Algar brand as it really seeks to be. The Algar Group’s image, whether it is seen as a group or as a specific company, is closely associated with reliability, one of the Algar values. The greatest strength identified in the study is that this attribute is also the most appreciated by all stakeholders in their relationship with any Algar company. This result explains the high recommendation rates and probability of continuing to be a client, leading to high customer loyalty. Finally, most respondents believe companies gain value by belonging to the Group. This is because Algar projects an image of confidence and credibility and is a prominent, respected group.
