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Companhia de Tecidos Norte de Minas-Coteminas

International Directory of Company Histories, Volume 77 (2006) by Robert Halasz

Av. Magalhães Pinto 4000 Montes Claros, Minas Gerais 39404-166 Brazil Telephone: (55) (38) 3215-7777 Fax: (55) (38) 3217-1633 Web site: http://www.coteminas.com.br

Public Company Founded: 1969 Employees: 12,576 Sales: BRL 1.42 billion ($485.32 million) (2004) Stock Exchanges: São Paulo OTC Ticker Symbol: CTNM3, CTNM4; CDDMY; CTMD Y NAIC: 313111 Yarn Spinning Mills; 313113 Thread Mills; 313210 Broadwoven Fabric Mills; 313311 Broadwoven Fabric Finishing Mills; 313312 Textile and Fabric Finishing (Except Broadwoven Fabric) Mills; 314129 Other Household Textile Product Mills; 315119 Other Hosiery and Sock Mills; 315221 Men's and Boys' Cut and Sew Underwear and Nightwear Manufacturing; 315223 Men's and Boys' Cut and Sew Shirt (Except Workshirt) Manufacturing; 315231 Women's and Girls' Cut and Sew Lingerie, Loungewear and Nightwear Manufacturing; 315232 Women's and Girls' Cut and Sew Blouse and Shirt Manufacturing

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Companhia de Tecidos Norte de Minas-Coteminas is the parent company of a group that collectively forms Brazil's second largest manufacturer of textiles and ready-to-wear clothing. The company's 11 factories turn out such textile products as polyester threads and cotton-made fabrics, yarn, and knitwear, home products including towels and bed linens, and clothing including T-shirts, underwear, and bathrobes. Coteminas has merged with Springs Industries Inc. of Fort Mill, South Carolina, to form Springs Global S.A., a Brazil-based company, but both companies retain some independent operations.

JOSÉ ALENCAR'S BOOTSTRAP CAPITALISM: 1945–92

Coteminas was founded by José Alencar Gomes da Silva, one of 15 children of a man who owned a small store. He went to work at the age of 14 as a clerk in a fabric shop. With his earnings he bought a food wagon that he operated in a hotel in Muriaé, the nearest city to his birthplace in the state of Minas Gerais, sleeping on a cot at the end of a corridor to save money. In 1949, at the age of 18, he borrowed money from his older brother Geraldo to open A Queimadeira, a fabric shop in Caratinga, Minas Gerais. Next, he manufactured and sold cheap cloths. After Geraldo died, he assumed control of A União dos Cometas, a textile wholesaler that Geraldo had founded with three friends. Gomes da Silva bought out these partners and, in 1965, founded Wembley S.A. (originally Wembley Roupas S.A.), a clothing firm that was to become the holding company for Coteminas (and that owned 24 percent of Coteminas's stock in 2005).

ADDING CLOTHING TO TEXTILES: 1992–97

Between 1985 and 1994, the net worth of Coteminas increased from $40 million to $492 million. The enterprise became a publicly owned company in 1992, when it collected $14 million for shares sold. Two years later, the company collected another $53 million from the sale of shares. In that year, 1994, Coteminas earned $46.6 million on sales of $164 million, and by mid-1995 the company's shares of stock had increased sevenfold in value since it first went public three years earlier. Coteminas also established a new woven-textile operation named Embratex from its own resources, building a plant in Campina Grande in the state of Paraíba.

Another new enterprise founded by Gomes da Silva in 1994 was Wentex Têxtil S.A., whose role was to manufacture T-shirts and sell them for as little as 75 cents each, cheaper even than the Chinese were charging on average. He took in $35 million from the sale of Wentex shares but kept total control of the voting capital. By this time, however, Gomes da Silva, usually referred to simply as José Alencar, was devoting himself chiefly to politics, having run unsuccessfully the previous year for governor of Minas Gerais. His 30-year-old son, Josué Christiano, was put in charge of Wentex, which, like Coteminas, was based in Montes Claros. Trained in Brazil as a civil engineer, Josué Christiano had next been an honor student at Vanderbilt University's graduate school of business.

Wentex had one advantage over the Chinese competition: the cost of energy in Brazil was less than half of that in China. Josué Christiano also kept costs down by purchasing the raw material, cotton, directly, without dealing through middlemen. Manufacturing expenses were reduced by totally mechanizing nine of the 14 steps to completion. Soon Wentex was turning out 62 million T-shirts a year, two a minute, or four times quicker than the national average. The cost of production to make this cotton-and-polyester-blend shirt was 11 cents cheaper than the average Chinese price.

Before the end of 1995 Josué Christiano obtained BRL 60 million (about $62 million) from investors for a new Wentex factory to be built in Campina Grande to produce more than 82 million T-shirts and 24,000 metric tons of knitwear per year. By late 1997 Josué Christiano was Brazil's leading T-shirt manufacturer, producing not only for Coteminas under the brand name Jamm but also for rival Companhia Hering under the latter's own brand name. During the year Cotene, Cotenor, Cebractex, Wentex, and Empresa Brasileira de Fiação e Tecidos S.A. (Embratex) were merged into Coteminas. Also that year, Coteminas acquired a number of brands, including Artex, Santista, Calfet, and Garcia, and formed a joint venture with Artex, principally to produce and distribute bed linen and terrycloth towels.

Companhia de Tecidos Norte de Minas-Coteminas

International Directory of Company Histories, Volume 77 (2006) by Robert Halasz

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