Francisco Santos: an idealist who succeeded

He bet on trade development of the footwear segment, reached success and expanded his ideas to other segments.

In 1973, Brazil went through a dictatorship. There was a politically hard period. Brazilian economy was predominantly primary and the population was concentrated on rural areas. Brazilian industry lived a lethargy period, in despite of being close to have a development which has marked that period. 70’s decade, according to the economical point of view, ended by being the decade that was not lost in the last 30 years. Since then to the current days, in which it is celebrated five consecutive years of growth, many things have occurred on national industry in general and on footwear industry, particularly.

It was in such uncertainness setting that Francisco Santos, a visionary that is in love with what he does, created COUROMODA. In 1973, Brazil did not use to export footwear and it had a modest home marketing. However, something stimulated Francisco Santos to create COUROMODA and turn it, 35 years later, into one of the biggest worldwide fairs of the segment and beyond.

Thousand of people visit it each year, more than 2,000 foreign purchasers spontaneously arrive to it, and millions of pairs of shoes are negotiated during the four days of fair.

Since then, trade fairs have got a new status, they play an important role of trade development as well as generating demand, activating supply, stimulating fashion. They are an important link of any productive chain and so they might be seen.

Brazilian hide and footwear chain is maybe the one in the world to have two extraordinary events that represent the fashion stations: Francal and Couromoda. One of them was born in one of the most important birthplace of the footwear industry; the other one, was born from the dreamer, illuminated and enterprising Francisco Santos.

In COUROMODA 35 years anniversary, Courobusiness Magazine, modestly, provides to its readers a synthesis of Francisco Santos thought: Brazilian’s trade development face of the 21st century.

COUROBUSINESS: What has induced you to create COUROMODA, 35 years ago, when industry was still incipient and trade development was not a well broadcast concept? Why did you opt for footwear segment?

SANTOS: This idea did not come from nothing. Since 1968 I already used to work in such segment. Then, in 1973, I went to Europe in order to visit an event in Brussels and I came back with the idea of changing the marketing on Brazil’s footwear industry. That’s because there where no trade development in the country until that time. We kept waiting the purchaser, in the states, to come to us. It was necessary to create new marketing concepts. To turn over the order: Let’s go to the purchaser!
Couromoda was created and realized initially in Rio de Janeiro, because in 1973 such city was a reference pole. Then, in the 80’s, this influence changed to Sao Paulo, where the fair happens currently.

COUROBUSINESS: What kind of changes did the footwear segment go through when doing a retrospective from the first edition of COUROMODA? Please highlight negative and positive points.

SANTOS: The footwear segment has acquired professional qualities. It has changed to better. We are the only country in the world that has conditions to compete with Asia Southeast. And this situation can improve if we sustain the home market, which is currently very good, and improve foreign market. I have seen, along all these years in straight contact to the segment, the command change in the industries. Many young people are taking over companies, establishing new ideas, new marketing concepts. They are entrepreneurs that travel a lot and try hard to professionally progress and to continue with their companies’ progress.

COUROBUSINESS: As an entrepreneur and president of one of the biggest fairs of footwear segment in the world, what is your opinion about Trade Development in the segment? Which influences these fairs have, in production and in sale (home and foreign) and, consequently, in the segment growth?

 

SANTOS: Fairs are the most important tools of the segment. The trade development concept has advanced a lot in the last few years. In the segments where we perform (footwear/ fashion; beauty and health) we are leaders.
The trade development has a very high influence in sales as well as in production. And it helps to keep the growth of companies and of the segment, as a whole, internally and externally.

COUROBUSINESS: In spite of the crossing of the line of US$ 2 billions for the first time, footwear producers regret for not having reached a better result in 2007. Do you believe that 2008 will be better?

 

SANTOS: Footwear segment has suffered a lot because of the exchange problem, however it has succeeded in changing and keeping aggressive. Today it exports to more than 120 countries. We are independent from the United States. We are well structured and consolidated. And the segment growth may tend to improve.

COUROBUSINESS: In the last 13 years, only in four years import has surpassed the barrier of US$ 200 millions (1955, 1996, 1997, 2007). In 2007, it represented 10.9% of the total exported. Does import preoccupies? Which is the limit capable of light the yellow sign?

SANTOS: In Brazil, 80% of the production is destined to internal consumption. What interferes is beyond the duty problem.
However, the segment’s big structure can protect national industry.
We have thousands of stores. The service and the logistics, for example, are as much important as the production. And Brazil has consolidated all those things, and this allows a great segment performance.
Asiatic, on the other hand, still has problems for that matter.
If there was no such structure, we would be importing double, more than US$ 400 millions.

COUROBUSINESS: COUROMODA, in spite of thousands of foreign purchasers that visit it, has a special focus on home market. According to your evaluation, how does the home market has behaved in the last few years? Would it be capable of balancing an eventual reduction on foreign market?

SANTOS: In Brazil, the production capacity is higher than consumption capacity. The companies that were closed were precisely those that used to export only.
The companies that held on until now, even after a moment of turbulence in the foreign market, are not dependent of export.
They have a production that faces home market and only a part of it, this is, the rest, is destined to foreign market.

COUROBUSINESS: We still don’t have an actual evaluation of American economics crisis. Do you believe there's a possibility that the crisis affects footwear exports in 2008?

SANTOS: No. We already have 60% of our export in other countries. Our dependence from the United States is decreasing. We are already independent enough regarding to North American market.

COUROBUSINESS: Do you have something to add, about Couromoda X Footwear Segment relationship? And your opinion about the segment’s future?

SANTOS: During our 35 years, I believe that we were important for the segment. We grew together. It was during this period that every association of the category has appeared. Our segment is unique: solid and organized – there are nine national associations. We have a great raw material inventory – we have the biggest cattle of the world – and this will allow us to be competitive for many years.

Revista Courobusiness, Ed. 56 – Jan/Fev 2008.