Flavio Maluf is a well-known Brazilian entrepreneur and businessman. He is most recognized as the CEO and president of his families lumber empire, the Eucatex Group, a building supply conglomerate based on eco-friendly eucalyptus wood products. He worked his way through the ranks of the company starting with low ranking industrial positions. After almost ten years of working his way through the company, in 1996 he was promoted to the executive team. Only after learning the entire business from the ground up was he appointed the president of the company in 1997.
Maluf prides himself on developing cutting edge residential and commercial products for distribution to his customers worldwide. The Eucatex Group is a leading innovator in the production of environmentally friendly and sustainable products. In its continued efforts to maintain minimal environmental impact, Eucatex was the first business in South America to incorporate a recycling plant into its factory, which uses leftover wood and sawdust for energy.
In addition to running one of Brazil’s most successful companies, Maluf is also the president of the GrandFood Group. GrandFood is the parent company for well-known pet food brands Premier Pet and Golden Feeds. He is also recognized for his continued involvement in national charity events as well as volunteering in his local community. He recently collaborated with local farmers to help them gain valuable knowledge and resources regarding soil and forest management. He developed a local Apiary program to bolster the local economy while simultaneously improving the health of the surrounding forest. Maluf has also made generous donations including X-ray machines to the Community Hospital’s maternity ward, Maternidade Ídio Carli, former home of Santa Emília Health. Maluf’s charitable giving supports his belief that it is important to help the local community.
How did you get started in this business? What inspired you to start this business?
I was almost literally born into this industry. My great-grandfather, Salim, founded one of the largest sawmills in Latin America in 1940. This gave my uncle and father an extremely valuable strategic advantage. They used the sawmills and surrounding forests to start a new wood fiber lining industry. They named it The Eucatex Group – the name is derived after the eucalyptus trees and textiles they used to manufacture the slabs for their furniture and civil construction products. I first attended school to become a mechanical engineer but switched to business administration. After graduation, I got my first real job at Citicorp. Working for other companies was essential to my growth and provided me with important experience in managing a business. When I began working at the family company I had to start at the bottom and work my way up. I was destined to be a part of the successful empire they had started, although when asked I would probably tell my younger self to do something outside of the industry because of how limited it is becoming.
How do you make money?
I maintain a profitable portfolio by constantly looking for new ideas. During the week I’m always in the office researching and finding the latest trends. Even on the weekend, I relax while reading material that helps to inspire me and give me ideas to implement at work. Success is difficult to achieve if you simply go with the flow, so it is important to innovate and take calculated risks.
How long did it take for you to become profitable?
I took over an already profitable company, but I believed that we could continue to grow our company despite the fact that we were already the market leader. I quickly achieved this growth by not being afraid to go after big ideas; if you have a vision, go for it. If you dedicate yourself to the idea and strive for perfection then you will be able to achieve your goals. Another key to profitability is to listen to your customers and anticipate new trends. For me, staying ahead of the curve on sustainable and environmentally friendly business practices made Eucatex products the first eco-friendly products available in major North American home improvement and construction chains like Home Depot. Our eco-friendly certified products have been available since as early as 2000 and we are still a major supplier today.
When you were starting out, was there ever a time you doubted it would work? If so, how did you handle that?
When I first became CEO of Eucatex there were many people who believed the industry had become saturated. I was very ambitious at the time and wanted to make a name for myself by showing that there was still plenty of room to grow. It was hard to overcome the doubt of whether or not my ideas were going to work. Many of them had never been tested so it took a lot of perseverance and persuasion to get things done. They were calculated risks, however, so I had my data and research to back me up – plus, I am so passionate about new and innovative ideas that I was going to do whatever it took to see them succeed. I never doubted the business as a whole; however, there have been several products and initiatives over the years that failed. The important lesson from those failures was that they were the cost of innovation. I firmly believe that failure is an important part of success because you need to test your limits and discover what is working best for you and your business.
How did you get your first customer?
Eucatex was already a well-established company when I took the reins so my first customer acquisition was somewhat difficult. My main focus was on growth in an industry that many people thought was completely saturated. The truth about getting my first customer is somewhat cliché, however it is generally solid business advice. It took good old-fashioned hard work, research, and long hours to earn my first customer. That is simply the truth of the matter for all aspiring entrepreneurs because there is no easy way to achieve your goals and be successful in business. Many people think that by owning their own business they can simply hire people to do all the work and then they can sit back and watch the profits roll in; in reality, the truth is completely opposite. You need to be dedicated and work harder than everyone else to set the standard for your company’s success.
What is one marketing strategy (other than referrals) that you’re using that works really well to generate new business?
I’m a huge advocate of inbound marketing, which includes digital marketing strategies that attract consumers through the sharing and creation of solid content. I have done extensive research on this type of marketing strategy and utilize its main strength of showcasing a business’s message to draw customers in. When it comes to my industry, inbound marketing has a lot of advantages. First, it makes it easy to target the right audience for business by releasing segmented content that attracts the most advantageous customers. It also creates trust and close customer relationships by providing interesting content to a particular audience. Customers relate to the content and become open to the brand. This also heightens a company’s ability to persuade, which is essential for closing a sale. It approaches customers in a direct way and provides facts that attract them. Since inbound marketing is direct and offers personalized content, it takes less time to influence a buyer than other marketing strategies. The list of benefits goes on and on, but you can see why it works so well generating new business.
What is the toughest decision you’ve had to make in the last few months?
The toughest decisions, whether they happened last month or last year, are always about knowing when to pull the plug on a product or plan that is not working. It is important to take calculated risks and that means not getting too emotionally attached to any specific project. As an entrepreneur who draws success from innovation it is difficult not to be passionate about new ideas and products – this is what makes these decisions so difficult. When you are having to terminate a product or initiative that you had so much hope for, it is important to remember that failure is an inevitable part of being an entrepreneur. Learn from these mistakes and failures and they will grow into new ideas and new opportunities.
What do you think it is that makes you successful?
As I touched on before, I attribute my success to staying ahead of the curve when it comes to new trends and new innovation. Many of my clients, customers, and I think consumers, in general, want novelty, so the key is to anticipate new trends. The obvious trend for my company is to provide the latest environmentally friendly products that consumers want. The demand for natural and environmentally friendly products continues to grow. Staying on the cutting edge of this trend is the key to my success and is sure to drive sustainable growth into the indefinite future.
I also think that my company’s commitment to corporate social responsibility impacts our success. In today’s world, consumers want to spend their money at companies that are helping the community; and, we do just that. We run an environmental education program called Casa De Natureza, which is dedicated to supporting and educating the local communities where we do business. The objective of the program is to educate people about environmental preservation, sustainable practices, the importance of proper forest management, and the importance of eucalyptus trees as a raw material for various forest-based industries. Our commitment to the communities in which we do business proves to our consumers that we are not strictly driven by financial success, but by community growth as well.
What has been your most satisfying moment in business?
A couple of big successes for me come to mind. First, it was one of my happiest moments when I won the contract to supply Brazil’s new World Cup stadium with Eucatex building materials and paint. It was very satisfying to see that stadium come together and know that the vibrant colors the stadium is recognized for are provided by my paint. The Olympic games were the other notable moment for me. Having Eucatex involved in many of the construction projects needed to host the games was a point of national pride. The satisfaction of representing Brazil in such a big way through my products was a once in a lifetime opportunity that I am still very proud of.
What does the future hold for your business? What are you most excited about?
I am so fortunate to be a part of my family’s legacy of providing an environmentally friendly and sustainable product for the construction and home improvement industries. The sustainable vision Eucatex was founded on has literally become the future way of thinking across all sectors of the global economy. Governments, businesses, and citizens are all taking a closer look at how their decisions today affect the future. I am excited to be at the center of this worldwide change in thinking and playing an important role in how the planet can achieve sustainability.
What business books have inspired you?
Many of my ideas come from reading magazines related to the sectors I work in. However, some recent books that have given me inspiration are: Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage, by Daniel C. Esty; The Urban Farmer: Growing Food for Profit on Leased and Borrowed Land, by Curtis Stone; and Natural Capitalism: Creating the Next Industrial Revolution, by Paul Hawken, Amory Lovins, and L. Hunter Lovins. They all have influenced my decisions at some point including many off the social projects I work on in the communities surrounding our operations.
What is a recent purchase you have made that’s helped with your business?
A recent and substantial purchase I made in order to help Eucatex expand was the acquisition of the Sâo Paulo-based building panel manufacturer, Duratex. This purchase added roughly 280 workers to the Eucatex Group and provided the company with a potential increase of 200,000 cubic meters of product per year. As a result of this acquisition, we expanded our installed building panel operations by 80 percent in Brazil alone. It also helped expand the production of fiberboard by approximately 70 percent, paint production grew by about 30 percent, and our various paper products grew by roughly 40 percent. In addition to expanding our business, the added facilities made it possible to better plan sales and maintenance. This big move helped Eucatex improve its position in all of our global markets and ensured stability for the company in any economic climate.
What tips do you have for aspiring entrepreneurs?
I enjoy sharing my knowledge with up and coming entrepreneurs and have written several blogs to help people avoid common mistakes when starting a business. There are many things that I do to help me stay organized and informed throughout my work week. For starters, it is essential to stay focused at all times. Paying attention to detail helps to avoid the added stress of unexpected errors. Be open to new ideas and methodologies. As I mentioned before, innovation is one of the keys to success in an ever-changing business world. Don’t waste time on the phone. I find phone calls to be very distracting and take time away from value-added work. Avoid unnecessary conversations during work to stay productive. Most importantly, never stop learning. The pace of business has become so rapid that it is absolutely essential to have a thirst for knowledge that will provide you with the competitive edge you need to survive in today’s fast-paced world.
How would you describe your style of leadership?
My strengths lie in leading by example and inspiring people to carry out my vision. I set the tempo and the expectation of everyone at Eucatex. I am well aware that they are following my lead and typically spend 10 hours a day in the office. I stick to a strict agenda so I can have a regular and open line of communication with my management team. I am always innovating and looking for new trends and it is important that I inspire others to do the same. Staying focused and successfully communicating my vision for success is a big part of my leadership style.