It servatis by Jorge Leandro Rodrigues

PROFILE • SERVATIS

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SERVATIS • PROFILE

This agro-chemical industrialist is strengthening its foothold in the market by investing in innovation and environment. Reuben Ford describes a concentrated commitment to clean-up and incredible comeback.

OMBINING 55 YEARS OF EXPERIENCE WITH GLOBAL leaders in fine chemical treatment, Servatis is considered one of Brazil’s leading providers of fertilizers and pesticides. When crisis struck Servatis at the end of 2009, production was halted. The company focused on not only repairing the environmental damage caused, but taking enormous steps forward in safe practices. Today, with plans in place and new clients affirming its quality and responsibility, Servatis is back. “It is the absolute beginning of a big process,” confirms company President, Carlos Lanza. RESEARCH AND RESCUE

Located in Resende in Rio de Janeiro state since 1957, Servatis began as Cyanamid Química do Brasil Ltda. In 2001 it was purchased by BASF. Four years later, the BASF Industrial Park was bought out by its 184 employees and Servatis was founded. The company had built up almost 50 years of professional experience with chemical compound production and 27 years of producing agro and fine chemicals – but there was a problem. “The employees had a deep understanding and strong professionalism but had problems managing operations,” Lanzo explains. In 2009 a leak from the Servatis plant contaminated the River Paraíba do Sul in one of the most serious disasters in its history. The State Environmental Institute (INEA) blocked further activity pending an Adjustment of Conduct Declaration and imposed compensation payments and commitment to environmental projects. The restrictions were heavy and with licenses for new products almost impossible, Servatis was in dire straits. Help was at hand. In 2011 the CGR Group, experts in the corporate reconstruction in Argentina, Mexico and Brazil, became the majority shareholder of Servatis and began the process of strategic business transformation. “The problem was not a financial one, but managerial,” Lanza recalls. STRATEGIC STEPS

CGR immediately implemented a series of steps to set Servatis on the road to recovery. The first was to sign the Adjustment of Conduct Declaration with INEA, proving commitment to clean-up operations, compensation and environmental programs and, importantly for resuming business, allowing liberation of licenses.

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PROFILE • SERVATIS

SERVATIS • PROFILE

CREATING SERVATIS Servatis is an industrialization company for agrochemical companies, working with environmental services. •

1957 – Cyanamid Química do Brasil

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2001 – BASF S.A. (acquisition)

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2005 – Servatis (management buyout)

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2011 – CGR Group becomes majority shareholder

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The agreement was signed in June 2012, marking Servatis’ reforestation, sewage treatment and river-life recovery programs, totaling $12.5 million. In the meantime, with the structure still in place and in the absence of licenses, Servatis had been building on its experience and the quality of its fine chemical products. “When INEA lifted the restrictions and facilitated sales and production it was the start of a new era for Servatis,” Lanzo confirms. Important new clients confirm the positive changes. Global agro-chemical giant Syngenta is one of the world’s largest companies joins Petrobras and Brazil’s largest environmental management company Nova Ambi as new clients of Servatis. “As well as the amalgamation of expertise from Cyanamid and BASF, the new clients and recovery come from fresh investment in innovation in new market sectors,” Lanza says. Servatis has directed investment into new laboratories for water treatment and petroleum handling research. Technical agreements with European companies have improved and modernized processes in an information exchange, which Lanza says “mutually raises the bar.” Servatis is a pioneer in Brazil in the recovery degraded chemical products. Through intensive purification processes, which also make financial savings, the company recycles solvents and ensures the safe disposal of residues, in accordance with environmental control programs.

“New clients and recovery come from fresh investment in innovation in new market sectors.” Carlos Lanza, President – Servatis

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PROFILE • SERVATIS

“It is the start of a new era for Servatis.” Carlos Lanza, President – Servatis

SERVATIS • PROFILE

“High-tech equipment, such as carbon-steel column reactors, guarantees the re-use of residues with quality comparable to new material. The new technology has a recycling capacity in excess of 1,000 tons a month,” Lanza explains. CONFIGURING THE MARKET

Servatis is covering new ground. Chemical recycling is the start of a new area of business competencies. Lanza elaborates: “We are operating agreements with water specialists Oxital for the treatment of solid residues and urban waste, Meruelo for construction of urban treatment plants and INERCO environmental solutions for power generation.” Establishing a group of companies as a point of reference for turn-key solutions for environmental waste management is a revolutionary concept in Brazil. The main plant in Resende employs 280 people and houses a biological treatment station for the safe disposal of effluents. Based on the concepts that Servatis promotes to the industry, the station processes 1.5 million liters of water a day. The capacity of the technology allows Servatis to offer free sewage treatment services to the surrounding neighborhoods, home to more than 4,000 people.

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The industrial complex also has the largest liquid residue incinerator in Latin America. With a capacity of 23,000 tons a year and 99.99 percent efficiency rate, the incinerator is the only one of its type in Brazil. It is controlled by a digital distribution system, which monitors atmospheric emissions online and automatically corrects and manages disposal.

COMMITMENT TO COSTS Servatis signed an agreement with state environmental institute INEA on July 4, 2012. The Adjustment of Conduct Declaration committed the company to major projects:

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• A 30,000 tree reforestation program along the banks of the River Pirapitinga. • Provision of sewage treatment for neighborhoods around the Servatis plant. • River-life operation for the breeding and reintroduction of fish native to the River Paraíba do Sul. Producing 1 million fish a year; Servatis maintains the operation beyond the stipulations of the agreement. The contract requires a $12.5 million investment between 2012 and 2016. However, secondary costs in implementing the plans, such as $6 million in lost revenue and $850,000 in logistics support for a technological park for medical product research. The technical park, in association with the Brazilian government, medical company Vital Brasil and state universities has an estimated total cost of $80 million.

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PROFILE • SERVATIS

CLEAN WATER

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SERVATIS • PROFILE

All water emitted from the Servatis plant in Resende (Rio de Janeiro state) complies with environmental management laws ISO 14001:2004. Monthly checks are monitored by the Brazilian National Environment Council (CONAMA) and by the State Environmental Institute of Rio de Janeiro (INEA).

ALL SYSTEMS GO

A new lease of life affords Servatis the possibility to expand its product range. Typically associated with agro-chemicals, the company applies its molecular expertise to other fine chemical products. “We now have an excellent industrial platform from which to develop our business,” confirms Lanza. As well as producing substances that are environmentally safe for agriculture, Servatis has also invested $22 million in a technology park together with The Vital Brasil Institute, Brazilian government and state universities. The park is another requirement of the Adjustment of Conduct

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Declaration and is a government incentive, together with Vital Brasil, manufacturer of national health medicines in Brazil. “The government wants to develop know-how for national production, reducing the need to import from China and India and we are proud to be partners in the venture,” Lanza says. Servatis has allocated part of its 871,000-square-meter industrial park to the construction of the research center, which in addition to bio-fertilizers and other environmentally sustainable products aims to increase Brazil’s medicine production. “In five years the aim is to produce $250 million of medicines – and in eight to nine years $500 million (1 billion Brazilian reais),” Lanza explains. The new products show the application of Servatis’ expertise and the total engagement in environmental concerns. The company’s biggest client and the second largest chemical company in the world, BASF continues to be one of Servatis’ strongest differentials: “We inherited our fundamental structure from BASF. We have incorporated our technology and knowhow with the most effective contamination control treatment systems in Brazil,” Lanza affirms. With the CGR Group at its Helm, Servatis has passed the storm. The changes that have been implemented make the company one of the most environmentally-aware chemical producers in the industry. Clearly, it’s not all plain sailing but the start of a prosperous future. “Operations were flat for two or three years, but in 2013 we expect growth of 50 to 60 percent and revenue of $25 million,” Lanza says. Fulfilling commitments and moving forward, Servatis is a fine chemical company for the future – with latest generation production and practices it is making an industry breakthrough.

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