1,001 Days Of Bombril.062010letter


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1,001 Days Of Bombril.062010letter

  1. 1. 2010 Bacellar Venture Partners JOSÉ BACELLAR [1,001 DAYS OF BOMBRIL] Bombril´s Turnaround and Restructuring Business Case - 2003 to 2006, focusing the management of the corporate communication strategy and stakeholders confidence recovery into the company, as well brand equity and operational salvage from bankruptcy to profit generation and healthy growth.
  2. 2. 2 Presentation 1,001 Days of Bombril business case was originally written as part of a larger project of Prof. Francisco Viana, from Catholic University in São Paulo, and published in the book ― A Surdez das Empresas – como ouvir a sociedade and evitar crises‖ – ―The Impaired Hearing of the Corporations – how to listen to the society and avoid crises‖. The Book was published in 2008 and had another two business cases and a main essay by Prof. Viana about corporate communication management and crisis management. Bacellar Venture Partners believes that the Bombril´s business case expresses, in spite of its focus in corporate communication and media and general stakeholders’ management, a complete perspective of the potential of our company value proposition and capabilities. It describes the results of the restructuring and the sixty management measures of the turnaround. Therefore we decided to adapt the original text and produce an English version of it. From a direct translation of the original Portuguese published book, we challenged Miss Mariangela Gentile, a Professional Senior Editor, Graduated from University of Toronto, to prepare a complete new version of the business case. She has over exceeded herself in doing so and the result is the business case presented here. We want to acknowledge and register that we would not have this business case without her unique contribution and outstanding professional skills. We do expect the business case to be ultimately entertaining and a fair story of what happened during those amazing 1,001 days of Bombril. Bombril´s restructuring was the major accomplishment in my professional career. It was also a landmark in the Brazilian business world due the relevance and extremely high profile nature of Bombril´s Company. Alongside this text, we have a short video of 20 minutes presenting the turnaround and restructuring in another format – more emotional and marketing wise. Bacellar Venture Partners is ready to answer any question about this business case as well as would be honored to present or debate it details at any time.
  3. 3. 3 Content Introduction – Untying Knots of Steel Milestones in Bombril´s S.A. business time-line The Rise and Fall (and Rise) of Bombril: A Detailed History The Beginning of the End Bombril: “Advertised” in the Crime and Scandal News Pages The Roots of the Media’s Distrust Elements of the Corporate Communication Plan Corporate Communication as a Strategic Element Communicative Actions Facing the Media The Power of Reputation Phases of the Bombril Judicial Administration Process Final Comments Appendix Bombril S.A.’s Turnaround and Restructuring Actions (60 Measures) Turnaround Plan Operational Restructuring Plan Integrated Business Communication Strategy
  4. 4. 4 1,001 Days of Bombril: The Return to Business Headlines from Corporate Scandal Daily News By José Bacellar1 “Three hostile newspapers should be feared more than a thousand bayonets.” — Napoleon Bonaparte2 Introduction – Untying Knots of Steel The accomplishments outlined within this business case study are not based solely on one person’s efforts. They are the result of a collective effort involving more than two thousand individuals – employed men and women of Bombril S.A. who were firmly united in their determination to get the company back on its feet. This case study will examine the 1,001 days of Bombril, which took place over a three-year span from July 2003 to July 2006, when the company was in judicial administration. I have compiled this document using my firsthand, personal experience as the inspiration to demonstrate how we were successful in transforming Bombril from a business in an extremely vulnerable and precarious position, to a solid and thriving company. Restoring Bombril to its original historical reputation while also ensuring its value among future generations were essential components to overcoming the challenges I faced while I held company leadership. Dialogue, transparency, and concrete results from the judicial administration process were imperative factors to understand what practices were implemented at Bombril. Despite its exceptional marketing campaigns, one of the many difficulties the company faced was the lack of any corporate communication strategy. Journalists work with contradictions of facts, and for years Bombril was an inexhaustible source of contradictions. There were numerous litigation processes and judicial procedures taking place amidst intense conflicts between company shareholders. Ronaldo Sampaio Ferreira, heir and current controller of the company, had requested that litigation processes be set up in order to protect his interests against the previous company owner, Sérgio Cragnotti. 1. José Bacellar is an Economist and Master of Business Administration from the University of São Paulo. He participated in the Bombril S.A judicial administration process from 2003 to 2006, having exercised the functions of Advisor to the Judicial Administration, becoming Bombril`s CEO and Board Director from August 2004 to March 2006. 2. Extract from the Duailibi Book of Citations, page 148, entry 381. 5th, edition, Publisher: Arx.
  5. 5. 5 Multiple clashes among those at the shareholder and stockholder levels and disputes between the former managers of the company, as well as the judicial administration of the business functioned as serious obstacles on Bombril’s road to recovery. Further compounding the challenge was that the company lacked cohesiveness and desperately needed to distance itself from the drama being played out in the courts. While our main priorities were to emerge from a swamp of debts and business paralysis as a whole, our immediate goals were to recover Bombril’s market value and restore confidence to its work teams, reconciling the company’s reputation that had been tarnished not in the business section, but amidst the scandal pages in the newspapers. To address these problems, the central theme for judicial administration became management of corporate communication in all its dimensions. We needed to restore clear dialogue with all the agents who were part of the administration and business process, and at the same time we had to provide concrete facts to the media in order to debunk the rumors. These two strategies were central to avoiding bankruptcy in the beginning, and later on, during the course of the long judicial process, they became crucial to permitting full implementation of the company turnaround and restructuring measures. To save Bombril from economic failure, it was essential that the courts make a just and independent decision on the conflict. This case study is largely based upon the success of Bombril’s recovery as a result of brand strength and reputation. I will present a broad view of this recovery process as it took place amidst the conflicts and contradictions. Along with a conceptual model and Bombril’s corporate communication administration strategy, I will also outline other themes including the judicial administration’s business communication and how it was an integral part of the company’s general plan of recovery during the 1,001 days of Bombril.
  6. 6. 6 1948 On January 14, Bombril Ltd. (a synthesis of Bom Brilho) is founded in the city of São Paulo by businessman Roberto Sampaio Ferreira. The idea of selling steel-wool sponges was inspired by a new product that had been launched in the United States. 1950 At the beginning of the decade, the founder of Bombril created the ―Bombril Caravan.‖ The highly successful advertisements featured the famous Brazilian radio star and personality Isaurinha Garcia singing the praises of the steel- wool sponge to housewives. Bombril instantly became a household name and a product with ―1,001 uses.‖ 1961 Bombril takes over the Companhia de Produtos Quimicos, Belém factory, with its brands Sapólio and Radium soap bars, and starts to develop and perfect the Sapólio Radium line, including a creamy-liquid version. When it was launched in Brazil, Sapólio had only existed in three European countries: France, Holland, and Belgium. 1972 Bombril takes over the Mimosa Steel Wool Co. Ltd. of Rio de Janeiro. The following year Bombril acquires Q’Lustro, a company that held approximately 25% of the national market for steel wool.
  7. 7. 7 1976 Bombril moves its production line out of São Paulo city to the new modern factory in the Via Anchieta, in São Bernardo do Campo. Always renewing, progressing, and open to new technologies, this unit is still Bombril’s main production center. 1978 Bombril takes another step toward diversification. Limpol detergent is introduced followed by Pinho Brill, and Kalypto disinfectants, Fort ammonia, as well as plastics (garbage packing and foam disposable sponges). The infamous ―Bombril Boy‖ figure is also created, portrayed by actor Carlinhos Moreno, produced by advertising executive Washington Olivetto. The ―Bombril Boy‖ campaigns became one of the most famous in Brazilian history. Following the sales growth of Brazil’s most famous steel wool, 420 million units of Bom Bril are sold. 1981 Roberto Sampaio Ferreira, the founder of Bombril, dies. Company activities are divided equally between his three sons: Fernando, Marcos, and Ronaldo. Fernando and Marcos begin to command Bombril without Ronaldo’s participation. 1983 A new expansion cycle starts. Bombril Química is inaugurated in Simões Filho, in Bahia State. The softener Mon Bijou and the Bom Bril steel-wool sponge in a soaped version are launched. 1984 On August 1 the corporate name changes to Bombril S.A. The company begins having its shares negotiated on the Stock Exchange. Bombril Nordeste is inaugurated in Recife, Pernambuco. 1985 Bombril Minas is inaugurated in Sete Lagoas, Minas Gerais. 1990 The Italian group Ferruzzi acquires two thirds of Bombril shares. 1991 Shares are sold by Cragnotti & Partners, businessman Sérgio Cragnotti’s group. The Italian entrepreneur buys the shares from two of the three heirs of the Ferreira family: Marcos and Fernando. Ronaldo Ferreira does not agree with the sale and he begins to fight the decision in the courts against his brothers, and later against Sérgio Cragnotti. 1992 Previ, Bank of Brazil Employees’ Benefit Fund, becomes one of the main Bombril shareholders. 1993 In September, the company enters the soap powder market. The year also sees consolidation of the purchase of Orniex; this move represents a considerable increase in company revenue with the possibility of further improving its performance in the liquid detergents market. 1994 A strategic alliance is consolidated with the Henkel group in a technology transfer agreement for the production of powdered soap. This same year, the acquisition of Vieira Garcez Química of Salvador, in Bahia, a soap bar manufacturer is made. Bombril launches Limpol in soap bar form. The following year, Henkel takes control of 25% of Bombril’s shares.
  8. 8. 8 1995 Ronaldo Ferreira sells his participation for US$ 200 million to entrepreneur Sérgio Cragnotti, but only receives about US$ 80 million. The sale puts an end to company conflict that had started with the death of the founder. At the time of the transaction, Cragnotti was seen as a great entrepreneur and financier. Note: The debt of Cragnotti to Ronaldo would be rolled over a dozen times, for the last time in 2001. In January 2002, Ronaldo Ferreira sued the Cragnotti & Partners group, Bombril Holding, and Círio Finanziaria to collect the full debt value (more than US$ 120 million). The execution of this debt, originating in 1995, and the collapse of Bombril administration after the bankruptcy of the Círio group are what led to the Bombril judicial administration process from July 2003 to July 2006. 1996 Henkel sells its 25% stock share back to Cragnotti & Partners. The same year, Bombril sells two powdered soaps factories to the North American Procter & Gamble, stopping production of Quanto powdered soap. 1997 BNDESPAR (a holding of the Brazilian owned National Bank of Economic and Social Development) buys part of Bombril’s preferential shares, and Bombril shows a capital increase in which Previ and BNDESPAR invest more than US$ 220 million. Bombril (at the time controlled by Cragnotti) acquires share control of Círio Holding, a well-known manufacturer of tomato-based paste and preserves in the foods sector, as part of a process announced as the internationalization of Bombril. Value of the transaction was US$ 380 million, paid in cash. Bombril and Círio are merged, forming a considerable international company. Via the merge, Bombril thus takes control of a 100-year-old European group in Italy. 1998 Bombril buys the Carlos de Brito company (Peixe brand). A year and a half after the purchase of the Círio group, Bombril decides to resell Círio Holding to Círio International, a company belonging to Sérgio Cragnotti (an operation known as ―retro-sale‖). The transaction is made at the same purchase value (US$ 380 million), but the payment takes place in four installments. The operation is interpreted as a loan to the controller, which is illegal according to the Law of the Limited Companies. On April 30, Bombril launches its website www.bombril.com.br. The following month, Bombril inaugurates a new detergent, disinfectant, and conditioner factory inside its unit in Abreu e Lima, near Recife. A survey conducted by Top of Mind (a Marketing Research and Consultancy company) reports that Bombril is the Brazilian brand most recalled when people are asked: ―Which is the first brand that comes to your mind?‖ Bombril is also named one of the top 21 most prestigious brands of the century among Brazilian consumers, in a national pool research edited by the prestigious business magazine Exame S.A. Out of the 21 brands nominated, only 4 (of which one was Bombril) have been created and developed in Brazil. 2001 In January, Sérgio Cragnotti again renegotiates the debt of approximately US$ 120 million with Ronaldo Ferreira. The 12th Additional Clause to the 1995 Contract of Sale and Purchase of Shares is signed in which Bombril ordinary shares are given in warranty, but Cragnotti pays only US$ 5 million to Ferreira. 2002 Ronaldo Ferreira sues entrepreneur Sérgio Cragnotti for receipt of the US$ 120 million debt from the sale of shares. The Stock Exchange Council (CVM) goes to court against the controllers of Bombril on suspicion of fraudulently sending
  9. 9. 9 US$ 1.3 billion abroad between 1996 and 2001. Cragnotti is accused of diverting company resources to other companies within his group in Brazil and abroad. Inspection by the IRS confirms that purchase and sale of bonds were simulated to justify the remittances. Cragnotti is fined R$ 62.5 million, the largest penalty ever recorded in the Brazilian stock market against a manager of an open stock company in the country. The CVM concludes that there was abuse of power by the controller including numerous irregular purchases and sale operations of bonds between the Cragnotti groups of companies, resulting in heavy losses for the minority shareholders. Cragnotti is removed from the Bombril administration. In November, the Círio Grupo in Italy, controlled by Cragnotti, decrees default on debts for failing to pay debts to the value of more than one billion euros. The Italian courts intervene and take over administration of Cragnotti’s assets. 2003 The sale of Bombril shares is suspended by Bovespa because of the imminent risk of company bankruptcy – company stock would drop to R$ 2.50 per share that year. There are 12 requests for bankruptcy and more than 570 protested notes. At the request of the former shareholder and heir of the company, Ronaldo Ferreira, the courts intervene. On July 27, judicial administration of the company by José Paulo de Sousa, designated by the Court in São Paulo, commences. Thus begins the recovery process of the company, paralyzed by a lack in supply of raw materials, without credit and payment of wages in arrears. During the second semester of the year, Bombril is administered by all the contenders in the litigation process. Members representing Ronaldo Ferreira, Sérgio Cragnotti, BNDESPAR, and minority holders are present on the administrative council. Managers linked to Cragnotti are removed and legal disputes are put on hold. Over the course of this period, the company focuses on renegotiation of the debts with suppliers and resumption of industrial production. Sales are generated through the implementation of large discounts with the goal to regain market share. The first phase of judicial administration is focused on avoiding bankruptcy at all costs. The ―collective administration of interested parties‖ permits the company to ride out the storm, even while retaining many executives from the Cragnotti administration. 2004 In February, Sérgio Cragnotti is arrested in Italy, accused of falsifying balance sheets and causing losses to Círio Group investors. In Brazil, Bombril starts a reconstruction stage, restoring credibility and a period of stability in production and negotiation with suppliers and clients. In the first semester, a calmer atmosphere reigns between the members of the Board, which still include executives from the Cragnotti administration and the administrative council. A budget presented in March leads to José Paulo de Sousa initiating a search for new company managers with the help of the president of the council, Válder Viana de Carvalho. Ronaldo Ferreira’s lawyers pressure the judicial administrator to accelerate the transition of power to him. The judicial administration tries to maintain impartiality with the parties in conflict, concentrating their efforts on leading the company back to full recovery until the final decision is taken in the courts. In July, the Court of Justice in São Paulo determines that Bombril’s controlling stock will be auctioned in the Stock Exchange to pay off Cragnotti’s debt to Ferreira – an auction that did not materialize. Ferreira reaches agreement with the Italian Commissioners and managers of Bombril Holding in Brazil, and the shares are returned to him in lieu of the debts. In August, José Bacellar is nominated a member of Bombril’s Council after acting as a consultant to the former president of the Administrative Council, Válder Viana de Carvalho. After 26 years of success, the ―Bombril Boy,‖
  10. 10. 10 Carlinhos Moreno, retires, thus ending the longest-running advertising series in the world (according to the Guinness Book of World Records). In October, Ronaldo Ferreira and the Italian authorities negotiate a first agreement for joint administration of Bombril. Here begins Ferreira’s attempt to accelerate a company takeover. However, the Court in São Paulo recognizes the entrepreneur has a credit of US$ 200 million; in response they fix lawyer Antonio Augusto Coelho’s fees at 12%. The entrepreneur does not agree with the proposed lawyer’s fees and the agreement with the Italians is postponed. Compositions of the administrative council and of the Board undergo changes. The administrative council is restructured, and José Bacellar is named president of Bombril S.A. Management promotes reductions in production, with temporary shutdown of one of the factories, and is fully successful in implementing a program of voluntary dismissal. The financial health of the company is being reestablished. In December, the IRS fines Bombril again, this time for R$ 1.7 billion because of the remittances of money considered illegal which was sent abroad in 1998 and 1999, during the Cragnotti administration. 2005 In the first quarter, the company enjoys full recovery in the market and in production. Bombril sales volume and values grow and cash generation needed to meet the financial and fiscal liabilities of the company reaches almost R$ 10 million a month. During this period, the legal battle for judicial administration of Bombril between Ronaldo Ferreira and Antonio Augusto Coelho (Ferreira’s former lawyer) takes place. The board members linked to Sérgio Cragnotti and Ronaldo Ferreira finally leave the company administration, thus ending the first phase of judicial administration. In March, Bombril sues Sérgio Cragnotti’s Bombril Holding for receipt of R$ 207 million in overdue and unpaid loans. Bombril also obtains pledge on Cragnotti’s shares, thereby adding to the confusion of legal and company disputes. In April, Ronaldo Ferreira signs an agreement with the Italian government and withdraws his request for judicial administration of Bombril S.A. He nearly resumes control of the company, but the agreement is contested by Antonio Augusto Coelho. Coelho obtains a pledge on the Bombril shares in order to guarantee payment of his fees. Bombril S.A.’s judicial administration is maintained, now to protect Coelho’s rights. The company, now more financially stable, begins its recovery and growth and starts to invest again. The EBITDA (profit before payment of taxes, interests, depreciation and amortizations) is R$ 30 million in the first quarter of 2005, against R$ 4 million in the same period in 2004. The company closes the first semester with 30% sales increase in comparison to the same period of the previous year. Bombril launches the ―Pronto‖ line, popular products among consumers in the north and northeast regions of Brazil. The main objective is to use idle capacity at the Abreu e Lima plant and protect brand leaders Limpol and Mon Bijou from competition by regional rebel brands. The company, located in Recife, a wholly owned subsidiary of Bombril S.A., reaches more than R$ 20 million in annualized sales for December 2005. Still in the first semester, Bombril returns to the media with the ―Limpol, Our Detergent‖ campaign, created by Washington Olivetto, launching the slogan, “Where there‟s Bombril, there‟s Brazil.‖ In the second semester, Bombril turns once again to the DPZ Agency and launches the Mon Bijou commercials. The campaign’s leading role is performed by the Brazilian pop singer Wando. In 2008, Wando teams up with the ―Bombril Boy‖ and actor Reynaldo Gianecchini to star in additional Bombril commercials. In December, the return of ―Bombril Boy‖ is announced. On December 20,
  11. 11. 11 Carlinhos Moreno, Washington Olivetto, and Andres Bukovinski hold a press conference in which they announce the actor’s new contract with the company. At the beginning of 2006 the new ―Bombril Boy‖ campaign is released. Banks reopen their doors to Bombril with new loans and lines of credit. The year ends with the company in the black. Net profit: R$ 100 million against losses of R$ 458 million in 2004 and R$ 1.8 billion in 2003. Cash generation: R$ 110 million against R$ 30 million in 2004 and R$ -20 million in 2003. Gross revenue had catapulted from R$ 550 million in 2003 to more than R$ 870 million in 2005. Bombril exceeds R$ 82 million monthly sales, projecting annual sales of R$ 1 billion for the following 12 months. At the end of the year, the so-called judicial recovery of Bombril Holding (Bombril S.A.’s controlling entity) begins, having been approved by its creditors in assembly on January 10, 2006. Ronaldo Ferreira agrees to the process of judicial recovery of this company, thus paving the road to legally resume control of the company through a new legal action in the Court of Bankruptcies and Concordats (now called the Court of Judicial Recovery). This serves as an auxiliary course for execution of the debt process originally moved against Sérgio Cragnotti. 2006 At the start of the year, Bombril holds its National Convention in Rio de Janeiro, bringing together the company’s sales team and main executive leaders to celebrate the remarkable results of 2005. March 2006 marks the onset of the final stage of Bombril’s recovery process with the finalization of the judicial administration and the handover of control to Ronaldo Ferreira. Judicial administrator, José Paulo of Sousa, having fulfilled his recuperation mission in accordance with chief judge, Dr. Carlos Stroppa, requests the Court’s permission to resign from his position. Along with him, Válder Viana de Carvalho (former President of the Board of Directors), and José Bacellar (Board Director and CEO), also step down. The Chief Judge appoints a new Judicial Administrator, Dr. Marcelo Freitas Noble, to manage the transition to Ronaldo Ferreira, with Dr. Noble managing the company in the interim until Ferreira’s resumption of control. Bombril Holding’s recovery process continues to progress, and the agreement with the Italian commissioners is successful. Ronaldo Ferreira formalizes liquidation of the debts with Bombril Holding and (with the recovery plan approved at the creditors’ meeting) assumes command of Bombril S.A.’s controlling entity. Among the terms of the agreement is the extinction of debt collection against Sérgio Cragnotti, which will be paid with shares of the company itself. At this time, Ronaldo Ferreira is able to have Bombril S.A.’s judicial administration process begin drawing to an end in the courts in São Paulo. While still under judicial administration in May, Bombril launches the commercial with ―Bombril Boy’s‖ return. Ronaldo Ferreira resumes control of the company and appoints a new Bombril board of directors. From July 7, 2006, judicial administration is definitively ended with Ferreira’s command of Bombril S.A. The magazine Isto é Dinheiro on August 2, 2006 (#463) features Ronaldo Ferreira on the cover and a photo of him with Carlinhos Moreno in the text. The four-page article highlights the following headlines: ―Now this company has an owner … After 20 years of legal battles, Ronaldo Ferreira returns to take control of Bombril, the company founded by his father, planning to put the shine back on one of the most valuable brands in the country.‖
  12. 12. 12 The Rise and Fall (and Rise) of Bombril: A Detailed History The Beginning of the End In June 1997, Bombril was in the hands of Italian entrepreneur Sérgio Cragnotti, who had increased the company’s capital stock with the issue of preferential and ordinary shares on the São Paulo Stock Exchange from R$ 221 million to R$ 565 million. The company received R$ 344 million at a time when the Real was at parity of the U.S. dollar. Of this total, BNDESPAR and the Previ paid out approximately R$ 220 million. Based on the exchange rate of May 2008, this payment was equivalent to about R$ 400 million (without interest). By July 1997, Bombril bought out the Círio Group in Italy and sent all the money from its increase in capital abroad – a total of US$ 380 million. These occasions were the only two in which money actually circulated in the accounts of Bombril and the Círio Group. At the time, the plot resembled a rotating kaleidoscope in which a confusion of characters kept shifting and changing. The next move was the ―retro-sale‖ of Círio Holding to owner of the Círio Group, Sérgio Cragnotti himself, between December 1998 and January 1999, and a scandal that was widely publicized. Cragnotti bought the Círio Group in cash, of which he was the controlling shareholder, from Bombril; he later resold it ―back‖ to himself (Cragnotti & Partners) on account and in installments until December 2007. In practice, almost R$ 400 million metamorphosed into records on paper with no monetary basis. Millions were transferred from one tax haven to another, getting lost in a maze of companies with very similar names, thus making tracing of their origin virtually impossible. When a company’s records were followed, no money was found; all that remained were just airy accounting reports of companies that had closed, gone bankrupt or simply disappeared. At this point the plot transitions from a spinning kaleidoscope to a jigsaw puzzle. And piecing the puzzle back together again would involve some relevant records. One of these records, dated July 7, 2004, when Bombril S.A. (not to be confused with Bombril Holding, which was owned by Sérgio Cragnotti) announced it had opened legal process in the Courts of Rome and claimed damages against the Círio Group Holding Company and its shareholders. Its aim: to recover credit related to several supposedly fraudulent operations among companies involving Cragnotti Group companies, Círio Group, and Bombril, which had resulted in billions in losses for the shareholders of Bombril S.A. Aside from Sérgio Cragnotti, the companies being sued in the Italian Courts included Grupo Capitalia S.p.A., Cragnotti & Partners, Capital Investment N.V., and C&P Overseas Ltd. – all of which were major sections of Cragnotti’s accounting and financial puzzle. Unlike Bombril S.A. (which was productive, paid taxes, and generated wealth), Bombril Holding had only one employee, produced nothing, and had zero capacity for cash generation; it nevertheless possessed 100% of the Ordinary Nominative shares (ON) of Bombril S.A., and therefore held complete control of the company. It was an unprecedented move, but in March 2005 Bombril S.A. sued its controlling company in the 10th Criminal Court of São Paulo. The goal was to recover R$ 207 million credit on loans granted to Sérgio Cragnotti’s company that had not been paid. There were also Previ lawsuits against Cragnotti, claiming R$ 160 million, and with an updated value estimated at more than R$ 400 million; BNDESPAR, and the Public Prosecution Service, with lawsuits for damages concerning the remittance of US$
  13. 13. 13 380 million for the cash acquisition of Círio and its subsequent ―retro-sale‖ to Bombril, alleging harm to the interests of the shareholders/bearers of Bombril S.A. preferential shares. It is also worth mentioning that the fight between company heir Ronaldo Ferreira and his former lawyer was also taking place, as Antonio Augusto Coelho was claiming unpaid fees to the value of almost R$ 80 million. The repercussions echoed loudly throughout the media as litigations and liabilities of the most varied kind began to accumulate, lending a much more dramatic significance to the disappearance of BNDESPAR, Previ, and other minority interest funds. Here marks the final act in the plotline of company conflict within Bombril. Bombril’s legal battles resulted in a serious crisis of corporate governance, making it immensely difficult to keep the company (which was also suffocating from debt) in operation. It was no coincidence that when the Círio Group went into administration in Italy in 2002, the financial difficulties surfaced in Brazil with full force, almost bringing Bombril to bankruptcy. The threat passed, but the debt demons were not exorcised. Bombril owed approximately R$ 300 million in overdue taxes; it owed suppliers; it owed workers. Because the company had accumulated so much debt, and given its ongoing discussions on the true intentions of Bombril’s controllers and managers, the courts determined the company should be administered judicially and removed Sérgio Cragnotti from his commanding position. In 2004, Bombril knocked on the doors of the Italian justice system (in what turned out to be a vain attempt) to recover billions in damages. In retrospect, I can’t help but wonder how Bombril ever managed to overcome so much turbulence in its business activities. Bombril had the largest market share in the steel-wool segment; it was a brand with ―1,001 uses,‖ and it was the most known national brand in the country. However, Bombril’s resistance held firm. The domestic cleaning products market is extremely dynamic, and at the time, it was turning over roughly R$ 10 billion a year. The market was becoming a battlefield for giants like multinationals Unilever, Procter & Gamble, and Reckitt Benckiser, along with national companies in ascendancy with ―Assolan‖ from the Hypermarcas group, Friboi Group’s ―Minuano,‖ and Química Amparo’s ―Ypê.‖ The latter group had become a contender after only two decades of activity in the market, as it was geared toward younger consumers and offered intermediate price ranges. Nevertheless, Bombril had successfully made itself stand apart from the crowd. The reason became clear to me: Bombril’s trump cards were its unbeatable brand strength and the quality of its team of collaborators. Bombril: “Advertised” in the Crime and Scandal News Pages Scandals, recovery of a company on the brink of bankruptcy, and a constructive reputation make poor companions. History has proved repeatedly that the power of a media siege can have a damaging and often irreversible effect on the faith people have in a business that is in the midst of crisis. It was hard to believe that the Bombril of 2003 was the same company that in 1948 had been founded to manufacture steel wool. In fact, you would be hard pressed to find someone living in Brazil who did not know Bombril and its main brand ―Bom Bril.‖ The company had been a pioneer in the development of its own technology, and thanks to creative advertising campaigns, it had won over the Brazilian consumer’s hearts and the interest of the general public. In 1978, two years after the inauguration of the large industrial unit on the Via Anchieta in São Bernardo do Campo, Bombril was already producing 3,600 tons of steel-wool sponges monthly; that number represented two out of every three steel-wool sponges manufactured in the world. This
  14. 14. 14 remarkable success moved Bombril into the spotlight as an icon in the cleaning products department, and the company stole the show, so to speak, when it began manufacturing the liquid detergent ―Limpol,‖ the disinfectant ―Pinho Bril,‖ and the conditioner ―Mon Bijou.‖ As the product line grew, Bombril was transforming a utopia into an empire in the making. Sitting so high as industry leaders, it is easy to imagine that when Bombril eventually fell, it hit the ground hard. This catastrophic collapse was clearly demonstrated when the company had plummeted out of favor with the media. Veja magazine (edition no.1.761; July 24, 2002), for instance, ran a story with the heading, ―Central Bank investigates Bombril fraud,‖ and reported that the company had sent US$1.3 billion abroad illegally. The following paragraphs are an excerpt from the article: ―Central Bank (BC) has sent the result of a secret investigation that started two years ago to the Public Prosecution Service. In a document more than 12,000 pages in length, distributed in 84 volumes, BC reports that between April 1996 and February 2001, Bombril sent 1.3 billion dollars abroad in irregular operations, and that it will request the company be investigated for exchange fraud, illegal remittance of currency, and money laundering. It is the largest case of money laundering concerning a single company in this country.” An employee of the Central Bank involved in the investigations told Veja: “The case covers irregular remittances equivalent to more than 3.5 billion Reals involving a single company and a single bank account – the Bombril S.A. account, number 181601-2, opened at Bradesco, São Paulo. The company began to be investigated two years ago because of the disparity in the numbers. The Central Bank investigators wanted to know how Bombril managed to dispatch approximately 300 million dollars abroad per year, since its annual profit is much lower than that, at about 150 million Reals. Investigators became suspicious because of the fact that, when sending the money abroad, Bombril always informed that it was working with its own resources and sending them to Bombril in the United States – they also always specified that the money sent would, in some cases, be used to make loans and in others instances to protect against violent swings in exchange rates.” The article also reported that “bond contracts may have been falsified, and casts doubt on the existence of the bond sale operations, alleging that Bombril provided insufficient documents. The contracts did not inform on the number of bonds, their numbering, or the banks where they would be held in custody-data that appear in any normal contract. Last week, Veja had access to the summary made by BC on the case. The summary stated that „the purchase and sale contracts of those bonds present conditions that indicate falsification.‟” The Roots of the Media’s Distrust Conditions were worsening for Bombril. Although the company had an impeccable reputation for its products and success in its marketing campaigns, there were no channels for clear dialogue with journalists; this reality posed a serious threat to any effort Bombril made toward bringing about business recovery. And the problems, unfortunately, were not limited to just the relationship with the press; the company’s communication with the market and with shareholders was also suffering, and internal communication with employees was simply nonexistent. When the judicial administration took control of Bombril in July 2003, Sérgio Cragnotti’s representatives were removed. Over a period of time, a totally new command structure for the company was installed, including hiring of new managers to replace the previous ones. In November 2004, the second stage of the judicial administration began, which would
  15. 15. 15 ultimately promote the turnaround and restructuring of the company. Unfortunately, a seemingly impenetrable wall dividing Bombril and the media had been erected – demolishing it would take time and a great deal of work. The company, which had grown in large part thanks to the success of its advertising, had not heeded the new phenomenon of integrated corporate communication, which caused the relationship with the media to come to the forefront of company business. Bombril was lacking the informational sources properly prepared to speak to journalists it was missing the knowledge of how the press worked; it was without any perception as to the development of full democratic freedoms the country was beginning to acquire. And above all else, Bombril was unconsciousness to the enormous risk this vacuum in communications represented for the company’s recovery. Journalists were growing tired of hearing information that did not correspond with the facts. Before the scandals, Cragnotti had arrived in Brazil as a financial executive of the Santa Rita Cement company, part of the Italian group Ferruzzi, later to become owner of the Cica brand, which in its turn had belonged to the Bonfiglioli family. He gained respect in Brazil as a financier and appeared in the media as a capable entrepreneur, a sophisticated businessman, and very successful executive. When, after assuming control of Bombril, Cragnotti took over the Italian company Círio (a European brand that has existed for over 100 years, turning over more than US$ 1 billion a year worldwide), he was applauded. The following year, the applause got even louder. During this period, Cragnotti already held control of Cica and Bombril, and he had made a significant number of advances. In 1991, he had bought the Bombril shares from two of the three heirs of the Sampaio Ferreira family, Marcos and Fernando. In 1995, he took over the controls definitively; after buying Ronaldo Ferreira’s share, Cragnotti increased Bombril capital and with the money, he bought the Italian group Círio from himself, as was explained in an earlier section. Later in the ’90s, Bombril made a leap that its founder could never have imagined: the company became multinational. The phrases, ―New money. New expansion cycle.‖ were being heard in association with Bombril. The press even announced that Cragnotti & Partners and Bombril-Círio had decided to invest US$ 100 million in a food manufacturing factory in Brazil and, starting from 1998, the group would have the capacity to produce 150 thousand tons annually to reach a turnover of about US$ 150 million a year. The strategy announced by Cragnotti was clear: They would manufacture the products in Brazil that the Italian Círio already produced in Europe. Products would include vegetables in preserve form, tomato and milk derivatives, cheeses, and pastas. Cragnotti promised that Círio would supply all the necessary technology to the Brazilian factory. Furthermore, he announced his strategy to transform Bombril into an international group by selling and producing its products abroad. Although Cragnotti had even boasted about going to China to set up a steel-wool plant, none of his announcements came to flourish. Despite his shortcomings, however, Cragnotti was respected for years as a great entrepreneur and investor. Once Cragnotti’s corruptness was revealed though, every action or statement associated with Bombril became suspect.
  16. 16. 16 Elements of the Corporate Communication Plan In many facets of life, without communication there can be no solution, and for businesses in general, of any size or segment, information exchange is the foundation of success. For a company in crisis like Bombril that depends so heavily on vehicles of mass communication to create its brand and sell its products, lack of proper messaging and converse is certain death. Moreover, having its business activities continuously hammered by the media with negative headlines is even more torturous. Basing its beliefs on the factor of information transmission, Bombril developed a framework, an analysis structure for understanding the constituent elements of the corporate communication plan. Corporate communication is far reaching because it involves all the agents and participants (i.e., stakeholders) in company activity. A strategic plan for business information exchange should include all of these multiple agents, several of whom will have conflicting interests between themselves and/or with the company itself. The objective of the strategic plan of corporate communication is to offer sustainability to the business and management plans by improving their processes of value creation, emanating from and integrating with them, while simultaneously being one of the constituent parts of the business plans and one of pillars of their sustentation. While the Bombril corporate communication plan below is not exclusive or absolute, it does outline practical measures for companies faced with the day-to-day challenge of business communication. Key Elements of Bombril’s Corporate Communication Plan: 1. Solidity: information offered needs to correspond to the facts, and vice-versa. The information given is based on concrete data. 2. Consistency: information must not be contradicted or contradictory. Data needs to make sense, and the numbers (checked by financial analysts or by agent of the process) can be sustained by simple addition and subtraction calculations. Information must be coherent and coincide with concrete business actions. 3. Transparency: information must be confirmed by external sources and with assurances that the plan is all- encompassing, covering every aspect one wishes to communicate, every point that can be communicated, and every
  17. 17. 17 component that should be communicated. The principle of transparency in corporate communication is to prevent the company from losing its credibility through ―hiding‖ or ―omitting to inform‖ specific details or information. 4. Integrity: containing all the information necessary for the business plan, as in the ―honesty‖ of information. To decipher what the corporate communication plan would be comprised of, several questions had to be considered:  What is the message, and what is its purpose?  How will the message be communicated? What will be the form/format? (e.g., Will it be via Internet, newspaper, paid advertisement, and/or press briefing? Will it be a “one-to-one” official report? Will it be direct communication with the employee, or a bulletin for all employees? Will it be sent out via Intranet or notice board?)  At what frequency is information issued? (e.g., Should communication to the market be made every month or every six months? Are all directors informed of cash generation fortnightly, once a month, and/or at the board of directors meeting?)  Who should deliver the message? (e.g., the manager, director, chairman of the board)  Who should the originator of the message be?  Who should the receiver of the message be? (e.g., the internal public, external public)  What ―noise level‖ will this information generate? (Every piece of information generates ―noise,‖ so being prepared for the reaction and having contingency plans are fundamental.) The communication plan is a broad and complex matrix, one that needs to be monitored and scrutinized. It needs to measure whether the content is appropriate by reading and analyzing audience reaction. There also needs to be a system of ―feedback,‖ of permanent reassessment of the plan. The feedback model must permit assessment, allowing adjustments according to the results obtained against the plan’s aims and goals. On one side are the message receivers: internal and external public, along with all the stakeholders; on the other side is the content to be transmitted. First, one must take into account that the content for shareholders is different from the content for the media. Second, the frequency at which information is transmitted to the supplier also varies from the frequency at which it is transmitted to the consumer. Finally, the individual who is responsible for speaking to the client is completely different from the person whose role is talking to the government or an NGO. Furthermore, the form/format of the message delivery should be appropriate to the content of the message, the communication objectives, and the originator and receiver. Lastly, there are no definitive rules in this regard, but generally one does not dismiss a person publicly nor announce a mass dismissal process via email or written memo. A communication plan therefore needs to be finely detailed. The ways and means just described were used in Bombril corporate communication in modular form. To publish results for our customers, for instance, we produced a printed media edition through our quarterly magazine, Thousand and One. If the aim was to align the entire managerial body with company global objectives, we held a Bombril National Convention with PowerPoint presentations by each Director and Manager, which was later transformed into a meeting
  18. 18. 18 format. The full content was then fed back in a new graphic presentation and distributed electronically to everyone involved. When launching new marketing campaigns, we always introduced them within the factories first. For example, with the relaunch of the ―Mon Bijou‖ commercials, our aim was to inform workers of its return first, as a means to integrate them into the commercial and marketing effort. The format chosen was a performance by the famous singer, Wando, was featured in the commercial for everyone in the Anchieta factory, followed by a screening of the actual commercials (which would be broadcast two days later to the general public). Below is a diagram of the outlined framework, structured in accordance with the management information process of the corporate communication plan.
  19. 19. 19 Corporate Communication as a Strategic Element One did not have to be a communications specialist to recognize the problems between Bombril’s business and communication plans. In the past, the company had made history in advertising, but this period of greatness was being swept away by a wave of communication shortfalls. This very dichotomy was compromising the company’s future because the value of the business inevitably rested with the recapturing of public opinion. The difference this time, however, was that we were willing to change the innovations with the improvement in communications to and from our investors. Through judicial administration, the company began to conform to the customs of Corporative Governance good practice (as defined by the Code of the Brazilian Institute of Corporative Governance). We made these practices visible by strengthening the market relations department, posting information on the company website, holding meetings and frequent seminars, and restructuring our relationships with all stakeholders (including analysts, brokers, investors, clients, consumers, employees, suppliers, the Stock Exchange Council (CVM), and the São Paulo Stock Exchange). Publishing relevant Bombril news items and establishing closer contact with entities including stock market analysts became part of company routine. After a seven-year absence, we resumed the practice of giving presentations for the São Paulo Stock Market Analysts Association, APIMEC. We began to follow the operations with Bombril shares on a daily basis, monitoring investors and brokers. Information was also updated and published daily. We positioned ourselves as a company that fulfilled its company obligations and honored its commitments. We were not the owners of the company, but we were determined to strengthen it, to assure proper conditions for its progress and to maintain those conditions for the company’s future and continued success. This strategy helped reinforce our credibility in the market by providing it with solid, clear, trustworthy, and comprehensible information. Our intention was to convey trust and to transform the information into a value for decision-making. We were successful in accomplishing these goals, thus demonstrating that the old practices of masking problems and withholding information were in fact detriments to positive public opinion and the company’s success. Through modifying these initiatives, it was clear that the more we dialogued, the greater employee support would be. It was vital for us to show our personnel what was happening with the company, listen to their concerns and ideas, and win back their support so that they would be committed to the company’s success. We wanted our employees to be motivated, to participate and to be ambassadors for Bombril. In January 2005, the company newspaper Our Shine (released bimonthly to highlight the advances made by the judicial administration) became one of the first links among the Board of Directors, Executive Management, and the rest of staff. The connectivity between the three groups was conceived and represented as a single living body. It put the employee at the center of the communication process, showing that they were main players in the construction of the new Bombril. Fundamentally, we presented ourselves as a united work team whose strength was in cohesion and unity of purpose. In July 2005, in the commemorative edition on the second anniversary of judicial administration, I affirmed in an editorial:
  20. 20. 20 “In the last two years, Bombril and its employees have been the major characters in a unique story in this country. Never before, and in such a short period of time, has a company submitted to judicial administration achieved such a recovery in the quality of its performance. Anyone who was working here in July 2003, when the Courts of São Paulo designated José Paulo de Souza to take over the management of this company, knows what I am talking about. In those days, Bombril was a company weakened by a series of administrative difficulties. Pulling the company out of the situation in which it found itself and putting it on its feet again, while rebuilding its strength and credibility with the employees, suppliers, clients, consumers, and shareholders, were extremely complicated tasks. In order to correct the mistakes of the past, administer the present, and plan for the future, each task demanded much attention and dedication, commitment to responsibility, and strategic vision. We sought economic and financial stability for the company – and had we failed to reach these goals, we would not today be commemorating the feats achieved by the new Bombril. All this was achieved largely thanks to the competence and drive of the people who were already part of the Bombril family, the determined men and women who would not accept the idea of their company being dragged to a melancholy end. Together with the collaborators that joined this team, these commitments have allowed Bombril to be reborn.” Communication Actions As our success grew, we were able to widen the range of business communication tools and leverage, and potentialize concrete economic and financial results. The corporate communication plan of Bombril’s 1,001 days was a living entity during that time. Now that it can be seen in its entirety, it can be finalized. In the Appendix to this case, we describe the Bombril Turnaround and Restructuring Plan, detailing more than 60 administrative actions carried out during that period, the corporate communication challenges we faced, and what was achieved. Below are the five main goals, or communication aims, that involved all of Bombril S.A’s stakeholders and the actions we took in order to guarantee implementation. 1. Keep employees, suppliers, and clients informed of the administrative actions, goals, and results of the turnaround and restructuring plans.  Individual and/or group meetings to communicate administrative actions; turnaround dismissals; voluntary dismissal plan; product price increases and new price lists; renegotiation of sales and supplies conditions; redesign of the organizational structure, new control and process systems in general; variable remuneration policy. Printed material support (i.e., memorandums) and/or PowerPoint presentations were the main means for communication.  Updates in the company newspaper Our Shine with article emphasis on employee participation, and on employee’s lives and their families. Every newspaper delivered was labeled with the employee’s name, position, and section in order to personalize the relationship between the company Board and the body of employees. An electronic edition of Our Shine in the format of a weekly email, with snippets of information regarding the company, was also made available.  Thousand and One Magazine – a quarterly review edited by Bombril’s clients. The magazine kept wholesalers, supermarket owners, and other clients informed of Bombril’s commercial actions and market conquests. It
  21. 21. 21 reported on promotional campaigns, and communication focused on the buyers of the company products and their customers.  Cyclical sales meetings – every month the commercial area and marketing teams gathered at the Anchieta factory; every two months the Cyclical Sales Meeting took place in the five different sales regions Brazil, which brought together the salespeople and promoters of the entire country. The aim of these meetings was to inform attendees of the commercial results of the previous month, discuss any problems in the field, check on the sales goals, and align sales goals for the following month. The meetings also allowed the marketing and promotions department to report on activities in order to give support to product rotation.  Product launch conventions – launches of products like Pronto, Limpol, and Mon Bijou were supported by sales conventions which brought together the commercial team and clients in order to catalyze sales and accelerate introduction of innovations in the market.  Bombril National Convention – a three-day convention of commercial leadership and management was held twice in Rio de Janeiro, in January 2005 and January 2006. The conference brought together approximately 150 people from Bombril’s marketing and sales, factories, financial departments, legal teams, R&D, IT, HR leaderships, and other staff. The annual encounter presented the results of the previous year, aligned sales goals for the upcoming year, and helped to align the budget with the company leadership. The goal of the convention, with its numerous meetings, presentations by region, and organizational motivation events, was to strengthen the Bombril team spirit. 2. Present the balance sheet with economic and financial results of the judicial administration to the Judicial Administrator, the Court representatives, and to all parties in the litigation.  Detailed reports by company area, beginning with an executive summary by the Bombril Presidency, containing the macro-results and a synthesis of the economic and financial performance, later detailing area by area: (i) the status of the situation in July 2003 and November 2004; (ii) the results reached up to the date of publication of the report; (iii) the actions taken and key factors to their success; (iv) the sales goals for the following period; and, (v) the action plan and the work chronogram for the future. There were five reports: 1. 100 Days of Administration – The Turnaround – February 2005; 2. First Half Year 2005 – July 2005; 3. Two Years of Judicial Administration – July 2005; 4. Administration Report 2003 to 2005 – January 2006; and, 5. Institutional Film on the Period 2003 to 2005. These five reports were formally presented (in PowerPoint graph format) to the Administration Council and Judicial Administrator, to the parties in litigation, as well as to the judges responsible for the Bombril case. I also personally gave presentations of the above reports in Rio de Janeiro to the Board of the Previ and to BNDESPAR technicians responsible for examining Bombril’s business performance.
  22. 22. 22 3. Present the balance sheet of economic and financial results of the judicial administration to shareholders in general and to institutional investors.  Annual Management Report – open stock companies have a communication standard called Annual Management Report. Bombril produced three reports during the judicial administration period, and I signed the 2004 and 2005 balance sheets and reports (published in 2005 and 2006, respectively). Apart from being a detailed financial statement, these reports typically present and discuss management’s actions and their results in a format more accessible to the general public. They are destined for banks, financial institutions, trading partners, clients, and suppliers in general.  Presentations of Quarterly Results – meetings with investors and analysts from the stock market, as well as with financial institutions, to discuss the balance sheets and financial statements published quarterly, as determined by Limited Company Legislation and the Stock Exchange Council (CVM). The meetings began in São Paulo, at the São Paulo Stock Market Analysts Association, APIMEC, and later throughout Brazil sponsored by the Stock Market Management.  Relationships with Investors Site – Stock Market Management and Financial Management created a website dedicated to managing the relationship with Bombril shareholders and informing them on the company management actions.  Publication of Relevant Facts and Notes of Explanation – through paid advertisements, Bombril informed the market in general about its more critical management actions, including ―write-off‖ of debts (recording of accounting losses from bad credit) and performance goals. 4. Communicate company initiatives to consumers to increase sales volume and value (general marketing strategies. After the turnaround was concluded in March 2005, Bombril again began to use all the tools of mass communication, marketing, and sales promotions, including pamphlets, promotional kits, point-of-sale materials, exhibitors, etc. Consumers could sense the return of the familiar brands and products with the same great quality. These marketing initiatives took the company revenue to almost R$ 900 million in 2005 and 2006, against R$ 600 million in 2004, and just over R$ 500 million in 2003. Important marketing milestones include the following:  ―Women who Make Brazil Shine‖ Project (March 2005);  Limpol Campaign (June 2005);  Launch of Pronto S.A. (July 2005);  Mon Bijou Campaign (August 2005);  Cine Bombril (refurbishing of old Cinearte/Cine Rio in the Conjunto National building in São Paulo) (October 2005);  Announcement of Bombril Boy’s return (December 2005); and,  Bombril Boy’s return (May 2006)
  23. 23. 23 Note: Detailed explanations of each marketing campaign can be found in the Appendix (see C – General Marketing Campaigns). 5. Inform investors and consumers, government and NGOs, as well as clients and suppliers, on the general results of the judicial administration (via contact with journalists and other appropriate vehicles of communication). To come face-to-face with the media again was one of the biggest obstacles we faced during the 1,001 days at Bombril. The challenge was to move away from the inheritance left by the Cragnotti administration and be qualified as a speaker on behalf of Bombril and the judicial administration. Management of the relationship with the press fell into three separate categories:  Press consultancy – communication of actions, marketing and product management, as well as relevant company events. The focuses are the products and marketing campaigns, as well as actions of social responsibility or relevant management facts, such as the reopening of factories.  Re-establishment of channels of communication with journalists and information exchange vehicles. An organized process of visits was arranged to the country’s main communication outlets and journalists that were following Bombril’s case. The purpose was to create a ―new and clean‖ pathway of communication, with focus on explanation of the judicial administration’s work, without necessarily seeking publication of any fact or information.  Communication of the results of the judicial administration and management of communication crises. The bombardment of negative news reporting and the siege by the media required more decisive action in presentation of the company results in order to strengthen the judicial administration and lessen the impact of the negative news items and the company’s infighting. Facing the Media Communication is the key that opens the doors to dialogue. By using it correctly, Bombril was able to unblock its channels of understanding and confront its tarnished image in the media. But it was not easy. There were years when Bombril remained silent, a prisoner of its own incommunicability, and everything the media published about the company was based on criminal reports and negative press. To repair such a reputation, we grounded our initiatives on what we believed to be rule No. 1 for constructive dialogue with the media: transparency. We realized that it simply was not enough to produce results; it was necessary to make them visible and reliable. With our understanding that the media exercises a positive and absolutely indispensable role in the formation of value for companies, we presented the results of the judicial administration to journalists and to the owners of media outlets. In 2005, I traveled around the country meeting with reporters, editors, and journalists to speak on behalf of the company about what was being done to get Bombril back on its feet. I went to numerous media outlets, including local and national newspapers (Folha de S. Paulo, Estado de S. Paulo, Correio Braziliense, O Globo, Zero Hora), and spoke to several
  24. 24. 24 leading news magazines and economic journals (Time magazine, Valor Economico, Isto É, Isto É Money). The print media became a major player in resurrecting Bombril’s good name. We were able to communicate to the masses that Bombril existed and that we had a new message, one not connected to the previous scandals that dominated the headlines. We were taking proactive measures to mend the damage done to the Bombril name, but the road to recovery was not a smooth one. The company was still surrounded by an aura of suspicion. But patiently, with hard data in our hands, we set about seeking to confront and deny the malicious allegations, focusing instead on providing journalists and the media outlets with the facts. We made our data available to them, and we were always ready to speak on record to clear the air of rumors and half-truths. In March 2006, during the transition to the third stage of judicial administration, I discovered that Dr. José Paulo de Sousa had resigned from judicial administrator’s post and that the resignation had been accepted by Chief Judge, Carlos Stroppa. I was also aware of the new interim administrator’s nomination, and I was able to inform reporters (with whom we had developed a trusting relationship) that Válder Viana de Carvalho and I would soon be giving up our positions as administration counselors because our work had been concluded. Among the many advantages obtained during the process, the most outstanding was the fact that Bombril S.A.’s judicial administration was eventually perceived by public opinion and the authorities as an authentic defender of the value of the shareholders’ and company assets. Rebirth in 2005 was firmly established when we defined a communication strategy, including Carlinhos Moreno’s return as the ―Bombril Boy.‖ Our research indicated that although no longer visually present in the media, the character was still the consumer favourite. ―Bombril Boy’s secret had always been his capacity to transmit the values of being Brazilian and those of credibility and quality of the company’s products. He was an emotional icon that was useful far beyond Bombril’s 1,001 uses. It would be the ideal ace in the hole to Bombril’s return, a breath of fresh air after the dark clouds that had loomed over during the Cragnotti administration. From this feat and on the solid ground of results, Bombril’s corporate communication was reborn. Through transparency, factual truth, and continuous dialogue with the media, we managed to overcome the distrust created by the Cragnotti administration and reassume our place in the economic and business sections in local and national papers. The Power of Reputation In July 2005, the magazine Isto é Dinheiro (# 413) circulated with an unexpected headline: ―Without an owner, but making a profit. Bombril moves out of loss, reopens factories, and renegotiates debts. But it remains under the Jurisdiction of the Courts.‖ The article went on to state: “There are no longer leaky roofs or nonfunctioning machines at the Bombril factory site in Abreu e Lima (PE). The facilities at the Sete Lagoas unit (MG) have also been refurbished and the equipment is working again. Productivity has increased at the Anchieta (SP) plant.”
  25. 25. 25 A few months later, on October 10, Veja magazine, the influential ―Radar‖ column written by Lauro Jardim verified: “After undergoing a clear-out of its management (caught out by frauds and tax evasion in 2002), Bombril has managed to turn around and obtain a profit of 50 million Reals in the first half of this year.” New horizons were opening up for the company. Thanks to the combination of economic recovery and a coherent strategy of dialogue with the media and its audiences, including employees, suppliers, and customers, Bombril banished the threat of having its name reduced to dust and, little by little, the company resurrected the once-solid capital of its model reputation. The distinction of the Bombril brand had paved the way for rescuing the company’s image with the media. From the entanglement of the company jungle and the web of corporate breakdown, the company, loved by Brazilians and one of the most widely recognized brands in the country, was clawing its way back to the top.
  26. 26. 26 Phases of the Bombril Judicial Administration Process July 2003 to October 2004 – Financial Survival and Operational Stabilization The focus of this first stage of judicial administration was avoiding bankruptcy and resuming normal business operations. Representatives of all the parties to the company conflict were maintained in the company management structure. During this phase, the first major restructuring was of operations liability – R$ 60 million, and resumption of production, with focus on increase of sales through price reduction. Also in this period, loan agreements with associated companies and/or linked to Sérgio Cragnotti (which had caused the company to register an R$ 1.8 billion loss in 2003) were accounted for. November 2004 to March 2006 – Execution of the Turnaround and Restructuring Plan by the New Administrative Council and New Executive Board In November 2004, the Judicial Administrator José Paulo de Souza named new members for the Administrative Council and a new Executive Board was chosen. The plan was divided in two parts: 1) the Turnaround Plan, from November 2004 to March 2005; and, 2) the Restructuring Plan, from April 2005 to March 2006. During this time, new liabilities from the Cragnotti era were recorded, and the company closed 2004 with new losses of about R$ 450 million. Apart from the change in management, the parties in conflict were also removed from company administration and Bombril began to be managed only by judicial representatives. April 2006 to July 2006 – Transition to Ronaldo Sampaio Ferreira Dr. José Paulo de Souza left the judicial administration of Bombril, and a new council and executive management were installed to direct the company until the legal conflict was resolved. During these final three months, the judicial administration was being finalized, and the return of Bombril’s command to its rightful owner and heir was being prepared. The two diagrams summarize Bombril’s recovery of operational and financial statements from 2003 to 2005. They were extracted and adapted from the January 2006 Management Report sent to the administrative council, shareholders, judicial administrator, and judiciary.
  27. 27. 27
  28. 28. 28 Final Comments By July 2006, the 1,001 days of Bombril had elapsed, and the judicial administration process had come to an end. It took three years to reestablish the company, return control of Bombril to its heir and rightful owner, Ronaldo Sampaio Ferreira, and pave the way in a positive direction following the company’s long-standing legal conflicts. The actions carried out by the judicial administration are the pillars that have upheld and sustained Bombril’s current economic and financial strength – of this, I have no doubt. The brilliant image and reputation of the company were restored, both in the media and in Brazilian homes, particularly with the help of the ―Bombril Boy‖ figure. Expectations of economic recovery were high. On May 16, 2007, the newspaper Valor Economico printed a front-page business supplement of how Bombril had published a net profit of R$ 18.9 million in the first quarter. On March 19, 2008, the magazine Isto É Dinheiro featured a photo of Ronaldo Ferreira on the front page, and in the magazine’s five- page article he talked about the company’s bright future, declaring: ―We‟re going to be the largest hygiene and domestic cleaning products company in the country.” Ferreira also announced the launch of Tanto soap powder, as well as a wide-ranging program of investments including entry into new categories of personal hygiene and cleaning products. The company once again had an ambitious and promising future. I believe that we, along with the more than two thousand Bombril collaborators, helped to build an exemplary model of business turnaround and success. In fact, Bombril was one of the first favorable cases of judicial administration of a company in Brazil, a true mark in the country’s business history. In spite of the crime-page appearances, business scandals, administration difficulties, and serious challenges to codes of business conducts and entrepreneurism, Bombril held its course in stormy seas, much in thanks to its brand strength, product quality, and to the efficiency of its operational assets. As I affirmed at the beginning of this case study, however, credit of the accomplishments is not solely mine by any stretch. Bombril’s recovery represents the perseverance and efforts of all its employees, the thousands of men and women who stuck by and fought for their company during its disputes because they believed in the Bombril family and in the brand.
  29. 29. 29 APPENDIX Bombril S.A.’s Turnaround and Restructuring Actions This synthesized outline presents the 60 administrative acts of judicial administration and the corporate communication challenges that occurred during Bombril’s 1,001 days. Bombril Recovery Plan Stage Areas of Action / Main Measure Content and Objective of the Communication Turnaround Plan A – Restructuring of the Management Model Date Execution 1. Dismissal of directors, managers and department heads. Nov/04 Immediate Dismissal of almost all directors and more than 20 managers and department heads. In all, more than 50 company executives were let go during the judicial administration process. 2. Definition of new organizational chart and administration processes. Nov/04 Three months Renewal of leadership; drawing a new organizational chart for Bombril, with reductions at managerial level; review of management processes. 3. Establishment of new policies of corporative governance. Nov/04 Immediate B – Restructuring of Commercial Policy Date Execution 4. Restructuring of the organization and of the commercial managers and salespersons’ performance areas. Nov/04 Three months Commercial Management underwent drastic changes, with the redrawing of geographical areas of activity; creation of new regional management; elimination of the national sales management; decentralization of sales to wholesale. The changes sustained the tough commercial measures needed for recovering company margins. The result was an increase in the monthly average variable margin from R$ 22 million to R$ 33 million. 5. Elimination of FOB sales and 100% implementation of CIF sales. Nov/04 Immediate Elimination of FOB sale – “free on board” (where the client takes the merchandise directly from the Bombril plant) and integral execution of all sales CIF – “cost and freight included” (where Bombril controls the process of contracting the carrier and delivering the product to the client) to reduce potential frauds and ensure a new pricing policy. 6. Elimination of special discounts – client and product. Dec/04 Immediate Total elimination of special discounts for client and for product. Later, standardization and renegotiation of special contracts with big supermarkets and wholesalers. Minimum order increase per client. 7. Price increase of products to recover margins. Dec/04 Nine months Bombril made a series of price increases in all product lines, “Bom Bril” in particular, which rose from R$ 86/bale in 2004 to R$ 140/bale in 2005. The chemical lines also recovered price levels.
  30. 30. 30 8. Definition of new discount policies per channel and volume. Dec/04 Three months There was much confusion with regards to the pricing policy for different clients. Because of this incongruence, a big supermarket chain could in many cases buy cheaper from a wholesaler than if it bought directly from Bombril. This led to price distortions for the retail channels and for the consumer. Bombril’s margin was in fact being eaten up by their sales channels, especially by the large wholesalers and retailers. Bombril increased clients with medium monthly purchases superior to R$ 3 million/month from 26 to 48 in 2005. 9. Definition of the new commercial budgets policy for promoters’ teams and salespersons – Advertising and Promotions. Dec/04 Three months For three months budgets were suspended, including budgets for Advertising and Promotions for the clients, which helped to balance price distortions originating from sales pricelists between the various sales channels (also a key tool for the promoters and salespersons to reach their commercial targets). 10. Full review of the marketing and commercial budgets. Dec/04 Three months In view of cash restrictions, Bombril froze commercial and marketing costs and investments until March 2005, when they were able to move on to the restructuring phase. C – Administration of Cash Flow and Financial Results Date Execution 11. End of critical decision process management committees. Dec/04 Immediate The company decision process was concentrated in management committees, especially the cash committee. Elimination of all the management committees and re-establishment of the managerial hierarchy, management policies, and management systems. 12. Review of cash guidelines – Trend Bank and Factorings. Nov/04 One year Our financial partners, especially the factorings which fomented working capital for Bombril, were coordinated by Trend Bank. This meant maintaining Trend Bank managers in the company to guarantee short-term capital flow, especially resources without operational warranty – labeled “clean.” 13. Full centralization of expenses and payments. Nov/04 Six months The Managing Director and Financial Director resumed absolute and centralized control of all expenses authorizations and execution of payments in conjunction with Trend Bank, to maintain the financial flow necessary for the turnaround plan. 14. Daily monitoring of financial requirements. Nov/04 One year During the period when the company went into decline, before the judicial administration process, Bombril had unfortunately built up huge financial, operational and tax liabilities. Part of the new management policy toward these liabilities was to resume payment of taxes (which were still overdue during the judicial administration process). Daily monitoring of cash needs and unified management of payment priorities was carried out by Trend Bank. D – Closing of the Factory in Sete Lagoas/MG Date Execution 15. Concession of collective vacations and subsequent dismissal of Sete Lagoas employees. Dec/04 Immediate The low productivity level of the factory, because of use of very old machines, high operational cost, and the fall in the sales volume of Bom Bril (already expected because of the strong increase in prices), led to
  31. 31. 31 shutdown of the factory in Sete Lagoas, Minas Gerais State. The process began with the concession of collective vacations to almost 300 workers and subsequent dismissal of 90% of employees, the remaining being re-employed at other industrial units of Bombril. 16. Elaboration of the plan for recovery of the fixed assets in Sete Lagoas. Jan/05 Nine months After the plant closure was concluded, a plan of investments was conceived for the recovery of the operational assets – from repairing the roof, to structural repair of the building along with the hydraulic and electrical facilities. 17. Implementation of the plan for reopening the Sete Lagoas plant. Mar/05 Six months The recovery plan for the Sete Lagoas plant led to transfer of the production line of soap sponge products from the Anchieta plant, in São Bernardo do Campo/SP, to Minas Gerais. This made a reduction in production costs of soap sponges, optimization of production processes, and release of physical space in São Paulo possible. E – Support for the Turnaround Plan Date Execution 18. Renegotiation of debts and conditions of supply. Nov/04 Three months The critical element in the turnaround was the maintenance of open channels of communication with the suppliers in order to renegotiate debts and extend payment periods, thus assuring supply of raw material for production. 19. Renegotiation of commercial and sales conditions. Nov/04 Three months Review of the commercial conditions in force, including pricelists, discount policies by channel and volume, and the widening of the client base (through adding new wholesalers and retailers to the existing client base). In November 2004, the 10 biggest clients were responsible for more than 70% of the revenue of Bombril. At the end of 2005, the 10 biggest clients did not account for 40% of monthly sales. 20. Widening/reducing the scope of our business. Jan/05 Three months Another key point in the management of suppliers and clients was the change in trade relationships, seeking to bring in new clients and suppliers and alter existing contracts (e.g., the outsourcing of some stages of the productive process, as well as changing clients and suppliers without damaging the current course of operations). F – General Adaptation of the Organizational Structure Date Execution 21. Adaptation of the organizational structure – Incentivized Dismissal Plan – PDI Mar/05 Three months Unfortunately, Bombril was overstaffed. The employment picture held only one alternative: a reduction of up to 600 of the 2,000 collaborators. The consultants, Pricewaterhouse Coopers, or PwC, elaborated a plan of operational restructuring and implemented a Plan of Dismissals, which led to the exit of almost 550 collaborators in the second quarter of 2005. 22. Management of the impact of the Dismissal Plan with support of professional retraining for employees dismissed. Mar/05 Three months One of the pillars of the Dismissal Plan was the support given by Bombril for professional relocation and/or new professional direction for the dismissed employees – opening of small businesses, straight retirement, or career and function change. In July 2005, about 80% of those dismissed were already placed in other
  32. 32. 32 companies or had taken new professional directions. 23. Implementation of the new organizational structure and the 2005/2006 management processes. Apr/05 Three months A new management model and organizational structure were developed and a new management process defined, with more IT technology and with fewer reports and operational procedures. Operational Restructuring Plan A – Sales and Commercial Plans/Goals/Results Date Execution 24. Definition of volume goals and sales value per product/client – “top down” income forecast. Jan/05 Monthly The establishment of the selling price and sales volume of each of the company products, which should be detailed by client, is the basis for any budgeting process and any projection of operating and financial profits. This basis was redefined using the new commercial policies of the turnaround plan and a monthly process for establishing these values was created. The Commercial Directors and Marketing Management determined these guidelines for the entire company. 25. Definition by sales operational profits by area and globally – “bottom up” forecast. Mar/05 Monthly Starting from the income forecast for Bombril and from the implementation of a system of reliable management, we were able to create an interactive process with the commercial and marketing managements, adjust forecasts monthly, and create profitability goals for product, client, and commercial management. Every month a Cyclical Sales Meeting was held, which measured results, analyzed the need for adjustments, and confirmed the next month’s goals. 26. Managerial capacities were invigorated as a result of sales strength. Mar/05 One year With the idea of assuring that the sales goals were reached, the sales force received new equipment and working systems, including new notebooks and pocket PCs, sales force automation software, as well as changing of vehicles, and reduction of movable telephone costs. B – General Sales and Commercial Campaigns Date Execution 27. Restructuring of the Export Department. Mar/05 Monthly Bombril’s Export Department, subordinated to Commercial Management, and was restructured. Indirect exports via border companies were eliminated and direct sales taken up again, with packaging exclusive to the target market. Sales started to be made exclusively by letter of credit, with automation of embankment processes and online tracking of the load right to the final client/customer. The result was an increase of 17% in sales volume and an increase of 15% in Bombril export margins, with four new countries included. 28. Creation of the new Advertising and Promotions schemes for promoters and salespersons – contests and funds. Mar/05 Quarterly Implementation of the commercial budget focused on new investment in commercial funds – for points of sale, as well as for each promoter, salesperson, and area manager. The schemes were appraised monthly, and quarterly contests were created to motivate the commercial team into reaching the results targeted. The
  33. 33. 33 merchandising team was enlarged from 183 to 334 promoters, with drastic reduction of third-party merchandising companies, except for non-recurrent marketing campaigns. 29. Creation of commercial incentive for clients –commercial funds. Jun/05 Bi-yearly On the client side, fidelity programs were created – maintenance of purchase volumes, as well as contests for the commercial teams of wholesale clients, and promotional campaigns to reward the best commercial performance by a client. The number of stores directly attended to by the Bombril merchandising team went from 1,300 to 2,300 in 2005. 30. Variable remuneration for commercial teams by volume result and sales value. Jan/05 Monthly The commercial team (salespersons and managers) began to have a new reliable basis on which to measure their performance. These results were used to redefine variable remuneration policies for salespersons, motivating them to maintain volume and value goals from revenue projections. C – General Marketing Campaigns Date Execution 31. Planning of the general resumption of investments in marketing. Mar/05 One year From March 2005, nearing the conclusion of the turnaround plan, it was possible to reassess the need for resuming investments in marketing in order to regain market lost in all the Bombril product lines, as well as to bring sustainability to the company’s joint income goals. 32. The “Women That Make Brazil Shine” Project – Brunoro and Cocco. Mar/05 Two years The first project implanted was “Women that Make Brazil Shine” – a campaign incentivizing and giving value to women’s sport in general via sponsorship of athletes and individual events, with the aim of improving Brazil’s performance in the 2007 Pan American Games. The campaign was created and managed by sport managers Brunoro and Cocco. (Note: Brazil achieved an increase in the number of medals won by women in the Rio de Janeiro games by 50% in comparison to the last games in Santo Domingo.) 33. “Limpol” Campaign – W/Brasil. May/05 Four months In April 2005, it was decided to resume investment in Limpol. The W/Brasil agency provided the support for definition of the product sales recovery plan, creating the campaign “Limpol, our detergent,” which focused on women and on product functionalities, as well as on the playful aspect of the arduous domestic task of doing the dishes each day. Limpol recovered market vice-leadership, attaining 28% of market share, with an increase of about 50% in sales volume and value in 2005. Limpol was market leader in three regions of the country: South, Northeast, and Greater Rio de Janeiro. 34. Sponsorship of the Pan American Games – transmission by Record TV. Jun/05 Two years Linked to the project “Women that Make Brazil Shine” was the contract for Record TV’s Pan American Games transmission sponsorship. The priority given to the project and the broad scope for inserts in other Record TV programs meant that the commercial contracting conditions were extremely favorable for Bombril. 35. Launch of the “Pronto” product line – Ampla/Promo. Jul/05 Six months The Bombril factory in Recife was not reaching profitable productive capacity levels in the chemical products area. Bombril at this point launched the “Pronto” product line, with the marketing focus exclusively on consumers in the North and Northeast, and with a regionally dedicated commercial strategy. Pronto S.A., a fully owned subsidiary of Bombril, created for exclusive dedication to the project, obtained projected annual
  34. 34. 34 sales of almost R$ 20 million in December 2005. 36. “Mon Bijou” Campaign – DPZ. Aug/05 Four months In the second semester of 2005, Bombril started to market “Mon Bijou” again, with the aim of regaining ground lost in the market. After a careful process of agency selection, Bombril resumed its partnership with DPZ. The agency created the campaign “Squeeze Me, Smell Me, Call Me Your Little Honey Cup (Mon Bijou).” Initially, the commercials featured the pop singer and songwriter Wando, and then in 2007 and 2008 Bombril would use the campaign with Carlinhos Moreno and other actors. In 2005 “Mon Bijou” would return to market vice-leadership, reaching 14% of market share by value, and even attaining the leadership by volume in Greater São Paulo, beating its Unilever rival, Comfort. 37. Cine Bombril (project initiated in May 2005) – Agency K. Oct/05 Six months Cine Bombril was embryonic to a strategy of separation of the “masculine” Bom Bril brand from the “feminine” soul of Bombril, within a wider project of redefinition of global company corporate communication. The idea was to launch a new corporate signature for the company, where the logo of the Bom Bril product would be restricted to steel-wool sponges, and the remaining communication element for Bombril would acquire a new form. Independently of this, Cine Bombril’s project in itself contained elements of profitability and brand recall that justified its execution. 38. The return of the “Bombril Boy” – Carlinhos Moreno (announcement). Dec/05 Three months In October 2005, negotiations with Carlinhos Moreno began for the return of the “Bombril Boy” who had retired in August 2004. In December 2005, the Administrative Council approved renewing the contract with actor Carlinhos Moreno, and his and the character’s return to the company was announced in a Press Conference at Cine Bombril. 39. Bom Bril Campaign – Bombril Boy’s return (commercials). May/06 Two months In May 2006, in the final months of Bombril’s judicial administration, the “Bombril Boy” returned to Brazilian television screens. The campaign created by W/Brasil used “Isolda’s Song” performed by Roberto Carlos in its commercials. This marked the endpoint and final consecration of Bombril’s 1,001 days. D – Bombril General Plans/Targets/Results Date Execution 40. Plan of action and budget by area. Jan/05 Quarterly All the company areas developed detailed action plans with targets and objectives for 2005. The objectives of each area were supported by specific budgets, with cost reduction plans, increase in operational efficiency and dimensioning of investments required in each of them. 41. Consolidation of the global budget. Jan/05 Quarterly The commercial budgets – revenue goals, with specific investments in advertising and promotions, and investments in marketing, in addition to the plans and goals for each of the areas were integrated into the annual budget. This budgetary tool was the rulebook to be followed and rigidly pursued by the entire company, facilitating greater control and better management of operating profits throughout the company. E – Variable Remuneration Plan Date Execution 42. Variable remuneration of the managerial and executive staff – cash generation goals. Jan/05 Quarterly Based on a consolidated budget, and with central focus on increase of cash generation, a plan of variable
  35. 35. 35 remuneration for the 100 main executives and managers of Bombril was approved by the Administrative Council. Variable remuneration was directly linked to company cash generation. This incentive was key to Bombril reaching more than R$ 100 million cash generation in 2005, going from a level of R$ 20 million in 2004, and R$ 1 million in 2003. 43. General Employees’ Variable Remuneration Plan – PLR. Mar/05 Annual Other employees, mainly factory personnel, would participate in the results generated by the company through Profit sharing and Results – PLR. The 2005 PLR (worked out by RH Management, approved by the Administrative Council, and paid in 2006 to the almost two thousand company employees) was the result of the operating and financial profits achieved by the company. F – Direct Relationship with Consumers Date Execution 44. Reactivation of the Customer Service System – SAC. Dec/04 Daily The pillar of the company’s relationship with the consumers was the customer service center, SAC. The system operated through a 0800 number and received data, information, requests and complaints from consumers, thereby playing a fundamental role in the conception of marketing plans and action strategies along with the Voluntary Dismissal Plans in general. 45. Reactivation of market research. Apr/04 Monthly Bombril had stopped carrying out research on its consumers, as well as ceasing to buy market data – for instance, public opinion polls (IBOPE) and Nielsen reports on competitors’ sales volume and value. Between November and March these investments were frozen. Starting from April, acquisition of this information was resumed and used again by the company’s marketing and commercial management. And, most importantly, investment was resumed in qualitative research, through group discussions and interviews with consumers, to assure correct understanding of their needs and perceptions concerning Bombril and competing products and companies. G – Relationship with Investors Date Execution 46. Reactivation of Investor Relationship Management. Jan/05 Daily Bombril had disappeared from the stock market. Financial statements were delivered late to the Stock Exchange Council (CVM), and there were no communication channels open to small and/or institutional investors. Contracting a new Stock Market Manager and implementing a broad program to strengthen this area formed the basis for resuming an obligation every open capital the company has. H – Monitoring of the Competition Date Execution 47. General review of studies and market research. Dec/04 Three months During the period of "freezing" market research, Bombril carried out an extensive study of the complete Paulo Mathias Library – Bombril’s competitive intelligence files, containing information on everything that had been researched and studied from the beginning by Bombril, regarding products and competitors. These archives contained films, advertising campaigns, research data, and press clippings that were decisive for the new research and marketing campaign strategy proposed for 2005/2006. 48. Survey for obtaining tactical information. Nov/04 Permanent The Bombril commercial team received managerial instruments for monitoring information on the Voluntary
  36. 36. 36 Dismissal Plan and on clients concerning the results of Bombril’s actions and those of its competitors. The teams gathered information on competitors’ sales personnel, sought to obtain price lists, and prices actually applied in the gondolas and promotional campaigns in order to understand competitors’ movements on the supermarket shelf “front.” 49. Monitoring panel and strategic action control. Mar/04 Permanent From the information collected by the commercial team, a monitoring panel for competitors’ activities was developed to give greater capacity for reaction and, if possible, to forecast competitors’ movements regarding clients and consumers. I – Class Associations Date Execution 50. Active participation in business associations. Jan/05 Permanent The Bombril Superintendents began to represent the company in all the sectorial and business representational organs. The HR department participated in a committee for reciprocal assessment of remuneration and performance policies of the companies in the sector, and of the ABCD Municipalities Region of São Paulo. Another concern was the representation of the Bombril’s interests at the regulatory organs and the attempt to influence the tax policy and establishment of standards for the hygiene and cleaning industry in Brazil. J – Business Social Responsibility Date Execution 51. 1,001 Opportunities Project. Apr/05 Permanent Business Social Responsibility (BSR) had always been a theme personally dear to me, since I supported the Ethos Institute in creating the model of self-assessment by the companies in this area in 1999. Starting from this vision, Bombril’s BSR projects were born. The first of them was the 1,001 Opportunities, which brought together almost 100 children and youths in a complementary educational program organized at our own Bombril Anchieta employees’ club. After reaching their 18th birthdays and concluding post-secondary studies, the youths were guaranteed their first job in the company. Participants were chosen from the São Bernardo do Campo community, following guidelines of the General Secretary’s Office of Social Action, which monitors at-risk children and adolescents throughout the state of São Paulo. The families received a scholarship and a basic food basket so as to help allow the children to devote themselves full-time to formal schooling. 52. The “Long Live Woman” Program. Jun/05 Permanent At the Pernambuco factory, Bombril gave support to the creation of the “Long Live Woman” Program, in partnership with the City Hall of Olinda. The goal was to strengthen the assistance service to those women who were victims of domestic violence, and improve the possibility of rebuilding the families affected by this problem. The focus was on objectively integrating company business activities in Greater Recife with the deficiencies of the communities around the factory. 53. “Bombril Voluntaries” Project. Aug/05 Permanent Active participation by employees in social actions in general was the focus of the Bombril Voluntaries Project. Through a type of mileage program, company employees’ individual actions in daycares, orphanages, asylums, and any other form of community work counted as points. At the end of the year, these points were converted into products and donations to the entities receiving assistance; thus, the