- 1 IDENTIFICATION
- 2 FAMILY
- 3 HABITS
- 4 THE TOWN
- 5 EDUCATION
- 6 TEENAGE YEARS
- 7 GRADUATION IN ENGINEERING
- 8 BEGINNING AT THE CVRD
- 9 THE VITÓRIA TO MINAS RAILWAY
- 10 RELATIONS AT WORK
- 11 PROGRESS AT CVRD
- 12 MBR
- 13 LOGISTICS
- 14 THE PORT OF TUBARÃO
- 15 RELATIONSHIP WITH THE JAPANESE
- 16 CARAJÁS
- 17 DIVERSIFICATION
- 18 BUSINESS ABROAD
- 19 THE ENVIRONMENT
- 20 RELATIONSHIP WITH SOCIAL GROUPS
- 21 WORK PROCEDURE
- 22 PEOPLE
- 23 SERRA PELADA
- 24 VALE CULTURE
- 25 OPINION
- 26 RELATIONSHIP WITH THE GOVERNMENT
- 27 PRIVATIZATION - OPINION
- 28 THE RELATIONSHIP BETWEEN CVRD AND THE COMMUNITY
- 29 DAILY LIFE AT WORK
- 30 WORK
- 31 PRESENT ACTIVITY
- 32 HOMAGES
- 33 THIS STATEMENT
IDENTIFICATION[edit | edit source]
My name is Eliezer Batista da Silva, I was born in Minas Gerais, in a place called Nova Era, which is in the valley of the River Doce itself, on 4th May 1924.
FAMILY[edit | edit source]
Name and profession of parents My father's name was José Batista da Silva and my mother's was Maria Batista da Silva. My father had originally been a saddle maker, a craftsman, making bridles for animals. When they emigrated to Brazil they went to Espírito Santo, and from there to Minas Gerais, as in Espírito Santo all the economy was coffee, and there was no leather to make products for animals, bridles and other things, for the transport of coffee. So he went to Minas and settled there and took up this profession. My father got on very well and developed the business, and he exported to other regions. His market was Espírito Santo, all the region of Castelo, Afonso Cláudio, Muniz Freire, Cachoeiro de Itapemirim, which is the coffee area. He had what was called a "mule train", a group of asses and mules which carried the saddles, and he also sold the animals, also in Espírito Santo, which was his big market. And he bought the leather from Juiz de Fora, in other words, he was a kind of primitive industrialist, but a big one, and then he went over into farms. He bought farms and reared cattle and took an interest in specialized agriculture. He was a very intelligent and inquisitive man and introduced new varieties of fruits, oranges, for example. He was a great innovator and loved nature. He might have inherited this from his grandfather as he had always been with him. And basically this was it.
Family Upbringing[edit | edit source]
The great thing that my father did was to bring up all the family. And at that time, it was very difficult to bring up a family in that region as Nova Era was much more linked to the economy of Espírito Santo, and there was Serra Geral, which made contact with the centre of Minas Gerais. My brother, who became a medical doctor, went to Ouro Preto to take his secondary course. He went there on horseback and took three days to get there as there were no roads. It was much easier to communicate with the Zona da Mata part of Minas Gerais, which was connected with Espírito Santo. This was where the market for his products could be found, although my village belonged to the town of Itabira, which is also a source of iron ore. Two interesting things. But he managed to bring up the whole family.
The origin of the family[edit | edit source]
My family came from Portugal. At that time it was a struggle for survival. In Portugal, the living conditions were very bad, so they came here as immigrants, like many others.
Brothers and sisters[edit | edit source]
I had one brother and four sisters. Three of my sisters became nuns and my brother studied Medicine and I went to study Engineering, that is, I went to secondary school in Ouro Preto, also in São João del Rei, then I went to the South of Brazil and finished my course in Curitiba in 1948
Some of my sisters also left Nova Era. One is here in Niterói working as the head teacher of a high school in Brás de Pina, and my brother graduated in Medicine in Belo Horizonte.
Wife and children[edit | edit source]
I have seven children. This is exhausting night-work. My wife loves children, and I like the family a lot and have a family life which I love. I think that the only obligation which you have in your life to keep the species going. The rest I don't know, you don't know where you're going, what you are doing here, no one knows. My family is a normal family, and I don't know how that came about. I owe it to my wife that she brought everyone up. She's from Hamburg, and has those German qualities, beauty, and she was brought up with all that German strictness. Unfortunately she is now very ill, but she's an amazingly resistant person. I've never seen anyone so resistant.
HABITS[edit | edit source]
My father was quite religious, but his was no fanatical Catholicism. At that time you would send your daughters to a school run by French nuns, and they would indoctrinate and win the girls over as it was not easy to contact the outside world, as it is now with the television and everything else, and I would say that this is the reason rather than religious fanaticism. We didn't have this fanaticism. My father was religious in a normal kind of way. And neither was my mother fanatical, though her family was all Catholic.
THE TOWN[edit | edit source]
Nova Era[edit | edit source]
Nova Era was no town but rather a scruffy village. There was nothing there, but it was in a strategic position as it was the crossroads for communication with the market of Espírito Santo. It was part of Minas but was culturally much more connected to Espírito Santo because of transport.
The Serra Geral, which was only crossed after the construction of the Central Brazil Railway to connect Vitória to Minas Gerais. At that time there was no connection, so Nova Era didn't really belong to the Minas Gerais economy but rather to that of Espírito Santo.
The big centre was Belo Horizonte, a long way for an ass, but the biggest centre as Governador Valadares didn't yet exist. Governador Valadares came a long time after. When the railway companies joined up, Governador Valadares was settled when the timber people, the timber merchants of the state of Rio de Janeiro, migrated, as happened later with Espírito Santo, then Pará, then Maranhão. They live migrating. And Valadares and Teófilo Otoni, with the construction of the Rio-Bahia railway line between Valadares and Teófilo Otoni, destroyed all the forests in the region, but that was only going to be much later. When I was a child, I remember that there was no communication with anywhere else, and we went everywhere on horseback, our means of transport. It was very backward, and we were very isolated.
EDUCATION[edit | edit source]
I only took the primary course in Nova Era. The I left never to return until I graduated. I went on my own and left the family in Nova Era. I first went to Ouro Preto, then São João del Rei, and from São João del Rei to Curitiba.
I was always top of the class. That's not saying very much, but there in São João del Rei that didn't go down very well. The Franciscans even sent me away at the end of the course. Because they thought I was somewhat iconoclastic and influenced the others too much. As I was top of the class, they thought I had an anti-religious influence. So they didn't like me very much, and I can see their point. Because I already had different ideas. I never hid my ideas and always had different ideas and criticized the type of teaching. And as I always had good marks and picked up a lot of things as then I found it easy to learn languages, and all this didn't go down well. Though the Fransiscans have developed a lot, at that time they were very peevish, Dutch-types with a German discipline. And I couldn't get on well with them.
It was a boarding school. In Ouro Preto it was better, more liberal, a boarding school too. But they had told me that São João del Rei was better. And it was, they were Dutch, and brought knowledge from Holland and translated it. The teaching method was better, but it was still not very good as we already had access to books and everything else. I read other things, and expressed my doubts, remettre en cause, but many people don't appreciate that, they just want us all to keep silent: "Be quiet you over there!"
I read. I read everything! I read everything I saw. I've always loved reading and I didn't waste much time on the nonsense of the school, leading the students associations. I never liked these things. I read and studied. And I quarrelled a lot.
In São João del Rei I questioned what the Dutch monks said, certain religious questions, and they got angry with me. Because I was the leader of the other pupils, they thought I was leading a religious revolution. They expelled me because of this. In the South I also had a different kind of life, and I was always stirring things up. I was very curious to learn new things, inquisitive, and this is something which is very important. The Greek word "phantasia" means "imagination", and that which leads to the imagination is inquisitiveness. It is not imagination in the poetic sense but rather in the Greek.
TEENAGE YEARS[edit | edit source]
I went to Curitiba as I was keen on travelling and I had friends there. It attracted me as it was a new and different place. I also, deep down, wanted to travel. I first went to Porto Alegre and then Curitiba. I liked it, stayed there for a long time and graduated there.
I travelled. This, let's call it, spirit of adventure, has been there a long time. I don't know where it comes from. I only went to Curitiba and Porto Alegre out of curiosity to experience new things. And in Curitiba I had a very eventful life as I founded in Curitiba, the hippie youth movement.
I was a tremendous anarchist. I wore colourful clothes and everything else. In Curitiba there are a lot of stories about the crazy things I did. And as I wasn't a very hard-working student, but I never failed the year, they held me in a certain respect, which didn't prevent me from doing ridiculous things.
I went out exactly as the hippies did here in the seventies, not only in terms of clothes but also in the way of walking, living, everything was the same. I didn't even know what a hippie was, and I invented these things. I was just a semi-isolated hippie, but then I was joined by some followers. But I never wanted to be their leader. I remained a lone wolf. Alone.
I lived in a hotel. My father always paid my expenses. In this point he made a great sacrifice. He always told me: "When you graduate, take off alone, but until then I insist on helping you". Then I had to take off alone, get by, me débrouiller and then I began to study Engineering.
GRADUATION IN ENGINEERING[edit | edit source]
The choice of Engineering[edit | edit source]
I liked Engineering. I studied it because I liked it. If I had been offered Law or Medicine I wouldn't have accepted because I loved Engineering. Today I might do something different. Because Physics was too theoretical; and Engineering was something in which you applied knowledge and saw results. I always looked to see the results of what I was doing.
My father never influenced anyone, not even my sisters. That's why I said they became nuns through sponte sue, of their own free will. Obviously indoctrinated by the nuns. But my father never influenced their decisions.
Perennial knowledge[edit | edit source]
I always was good at math and languages, which has helped me a lot in life. When I travelled around the world, I improved my languages, and my languages helped a lot. And math is the basis of physics. Technology always becomes obsolete. I remember Doutor Burlamarque, who was an expert on steam engines. Even before he died, steam engines were a part of the past as diesel locomotives already existed. All his knowledge became useless.
Just like today, when it's even worse. You run the risk of setting up a new factory in the area of telecommunications, and on the following day you find you have opened the most obsolete modern factory in the world. It's not the case with physics, where knowledge stays. As does knowledge of mathematics. With this knowledge you have the possibility of at least preparing yourself to understand modern technologies. What is important is that you put your knowledge into practice, and as you change levels, for example moving to administration, you leave the purely technical area and change. The risk of becoming obsolete is reduced. But when you devote yourself to just one technology, which runs the risk of becoming obsolete, it is a tremendous waste of time. This is what happens today. Thus the individual, in order to get by, should concentrate on Physics and Mathematics as these are permanent variables, they are always there. Even if they vary somewhat. For example, today, without Quantum Physics and Non-linear Mathematics, you cannot find a way around the world. So here you must also develop, but it is easier as you have the basis, and this basis hasn't changed very much. The problem is when you enter technology. What is technology? The practical application of science for utilitarian ends. So if you devote yourself just to technology, you run a tremendous risk of becoming obsolete.
University in Curitiba[edit | edit source]
Curitiba was like this: there were a lot of teachers who came from Europe-they were really European. For example, the teacher who taught us how to build bridges was a well-known Italian. They were people who read more, because they could get hold of foreign material, from Italy, France and elsewhere. Parigot, for example, who taught Hydraulics, was a character. Also, he later set up COPEL electricity company in Curitiba, a famous person! So there were these important figures. Suplicy Lacerda wrote the best book on Construction Stability and became a minister in the Geisel government. And these big names gave the University of Curitiba a certain reputation. Even more to Civil Engineering. And so I graduated there in Civil Engineering and Architecture.
It was all like that! By the way, I'm just pointing out something. For Mechanical Engineering, there was Zanetti. It was a good atmosphere to learn Engineering in, both in Curitiba, for those of us who went there to find it, and then in the team which we formed in Vitória, using many of the people such as Ditzel and other colleagues who we got from Curitiba because of the high-quality course there.
The future and specialization[edit | edit source]
I only thought that I wanted to work in Engineering, that I wanted to do something in the area but I didn't have anything precise in mind. A number of classmates were already working on the railways. I took a look but didn't see any future there. At that time you were always worried about the future. And what is the future? If you don't have a vision of the future then you get lost. This is often what happens today in the world: "Where are we all going to?" You are half-lost, like a blind man in a shoot-out, you don't know in which direction to turn.
At that time engineering was the thing I liked most; but at that time railway engineering was no longer the peak of the engineering profession, as the petrochemical industry was appearing, together with other new industries. I was to see this later in the US, where I went as a trainee-a great event-supported by Juracy Magalhães, and it was clear then that the elite of the students, or the most intelligent, would always look for the area, or the course, where they could make most money. Even this has developed in recent times. Especially in the 80s and 90s they went for Wall Street: "I'm going to get into the markets because that's where I can make money. Not because I like it or anything.' And this is at heart a simple way of reaching one's goal, though today it has become an end in itself, a kind of aberration. It isn't normal, but the normal situation will return some day. When I was in the US, for example, the top students all took engineering, but no longer railway engineering. They went into petrochemical engineering, the chemical industry, and other different types of industries. And this developed, until information technology came in, and all that developed even further. Gradually the best schools, MIT, Berkley, etc., the best students went there. Today everyone, from the 1980s up until now, has been going into the financial world because that is where you earn the most with the least effort. And in addition to money, you get power. It is what happens today. You have a financial and information technology joint venture, "telematics," which is the combination of telecommunication and information technology. And to this join joint financial knowledge, which today includes a lot of mathematics. The Montecarlo Model is non-linear Mathematics. With Physics, which comes from telecommunications. This is a new cluster, and the best brains are migrating to this kind of thing. And the old industries began to become obsolete. For example, during the 1980s, the railway industry in the US no longer had any "top person." The same with steel. People left steel. The basic industry is polluting, full of problems and doesn't pay well. If you ask any excellent pupil today whether he wants to work in the steel industry, he'll look around and laugh. Go to Silicon Valley. I have two sons there. Why? Because there you're at the peak of new knowledge and at the gateway of the road to achieve power.
BEGINNING AT THE CVRD[edit | edit source]
I had no idea of what was happening in the Valley do Rio Doce Company. I went there when I went to visit my family in Nova Era, and then got a contact. There were a lot of Americans there, and at that time the headquarters of Morrison Knudsen was Governador Valadares; so I made contact with the Americans and became enthusiastic about what they were doing. "Good, something is going to happen here." There were people with a completely fresh vision of everything. They were the first works in Brazil, which used heavy equipment for large-scale construction: tractors, mechanical diggers. In Brazil, there was none of this. So when I saw it all, I said: "I'm going to stay here! This interests me!" And then it developed, but it was the influence of the Americans in the area of construction engineering. (It interested me) so much that I began in construction engineering. I actually began working in the Rio Doce but not in Morrison at this time. I worked for the Rio Doce, but already with a foot in the construction process at Morrison. Functionally, in terms of being employed, I was with Vale, but I worked together with Morrison, which was redesigning the railway. There I learned all that they were doing. The fact that I already spoke English greatly helped my contact with them. And I learned a lot there as there is a huge field to learn about.
THE VITÓRIA TO MINAS RAILWAY[edit | edit source]
Origins and Nova Era[edit | edit source]
The Vitória to Minas line didn't go all the way to Nova Era. It was very primitive, a train line like those ancient train lines in the Northeast. Not exactly a railway. When the Americans began to need iron because of the war, because this material didn't exist in the US, they needed this material for the cooling of the smelting furnaces, they began to think and realized they had the Itabira reserves which had been known about for a long time. So they connected this line to Itabira as the Vitória to Minas originally went to Diamantina. It was called the Vitória-Diamantina, and didn't originally go to Itabira. A considerable modification had to be made, and this all happened before what I'm telling you about. So when Itabira was linked in this project to export iron ore, which wasn't finished, it worked as it used the remainder of the Vitória to Minas. A number of small parts were used in the reconstruction, which now had two tracks, and linked up with the Brazil Central in Nova Era, which became the junction of the railways and highways, some time after. An enormous transformation took place in the whole region, with an influx of migrants, from the Northeast, the border with Espírito Santo and Minas. The town changed completely and no longer has anything to do with what it was like when I was a child.
Technology, Americans and Labour[edit | edit source]
Already at the time I was working in the administration of the railway, somewhat later, we set up the first plant for the treatment of wood in Governador Valadares; as there was an incredible wastage of wood which rotted very quickly, and the sleepers were the most costly part of the maintenance. Then we imagined an initial plant to treat the wood in autoclave with Woolman salts, which was set up in Governador Valadares. But now I was in the Superintendent of the railway; and it was an administrative matter. During this period we examined all the questions about the metallurgy of the rails; as one of the great problems was their enormous wear and tear as it was a narrow gauge line with tight curves and heavy loads. We examined the idea of reforming the design of the wagons, the brake systems, the length of the train. (We examined) the heaviest wagon that could be allowed on the Vitória-Minas line, at the highest speed, the wear and tear of the material in function of the speed. But for this you must have a very good wagon, the metallurgy of the tracks and the wheels must be optimized, to then determine the correct size of the train and the speed at which it should run. All this was carried out, when this completely new thing came out, the narrow-gauge railway. You can see what they did in Australia many years later, but with a 1.44m gauge railway, which is the American gauge, a simple copy. Ours was not a copy, and you had to develop it yourself. So a lot of work was carried out by our team there, the colleagues who worked with us and with the help of the foreign companies and all. We had no inferiority complex. After this, I felt no inferiority complex to the Americans. Our people were shy and timid. I had none of this. With this experience I'd gotten "You've managed to do things." I said: "Good, after all, we can all learn this, it's a question of wanting to."
The manual labor on the railway was the worst you can imagine. Totally unqualified, the manual labor that operated the heavy equipment was all American: the tractor and digger operators were all American. At that time Brazil had nothing. Absolutely nothing. "Wasn't there even a mechanical digger operator?" No! "A tractor? A tractor driver?" No! They were all American. The Brazilians worked on the railway as unqualified labor. There were a few Spaniards and Portuguese who did the brickwork, the stonework, bridge joints. They were first-class guys - Asturians and Galicians - who worked on the brickwork and the maintenance of the track, the art work of the track. There were the engineers; some of them were university-educated. They didn't have much experience. And the engineers who had been trained at Morrison, a lot of them stayed here afterwards. They came from all over Brazil. There were engineers from everywhere. One of those who worked with me most, who died a short time ago in the US, was Doutor Gabriel Paes de Carvalho, who was from here in Rio de Janeiro. One of the things that most helped the Vitória-Minas line, the Vale do Rio Doce, was to have as its origin a large foreign company doing all of this work, being a school of knowledge. Right from the bridge's engineering design stages, I worked with Russo, who was one of the most important bridge designers in the US, who worked for Morrison. So if you wanted, you had a chance to learn. And if you didn't want to, you didn't learn anything and could swear with the rest: "These yankee bandits!" Who won in the end? This person or you?
RELATIONS AT WORK[edit | edit source]
The majority of my workmates, and I did have a number of colleagues who worked, took a somewhat political approach. When you see foreigners doing everything, dominating everything, you can behave in two ways. Either you join them or you beat them. If you can't beat them, you begin to create problems: "American idiots! Crooks!" And I thought: "This may be so, but I want is to learn what he knows. When I know what he knows, I look for something else." And I took the path of humility and pragmatism: "What I want is to learn!" I don't know anything! I had never had a job!
PROGRESS AT CVRD[edit | edit source]
Chief Engineer and trainee period in the US[edit | edit source]
On the railway there was everything: bridge building, track laying, depot building, port engineering, mining engineering, everything. And it was in this period that I became familiar with all the different sectors of construction, which placed me in a position that made it easy for me to become a kind of chief engineer in the company. I now see how important all this of learning is, education. Technically, my beginning was there. Then, Juracy, when he became President, thought it would be good to send me to the US to see something that was working there. And so he sent me there, and I spent a long period there, and returned because he wanted the Vitória-Minas to be a railway just like the Pennsylvania railroad. We can say that it wasn't as good as the Pennsylvania, but it is the best narrow gauge railway that exists today anywhere. And this was done at a time when there were no resources, nothing.
The Americans also built the mine. And here I had a role as Chief Engineer. I also had access to the mine as I was a type of common denominator of the line, from the port to the mine. There I learned a lot, in the mine, as I did in the port operation.
President of CVRD and Minister[edit | edit source]
It was Santiago Dantas who nominated me for the Ministry of Mines in Jango Goulart's government. But in the Presidency of the Vale, when Jânio Quadros took over, it was João Agripino, who was Minister of Mines and Energy at the time, who helped me a lot. He was a Minister from Paraíba. He made a trip there, saw it all and thought: "This cannot stop!" Maybe he wasn't such a brilliant intellectual as Santiago; but he was decisive, determined, and when he understood a problem, he would try to solve it. That is, it is this kind of man that we lack in Brazil, someone who has determination and coraggio to do things. Coraggio in the Napolitan sense: Coraggio è l'arte d'avere paura senza che la gente se ne acorda. It is the art of being afraid without letting anyone see. He took me to Jânio Quadros. The last day he visited Tubarão, was the day before he resigned. Jânio was somewhat crazy, he had his peculiarities, but he understood the business and didn't interfere. He's like the American who worked with me, Simpson, who said: "As long as he doesn't smell, he won't stink." He didn't get in our way.
Agripino invited me during the time of Jânio. Then Agripino fell and Santago came in. And Santiago was the important figure because Agripino just helped me to become President, but he didn't have anything to do with Tubarão. This was because of Santiago. I asked Santiago, who was keen on it, and said: "I'll pay to see, that guy is trying to run it down, let's see if it works." And he believed in it, he piously believed in it, and it worked like clockwork. I'm only sorry that he didn't live to see it. He was a great man, in each generation there are few like him, and we need them.
President of CVRD coming from the ranks[edit | edit source]
I was the first President to come up from the ranks of the company. Inside the company there was a lot of support from everyone. Like everywhere else, there was no unanimity, and there was always a small group that always wanted to stick to doing the same thing. What is that Italian definition of the opportunist? It's the guy who does what you'd like do before you manage to do it. A little group there didn't have the slightest idea, they had nothing at all, but, let's say, 90% supported me. As it was teamwork, it wasn't about just one person, and everyone felt that they were valued. And this is the advantage of working in a team. Everyone felt that they were taking part in a process. You could philosophically say "Construzione de una catedrale. I am not building a concrete snack bar but a cathedral!" So everyone felt that they were taking part in the process, and there was total support from colleagues.
MBR[edit | edit source]
Then I almost had my civil rights taken away after the military revolution of 1964, but managed to escape, and Doutor Antunes, the person who most helped me during this period, invited me to be the President of MBR, a company which he had founded, and in which we started the Sepetiba project, and we also started the Caemi project, with the experience we had already acquired. Continuity in Tubarão and abroad
My successor in Vale was Doutor Paulo Vieira, who is a very correct engineer. He was aware of this and was very loyal to me. In Tubarão and everywhere else. At this time Paulo Vieira carried on with things there, that is, they opened the port in 1966. I was not President of CVRD at this time as I was the President of MBR. And in 1967 or 1968 Doutor Dias Leite became President of the Vale, now in the government of Costa e Silva. And Dias Leite invited me to go to Europe as Paulo Vieira succeeded Oscar de Oliveira. Another engineer, who gave more continuity, but the Rio Doce market began to fall apart, etc.. And when Dias Leite took over as President of Vale do Rio Doce, he invited us to help him to rebuild the European market.
LOGISTICS[edit | edit source]
Synthesis of the establishment of the system[edit | edit source]
Vale do Rio Doce had an annual program that came from Geraldo Lopes Magalhães, of a million and a half tons. But at the end of the 1950s we already produced three or four million tons, but it was still very little. Iron ore is a product that has a very low value, but is very abundant, and we wanted to increase the scale of operations in order to make it economically viable. But the infrastructure was poor. That is, there were problems in the Péla Macaco port. Paul, the headquarters of the company was in Rio de Janeiro, but all the planning was done in Vitória. I was the Superintendent of the Vitória-Minas line there in Vitória, and the planning came from there, but it was a struggle. We managed to complete the construction of the railway, including the ballasting of the permanent track, which was the weak point of the railway.
Another victory was that we showed how a railway with a metre gauge could be competitive with a railway with a normal gauge, I m. 44 cm., but this was thanks to the development of a number of items such as the metallurgy of the rails and wheels, the types of wagons, the size of an economical train, the balance between the wear and tear of material and the wear and tear of wheels, and this all not merely to make it efficient but also economically viable, using all the economic thinking which is important in the process. So, the impulse for the growth of the Vale do Rio Doce was much more in economic terms, and this is very important. On this occasion, we began to develop the use of the land which belonged to the company alongside the line, planting eucalyptus and other trees.
Then, when becoming President, we had a chance to begin to think, firstly about making a quantitative leap, which was necessary if we were not going to be left out of the world market. The choice we had was either to grow or to disappear, and we found a positive reaction in Japan, which was fighting to rebuild its steel industry in the post-MacArthur period, and which was still seen as a war industry, and there was a worldwide movement from the developed countries against the reestablishment of Japanese steelmaking. So we found an ally. And the combination of the Japanese interests, to reestablish steelmaking, with our product, was the reason for Tubarão. In order for this combination of interests to be viable, as Japan was on the other side of the globe, we had to have very large ships, which would also be versatile enough to come back with oil from the Gulf, as Brazil imported a lot of oil from Saudi Arabia, Kuwait and the Persian Gulf. So these versatile ships were conceived, and then there was Tubarão, which was built thanks to Santiago Dantas, who was Finance Minister at the time.
No one believed in Tubarão. It was considered totally insane! But Santiago Dantas received the proposal and acted, and as he was very intelligent he realized that it was very important for the Brazilian economy. At that time Brazil hardly exported anything, had debt problems as the economy was just coffee. So there was the idea of diversifying the economy, and he caught on to the idea of Tubarão and gave his full support. Tubarão was the great leap Rio Doce made from being an insignificant company to become a large-scale company, let us say. not yet on a world scale, but already one which has sufficient critical mass to survive and compete. Then new markets were opened up, markets for other mineral products which were beginning to appear, and all this added up in this period, and we received the first long-term contracts. Docenave was founded, and we took care to already sell 40% CNF, that is, this gave us a reason to set up Docenave with the market in front of us, and then came the notion of the system, that is, the Vale do Rio Doce was conceived as a logistics programme and not as a mining programme.
The mining fed the logistics. There was the production, the rail transport, the port handling, with the establishment of a shipping company, the sea transport and the business deals themselves. Before, the minerals were bought and sold by international brokers who also managed the shipping, so that they got the filet mignon. We did all of this on our own. We opened a company in Dusseldorf, which I then went to look after, and the system became independent and extremely efficient. Thus the first notion of a holistic system appeared, as it took in the whole world.
Embryo of new ideas[edit | edit source]
What was set up in the Valley is what can be called an incubator, rather, the Rio Doce became a type of embryo of new projects, where there was a basis of motivation, of highly educated people, for the diversification and verticalization of new projects with increasingly intensive knowledge. This was another leap which we wanted to make in 1986, when we left the Vale. The idea was to enter this new field of research. At the time the idea was to transform the Vitória-Minas coaxial cable which supplied power for the safety control of the railway and the signals, into optic fibre, into optic fibre cables which wouldn't just supply these new services but would also provide VIP, V.I.P, means voice, data and exchanges with the area of communication. Today companies make money to a great extent through their own restructuring. If I get the Vitória-Minas line, for example, which crosses an industrialized area, put an optic fibre cable down and enter telecommunications, I can set up a company there, as Mannesman did in Germany with Deusche Bundesbank, a business which might even be worth more than the Rio Doce in the future, as it is hybrid.
It's hybrid! The infrastructure which I have is the base, and with an ultra-modern business that brings about this modification, this evolution... It's the future of the company! This was the phase that we wanted to get into from 1986 when we left. The idea was to concentrate on these things. Then I returned to Europe, and from there you hardly have the same power to convince people as you do when you are nearer. It's not about frightening people, pulling a face or anything like that, but it's easier to convince people in a direct and continual dialogue. But a telephone call isn't the same thing.
So what I'm saying here is very important, telematics, telecommunications plus information technology, is the bridge between the economies which depend on natural resources and the modern intelligence industries. Money is made selling intelligence, and no one makes money by selling raw products, iron ore isn't worth anything, the merit of Rio Doce is that they transformed a business which was worth much less into a commercial business which gave you money, by means of capitalization, which was invested in training and the vision of becoming an intensive supply industry. Korea did the same thing without this capitalization. We have this capitalization, so why can't we do it? It's because there's a lack of political will to do it. Today, the future of the Vale is in the hybridization of the colossal infrastructure it has created, in the name it has, to take a step towards the intelligence industries, for which it has a colossal infrastructure, So to transform, let's say, into a logistics company, defining the core business of the company, let's suppose that it is iron and logistics, you can set up a logistics company without harming your business or iron ore mining, and I'm sure that this logistics company will be worth much more than the iron mining company. The future is in these restructurings and hybridizations with the modern concept of intelligence industries. The best thing today, what everyone is doing, is logistics lines, transport in this case, because logistics works with a notion of cost, you have to pass along the telecommunication lines, the power lines, all of them and have to pay for them.
Pioneers[edit | edit source]
Rio Doce was one of the first companies, and there's no tropical exuberance here, which worked as a system. Today you can see all these concepts of strategic alliances, systems, Internet, and at heart what is the Internet? It is a network. And what is a network? It is a web, a system. For example, in the conception of the Vale, it was one of the first companies in the world to work as an integrated logistics system, that is, to see the production, internal transport, land, rail, and port handling, shipping, marketing, and the distribution network. This is all a system, which worked as a system, that is, in modern terms, like everything that you do on the Internet today. You have modern instruments, as you didn't have the Internet then, which help transactions and improve everything, but the conception was already part of it. I don't want to say that we were the inventors of anything, but at that time, we already thought in terms of a system, and this is something which is extremely important.
CVRD and the perception of logistics[edit | edit source]
What attracted me in the Vale do Rio Doce was when I saw that they were building a railway and aiming at something else. That is, the railway was not being thought of per se.
The railway was an instrument, let us say, to transport iron and products. And it was in this period that I began to be aware of something, that it was when for the first time I began to realize the link between shipping and the railway, the road transport and the railway. Then I realized what logistics was. Deep down logistics is a notion of cost. It is all that you spend in order to take an object from here to there. That's logistics. All the costs involved in this. And today, for example, telecommunications can be a component of the greatest importance. So it's not a matter of transport logistics, it's logistics of everything, logistics is the sum of all the components that you use in order to move my object from here to there, everything that is involved is logistics. Today you have the Internet, you have something to sell on the television: "Let's sell medicine, let's sell anything." You may buy it on the television, but it has to be delivered. And the delivery is a question of logistics. It is a piece of micro-logistics, but it is logistics. There you have the various ingredients, from telephone calls, television, to the physical problem of delivery.
The system[edit | edit source]
At the time I didn't see things as I see them now. Of course not! But at that time it was a forced perception so you could find a solution to your problems. Then one of the problems that affected me was the following: you have this railway here, and what will you do with it if I can't use it and make money with it? If I can't do so, it will become an onus, and as an onus will not last, and then I'll lose my job. So you have to think: "What am I going to do with it? But in order to make money, I need a shipping component, and I need marketing..." All these things came together until we realized that for there to be a business, we needed a system, that is, a production system which in the case was iron but which might also be other businesses, the reason why we came in with the problem of Cenibra, with the transportation of wood and cellulose etc., which fed the same system. As the system already existed for iron, it could be used for other things. And we later opened up the way for the exportation of agricultural products from the west of Minas Gerais in order to use the Vitória-Minas. Already within this notion of system. You had production, you had railway transport, port handling, shipping, marketing, setting up a subsidiary of sales abroad, as we were until then dependent on the brokers, who both sold the minerals with very high commissions and also manipulated the shipping according to their wills, and what they made from the shipping was more than their sales commissions.
The dynamism of the system[edit | edit source]
All the system should be seen dynamically and not statically. And not just the mine, railway or port. There is the shipping, and the marketing on top of it. It is a dynamic and not a static system. Static it is worthless. It is a dynamic system. This is the modern notion of the system. And as it is worldwide it is also holistic. Holistic is that which takes in the part and also includes the whole. So this conception of systems is the conception that you use today for everything, for example, integrated door-to-door logistics comes from this. This is the modern notion of logistics, which the Americans call supply chance management, which is the procurement, that is, you get all those who supply the raw materials for this or that, and you cover all those clients of yours who you can reach with your products. This is supply chance management, which is the modern notion which I'm talking about.
Marketing orientated[edit | edit source]
These questions were not even discussed. The following problem enters: in order for you to sell ideas at the time, you had to show where you were going to sell your product, which was the mineral iron ore. So, the initial difficult phase, where Juracy and Burlamarque helped a lot, was to convince them: "Look, first we have to have a very good railway, if not, it won't work, and I won't be able to get my product to its destination. "What is this for? To sell more minerals. And then came the production plans for the minerals. The first, from Juracy, was for three, and we made from one to ten. And Tubarão, already with Tubarão, it went to 20. The original was 1.5. We made an initial plan for ten. Everyone in Rio de Janeiro thought : "Well, let's reserve a place in the madhouse for this one! What an idiot!" Well, and then we jumped to 20. Then it was total fear. Doutor Décio, who was then the President, said "This here..." He was even ashamed to speak about it, he hid me as if I was a dangerous animal: "Hide that guy there. He's going to make me ashamed of this..." Well, it ended up coming out well, as very good sales work was carried out, in spite of the qualitative difficulties. This lumpy stuff didn't have any more markets as technology developed towards new furnaces, and this material was no longer needed. It could be used, but not for cooling. And the Vale do Rio Doce began to work with high-quality material, and changed its market. And then the first exercises in marketing began so you would have to produce in function of the marketing. We did everything from the end to the beginning. Firstly: "What am I going to sell?" And in order to sell you had to have a system. Then: "I'm going to see whether I produce economically so I can make money, if not I'm lost. I'll be hammered because I spend a fortune and then it doesn't come out right". That is, it is an enormous risk that you ran when you were responsible for one of those things, with no definition of goals and no practical results. So throughout this period we ran a tremendous risk like that in Carajás, which was the biggest risk of all. And no one likes to take a risk. It is not only Brazilian bankers who don't like risks, nobody does. We start at the bottom and go to the top, and this is called marketing orientation.
Soya on the Vitória-Minas railway[edit | edit source]
We arrived at a time when the Vitória-Minas had double the capacity it was using, and so we thought of the products which we could transport in order to fill up this capacity, as this is an important part of productivity and Rondon Pacheco and then by Aureliano Chaves, we set up a company called Campos. We got together with the Japanese, and, with the Vale do Rio Doce taking the lead, we set up this company to develop the cerrado, the savannah lands of Minas Gerais, for soya. We brought people from Rio Grande do Sul, who already grew soya, in order to produce soya to be exported through Tubarão. So the origin of this, which then developed in other states, as it came out well, became policy. We wanted to remain within the economic limit of using the Vitória-Minas, and the soya producer earned money and we made money though the transport. The business is good when it is good for everyone, if it is no longer business, it is monkey business. So in this period, it began to spread, it became Prodecer. There was Japanese money, which was directed to the planter, the farmer, but our aim was to establish an infrastructure, including the road, rail and power connections, linking the production areas to end up in Tubarão. The soya silos ended up being built in Tubarão, but not just soya, also other agricultural products for export and import, the importation of wheat and corn. So we used part of the old port of Vitória, Catuava and Tubarão, and Ceval and other exporters such as Cargill are there. So this was an initial diversification in terms of occupying the idle capacity of the railway. This was then used in Carajás, at the time, mutatis mutandis, it was used in Carajás in the development of Balsas. We carried out projects which would target the development of Maranhão taking this into account, and the region of Balsas has today become an important producer of soya and exports through the Ponta da Madeira, which is the same thing as we had done previously, as what we did in the North was based on what we had done in the South.
THE PORT OF TUBARÃO[edit | edit source]
The market and the decision to build[edit | edit source]
I'll tell you why we came to this town. With the incident of the accident to the ship in the Vitória channel, which meant that no ships, not even small ones, could enter the port, it needed to be dredged, and there was resistance from the President of the company to dredge the channel, and so we became desperate as we couldn't even use small ships, of the Liberty type, which was what we used at the time, and so what would happen? So we began to feel the importance of the system, and this feeling was getting stronger: "Look, so we'll have to dominate the coastal part as well, and if we don't, we'll be totally dependent... And the coastal part even included the draining of the channel, clearing access to the ports, making it possible for very very big ships to enter. There was a limit because the old port of Vitória, called Paul, had many problems and could only take ships a little bigger than 30 thousand tons. And there was the question of the market. The buyers didn't want to buy there because there was no guarantee that the ships would be loaded in time, and there was not even a guarantee that they would enter the Vitória channel. So I thought: "Well, we'll have to solve the problem of how we're going to sell this material ourselves in the future". The notion of the system was strengthened in this way! Until you reach the conclusion: "Well, for this business to work, I must build a system. This system is a notion of what was learned during the process as we had no experience of the market at the time, and we learned from this kind of mistake. That is, it is about your transforming an obstacle into an advantage: "Well, as I am here, I'm going to learn it too". The Chinese like to say it a lot: "Transforming an obstacle into an advantage." Now, doing this at a time when Brazil was exporting, if I am not mistaken, a billion dollars worth of products, or something like that, made it seem ridiculous to speak about spending millions of dollars to repair a port, to make a new port, No one understood how far this could reach!
Santiago Dantas and the port[edit | edit source]
Then we met a man who gave us his support as he was a very clever man: Doutor Santiago Dantas, Finance Minister at the time. I went to speak to him one day when I was President of the Vale, when I had just taken over, in 1961, and he was João Goulart's Finance Minister. There was still this negative problem, because throughout the world the João Goulart government was discredited. And when we signed the first big contract with Japan, the President of Eximbank, in the US - I went there to ask for a loan, told me: "Look, your country has no credit, your company doesn't even exist." Our export program was a million and a half tons, though, in that period, we already exported some four million tons, three to four million to them, Eximbank... "And third, I don't believe in these Japanese steel companies." That is, there was nothing else that I could do! And then I came back, and Santiago Dantas gave me his total support: "I believe in this project, we'll do it whatever happens." And he helped us to solve the financial equation. In the case of Tubarão. But I'm mentioning all this to show the following: until you are able to consolidate the philosophy of a business, what, today, is the worst problem? It is inventing a new type of business, because the world today is complicated. What type of business are you going to be able to invent and turn it into a profitable business? It is not easy. At that time, it was much more difficult as you were in an environment which didn't think like this. It is something to be directed to the outside in a country which exported nothing. Brazil exported a billion dollars or something like that, almost nothing. So you got by, and no one was worried about exports. It sold coffee. Coffee! Just coffee. So you came in with a low value product, which needed considerable investment and large quantities in order to become economically viable, and it was a real odyssey to get it done. But we managed! We needed a lot of tenacity to conquer one obstacle after another, until we got there. This didn't come spontaneously: Good, now we're there!" None of that. Here you can see the past of things. You can see through history how it is that nothing is built or made without pain or without a struggle. There are struggles of all kinds. Nothing is done without a struggle. And I think that this matures men. It is that this matures men. It is what Dante Alighieri says: "L'uomo che non è educato dal dolore rimane sempre un bambino." A man who is not educated by pain - pain in the general sense of suffering, remains a child for the rest of his life. In order to mature, you need to go through pain. And this prepared us for Carajás, which was a great leap. The origin of the Companhia Vale do Rio Doce is Tubarão, because until then it was a company which was worth nothing. It had a railway line and nothing else. The CVRD was nothing, nothing at all.
Santiago Dantas was the great man in this field. Without his support we would never have been able to do it. He was one of the people who helped us most in this period because, with his firm determination, vision and considerable intelligence, he could see the importance of the project. And he quickly realized its importance. A very intelligent person has this advantage. It's the same thing as reading with the light turned on, you see everything quickly. He had ability and decisiveness, and didn't mess about. Does he have any doubts? He was a man who had self-confidence and knew what he wanted. On the contrary, he became a great enthusiast of the project and believed Tubarão was the great work of his life. He gave us great help and accompanied the process pari passu!
The Japanese and the port[edit | edit source]
The great leap was made in Tubarão, as with Tubarão we leapt from the small amount we had to export four million tons, and we couldn't go much further than that; though I had plans for ten million. Investing in an old port to reach a limited market I would not sell the amount I needed to because I needed to go to the more distant markets, and the most distant market was Japan , and to reach this market, I needed to have large versatile ships which could bring oil back. So here we entered a new stage of conception, not just of the scale of the ship but also of the fact that there were no thick steel panels available for shipbuilding, there was no ship design, which didn't exist at the time. So it was all a crazy adventure! And no one in the West wanted to help Japan , which had to reconstruct its steel industry because it was closely linked to the problem of war. I saw that there was a great strategic chance there. And here we can talk about the idea of strategic thinking, taking advantage of their need and our need to sell. The only market that I had was that one, and they had their problems, so they would take risks which they normally didn't. All this of building new ships and ports is like the tango. Can you dance the tango alone? No, it takes two to tango! So they would build the ports, four ports, and we would build one. To receive the material we sent. That is, it was this that made the great leap. So ten million became a joke, and our first contract with the Japanese we was for 15 million tons.
Let me explain how all this was done. First, the Japanese companies. The Japanese trading companies in Brazil began by they themselves taking advantage of the Liberty ships, which take general loads to Japan , to take test loads, and they discovered that the quality of the ore was very good but that it was economically unfeasible. These were the first contacts that we had with Japan . Nissho Iwai, which is a company here in Brazil , was the first company to open up the path and give us a green light in terms of the quality of the ore. Steel plants were being built in the case of Japan , which was attempting to grow. But a little boat that took less than ten thousand tons was no good for us. How could we reach the large quantities? Here we had to make an enormous change. We mobilized a number of Japanese friends we had made during the years and we got information about Japan , until we went there for the first time in 1961. And from then on the relationship for the construction of the port developed. Then they sent a mission here as they were also interested. Because of the reasons I have just explained, they wanted to rebuild their steel industry after the Second World War. They sent a mission here to study and help us in the question of the port. Here Ditzel worked a lot on it, and they thought Tubarão the best possible place to build a good port. Other places were studied, for example, the falls of the River Piraquê, in the state of Espírito Santo. Other places were studied, but Tubarão was decided on because the minimum requirement was for ships of a hundred thousand tons in a period when the largest ship in the world was 35 thousand tons. Of course, an analysis was made; and simulations of all types showed that smallest sized ship that was economically viable, the return with oil from the Gulf. All this was studied. Here we had great technical support from the Japanese, who, as we didn't have many technicians, could guarantee that a ship of this size would work. And Japan helped a lot in this. Of course, the port was opened exactly on time in 1966. And Japan gave us a lot of confidence, as, when all is said and done, in a country where no one is punctual, you open something of that size exactly on time . All our financial support was from Santiago Dantas, since we didn't borrow a cent from abroad.
[edit | edit source]
In Brazil there had never been a long-term contract for raw material. This first contract was made for a long-term period of fifteen years. Five million tons a year, for twenty years. And we discovered at the time, that for you to make the system—this system was in our heads—you had to have your own fleet of ships. Now it is not so important, but at the time it was. So we started up Docenave , with 40% CNF sold , handed over in Japan , which showed our confidence in the solution for the ships and everything else. It was founded at that time, after the contract with Japan was signed. So these are the innovations. The type of contract was completely new; nothing like it existed. The ships that were conceived for the process were revolutionary, and this can be said without any tropical exuberance. I'm not fond of tropical exaggeration , but this was undoubtedly the greatest ever revolution in world shipping. What is strange in Brazil is that no importance is given to this type of thing because people can't see it. And they still can't see it today. Brazil is not a country that sees the world as a whole, it just can't see. It has the vision of a dentist, which is downwards and inwards. It's true. Just look, all the revolution in shipbuilding came from there: from 35 thousand tons we went to 100 thousand, and from 100 thousand to 300 thousand. Nowadays Tubarão receives 350 ton ships and Carajás 400 thousand ton ships. And it was not just grain ships. We founded the first fleet of grain-oil tankers, that is, the ship that takes minerals and brings back oil. Then multi-loads came about, and the tankers, of course, and they reached 500 thousand tons. And that was the limit because there is a limit to their size.
We had to build a port in Yugoslavia . Marshal Tito came here, and, by the way, I was a marked man because I spoke Russian with him, and I was also called a Communist, added to other things. So we built a port in Bakar in Yugoslavia , totally paid for by the Yugoslav government so their grains could reach the center of Europe and Rotterdam . The huge Rotterdam grain port came about as a result of the companies that were our clients. And the developments in Australia years later were totally copied from this, everything was copied from this. So look, the greatest maritime revolution of grain ships in the world, the port revolution, as the ports had to have a completely modern design, with a complete difference in the layout of the port and the loading and unloading speeds and quantities. It was an enormous global change in the world economy. And for the Japanese this practically meant the opening of Japan to the commercial world, because Japan imported raw material, and it began to be economically accessible to the entire world because of the size of the ships. Thus the Japanese liked us. Not because we have blue eyes or anything like that, it was because they would also enormously profit from this. And as the philosopher from the Barra da Tijuca in Rio says: "For the deal to be good, it has to be good for the two of us, if not, it's not a deal. It's monkey business!" OK?
And now comes the business of the system. In order to work, the system has to be completely coordinated: one leg connected to the next, which is linked to the next. All this working. With the following condition: "I might even lose money on the different legs, but I shall make money on the whole." Now, for example, in a number of the legs, navigation, for example, it is often cheaper to contract to ship owners, sub-contract to ship owners who are more efficient than we are. Everything can be sub-contracted. But the notion of the system remained and took over. All the modern notion of logistics is also this. I don't to get on my hobby-horse, it's not that, but it's true! Everything was done in 1962! Now there are all these Peter Druckers , and I don't know what else, and all these people who go bla, bla, bla, that's what it is deep down. They didn't do anything, they write about things that they never even did. I don't want to ignore it, but it's an interesting story for these reasons. Now, who there in Brazil can judge the consequences from this angle? Not many people!
This was done with teamwork, which must be emphasized, because Brazil does not exploit these things in a very intelligent way, to create a sense of citizenship. When all is said and done, this country has a future, you can do everything that others are doing. What is Korea ? I saw Korea when it was a pile of rubble, and today Korea is even giving Germany a lesson or two in terms of cutting-edge technology. Why can't you do that here? It's like a cry baby: "Mommy, I lost my money, it'll always get lost." Do something! Don't just cry! This is what gets on our nerves. Now there are few people who are trying to do something like this, the media should do something, institutions like universities, which benefit from it, should take more interest in it.
Revolutionary designer[edit | edit source]
Here enters the figure of a famous Japanese ship designer, perhaps the greatest in the world, Doutor Shyndu. Hiroshi Shyndu. He was the President of the Nagazaki shipyards at the time of Daniel Ludovic. He was responsible for the design of all of these ships. And Japan had extremely important help. The Japanese industry, through all kinds of research, managed to manufacture thick navel panels for these large ships that didn't exist in the period for these first ships. And at that time Japan was taking off as the top shipping country in the world, and then it developed even further. Now the Koreans are in front because Japan is no longer interested in shipyards as a business, and the Koreans are taking over, but until a short time ago Japan was the top ship building country.
[edit | edit source]
The conception of Docenave was commercial, not to own ships, to obtain the know-how of production, but rather commercial. That is, dominating the maritime leg. We had to train people to operate the ships, which was a large business for a long time. Until we saw that in certain circumstances we were not competing with the independent ship owners, and as Docenave was not exactly a ship owner it didn't enter the dispute for freight in the world market, but just approved the freight in majority of the contracts. It's the comparison that you make between the lady's pekinese and the pit bull terrier. The ship owner is the pit bull and the pit bull receives the ready contract. It doesn't have to do anything. The other has to fight for his food and so has to get by. 40% CNF!
RELATIONSHIP WITH THE JAPANESE[edit | edit source]
The consequences of the confidence that was created between Japan and Brazil produced, not Usiminas , which had already been set up by the previous Juscelino government before, but the Tubarão Steel Plant, the pelletization plants, with the Japanese in Tubarão, a number of mining companies such as the Serra Geral Mining company with Kawasaki, Albras-Alunorte, the aluminium project, and the Cenibra project. Everything came from this, the confidence that was created with Japan . Has anyone analyzed the follow out, the consequences of a business like this, which is setting up a chain of confidence? What generated the great collaboration between Brazil and Japan ? A lot of people wondered about me: "Why has this guy got so much prestige in Japan ? It is not undeserved prestige. There are these consequences I'm talking about. And all the projects we did together worked and are producing a profit. All of them! Including Carajás. So the analysis of all this requires a separate chapter. Because when all is said and done, it is not just the export of iron ore that is in question. It is an economic process of the greatest importance in the second most industrialized and high-tech country in the world. Japan is not a banana exporter. Japan is a high-tech country, so this chain has a tremendous importance.
CARAJÁS[edit | edit source]
Origin[edit | edit source]
We felt that Itabira alone was not enough, not only for having a sustainable process, but also we had to take into account that we had a duty to supply national industries. That is, the Brazilian steel plants which were appearing, like Usiminas, in which we had a 9% share right from the beginning. This all made us realize that we should make another great leap and make the South System sustainable. And we opened Carajás, which was a mine which had been discovered by the United States Steel where Professor Dias Leite, together with Minister Costa Cavalcanti, worked with United States Steel so that Rio Doce could hold a share. It was a great thing they did, and Brazil should be grateful to them that they allowed Rio Doce to get a foot in the door in Carajás. Just a foot because the United States Steel was also in it. I was in Europe and only returned in 1979, when I was again asked to become President of the Vale, this time by Figueiredo, who was then President. And so we began Carajás.
Pressures against Carajás[edit | edit source]
In Europe, having analyzed all the problems of the market, we reached the conclusion that, in order for you to make a definitive leap, and be, let's say, a company which is not only worldwide, but the market leader, and it is important for you to be the leader because you'll have influence on pricing, we had to make a leap. And the ore in Carajás, was, after all, extremely rich. Now, to start up a project at that time was as great an effort as was Tubarão, as no one believed in it. It was just too big. So the critics came and said it was megolamaniacal, and that I should be put away, and all the rest. And then there were the Minas Gerais politicians, which felt that the economy of the Vale do Rio Doce was migrating to the North. Of course the people who fought the hardest against me and Carajás were the people from Minas, beginning with Itabira, which was the main focus, but also from Belo Horizonte, the Federation of Industries, and the Minas politicians. So, see, local regional and state politics. They made a campaign against our project. And then the competitors used the element of fear to make a worldwide campaign, as they had various projects, some ten of them, from Liberia to Australia. Australia right from 1966 began to be our competitor, copying the works we did in the Tubarão project.
At that time the Transamazonian highway had demoralized the large-scale projects. So we had to defeat this element. The campaign against us said that we were another project which would throw Brazil into the black hole and throw money away, that no one believed in it. So then came the fight. Even inside the company there were people against, afraid to go there: "I'll have to be dragged, I'm not taking part." "So, we're taking part, so what?" There is always the coward who has a strange psychology. Worse than the Italian who says courage is the art of being afraid without others noticing.
The moment of decision[edit | edit source]
First: if we hadn't attacked Carajás, we couldn't have grown. Second: there were a series of rival projects which could further undermine our position. So it was a case of Hobson's choice. As it was at the beginning of Tubarão: either we did it or our position would be undermined and we lost ground, and in the life of businesses, like in the life of countries, you have critical moments like that. "Either we take one path or we begin to go down, begin to disappear." So we had to take this decision, going on with the Carajás project.
The Amazon factor So we found the opportunity to make a great leap, but Carajás was a dramatic business as it was an enormous investment, with all the risks of that building in the Amazon involved. Everyone criticized it, saying that Ford had failed, that we were also certain to fail. (see: the failure of "Fordlândia.") So you could imagine the tension we lived through in that decision making period.
It wasn't difficult to convince the government, as we always had support from them, as much as we did in the time of Santiago Dantas and in the time of Figueiredo. Unconditional support was given to us, otherwise such an enormous project would never have been carried out. And what's more, we finished the project for more than a million dollars less than the original estimate, because everyone was afraid of Amazonia, all those stories, all that mythology: You're going to fail, you're lost, you can already bury this corpse!" That kind of thing. So we didn't only finish a year ahead of schedule, but we also spent a billion dollars less than the original estimate, and you never heard of any slip ups or anything else as it was something that was correctly built with the participation of all the staff which Rio Doce had. It was teamwork. We always work in a team. No one can do anything alone.
Obviously, when you have to make an important decision, if you're wrong, you are the only one to blame. But if things go right, then everyone has a share of the glory. But you're really alone when you have to make a big decision! This is only natural, it happens everywhere. Any President of Brazil, when he has to take a decision, and when everything is said and done, it's his decision, and if it goes wrong, he'll have to pay for it. But we always worked in a team, and with a lot of solidarity; since everyone had the same kind of motivation. This is the importance of having motivation, without it you can't do anything, you can't build cathedrals. The difference between building a scruffy old building and a cathedral is this extra, the spiritual side, this aspect of motivation, without which you can't do it. This is civism, all of it is a part of the process.
Financial architecture[edit | edit source]
We must say that the federal government of the time helped us, we understand that. We have to recognize that the federal government gave us support, without which we would never have done it. As Brazil was in a very difficult situation, the effort to set up a feasible financial equation was a dramatic business. MacNamara, from the World Bank, was negative at the first meeting we had, and then, as he was an extremely intelligent man, changed his mind. It was the KFW, a German bank, that helped us. It helped us together with the World Bank, which was the chef de filet of the financing of the Carajás project. It should also be said that this was the only major finance that the European Community gave to Brazil. We borrowed 600 million dollars, of which not everything was used, to invest in Carajás, which was provided by the European Community at exceptionally advantageous rates as Carajás was conceived in such a way that the consumers who took part gave us long-term contracts, and they were rich countries with credibility and credit in the bank. And this allowed us to have extremely advantageous conditions of finance. While Itaipú paid 17% floating interest, we had five years grace, 5% fixed interest, another demonstration that you can do things in a difficult environment, overcoming this international aggression, even from the press. The Financial Times, the economic press all round the world, took us apart because behind them there were the major interests of their big companies in Australia, other projects that were being planned by Liberia, and we still had another big dilemma, whether a large quantity of extra iron ore launched on the market wouldn't lower the price? This was a tremendous problem, a large number of simulations were made, and we reached the conclusion that although there was a risk, the timing was perfect. First because we were eliminating competitors, who were loose and could be killed. And when they felt that we were definitively taking off, they abandoned their projects. So we also entered the market with correct timing, but it was a huge effort to overcome these doubts as this could also have gone wrong, as it is an extremely delicate problem to change prices.
The credibility of the CVRD[edit | edit source]
The credibility was created by the success of the Tubarão project, which we handed over exactly on time. In 1966, on the exact day, it began to operate. This gave us worldwide credibility. For the Japanese this was the confidence they had in us as everything we did with them was done correctly and at the right time. So a certain credibility was created because people from tropical countries are thought of as... They even use an expression called: BRT, Brazilian rubber time, that is, time here in Brazil, four hours of BRT means that these four hours can be very elastic.
And it was this enormous credibility that we capitalized on in Carajás. It was MacNamara who was the man who mentioned it. And the Germans supported us a lot, all of them. And of course this credibility presupposed a previous success, and we had this success. If we hadn't had it, we would never have managed, and so you can see the great advantage that the Rio Doce has. It created an international griffe which has an enormous value and needs to be preserved. Companies set up and then lose credibility And of course we had our financial people too, Samir Zraick for example, who was also very good, all our people were first-class in every way, technically, in terms of railway engineering we had the top people, we had agreements with railway research institutes abroad. There are a lot of innovations that were introduced not only in the Brazilian process, but items that were afterwards extrapolated for worldwide use. So this technological core that the company used had an enormous importance.
Construction[edit | edit source]
This construction phase was a very interesting phase. Choosing people was a great problem. There were even misunderstandings between us because everyone wanted to go, and at that stage everything was financed, and everyone wanted to be the owner of the show. Thirst is natural. So you had to choose those who were the most apt to face that type of work, construction in the jungle. And we had very able people, like Sr. Moretzsohn, who worked very hard, a very correct person, as dealing with sub-contractors is not very easy. So this period was also an epic, dramatic, like the building of the Vitória-Minas. That is, everyone had to make a great sacrifice going there, and people were afraid of disease, but fortunately nothing happened because there are not even any mosquitoes in Carajás, incredible. But it was a great job because it was finished before the deadline, and for a much cheaper price.
The Carajás effect[edit | edit source]
Obviously, as the works progressed, everyone saw that it would be successful, and people became increasingly motivated and felt: "Well, everything that you were talking about has become a reality". So you felt the feeling that: "We can build others, we can do more". And then we began to think that our future would not be selling raw materials, we had already done this with Tubarão, verticalizing the Rio Doce, if not in Brazil, then overseas. Because we had grown beyond the limits of the Brazilian economy, so were destined to become worldwide by our own nature, we were sitting on top of the largest reserve of extremely rich iron ore in the world, so we couldn't just sit and wait. Just like the tomcat in the store who sits on top of the sack of coffee, and it is the she-cat who goes hunting.
Development, Confusion of the Greater Carajás Project[edit | edit source]
Disappropriation costs an absurd amount of money, in addition to it costing an absurd amount to cross regions, for example, inside cities or populated areas which is incredibly expensive, and you have to know how to take advantage of it. Today you have to move toward the intelligence industry, raw materials are no longer that important. Raw material was necessary to become capitalized, it is that which I have, it is easier to do, and so it is a more heroic business. Today it is education, the intelligence industry, the more you competitively add to the value, the more chances you have to survive and make money and create better jobs.
This is what is called the economic densification of the region. It is not a corridor. So the problems, let us say, that the Vale did not create, but not only the Vale, and here enters the problem the government created, and in the case of Carajás, the government made an enormous blunder, which was called Greater Carajás, made by the Sarney government. It did the most stupid things like taking cattle, destroying forests, all that. Instead of attempting to make a concentrated development, creating verticalization industries which would use the products that are found in Carajás itself, as, by the way, was done, Albras was started using this theory, and Alcoa set up a project in Maranhão based on the same theory as Albras, copying Albras, so Rio Doce played this pioneering role of inventing these projects, but it often came up against the government, which created this Greater Carajás, which was an enormous blunder! Ecologists throughout the world attacked our Carajás which had nothing to do with Greater Carajás, but their names were confused as both are big, and they attacked us, who were pioneers of the idea of sustained development, and we became victims, as they confused Greater Carajás, which was that stupidity, with our Carajás. That is, one of the criticisms that you can make is that we were also a company and a company has to have accounting papers, and that you have to sign the accounting papers, and these functions are not our functions but those of the government, and the government in certain cases helped, but in others didn't carry out its function, as is the case of the development in Carajás. This is a drama in Brazil. If you are not careful you end up by being the peacock in the shanty town! You set up a pretty business here, but you end up surrounded by misery, and that's not the aim. You have commitments to your shareholders, and Rio Doce has a lot of private minority shareholders that you have to respect, giving them good news when possible. At that time the minority shareholders all wanted to take part in the development, as they were continually seeing progress, increase in the share values, and they preferred the increase in the share value to receiving dividends. Nowadays there are people who think differently as they want immediate results, dividends, and the future of the company is not so important for them, what interests them is the present and the short-term. So then the functions of the company begin to become separate even though it was controlled by the government with the functions of the government, and these are different things, understand?
Greater Carajás was a total disaster. How many times did I go to the Netherlands? How many times did I go to the European Parliament to defend the atrocities in Greater Carajás? How many times? Defend, because they thought that it was Rio Doce, and I told the reporter from the Spiegel, the German magazine: "If you visit Carajás, you'll see that it has nothing to do with us." And he replied: "I know it hasn't, but if I say here, and you have credibility, if I don't attack you, Rio Doce, the Brazilian government won't do anything." So this is a negative episode in this context, but it is not our responsibility.
The Carajás concept[edit | edit source]
Many things were discovered afterwards, our assessment at the time was sufficiently wide-ranging, because manganese, iron, gold, and various others, not exactly there, but quite near. And afterwards new discoveries were made, and there are still many discoveries to be made, and all this was able to consolidate the concept, as Carajás was actually built to be economic just in terms of iron ore, everything that came later would use the same infra-structure, ports, railway, and so the costs were marginal. They could be economic with just a small investment. I wouldn't have to build a new railway to transport manganese, and then there were the problems with copper, etc.. So the original conception which was as follows was consolidated: "Let's make a project which will be extremely economical just for iron ore. Because it is the thing I am sure about, I have a contract so my risk is minimal, I'm not going to take any risks, the egg in the belly of the hen of the neighbor which is ill and it's only a chick." That is, you consume, consume and consume. It was an absurd risk, and we were very cautious, let's just take the risk with the iron ore, where we know the market and have the contracts, which is what convinced a lot of people that I wasn't so crazy; since I had my contract in my hand from companies the world over. The biggest companies in the world were there. So it can't go wrong. But you if you want to convince an ignoramus, or someone who has no faith in you, and there are always these types, and those who want to benefit from opposing you in order to take your place, there are all these things. And when they saw that it was going to be a success, everyone began to want to take it over, all that kind of stuff. But it is important that all these new initiatives confirm even more strongly that the theory made for iron ore was correct as all that wealth of minerals was within a radius of 60km of Carajás, the railway station, so everything that could go on the railway could leave on the railway. Today or tomorrow there may be other alternatives to leave by navigating the Rivers Araguaia, Tocantins, and take a number of products to Barcarena, but they are derivatives.
DIVERSIFICATION[edit | edit source]
At the time of Carajás we had already diversified, which is an important event that took place during the time I was in Europe. And when I was President of Rio Doce, at the time of the government of João Goulart, we had taken a number of initiatives, but they had not been very aggressive. But we began the Cenibra cellulose project and used the idea of taking advantage of the raw material from our lands and starting new projects as we had already started the aluminium program, that is, aluminium was an alternative for diversification. Its growth was limited by the reasons that were there, and so diversification was a way of balancing business risk.
BUSINESS ABROAD[edit | edit source]
Losing and extending markets[edit | edit source]
A lack of confidence in the Vale led to a loss of markets. Because although the successors had tried to continue what was being done, this was not enough. Here enters the business of motivation, the aims of the company, the management problems, but the drive was missing. And Dias Leite felt that this drive was very important, and we decided to bring back the former spirit of the company, that which helped to build Tubarão.
The Vale do Rio Doce was beginning to lose those markets which we had previously won with the Japanese contracts and others, and on this occasion Professor Dias Leite, who left his position as Minister of Mines to become President of the Vale, invited me to attempt to recover and extend European markets etc.. We went to Europe already operating a marketing company in Dusseldorf called Itabira Einsenerz GmbH. This shows an example of a holistic integrated world market, where we had control of all the legs of logistics, of the system, and we then began to become a really big company, and then it began. In this period we managed to get big contracts, and then the Carajás period came.
This was a major project, in which Doutor Ditzel was a great helper, because he was the first to consolidate these markets, and, second, it was a technical problem to sell the new kinds of mineral which were beginning to appear. Some of them were derived from the by-products of the basic minerals. It was a question of fine chemicals, of pelletization, that kind of thing, for synthetization, which was a technology which was being expanded more and more. We were pioneers in the use of pellets, for example, it was in the use of pellets for direct reduction, the accompaniment of these new steel technologies, and so the most important thing that the company has to do is to accompany the development of steel technologies. Just think, whoever has 18 billion tons of tons of high quality ore, as in Carajás, if steel begins to lose, and it is losing, and has lost to aluminium in the car industry. If the demand for steel is reduced, what are you going to do with the demand for iron? You always have to take this into account. So you must always accompany these new techniques to be able to take advantage of them as we did in the case of direct reduction, with great success, and today we are the major supplier of pellets. Because we followed, right from the beginning, the development of these new processes. This is one of the items of greatest importance. Today, more than ever, this is becoming evident, because if you don't do it, you run the risk of losing ground. Because of this there is great collaboration between the advanced steel plants and you as a producer of the raw material for them. This is important as it makes steel increasingly competitive. If you just have old-fashioned plants, all they'll want to do is to reduce the cost of your product in order to survive, and so this is enormously important. Navigation problems too, reducing the problems, building new ports which can receive our ships, diversification problems. These diversification projects were all made when I was abroad, and this required continual trips to Japan for Albras-Alunorte, Cenibra, the pelletization plants. So the advantage of being abroad is that at that time there were even problems of travelling because there was no foreign exchange, so the fact that you are already there makes everything easy. It was possibly the period when we may have worked most intensively, travelling madly. Not like travelling like a suitcase, which also goes on trips. Ditzel, who was a very serious man, and a fighter, helped a lot in this period, and one of his great battles was to hold the price. It was a difficult battle. This is a drama of the so-called out trade goods, which means raw material, and this is why I am always saying "raw material". No one gets rich from raw material because it is very easy for you to set up a cartel of buyers, but when you try to make a cartel of sellers, there's always a crook who betrays you or who pulls the carpet from under you. The Australians worked in a very negative way for a number of years to get the price down. Of course it's difficult to get on because you also clash with the anti-trust organizations in a number of countries, which are also complicated, but this was a job which Doutor Ditzel did very well in Europe.
The ethics of competition[edit | edit source]
The Australians began later to cause us problems when they felt that Brazil had become a great competitor; and in order to conquer a market share they began not just to lower their price but also to accept foreign partners in their mining concerns, something that the Rio Doce never did. It never accepted a foreign partner in the mining, at least not one that had a controlling share; because it supported the Serra Geral Mining company with Kawasaki. But Kawasaki had a minority share, that is, all this is extremely important in the question of the establishment of the price, which was always a problem, at least in our time, when this had priority over everything else. The idea is not the quantity of iron ore, but the turnover it can bring you, of getting the most from it and not just exporting a quantity. It is not saying: "Look, I'm the biggest in the world." What is important is the quality program as well, the turnover, what I'm going to make, and this idea was always predominant.
Globalizing the CVRD[edit | edit source]
If I take into account the fact that I stayed until 1986, from 1979 to 1986, in the Sarney government, and because of my health, I was already feeling weak through the thousands of problems which followed me, so I asked to leave in 1986. And I returned to Europe to try to consolidate other ideas which we had also begun as investment overseas. We bought Kaisler in California, and this was another way of globalizing the company. We were also pioneers in globalizing a national Brazilian company with all the problems that this brings. You can imagine the reaction at that time of you putting money into a company overseas. Today everyone is thinking that they are discovering America. This was carried out at that time with great success, and we always made money from it. And the Tubarão Steel company, which was a project of ours, was built for exports. Then the government took it away from the Vale and passed it on to Siderbrás. It was built to supply semi-finished panels for this company which was ours together with Kawasaki in California, and there we owned it 50-50 with the Japanese. And also the Italians, and the idea at that time was to export semi-finished products, and this is another important thing.
Repercussion of the CVRD[edit | edit source]
The results of the activities of the Vale do Rio Doce, not only in the area of the iron ore mining, but in the various other activities in which it developed, like aluminium, cellulose, iron alloys, etc. had repercussions outside Brazil. I'll give you a very interesting example, which today more than ever is being used as a reference. For example, what can be applied in Brazil from natural gas and the technological development of steel? In 1984, we bought the former Kaisler Steel in California and made a joint venture, fifty-fifty with Kawasaki. What was the aim of this? It was just to have a chance to sell to California, which was going to become just a cold roll mill, but it was also going to sell panels from Brazil to California to be processed and sold on the American market as the final steel product. In addition, and at that time the economic and financial environment was similar to today, overseas you would be able to not just have a market, but also to obtain financial resources there which were cheaper than here, because what is difficult today is the interest rate, the high cost of obtaining money. And overseas you would have this without requiring guarantees of the country, and, with the Brazil risk, no banker would give you cheap money. This is being done today, Gerdau is doing it, and various other entrepreneurs are doing it, it was something which was started in the Vale in 1984.
Another interesting example is the Forest Law, the Lei Florestal. It was developed by Doutor Dias Leite with me in 1965. It began in 1965, and this Forest Law was originally conceived for you to have a chance to encourage reforestation, giving you a fiscal advantage, that is, fiscal benefits, Income tax, in this case. This law was passed at the time of Castelo Branco. I wasn't even in the Vale then. Because of the Revolution I had to leave the Vale as I was considered to be something of a Communist, but I wasn't. It was passed by the Minister Gouveia Bulhões and by Ney Braga, who was Minister of Agriculture, and generated the reforestation movement in Brazil, which in turn generated the cellulose boom. Then Professor Dias Leite and I founded Aracruz Florestal company, which later generated the big company Aracruz. Of course this was together with the collaboration of Brazilian businessmen, and the one who specially carried out the industrial part of Aracruz was Lorensteirn, who is today the president of the company and developed this colossus. And all the forestation and cellulose boom was begun in this way, because you managed to make the raw material, which in Brazil is much more economical than in cold countries like Scandinavia, in the Northern hemisphere. Wood grows much more quickly here, and this industry which today is one of the props of the Brazilian economy was generated. It appeared inside the Vale, that is, maybe inside the Vale the story is not told in this way, and I think that this has an enormous importance.
The steel plant in California, CSI-California Steel Industries, gave birth to others. The purchase of a port in Long Beach. The Vale has a port in Long Beach, it helped to make the lobby in the US to prevent or reduce the aggression of the tariffs against the importation of Brazilian steel as there you have people defending their jobs in the US. A senator from California supported us, the steel panels, so we could import because California needed to. This opened the door for other imports and showed the influence of the induction of other enterprises beginning with the action of Rio Doce, which are not really connected with the field of action of the Vale, purely seen from inside, that is, this is all seen with a much broader horizon, with a bird's eye view and not downwards and inwards. This vision has another sense. I'm just giving a couple of simple examples, but here you can see a great number of examples. This had to be catalogued, and it had to be shown that the financial repercussion, the multiplying effects, the economic and financial goals which began in the Vale, go far beyond the boundaries of the Vale, but few people realize this.
THE ENVIRONMENT[edit | edit source]
Sustained development[edit | edit source]
I wrote an article on this, that this sustained development was inspired by Carajás. That is, we did it intuitively. At the beginning there was a enormous fight against because the entrepreneurs didn't want it, they felt that: "Well, if one day I get involved in this, the social side of things, and get involved in the ecological side of things, I'm going to spend a lot more and I'll not be making anything." Of course a lot a lot of firms disappeared and more are going to disappear if you take this into account. But a company that spoils the environment and the quality of life is of no use to the community. So the firms that understood this and supported us are those that reached the conclusion that: "Well, I can do what has already been done in Carajás, and still make money. Now this puts me in harmony with the community, and it is something much more human…"You can never ignore the sociological side, but unfortunately Brazil has little awareness of the social side. A lot of the misery in Brazil could easily have been avoided. But today not even the World Bank separates things any longer, there is not this trichotomy that the social is one thing, that it separately finances the problems of housing, housing for workers, this study was made together with the project, as it was made in Carajás, it was made like this, it's there: "We are going to build the houses, then I can even sell them, but I'll do everything together, the ecological side has to be economical, financially correct, and the whole must have the harmony required to preserve the quality of life and create employment."
I should say that this was my own thing. This is true, I don't like to speak about myself, but this was really ours, mine. I had a lot of problems with it, right from the start, because many people called me a "forest lunatic" and crazy, a poet, this kind of thing, but today no. Because people only began to understand a long time afterwards. It reminds you of the type of people of a certain institution that when you told them a story, an anecdote, they laughed twice, first when you told it, and then three months afterwards, when they understood it. Something more or less like this!
So the only thing that you can criticize in the Rio Doce are the pig iron plants that were installed around Carajás. The base of native wood, destroyed in the burnings, when they were cut down. The environmentalists said at the time, but today it's different. "Because you supplied the iron ore, if you hadn't supplied the iron ore they wouldn't be working, so you wouldn't have had all the clearings." But you even have the legal obligation to hand over the product, the guy settled the land with the permission of the government, of the authorities, at least, whether they are local or not, you have to hand it over. So there are these types of problems. But the vision of the people outside, especially the media, who don't know the legislation, they don't know our style or work, nothing. They interpret us using their own criteria.
We were pioneers in the questions of the environment. Carajás was the inspiration for the creation of sustainable development, all the theory of sustained development, which was presented in 1992 in the Rio conference, was inspired by the Carajás project. That is, the approximation of the projects on the economic, social and environmental levels at the same time. Of course each project will have different components from the others, but this simultaneous approximation, respecting all of these sides, and this social aspect includes education, health, all of this. Project Carajás was the model on which this theory of sustained development, which can be found throughout the world, was inspired. So, it is really another indirect contribution of the Rio Doce to all of this.
The environmental discussion in Carajás[edit | edit source]
We got all the existing knowledge and we had a lot of other people busy obtaining new knowledge. Everything one could know. Because here there enters an important thing, which I was concerned with when I was Collor's Minister. It is the so-called ecological and economic survey, you attempt to discover the ecosystems of the region where you are working, the scientific knowledge of the territory. After which, and only after this, you enter the economic area, so that you will not spoil things which you would spoil without any knowledge of the soil, as happened, for example, in Greater Carajás, in the settlement of the River Capim area. There are areas there which have become deserts, they have more or less the same characteristics as the Northeast, there is a problem of water, now you have water from wells, a pre-Amazonian region has been transformed into a Northeastern region. Why? Because no one had enough scientific knowledge of the territory to begin economic exploration without knowing it. With knowledge it is one thing, and without it, it is another, or rather, you can attempt to prevent the destruction of the fragile elements of the system. For example, these Indian settlements in Amazonia, without this knowledge of the ecological and economic survey, they are highly depressing because very often people ignore certain characteristics of the soil, the question of water resources, etc.. I'm giving a concrete example. And this is what we tried to do, within the possibilities of the period. Then people came with satellite photography, digitalized radio, and all this, criteria of the "arc" type, the units of nature, the Dutch software to classify the ecosystems of Amazonia. I have fantastic digitalized maps on all of this, which come from the Amazonia survey.
So we tried to use all there was in the Carajás period, and then in the Ministry we set up more things that were then used with a greater degree of knowledge. I'm in favor of the kind of business where you try to find out about everything that scientifically exists about it, so you are better informed. Don't we have the world of information today? The more informed you are, the less mistakes you make.
Geaman[edit | edit source]
Geaman was set up in this context to make sure we didn't do anything stupid. What was Geaman? We brought together the best people we had in the environmental area, Professor Ab'Saber, for example, who is a very intelligent man, and other figures. There is an Italian, from the Goeldi Museum. Everybody heard: "Look, the people who know are yourselves, and I don't want to do anything without your rubber stamp. It's not something useless, for my own amusement, it's for posterity, Brazil is ours. We must preserve that which must be preserved, I don't want to spoil anything. "We want to do something to make money but for the benefit of the whole, for the benefit of everyone. Now, I'm not going to throw it away just for my business to be successful at the cost of harming the nation, the collective, I'm not going to do this. So we brought Geaman into these studies, and everyone that was good in Brazil was called on.
There were a number of long discussions. There were always a lot of polemical points. The construction of the railway, for example, because it would cross regions where they were clear ecological dangers, all this was respected. We even managed to change things in order to respect the ecological miracle, the site of the mine, everything there in the mine. The care over the legislation. No one went a centimetre more than was absolutely necessary. And it was very nice to see how when you respect nature, nature responds. There was that thing which the French call: "Chasser le naturel et reviendra au galope." That's it, you get rid of nature, and it gallops back, you do barbarous things, and nature reacts. This is the pioneering work which was the origin of the Rio conference in 1992.
RELATIONSHIP WITH SOCIAL GROUPS[edit | edit source]
Go to Carajás and see what you can do. Do you know what I heard so much? "The Indians here in Amazonia are idiotic, they learn nothing, just rubbish." I heard this kind of thing in Germany for many years. "The Japanese can't learn this, they can't learn that, the Korean is an ass." Today the best mathematicians, the best physics scholars, are Koreans. This is a blinkered view, we are neither superior or inferior to anyone, it is a question of educating and having the political will to do it, just this. And perhaps we were also pioneers in this, the agreement with the World Bank, the loans we made abroad already foresaw that the estimate… We built villages on the right-hand bank, we looked after the Indians at that time. You can't find problems with the Indians in Carajás, as everything was solved at that time. There were just one or two problems were caused by people from outside, not by the Indians themselves.
WORK PROCEDURE[edit | edit source]
Decision taking[edit | edit source]
We discussed things with everyone. There was this channel. Many people said that I was a dictator, but it was the opposite. It was no good to discuss technical problems with people who couldn't understand technical problems, but the general lines of things, the meaning of everything, was discussed with everyone. Because of this we had a lot of support from the unions, all the people below. We always treated them very well, and it was because of this social side that I was called a Communist. And they all took part. I learnt a lot of things from my driver, for example, I'm not ashamed to say this, there always someone who can see something that you can't. But they called me a dictator at the moments of the technical decisions. I don't want to hear suggestions on a subject you understand nothing about, so don't come and gossip! So you don't discuss the specifically technical things with everyone, but with those experts from that area. Am I going to have a discussion with a surgeon about how he is going to perform an operation if I don't understand anything about it? It's a waste of time, it'll get in the way, it's his fault, OK? So these things are often badly understood. Especially by political people, they were really jealous of us, because we didn't listen to politicians. This doesn't mean that I don't respect politicians, I respect politicians a lot, they have an important function, but politicians always wanted to use, as they did use, government companies to get jobs, this kind of thing, and we tried to avoid this. Like a state company, you don't just have to swallow your pride, you also have to swallow big branches and open umbrellas, often to be able to save the end goal. You have to swallow all of that. And when privatization fired a lot of people, they fired some good people, but they also fired people who should have been fired, because they were there because they were there because they were politicians' stooges. This was the onus of having a state company. This was in my time, I left in 1986, in my time, perhaps through the type of situation, the press was smaller, in this type of thing, then it increased a lot, and then the state companies began to suffer. This is really not a national problem but rather a worldwide problem. Thus the trend toward privatization. The problem of privatization is the way that it is being carried out, and there are various ways of doing it. And the problem of Brazil is to create entrepreneurs, which is the great advantage of industry, the growth of industry has been because of private companies. Why is it so important? Because in strict terms a private company is not bureaucratic, because there is the bureaucrat and also the "bureaucrat". And we didn't count on this definition of the bureaucrat, who after a lot of time and effort manages to successfully present five problems for each solution. The problem is to avoid fanatics.
Developing self-esteem[edit | edit source]
I'll tell you how important this story of Carajás and Tubarão is. It gives you self-esteem, you say: We can also do it, because I'm not inferior to anyone". I'm from the time when I was never like that, I never had an inferiority complex. I remember that I went to the construction site in the Vale with the personnel from Morrison Knudsen, who came with machines that no one recognized. The majority of our engineers from the Vale's consultancy companies, together with the sub-contractors of the Vale, were shy, had a kind of inferiority complex, but if I were there I would say: "They may know more things than I do because they have had the chance to learn things that I haven't, but I can also learn, so what?" This made me feel that we also know and can do things, it gives you self-confidence, self-esteem, and this is important for a donkey, and we don't know how to take advantage of it. The media fails to explore these things, instead of doing degrading things, it should encourage things that came out right and worked.
Stimulating teams[edit | edit source]
Everything is teamwork. The ideas of other people was also accepted, and there is an osmosis in this process, it is not just you, that is, we always did things with more aggression, had newer ideas, because we had more contacts, maybe we read more, but we accepted other ideas, and we modified many of our own ideas with the help of the team. Nothing can work in the world unless it is done in a team. Look at the modern world, even more so when you work in systems. Nowadays, one of the important things in the development of a country, and when you analyze the possibilities of the development of a country, is whether the people can work in teams. That is, you can't do anything alone, especially at the time of implementation this is fundamental, because it will be someone else who will implement it. Even if you are the boss, other people will carry out the plans, so you will have to have a bird's eye view and have a team. Deep down, it was this was all teamwork, with people who contributed not only on the same level as us but even on lower levels, and also outside the Vale. The problem is for you to interpret all of this and get the result. This is the most difficult problem, because what generally happens is the following: it is not just that the adoption of new ideas is easier than getting rid of the old ideas, what is harder is to get rid of the barriers in the mind, let us say. You bring someone to think in terms of a system, an individual who thinks in terms of specific points, and it is a radical change in his head. You have to change his head. All the change nowadays in the so-called "New Economy", for example, is at heart a change of thinking, that is, the mathematics that you use are different, the physics is different, you are going to have repercussions in the economy that are going to change because the American economy, with the help of information technology changed completely and produced the new economy. It is not just saying that the Internet is the new economy. The Internet is no more than an instrument with which you can change the economy, to improve it. So the Vale made a great contribution with all of these things in this field, which is not known, and this teamwork, which I'm talking about, is something which requires motivation.
Building cathedrals[edit | edit source]
Everyone must have great motivation. And motivation is that story of the cathedral, of someone who is building a cathedral compared to someone who is building something which neither has the importance or the meaning of a cathedral. So this person will feel very different from the other who is building a drainpipe, won't he? It gives the feeling of greatness, self-esteem, enthusiasm which comes from stimulus, enthusiasm for that which his is doing, that he is seeing in front of himself a noble aim, which is important, and which has a social meaning, an environmental meaning, and this is another great contribution of the Vale.
We went to look for people in the best universities, I looked a lot in Paraná, Belo Horizonte, Ouro Preto, we brought people from all over Brazil. There were a lot of gauchos from the South, people from everywhere, and we looked for those who we could see had this cathedral spirit: "Let's build a cathedral!" It's very different from the spirit of those who were just looking for a wage or a job, it's an enormous difference when someone asks: "How much am I going to earn here?", of course I want to pay well, but the one who asks: "What am I going to do here? What future does it have? What is the beauty of this work? What is the impact of it on society, on the creation of jobs? What is the beauty?", beauty in this broad sense is very different is very different from the other who is just looking for a salary, which is something healthy, everyone wants to earn well, but on the other hand it is a demonstration of egoism and a primary feature of man, because he is not looking for a cathedral. We always preferred builders of cathedrals, those who had a wider vision and wanted to carry out a major project, it is not just reaching an important target, in English it's called a grand design. It is not just carrying out a project, it is very different. The Americans call it visionary, it is not visionary in Portuguese, because the visionary is a madman. For the American it is someone who has vision, who has a bird's eye view, who sees from far, who sees from high, and knows: "Well, we want to reach that point there!" One thing is very different from the other. So the problem is to find cathedral builders, this was our philosophy. To do this you created that tremendous motivation, which in Portuguese they call "wearing the shirt" of the team or company, that motivation, and this, curiously, was not just at the level of the engineers, it could even be found in the lower level workers, and you had this spirit that the person was building a cathedral. This is very different.
And nowadays there are not many cathedral builders. At that time we had a number of supporters, like General Juracy, Santiago Dantas, who was a great figure. They were cathedral builders. There are a lot of good people in Brazil today, but in today's environment you can't carry out, let's say, a project like Carajás. Are there any possibilities of doing it? It depends a little on the environment in which you live. For example, in order to build a cathedral, you must be in an environment where there are people who want to see a cathedral built, if not, you won't build anything, it doesn't depend just on you. I didn't have power in my hands, the power was not mine, so first you have to persuade others, and then there's the question of the chain of confidence. If you don't create this chain of confidence, mine with my colleagues and everyone, if you don't create this chain, then it's like all modern capitalist Calvinist systems, which are based on respect for private property, law enforcement, respect for the law, obedience to the law, and all this creates confidence. You have a contract, the charter, and if you don't respect it, if no one obeys the law, then I'm not going to do things, I won't invest, I won't do anything. You have to create the environment around you in order to build cathedrals, and if you don't, there's no way.
Looking for talent[edit | edit source]
We went to find people in the universities, we brought a lot back from Paraná, Belo Horizonte, the best engineering schools and other faculties. We tried to get the best, Rio Doce always took a lot of interest in the human element, and always invested a lot in training them abroad and bringing people from overseas to enrich things here, this was all based on human knowledge. Nowadays you have modern science, knowledge, countries don't get rich by selling raw materials, but rather by adding value, and value is intelligence, and intelligence requires education, so, right from that time we tried to get the best engineers, the best specialists in the different areas. The first computer in Brazil was at the Vale, an IBM in Vitória, in the computer centre there. The first in Brazil! So you can see the anxiety that there already was about progress, of being ahead on the technological side. The Vitória-Minas overcame a large number of technical and technological obstacles which required the cooperation of Germany and the US. So you can see the interest that everyone had to do the best, we trained the best railway engineers, the best mining engineers, the best port operation engineers, who today are spread out all over Brazil. You can see that people from that team at the Vale are occupying important positions, even outside Brazil. It is because of the importance which was already given to knowledge. Today enrichment is made through knowledge, it is a knowledge intensive economy, the economic is based on intensive knowledge, the brain power industries, and you don't get rich by exporting iron ore. Because of this we attempted to build the steel plant, Tubarão Steel Plant, and it was born within this context. Although it originated outside the Vale, it was implemented afterwards inside the Vale, it began when I was in the Antunes Group, which today is Caemi. Caemi was also founded by us. When the Revolution took me out of the Vale, Doutor Antunes invited me to be the President of Caemi, of the MBR (United Brazilian Mining Company), which was founded by us, and we carried out this project in Sepetiba, which everyone knows, and which is today controlled by Caemi. So this was all the valuing of human knowledge in that period. It began in 1960, actually shortly before, in that heroic period, there was another implementation problem, it wasn't about new conceptions and attempts to change the course of things as was done beginning with Tubarão.
And we always tried to use the people from Vale. Afterwards, much later, training them abroad, bring people from abroad, there were always a lot of reactions, when we tried to bring people from abroad to train the people from inside the company. It's part of human nature, someone repels a foreign body even though he may need it, and though he may recognize that it is bringing him benefit. We once brought a bearded Hindu, who was not very friendly but who was very competent, and they demoralized him by calling him the Maharaja of Brahma. He became well known, and however much science he may have had, no one believed in him, no one took him seriously.
Considered a Communist[edit | edit source]
I was unable to inaugurate Tubarão when it was ready because the Revolution came and I was considered a Communist, just because we has a very social idea about how to go about doing things. Even because of questions not just of altruism but also of economic thinking, that a worker who is well-treated, well-fed, well looked after, with his family protected is much more efficient and productive than a poor devil who doesn't even have enough to eat, and you require him to make an absurd physical effort. Because of all of this, they called me a Communist at the time, and after the Revolution I almost had my political rights taken away. I only escaped because Doutor Antunes, who was President of Caemi, saved me and invited me to be the President of his company, which I founded, and it was Caemi, MBR, which later became a great mining company, here in Sepetiba. And I stayed there until the end of 1967.
Knowledge and obstacles[edit | edit source]
How are we going to avoid each of the obstacles that appear? Because it is an obstacle race. You avoid one obstacle and another appears, and you have to overcome them in order to win the race. In order to do this you have to motivate people, bring new ideas, accept new ideas, and also motivate the team to also generate, accept and discuss new ideas. It's like when you take medicine. Don't you shake the container to see if it has any impurities? You don't take it until you have shaken it, so you must refine these ideas until you reach a result: "Good, this here is working", and for this you have a very important instrument: mathematics. Nowadays you have a computer to help you make the calculations, although the reasoning today is much more a case of just tidying up the mess than choosing the best option as the computer will do this for you, now you tidy up the mess and enter the Chaos Theory. It is another mindset. But everyone helps in this, it's not just one person. Of course, as President of the company you have to take the lead, and I don't believe in anything that doesn't have a leader, without a leader you won't get anywhere because when you have to take on responsibility you are alone, and the final responsibility is yours.
Decisions and Carajás[edit | edit source]
For example, in the Carajás decision, if it had gone wrong, I would have been the only one to be sacrificed. It is always like this, it's something human. It was naturally a decision which took me months. I needed to be supported by facts, with as few risks as possible in order to take the decision. We mapped out all the potential competitors in the world, and then there were many, and we were highly criticized for the fact that we would lower the price of iron ore, that it would go wrong, that Amazonia had all gone wrong, the failure was guaranteed. Even in the foreign press, the Financial Times criticized us. The competitors used that to hammer us even more, and of course inside the Vale there were people who didn't agree, it was never totally unanimous. At the moment you must take the decision, you have the support of your colleagues, but the final responsibility is yours. If it comes out well, fine, but if it doesn't, then you'll pay for it. And it can't go wrong, for if it does, there will be a colossal disaster, because there were billions of dollars involved. We finished Carajás for a billion dollars less than were invested, with the cheaper money which Brazil received. At that time, when Itaipú was receiving money with a spread of 2.5 years, floating interest of 17%, we were getting money without the spread, and we got the only loan that the European Community made to Brazil, and with a grace period of five years and 8% fixed interest, and that period was even worse than nowadays. All this goes to show that in the case of the Carajás decision, all the competitors were mapped out and everything was calculated, where each of them wanted to go, and where I would get to if we had to confront them. The pros and cons, the balance of all of it for you to take a decision: "Well, I'm not going to lower the price of iron ore, I'm going to kill so many competitors", and this is what happened. We killed off some ten potential competitors who were going to appear with smaller projects using lower quality iron ore. The price of iron ore didn't fall, quite the opposite, because of its quality it was in greater demand than that which was of lower quality. All this had been put in the thought matrix. It is not something that was just done like that, à la diable, in any old way, lying down, none of that. This was made after long reflections, in which a lot of people took part. It was not an individual decision, but of course it was our responsibility, and you had to put up with the consequences.
PEOPLE[edit | edit source]
Antônio Dias Leite[edit | edit source]
Dias Leite is a man of great value, with a smart brain, who brought great advantages to the Vale during that period. Because he was President and gave great support to the external area. We were in a period when, even though we were abroad, we received great help from Brazil. We didn't have this during the time when I was in Vitória, and we didn't have this support here in Rio, or we had restricted support. Giving this external support and taking a number of intelligent decisions helped the company get on enormously.
Manços Perdigão[edit | edit source]
Manços Perdigão is a very intelligent man. He has contributed in many ways. He is an example of the care we take to create people. Unfortunately he was a victim of a health problem. But he is an example of the kind of person I was talking about, and a very good example.
Augusto Antunes[edit | edit source]
I must say that I learnt a lot during the period I worked with Doutor Antunes, at Caemi. I was there for four years, and we founded MBR, which was also a project of ours. Caemi has a large-scale project in Sepetiba, I think the total was 32 million tons of ore, and I learnt a lot with him. He is one of the greatest men that I have met in Brazil, and I am proud to be from the same country. You see, someone dies, and the media praise him, he's on the television, and no one knows that a man like that has ever existed. Someone like that!
SERRA PELADA[edit | edit source]
This was really a serious problem, because, as in other places, Rio Doce had the right to the minerals, there was a legal process which was in the control of the company, but the government did not respect these rights, closing its eyes in relation to the garimpeiros, the prospectors, and many politicians became involved on the side of the prospectors. It was something that even had a bad repercussion for Brazil, because it was the guarantee of property rights. Compared to Carajás, it's a black mark in the history of the Vale. Not because of the Vale, but because of the government. It didn't respect rights. It was absurd. Everyone was afraid, because there were a lot of people who also had the problem of the prospectors, now it has died down, but there was a time when the prospectors were what the MST, the Landless Peasant's Movement is today, and everyone was afraid, and the police didn't intervene. There were too many people, and there was not this very important thing that if you're going to make a country work, then you have to respect private property, have the rule of law, without what is called today a Kontract, a Kontract with K, which is a chain of confidence, which allows everything to work within the legal system, within everything, with everything legalized and accepted. When you break this chain, confidence finishes, and you lose credibility. Serra Pelada had this problem and had an awful international repercussion.
VALE CULTURE[edit | edit source]
Why did they call me a Communist during the Revolution? Because we tried, and not because it was a cathedral, it was also to even selfishly increase production and improve working conditions. So we provided better housing conditions, schools for the children, health care, everything, and at that time people said: "This guy is a Communist, paying them more than…", the result was that the work was much more productive, the people were motivated, and they understood that they were working in something where they felt that they were part of a family, and that they were building something important for Brazil, important for everything, for Brazil as a whole. This is the cathedral spirit. In that period the vision was different from what it is now. I was called a Communist because of this, there was never a strike, we never had a strike because the people recognized it, the manual workers, you transmitted the spirit to them, now you need more than one person, you must have critical mass which allows this thing to be transmitted upwards, downwards and sideways.
This is a very difficult thing to measure. You can measure through results. Let's suppose that the Vale do Rio Doce had been set up without the cathedral spirit, it wouldn't be the same thing, you wouldn't have got there, it's very different, you wouldn't have got there if you hadn't had this visionary thing. Look, first the railway, which no one believed there was a solution to, the Board here in Rio didn't want to give any money, and we had a lot of help from General Juracy, who was also a visionary, he had a certain cathedral spirit. He helped the Rio Doce a lot, General Juracy Magalhães was a great figure. Another great Brazilian visionary was Doutor Antunes, the engineer Augusto Antunes, who was the owner of the Caemi group, a great Brazilian. A typical cathedral builder So, with this you also manage to influence people, and it makes your own life more beautiful. And your life is not just making money and throwing it away on purely material things, as civilization today has become too materialistic. You reach a lack of balance in the feeling of happiness of people, if there were a way of measuring this, gross national happiness, instead of gross national product, the Italians say that felicità is a form of pensare, if you don't have a cathedral to build then you are reduced to a wage earner, you're rich, but uncultivated, and you spend your money, will that make anyone happy? I don't think so, when you reach the end of your life you look back and what have you done? I don't know why I came here, I didn't ask to be born, they put me here, and I still have to keep on my toes to do well, so, when you look back, what did I do? Nothing. It must give you a feeling of uselessness, extreme distress, it's something horrific. This is at least what I think, I philosophise, sitting at the bar.
OPINION[edit | edit source]
Nationalist politics[edit | edit source]
The government had a somewhat sick type of nationalism at the time. First with natural resources. Ideas which are quite different from today: "What good is it being the owner of a raw material of you don't know to process it or use it to the advantage of the community?" So you have to have a broader vision, first learning to work with this raw material, adding value to it, and then selling it competitively instead of beginning to swear at any foreigner who might want to develop it. This person is bringing knowledge, valuing the product, creating jobs, so why not? This has improved a lot here, but at that time there was a very exaggerated kind of nationalism, somewhat because of Arthur Bernardes, who defended the iron ore mines in Itabira. A lot of the politicization of mining came as a result of the Arthur Bernardes thing, with the Itabira iron. Now, after the Law of Informatics, which was one of the most stupid laws ever to appear on the planet, perhaps on Jupiter or Pluto there has been something worse, with the Law of Informatics you taxed intelligence and benefited stupidity, and I've never seen this. It put Brazil 20, 50 years back. And now we're crawling again. Any old cucaracha from Central America, and Guatemalan society is a three to one society, that is, for every three Guatemalans, one knows how to use a computer. In Brazil it is three times less than that, and this is the end of the world, this is why we are so backwards here. It's only now that we are entering, and this is because of the Informatics Law, up to today you can see that 70% of the computer equipment here is smuggled in, and there is what is called "intraband", an internal contraband, an incredible business. These are the things that we've discovered with this law. I remember it, I even believed that it had something serious. Result, they wanted to make a project for hardware, which today is a commodity, and in a few years time the computer will disappear, these new telephones from Japan all have i-mode, with which you can access Internet, they transmit data, voices, images, everything on your cell phone. With this Swedish thing which is going to come out of Ericsson, you'll have guaranteed access to Internet with data, everything, images, voice, everything. Why will need your computer? The computer is becoming an obsolete commodity. It's strange, see how quickly the world goes, and see what the poet in the Barra da Tijuca in Rio said: "The alligator made a false step, and the next day it was a handbag!"
[edit | edit source]
I have read a lot about the Chaos Theory. It's something I like, and I do it with pleasure. And it has helped my contribution, because it helps you to think. Let's suppose, that for the people of my generation, who haven't accompanied what's been happening, that it's getting difficult to navigate in the modern world, even just to dialogue, because another language is being used. I'm not a real expert in this, but at least I understand, I know how to navigate. I understand what's being said, that it is annoying for you to say something that you yourself don't understand, so you lack a knowledge of the world, which is very annoying. There are those rules of the civil servant. The first is the following: the only better than the present boss is his successor. And the second is that in a meeting it is better to keep quiet and pretend to be stupid than to open your mouth and show it.
RELATIONSHIP WITH THE GOVERNMENT[edit | edit source]
[edit | edit source]
The Vale had to make propositions because it was the economic agent which was in the confidence of the government. Now there's something important, because many people criticized the Vale because it didn't distribute dividends. The government, which supported it, didn't want it to distribute dividends, wanted it to continue investing, because it was highly profitable after it reached this critical mass, but a number of criticisms were made during the period of privatization of the fact that it didn't distribute dividends. It didn't do this because it continued investing in the growth process and improvement of productivity.
You had to convince governments. And the advantage of the Vale was that it had a very high status, and we had a staff which contained people like Doutor Ditzel, Samir Zraick, who was the Financial Director in the Carajás period, highly qualified people. We took great care to choose people and train them. One of the great secrets of the Vale was for you not only to be motivated, which they call "wearing the shirt". Because they saw grandiose aims, they saw that it was something serious, a big thing, and you were proud to be working in something that was going well, that was on a definite course and was winning.
Diffusion of knowledge[edit | edit source]
The Vale attempted to spread its knowledge and technology. There's nothing better to make enemies than success. So you tried, and they thought that you always wanted to be dominant. For example, the example, the network always saw us as an enemy, so they didn't want to take advantage of anything. And this is something cultural, we also had our limitations.
Brazil always worked in terms of separate compartments cut off from each other. We had no dialogue with the railway network, just to give an idea. What kind of mentality is that! So each was the owner of a fiefdom. It's power, the dispute for power. We had no intentions to dispute power, we wanted results, the difference is that, the Vale do Rio Doce always tried to inculcate the type of mentality in which the result was what interested. That is our aim, let's get there, it's not a question of getting power. Then the man that wanted power, the bureaucrat that wanted power, measured his power by the number of employees he had under his wing, that is, something that costs a fortune and doesn't produce anything, that's the difference. It's power against efficiency. against results. It's obvious private industry must get results, it goes without saying.
The Image of the CVRD and the government[edit | edit source]
The government took advantage a lot of the image of the Vale. For a long time it worked as a kind of reference, especially a reference, it helped to raise a lot of money from the banks for other companies which belonged to the government and give credibility to Brazil. You heard that the Vale do Rio Doce was a symbol of what could happen to Brazil. It was not just the people that were there, a number of governments exploited this. At times the Vale had to repair the image of the government, but here everything is the other way round. So you can see it's a kind of epic struggle. The most difficult thing for you to sell is the obvious!
PRIVATIZATION - OPINION[edit | edit source]
I think that privatization is a good thing, I'm not against it, the problem in the way that it is carried out. There are privatizations like that of the railway network, which I don't think was done well. Others were done better, and I think that I would have used other criteria with the Vale do Rio Doce. For example, pulverization is one of the things that I think could have given a positive result, as it creates more capital, as the product has to create a market with its own capital. There are just pension funds, a single source of capital, just like in Britain, just like Britain. The Vale is going well, I can't criticize what is going on there are a lot of people who are there, and they are from the Vale, and the people who are new are being absorbed. But the so-called Point S of sharing is difficult to get to work because there are various bankers and pension funds, and they have all got different ideas, and so it's difficult to take a decision of this type I'm talking about before you leave. Let's suppose that you were to make a large-scale project like Carajás today, do you think that they would do it?
THE RELATIONSHIP BETWEEN CVRD AND THE COMMUNITY[edit | edit source]
Itabira and development[edit | edit source]
Itabira is a typical example of a mining town, which, when the mining finishes, is just left with a lot of holes. That's what they think about and they are right. But in the case of Itabira, first we tried to take a number of factories there, some were magnetic ferriferous plants, more sophisticated industries, and open up a steel plant, but the geographical location was no good for certain kinds of industry, like steel plants, which went to Ipatinga because of physical space. And the inhabitants of Itabira, like all those people of these mining towns, you have two types of category, those who tackle the problem, and try to help and get into it, and the others who just try to make claims: I am a victim here, so you have to give me this and that." I prefer the first alternative, when these people collaborate, then you create entrepreneurs, and then the help becomes much more efficient because social assistance doesn't help anyone to develop. It was what happened with Itabira, there was a lot of social assistance, but little help in the sense of creating entrepreneurs and creating a new life of their own, regardless of the existence of iron ore or not. Because the climate is good there, the conditions are good, etc.. There's still time to do this. There are some good examples there of this kind of mentality, but there were a lot of political movements of mayors who belonged to the first kind of mentality. You can't solve the problem just through assistentialism, so a critique which I would make of the Vale, and I can make it of my own administration, and at that time many of the things that we wanted to do on our own we could have sub-contracted, but it wasn't easy at that time, but there was already this more forward kind of thinking. If you had done this, you would have created entrepreneurs. And it is the entrepreneur who creates jobs and wealth. It is a critique which I admit, that we were wrong, we should have given a lot more support. But inside the administration, you often, in order to get domestic peace, end up agreeing with things with you wouldn't normally agree with. Because they are nearer your direct goal, and this was an indirect goal. Though it would have been important, because I would have created goods for the Vitória-Minas, but at a time when we were struggling to have sufficient capacity on the railway to transport the iron ore contracts. Then this problem began, and the railway improved a lot, and it began to have idle capacity. Then the problem was inverted. But in this period you could have set up industries in the region and allocated certain functions that the Vale carried out. I could have created entrepreneurs who could have given a completely different meaning to the region. That business of economic agents.
The steel business was created in the whole region. Some were there like Belgo-Mineira, and others were set up, Açominas, Tubarão Steel Plant are results of this, but it wasn't enough, there could have been a lot more. Valadares, for example, could have been transformed into a great industrial city, the people from Valadares belong to the second kind of mentality, they have enterprise, but they have not had the chance to develop there. So, for example, the majority of the services, the manufacture of wagons, the maintenance of the locomotives, should have been for the private sector to so. I just looked after my own side, as is today the thinking of my core business. That which I can do well, and what I don't know how to do well I pay someone to do who can do it better than I can, he'll do it better and cheaper. There was not this kind of thinking at the time, on the contrary, we struggled a lot internally with colleagues who thought differently to this, although there were only a small number of them, but there is always this well-known stubbornness.
We got some things right and others wrong. What was not business was that Fund of the Rio Doce, which you distributed without any chance of suggesting how, by law, it was 8% of the profit, something like that. The rest was carried out as a business as had to be done as a business out of entrepreneurial responsibility, and, at the same time, when setting up a certain business, there was the problem of the entrepreneur. You created employment, new sources of wealth, and you made people stay in the area, all this was already thought of at the time. Economic thinking hasn't changed very much since then, but what has changed has been the way you get there. Minas Gerais
A decision of mine, and I was hammered because of this, was to start up the Carajás Project. And it was outside Minas Gerais, when we should return to Minas Gerais all that we had taken from there. I understand that I am from Minas, but we couldn't do this because we didn't have the economic conditions to do it, and so what should we do? Let's build the Carajás cathedral, and, capitalizing on this, we can return to Minas Gerais now at a further stage of industrialization, bring industries with an added value, enriching the origin of the Vale do Rio Doce, which is something which is even sentimental for me, but unfortunately I wasn't able to do this, because I wasn't President of the Rio Doce at the time.
DAILY LIFE AT WORK[edit | edit source]
In 1986 I left the company on the spur of the moment, I asked Sarney to let me go because I had health problems, stress. I needed to rest a little. It was an infernal machine of trips, and all the health problems which I have today are derived from that, including thrombosis. I've already had four thromboses, which are to a great extent a result of the air travel. I have already made 177 trips to Japan. Imagine what that represents, 177 trips to Japan! If you take seven days to get rid of the jet lag, then I have spent a number of years like a zombie, you go there, get tired during the day and don't sleep during the night, and vice versa until get adjusted. This takes an enormous amount out of you.
WORK[edit | edit source]
I refused a number of invitations to become a Minster. I don't feel like a Minister, I feel more like a mongrel. But then I was pushed into it and they began to say: "You're running away..." And then I felt I couldn't refuse. Collor was decisive, he took courageous decisions, but those links with PC Farias began to be very evident, until there was a point that: "Well, this business won't come out well because this is an ethical side that is unacceptable for the government". Unfortunately we already suspected, I wanted to get out earlier, but I didn't manage to because
Jorge Bornhausen, who ended up getting out before me, said that if I did the situation would be ungovernable, that it would create a crisis, so I put up with it till the end. But the reason was one of ethics. But apart from this he did a lot of things, that of the cars, opening up the economy, he did it with courage, what he had his merit. A pity because Brazil wasted a lot of time on all that.
What did we do in his Ministry? We began the Bolivian gas, we began everything at that time. This document was requested by Fernando Henrique, when he was Foreign Minister. But, in the Collor government, we proposed five things along these lines. The gas from Bolivia, where we were fought against in the matter of principle, another thing almost no one speaks about. This comes from the times of Roberto Campos, but it was purely for questions of oil and fuel gas, not for gas to generate electrical power, which is something which entirely new. We had an analysis made in the Collor government, and we reached the conclusion that in 1998 we could have blackouts and even power rationing in the Southeast of Brazil. So the way out was gas power. There were extremely efficient and clean turbines which allowed you to produce in the short-term and avoid blackouts. So the only solution is gas, and where is the gas? Bolivia. But in Bolivia there is not enough gas, but there is the possibility of having a lot of gas geologically proved. So we took the risk, carried out the project that Petrobrás was initially against, but Eletrobrás was our worst enemy. But it eventually came out, and the government supported it, it originated at that time. River navigation, the main project was the navigation of the River Madeira, with the Linomagic group, which was set up then. The foundation of the ADTP, the Paraná-Tietê Agency, came from that time. The electrical link between Brazil and Argentina, using Argentine thermoelectricity with Brazilian hydroelectricity also came from then. The connection of the Gulliver transmission line in Venezuela with Manaus was made to Bela Vista because Petrobrás put dampers on the project because it would take the gas from Urucum to Manaus, but it was carried out. These things came from that time. This is the merit of President Fernando Henrique, who asked that a document be made and had the notion of the axis of everything which started "Advance Brazil". On August 31 and September 1, 2000, there will be a meeting of all the presidents of the "cucaracha Holland", South America, and they are going to open it out, instead of "Advance Brasil", "Advance South America". There's a document with the theoretical bases of this. It's full of technical back-up, chaos theory, non-linear mathematics, complicated. No one understands it, so we published the essential for the general public. It's no good making a show of knowledge if no one wants to know about it.
I belonged to the Ministry of Strategic Issues, which is an extension of the Presidency of the Republic. I had a considerable authority as I talked in name of the President. But what he definitely wanted from me were these things which I am talking about. He wanted a new development process. The theory is there, a new division in Brazil, not the federative division, but the division into economic areas. That federative division was made in colonial times, those hereditary regions called capitanias, all in the interest of the sugar mills, the landowners, it was all in people's pockets. So you divide, for example, in the Northeast, Paraíba, Rio Grande do Norte, Ceará, Pernambuco, all the same thing, you make a single economic block. Then you have the notion of synergy which everyone speaks about and no one knows what it is: synergy is the multiplication of interfaces, this is the notion of the chaos theory! Two and two can be five, but they can also be three. So with the money that you spend to join these four states up into five, if you do it as a block you will spend ten million dollars to carry out a determined type of work. if you consider them as states which are federatively separate, you will spend the double to obtain the same result. It is this federation which is hampering us, so change it. He had the courage to do things like this. Obviously he had nothing to do with this, we put it into his head. But he had the courage to touch it. So much so that he asked us to do it, and we did it. This study began like this, and then there was the notion of axes. Itamar doesn't like me, and with everything I did, he told me: "Get rid of it." But Fernando Henrique called me and asked me to do this job and gave all his support, the oscillation of the axis is also not very well understood, and there were a number of deviations from the original concept. Now he's asked me to start it up again and is going to transform "Advance Brazil" into "Advance South America " with the integration of South America the same way it is there.
All this has a vast documentation. We worked with their engineers, a lot of work was done on it. I like this type of thing, somewhat inquisitive, looking for the pest, looking for something to scratch yourself with.
PRESENT ACTIVITY[edit | edit source]
After I left all of this, we got into this area a lot, we were already doing this large-scale project, the logistics in the Southeast of Brazil, called CDSE, but that's another story.
Nowadays the Vale also takes part. The Vale, CSN, Unibanco, Mitsubitshi, Telemar, various companies. It's a business that's taking off. It became known as Sepetiba, but it's nothing to do with it. It's a big thing in itself.
Now I'm a lone wolf, I'm like housewives. I'm on the advisory board of a number of Brazilian and foreign companies.
HOMAGES[edit | edit source]
I've received homages I've deserved and others which I haven't. I have the most important award from Japan. I've just received one from the Portuguese government, the most important award from the Portuguese government, which the President of Portugal gave me. I have the most important award from the German government and also from Austria. I don't worry too much about this, because there's a lot of hypocrisy in all of this. I am an elected member of the Russian Academy, in the area of Mathematics. This is good because it has a lot of merit, it is not just a decoration to flatter you, it is something which we made a contribution in order to get it. Though I've left Mathematics to a certain extent. Because you can't do everything, and it requires that you're constantly updated and it takes up a lot of time.
THIS STATEMENT[edit | edit source]
It's been a great experience. I'm not a masseur, and I'm not saying this just to please. First, I liked it. It's a massage for the soul. I think its level is very good. What I liked most, what I think is most important, is that if you don't create a memory, you don't create tradition, and with no memory or tradition, you're nothing, you don't even know who you are, you lose your own identity. But you must take from all of these things that which is important. Not that what I am saying is best. You'll reach your own conclusions, but value that which is important, and don't concentrate on the useless chatter. Get that which is important, because this will be a historical reference. In the future a lot of people will read this as a historical reference, in search of the truth. First, it is necessary just to say that which is really true, there is a lot of blackmail in history because it is written to attend to certain interests. But you only build on top of the truth, and so if you want to build a better country then you should separate that which was successful from that which went wrong, but with an absolute purity of spirit, purity of soul.
I must say that I've learnt a lot of things through reading, but I've also learnt a lot of things through conversation. The oral is not as a lot of people think, useless, because talent is to a great extent interest, if you have interest, inquisitiveness, you will look for knowledge, and if you're not interested you'll learn nothing, but if you're interested in something, this is really important, then you're alert. This is what talent is!