My

My name is José Pereira and I am a director of Avelino Farinha and Agrela SA (AFA) in Madeira. The company was established in 1980 and originally specialised in residential development.

These projects helped the company’s turnover to increase to €140 million in 2006 with a 870-strong workforce.

HITACHI

AFA’s fleet of construction equipment consists of around 150 Hitachi excavators, the most popular being the ZX210. Since 2003, AFA has bought over 40 units, ranging from seven to 50-tonne models. The latest additions are a new Hitachi ZX225US and three ZX210-3 excavators.

Experience

We have used Hitachi machines for the past 20 years. We have our own in-house maintenance programme, which helps to reduce downtime and keep our machines in excellent working order.

We realise the value of highly-skilled operators – they are the key to our success. We rely heavily on their feedback in order to make informed purchasing decisions. All of them seem to like using Hitachi machines! Our 200 operators are trained to ensure that the machines are used to their full potential and productivity levels remain high.

The construction industry in Madeira has ALREADY reached its peak. Many projects rely heavily on Government funding, which is now being reduced. Construction companies have benefited greatly from this source of revenue, but are now having to evaluate their future on the island. Ground Control visits the autonomous region to see how Hitachi customer Avelino Farinha & Agrela SA (AFA) is overcoming this situation.

Madeira was discovered by Portuguese sailors in the early 15th Century and was known as the “Purple Islands” to the Romans. Even though its location makes it a geographical part of the African Plate, it belongs politically and culturally to Europe/Portugal and operates under the control of its own Government.

It is now a popular all-year round holiday destination and is famed for Madeira wine, its warm climate and stunning scenery. As a result, it is easy to understand why tourism and public services are the two largest contributors to the island’s economy. However, these are followed closely by construction, which has grown rapidly in recent years.

AFA was established in 1980 and is based in Arco da Calheta, with main offices in Câmara de Lobos, the second largest city on the island. Originally a traditional fishing village, it is situated 5km from the capital Funchal.

The company originally specialised in residential development. It then expanded into road and tunnel construction, due to the increasing amount of work in this sector. The island’s infrastructure is currently being upgraded with the straightening of many roads and numerous tunnels being built. The completed network will weave impressively through the mountains when it is finished in four years time.

This type of work is assisted with funding from the Government. In 1998, AFA was awarded its largest road and tunnel contracts to date. Some of this work is still ongoing, for example it is building a 1,150m tunnel at Campanario in the west of the island. Two of its Hitachi ZX210 excavators are working at either end of the site and using hammer attachments to break through the hard volcanic rock. Once the tunnel is complete, the walls will be concreted and the road constructed.

AFA had other Government-funded construction sites at the time of Ground Control’s visit in May, including coastal protection works. As the land erodes naturally over time, rubble falls dangerously into the harbours below. Concrete walls are therefore constructed to prevent this from happening. Several of the company’s Hitachi excavators were working on the site to prepare the ground for supports by stripping back the land.

Private investment is also a source of income for some construction projects on the island. AFA is currently involved in the development of a new 50,000 capacity sports centre, which has been funded in this manner. Two Hitachi ZX210 excavators started groundworks in October 2006 and are now preparing the foundations.

Madeira is the birthplace of Portuguese and Manchester United winger Cristiano Ronaldo. This has helped to increase the popularity of football on the island. Games from the Portuguese second division football league will be played on the pitch which is expected to be complete for the 2010 season.

Due to the nature of its work, all of AFA’s projects require cement in large quantities. It has developed its own crusher plants at quarries on the island to ensure it has a reliable supply. These facilities receive the majority of the company’s waste materials, which are graded before being mixed with quarry stone to produce the cement.

AFA’s fleet of construction equipment consists of around 150 Hitachi excavators, the most popular being the ZX210. The relationship between AFA and Hitachi Construction Machinery (Europe) NV has been developed with the help of Portuguese Hitachi dealer, Moviter.

It has flourished in recent years and since 2003 AFA has bought over 40 units, ranging from seven to 50-tonne models. The latest additions are three new Hitachi Zaxis ZX210-3s and a ZX225US excavator. This is a high concentration of orange machines for a relatively small island!

“We have used Hitachi excavators for the past 20 years,” comments José Pereira, AFA Company Director. “Our association with Moviter has developed over this time and the service we receive has definitely improved.”

Despite the fact that its headquarters is in Portugal, Moviter has its own dedicated team on Madeira. This has helped to strengthen relations with all of its customers on the island and allowed it to provide good levels of support and service. In addition, AFA has its own in-house maintenance programme, which ensures that any downtime is kept to a minimum.

“We have approximately 50 employees in our workshop on Madeira,” continues José. “This includes two highly skilled mechanical engineers. They ensure that our machines are kept in excellent working order as well as designing and building specialist attachments for various applications.”

AFA has a machine replacement policy of between 10,000 and 12,000 operating hours. When this figure is reached, the machines are usually traded back to Moviter or used for jobs with a higher risk of damage.

“We realise the value of highly skilled operators,” explains José. “They are the key to our success. For example, we rely heavily on their feedback in order to make informed purchasing decisions. All of them seem to like using Hitachi machines! Our 200 operators are trained in-house to ensure that the machines are used to their full potential and productivity levels remain high.”

AFA has contributed significantly to the development of the island through the nature of its work and by employing local people. In 1998, it employed 308 staff, which has now increased to an 870-strong workforce.

The company’s turnover also increased from €70.3 million in 2002 to €140 million in 2006. This is forecast to be a similar figure in 2007. However, AFA is eager to enter new territories and ensure that this increases further still in the future.

“The island has recently been experiencing a period of economic depression,” admits José. “The construction industry is OK at the moment, but has slowed down due to a lack of funding from the Government.

“We are already tendering for contracts in other countries. We will soon commence work on a 320km road construction project in Mauritania. We are also preparing to start work on a similar contract in Senegal.”

AFA has gained experience in various areas of construction industry, which will prove beneficial for receiving future work. However, it has now outgrown the small island on which it is based and is preparing for a working life overseas.
Although the company will continue to be managed from Madeira, the move to new markets is inevitable. Despite this, its commitment to Moviter and Hitachi looks set in stone.