The company is still family-owned. It was founded 120 years ago by a German immigrant, Johann Karsten, in the appropriately German-sounding town of Blumenau, São Paulo. The company is proverbially cautious. Its gearing has never gone above 40% of its capital. This conservatism meant that it was able to weather the challenge in the 1990s from Asian textile companies. Several of Karsten's more gung-ho rivals, such as Hering and Teka, went under in this period.
Another reason why Karsten survived the challenge from Asia is that it has exported, rather than just relied on the domestic market. Karsten started to export in 1971 and has tried since then to ensure that half its sales were exports. In 2002, around 60% of its total sales of US$100m were exports. In volume terms, exports rose by 11% last year and hit 42% of total output.
Karsten is interested in both the US and the European markets. It opened an office in the US in 1996 and now owns the Terrisol business there. Its German office opened in 1998. The company specialises in selling upmarket products in 40 countries. Its managers stress that it does not want to be a producer of commodity products. While Karsten has profited in industrialised markets it took a knock in Argentina: it opened an office there in 1997, at the start of the recession, and closed it in 2000, well before the devaluation. Even so, the adventure cost it US$400,000. The company remained profitable, despite the problems in Argentina. In 2002, it made a profit of US$4.5m.
The company's latest initiative is to launch a brand, Marina K, in Europe. It is trying to market the brand in partnership with its existing customers, such as Carré Blanc. These companies have traditionally put their own brands on Karsten fabrics.
The company's vice-president, Joao Karsten, said that this year the company would also try to make a push in its table linens business. This has been overshadowed in recent years by its towel, especially beach towel, business. The company is also looking at developing manufacturing sites outside its Brazilian base.
Brazil's textile exports are doing well this year, In May the country exported US$126m worth of textiles, up 38% on the same month of 2002. The country has recently restarted exporting to Argentina. Even in the collapse last year Argentina still imported over US$270m of textiles from Brazil. In 2001, its imports were over US$400m.
End of preview - This article contains approximately 517 words.
Subscribers: Log in now to read the full article
Not a Subscriber?
Choose from one of the following options
