Antonio Rios Amorim

Antonio Rios Amorim
Chairman and CEO

Corticeira Amorim SGPS SA

Antonio Rios Amorim holds a degree in Commerce from the Faculty of Commerce and Social Sciences of the University of Birmingham and has completed various Business programmes, such as the Executive Program in Business Administration: Managing the Enterprise – Columbia University Graduate School of Business, Managerial Skills for International Business – INSEAD and Executive Program in Strategy and Organization – Graduate School of Business Stanford University.

He has served as Chairman and Executive Member of the Board of Directors of Corticeira Amorim SGPS SA since 2001. Prior to that he was Member of the Board of Directors of Figueira – Praia, Director of Operations of Amorim Enpreendimentos Imobiliarios and Executive Member of the Board of Directors of Amorim Hoteis SA. He currently serves also as Chairman of the Company’s Executive Committee.

 

Watch interview highlights

 

A view from the top

In this short video, Antonio Rios Amorim shares his view on today's key business issues: risk, volatility, innovation, talent, and growth

 

Quotes

Antonio Rios Amorim

Antonio Rios Amorim

Chairman and CEO, Corticeira Amorim SGPS SA

It is clear an economy that is going to be de-levered is going to have credit restrictions in the market so your investment policy, your acquisition policy has to be a lot more prudent than ever before.

Antonio Rios Amorim

Antonio Rios Amorim

Chairman and CEO, Corticeira Amorim SGPS SA

If volume growth is not going to be there, you need to have value growth, and in order to have value growth you need to offer the market innovative solutions, products, materials. So, we are focusing a lot more on innovating across the board in our company.

Antonio Rios Amorim

Antonio Rios Amorim

Chairman and CEO, Corticeira Amorim SGPS SA

When you talk about innovation, you are not only talking about R&D, you are also talking about product development, you’re also talking about process development.

Antonio Rios Amorim

Antonio Rios Amorim

Chairman and CEO, Corticeira Amorim SGPS SA

Today, people prefer to come and work for a company like ours because we can offer them an international career. Most Portuguese companies cannot offer recruits that opportunity.

Antonio Rios Amorim

Antonio Rios Amorim

Chairman and CEO, Corticeira Amorim SGPS SA

We require more competencies as our international presence grows. Because we are becoming an international company, we have access to an international pool of potential recruits.

Antonio Rios Amorim

Antonio Rios Amorim

Chairman and CEO, Corticeira Amorim SGPS SA

Why shouldn’t we put the skills and experience of expats to use in a broad, company-wide managerial function rather than have their talents restricted to one particular country?

Antonio Rios Amorim

Antonio Rios Amorim

Chairman and CEO, Corticeira Amorim SGPS SA

A few years ago you would see a lot of resistance in people when offered a chance to go and work overseas. Today, we have people asking us to be placed in more than thirty companies that we have overseas.

 

Read interview transcript

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As you see it, what is the outlook for the global economy?

I think that Europe will be coming out of the situation on top. The current issues with Portugal, Greece and Ireland, in my point of view, are taking too long to be solved but the solution will strengthen the Eurozone in the long-term. However, once that issue is solved, I think that there is another uncertainty in the world, which is the American financial situation and I think that, somehow, let us hope, the situation will not take too long to solve, because, in the meantime, the American authorities have taken the necessary measures for the economy to continue to grow and for the financial problems to be solved in a very unique and particular situation, completely different from the European one. But I believe that both zones will be coming out of this current difficult time stronger than probably they were before. Despite some time to correct these situations, I think that over the long term this is certainly positive for the world economy.

What should governments be doing to support economic recovery?

I believe that it's always easier for the government to raise taxes, increasing their revenues, than reducing government spending and public spending. So I think that we will be seeing that in the short term. In the long term, of course it is unsustainable, as such. But I believe that both European and North American authorities should be worrying about something probably simpler that has been overlooked over the last few years. We know that Europe is not going to be growing a lot in the coming years. But we know that there are some other economies in other countries, emerging markets that will have economies growing 5 to 10% on a yearly basis. Countries like Turkey, countries like Brazil, countries like China, some eastern European nations – we'll be seeing those economies growing. Unfortunately, we have, today, disproportionate trade barriers to export our products from Europe or even from North America to some of those fast-growing economies. We could, somehow, offset slow growth in Europe and possibly in the US by increasing our turnover in countries that are growing a lot more.
The only problem is that these fast-growing economies have defended themselves against imported goods through trade barriers. So they can enter our markets basically on a free-trade basis and we still have barriers stopping or slowing down the European countries’ exports into those markets, and I think those should be somehow renegotiated, removed, in order for us to have proportionate trade rules amongst ourselves.

In what ways has your strategy changed over the past year?

We are looking more and more at the balance sheet. We are looking much more at working capital needs. It is clear an economy that is going to be de-levered is going to have credit restrictions in the market so your investment policy, your acquisition policy has to be a lot more prudent than ever before. But it is also clear that the markets are not going to be growing. So you really need to invest. And the focus of our company at the moment is on innovation - innovation in processes, in new products, in new applications, innovations that can really enhance the perceived value of our products. If volume growth is not going to be there, you need to have value growth, and in order to have value growth you need to offer the market innovative solutions, products, materials. So, we are focusing a lot more on innovating across the board in our company.

How is your approach to innovation changing?

Our core business is comprised of five business activities and we have created a research and development unit in each. But we have also created a corporate research and development unit that is responsible for developing new products, new applications, and new combination of materials of cork and other products. I believe, that when you talk about innovation, you are not only talking about R&D, you are also talking about product development, you’re also talking about process development. We have basically reviewed most of the processes we have had in our company for years and years, and we have changed a few of them for productivity gains, for efficiency gains, and, at the same time, developed a lot closer relationship between ourselves and some of our key partners and key customers around the world. Today, we are a much more customer-focused and much more customer-driven company. We are currently working with our most important clients in order to find customised solutions for their needs, and expect that will generate additional business for our company. So, turbulent times also demand creativity and innovation, and I think that we need to look and to keep that positive side of this economically uncertain moment in mind.

Is your approach to managing enterprise-level risk changing?

At the end of the day, managing risk is basically the central job of management. And the decisions that we take on a daily basis have got to be considered through the lens of risk management. I believe we need to be very prudent; we need to have a clear understanding of the current moment and the current crisis. This will bring a lot more realism, a lot more pragmatism, a lot more disciplined solutions to the day-to-day running of any company. You cut what is not necessary, what is not fundamental, and you keep the essential things in order to make sure that you don't deviate from your long-term focus. And at the moment, our focus is on our working capital needs and on balance-sheet management. It is very, very important to demonstrate that your company is not only generating the necessary EBITDA and cash flow, but is also proving to be very solid and merits the confidence of global financial institutions as we have managed to do in Europe. So, this is a concern that we never had before, but we need to have today in order to make sure that we will survive and will win the battle for the future.

In what ways have environmental or social concerns become an element of your corporate reputation or revenue growth expectations?

This is a question that I am most glad to answer because I don't think that you can find a more natural and sustainable material than cork. For people that do not know, we don't cut down any trees; we just harvest the bark of the tree every nine years. So we believe that we are on the side of the environment and sustainability. Of course, we try to communicate to the various markets the features, the advantages and the economic benefits of using cork products. We have done different life-cycle assessments of our various products and materials, and undoubtedly cork is a unique, sustainable product. Sustainability, since 2006, has been therefore a major area of focus for the whole company - not only internally where we have corrected a few practices - but mainly promoting cork and showing people the advantages that cork has as material. And we've been very, very positively surprised by the enormous enthusiasm that most customers, business partners, and consumers have given to cork as a material. The issue on which we have to concentrate the most is on communicating, on educating, letting people know what cork is. And if you do that, I'm sure people will be convinced that they are, by selecting cork, taking a very sustainable, social and environmentally responsible attitude.

In what ways has talent become a strategic issue for you?

I think that it’s clear that human resources are the key to the success of any company. It is clear that the success of every company depends on recruiting, developing and retaining the necessary talent it needs. Our company has been performing very well despite the crisis that has affected Portugal. So as a result of our solid performance and our balance sheet and, most importantly, due to the international scope of our business, we have managed to deal with our talent needs in a very effective way. Today, people prefer to come and work for a company like ours because we can offer them an international career. Most Portuguese companies cannot offer recruits that opportunity. Ironically, a few years ago you would see a lot of resistance in people when offered a chance to go and work overseas. Today, we have people asking us to be placed in more than thirty companies that we have overseas, which is fantastic because at the same time we are exporting Portuguese executives to work overseas we are bringing in some of our executives from around the world to work in Portugal. And I believe that this is going to make us a real international company with an international culture.

Are you confident that you will have the talent needed to deliver your strategy over the next few years?

Yes I am. First, because the company, as I said, is performing very well. And secondly, because we have a very young management team inside our company. The top leaders of our organisation today are in their forties and early fifties, which means that we will have a talented and experienced team in place for quite a few years. Of course, we don't have all the competencies that we are looking for, such as in product development and marketing. We require more of competencies as our international presence grows. And because we are becoming an international company, we have access to an international pool of potential recruits.

How is talent factored into your strategic plan?

In the current financial conditions, HR, in my view, must concentrate on two important areas. First talent recruitment, development and retention. We have very talented young people that need to be shown that they can have a very rewarding career inside our company, both in Portugal and, if they wish, overseas. But we also need to do more shop-floor management from an HR perspective. Today, many people are living through very hard times and we need to understand how our company can help, can support, can somehow give them some comfort to face the economic difficulties that some of them face. So, we have a twofold approach to HR matters. On the one side, develop young executives. But at the same time, we need to be very, very close to the people that are facing difficult economic circumstances. And we have introduced a series of projects and programmes to make sure we provide support to our people who need it.

Are you finding that you need to move more personnel across borders to fill talent gaps?

We are promoting that. I mean, at the moment, we are encouraging people to become expatriates, and we are promoting our people overseas to come and work in Portugal. And the response has been very, very positive. Today, we basically have more people asking for an opportunity to work in a different country, than we have places to fill - which means that we need to continue to grow in order to retain our most talented people. I think this is very, very positive for our company.

What skills or levels or functions are you moving most often and into what regions?

Three or four of the most senior people we have in our management structure are expats now living in Portugal. We're getting to know them better, and they’re are getting to know the business better and organisation better. Why shouldn’t we put the skills and experience of these people to use in a broad, company-wide managerial function rather than have them there talents restricted to one particular country?

What are the challenges and opportunities associated with recruiting members of the Millennial generation?

Portuguese universities do a very good job of training engineers, managers, logistics people. So many of the kinds of people we need, we can recruit from local universities. But then it's up to us to give them a project, it's up to them to provide the necessary professional development, and it's up to us to help them build a long-term career within our company. The people we recruit today put a lot of value on the concern we show for them. And conversely, the young people we recruit bring a lot of energy and innovation to the company. So every year you need to refresh your structures with young people that have very interesting skills even though - being Portuguese - they leave university thinking that they don't know anything about anything. But it's up to the company to give them a specific task that will raise their confidence and self-esteem up so that they become competent professionals who can move the company forward.

Are you collaborating with educational institutions or governments to better develop a pipeline of future employees?

We are. At some universities, there’s a period during the last school year that has to be completed as an intern in a company. So, every year, we welcome several engineers that need to conclude their academic programme by training with us. And this is something that is very important to our company because we work with them for at least six months and during that time we get to know them well. At the same time, I am on the board of a nearby business management school, which is also a very important place recruit. I'm also on the board of another Portuguese university that has some specialised programs in forestry, oenology, and winemaking and their students are recruitment targets for us. We also work with educational institutions and universities to customise some continuing education programs for some of our people. We send them on specific programmes for marketing, for sales skills, for negotiation skills and the results have been very positive. People attending these programmes come out of them liking them so much they want more. That’s a sign that you have talented people with ambition that want to grow and develop. And I think that it's up to our company to provide people with additional skills and we are very willing to do so.

In what ways have the allocation of your time and attention changed over the past year?

In a way, it's back to basics. I spend a lot more time with our market-facing people and trying to deepen our relationships with important customers. In the current economic climate, it’s absolutely crucial to keep the focus of the organisation on the fundamentals, which, to us, means being there to serve the needs of our customers.