Interview: Chris Daes of Tecnoglass Says the Company Has Big Plans For Continued Growth
Date: June 12, 2023
The rapid growth of Barranquilla-based Tecnoglass (NYSE: TGLS) makes the company seem like a high-growth startup, but the Colombian-origin aluminum and glass manufacturer just celebrated its 40th birthday. In Colombia, the company is well known as a socially conscious national champion, but even though over 90% of its products are exported to the United States, the company still has only around 1% of total market share.
With its hurricane resistant and energy efficient high-technology glass products, Tecnoglass and its subsidiary ES Windows dominates the South Florida market but is just now starting to expand in earnest throughout the rest of the United States. Finance Colombia executive editor Loren Moss sat down with Tecnoglass Chief Operating Officer and co-founder (along with his brother José Manuel) Christian Daes to talk about how the company’s solid foundations underpin its high-growth outlook and recent activity.
Finance Colombia: I’m here with Chris Daes, the COO and cofounder of Tecnoglass. We are here in sunny Barranquilla, it’s always sunny here. I saw it only rain once, and boy did it rain! [Laughs].
Chris Daes: [Laughs] When it rains, it pours.
Finance Colombia: Well, it’s great to be here again at Tecnoglass operational headquarters, the factory site basically, and you guys are coming off of a great year, so first, congratulations. I already talked to (CFO) Santiago about that. So let’s talk a little bit about…I know that you just came off of a great quarter too, that was announced last week, so the good news just keeps coming. So I think that you guys obviously have been doing a good job here. I’ve seen you grow from…the first time I was here you had less than 4,000 employees, I think you’re now about 10,000, that’s amazing. And so, tell me a little bit. We won’t go too deep into the numbers, but just tell me a little bit about, let’s recap the great first quarter that you had and the strong start to the year.
Chris Daes: Well, it’s becoming usual that every quarter we give good news: that we grew, that we are doing better, that our margins are improving, that our backlog is growing, so I sometimes think that I’m living in a dream, and I wouldn’t like to wake up. The truth is the company is doing so good, we’re trying to keep it that way, we’re working hard to make sure that it continues to be moving that way. Quarter two is looking great too. So here we are, looking for opportunities, looking for new markets, looking for new geographies. Sales went up 60% in quarter one compared to quarter one last year, EBITDA almost doubled, profit almost doubled, and we think the rest of the year is going to be very similar to quarter one, only better, and we really believe that 2024 is gonna be the best year for the company ever. It’s looking that way, we get in a lot of new orders, construction is booming, still, you know, we’re getting, I don’t know if the market is slowing down or not but we are growing, maybe we are eating too much of the pie.
Which, either way is good news, and we are moving into new geographies to make sure we can continue the train.
Finance Colombia: You know let’s talk a little bit about that, because you guys already have a great strong base in Florida, as most of your sales go into the United States, but you guys now are expanding. I know that you attended a major trade show a few months ago, you guys are opening showrooms across the country, you know I was in the Bahamas, and I was at my cousin’s restaurant, which is on one of the remote islands, and I met a guy, and I said, you know, “what do you do?” And he said “I’m a Tecnoglass dealer (Palm Beach Glass Specialties)” and I said “really?!”, you know, so you guys really are growing. But tell me a little bit about the expanded footprint in this new… I guess not retail, like to the consumer, but showrooms and a new presence across the country.
Chris Daes: Well it’s a lot easier, I mean it makes a lot more sense to open new geographies, because then we take the stress off of Florida, we don’t need to, you know, worry too much about Florida. Even though, like I was saying yesterday in a phone call with some stockholders that were interviewing me, I said, “we don’t want Florida to be 50% of the pie, but we grow outside of Florida, and Florida keeps growing stronger than the outside too!” So even though we try to move away from Florida, Florida has a hold of us and won’t let us go. But anyways, we opened in South Carolina a show room, in Texas, Arizona, Manhattan, in California, and in so many places where they want our windows. And we’re coming with new products, for example what happened with the garage door; we developed a new garage door and it’s already selling two and a half to three million dollars a month. So it’s unbelievable what the company is doing, what our research and development team is doing, the production guys, the selling side is, I mean, we have no complaints, so it’s like a perfect story.
Finance Colombia: That’s great, you know I talked to Santiago a little bit about the backlog increasing, and there’s two ways that happens, you can either get more sales, or not have enough capacity. Now, I know you are getting more sales, but you guys are also taking steps to increase your capacity, your output, your production capacity here in Barranquilla, right?
Chris Daes: We have increased the capacity so much that now we can produce 20% or 30% more not working on Sundays. Before we used to invoice 30% less and have to work on Sundays, that’s how much the capacity has increased. And we are adding more, now in September and October we’ll add another big percentage of capacity that will make us be, you know, we can [our delivery times] to three weeks to be there in the States, this is gonna be unbelievable, what we are going to be able to do. We want to have our customer’s satisfaction at the maximum level possible, customers are happy, services are getting there soon, reports are coming soon, the replacements are coming soon, I mean, like I said before, this is a dream come true.
Finance Colombia: You know it’s great, and I’d love to—now is not the time, but I know you guys have a tremendous story going back to how you and your brother first started. You know, even making solar stoves, and that’s a story that I’d love to tell with you one day, even before that, even the story—your family’s story and everything like that, we won’t go into that here. But really, when you say it’s a dream come true, it’s amazing, because I know, knowing a little bit about your story and the Tecnoglass story I know that’s true on so many levels, and I want to get into kind of, some of the things that you’re going to give back. But before we do that, I want to talk a little bit about…you know I’ve been down on the floors, you guys have automation in place, you guys have state of the art facilities, all coupled with the robotics, and the computerized measurements and quality controls and things like that. So I do want to talk a little bit about: do you need to expand the output capacity here in Barranquilla to meet current demands, are you concerned about the—there’s not really a slowdown right now in the US but the growth is slowed, it’s still growing, are there any concerns about the economy right now, and how that fits into your prognosis?
Chris Daes: I like to read a lot, and one of the things I read lately from somebody in the US, was that they were in another business, and they were expanding and he got a question saying, “why do you expand if the economy might slow down?” And he says, “maybe we’ll miss it now, and with it too much today, but in a year and a half, this comes around, turns around, then we’ll be ready when the economy booms again.” We are ready for the next high, because economy always keeps; you know, slows down, goes down, and then goes up again then slows down and goes up again. If you look at the chart from the Dow Jones for example, the last 50 years, it’s always going up.
Source: Finance Colombia
https://www.financecolombia.com/interview-chris-daes-of-tecnoglass-says-the-company-has-big-plans-for-continued-growth/#google_vignette
