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CEO’s words

Speech proffered by Fernando José Gomes Landgraf during his inaugural ceremony on August 27, 2012:

Ladies and Gentlemen,

Today I take over the position once occupied by Adriano Marchini, Ary Torres and Alberto Pereira de Castro, IPT’s first presidents.

And that of Ary Plonski, Vahan Agopyan and João Fernando, the most recent ones.

I am fortunate to be able to stand on the shoulders of these giants.

Those were the words of Isaac Newton, who stated he could see farther by standing on the shoulder of giants. If he, a brilliant mind, made a point of saying this, even more fitting that I should do so.

I’m lucky to be able to stand on the shoulders of the entire staff of IPT, this team that succeeded in earning revenues of 88 million reais in 2011. Together, we will see much farther.
Fernando José Gomes Landgraf

After all, the state government invested 150 million reais in the last four years, so we should be able to see farther. But if it were simply a matter of seeing a little farther, all it would take is the purchase of a telescope, without the need for spending so much...

Governor Alckmin was very clear in a recent meeting: the government wants to see results from this investment. Measurable results. This demand has guided me in defining the goal of this management:

Our goal is to increase IPT’s relevance and impact on Paulista and Brazilian industry and society in general, today and tomorrow.

We must be able to measure IPT’s impact on industry and society. Today we know that for every real of funding allocated by the government, IPT sells two reais in services to industry and government agencies. We know that the impact is greater than that. We assume that the result of the services we offer creates more value than merely its price. That’s what we must know how to measure. If MIT can measure its impact on American society, we must be able to do so too.

Almost 50% of IPT’s revenues come from the metrology, testing, analyses and calibration services that IPT sells annually to four thousand clients. What fraction of these services leverages the creation of value in these industries? We must try to assess this.

As an example, today we are inaugurating an investment of three million reais in the Center for Built Environment Technology to assess the quality of solar water heaters manufactured in Brazil, by means of the Solar Simulator. In so doing we expect to support Brazilian industry in producing solar collectors with higher energy efficiency.

Fifteen percent of IPT’s revenues come from Research and Development projects, which are expected to generate Innovation in industry. We refer to projects with industry. IPT’s Guidance Board, whose members are businessmen, strongly urges us to increase this percentage. Increasing this percentage is one of the four innovation goals we follow up on monthly throughout the year. However, this increase has been distressingly “slow and gradual.” Despite all the entrepreneurial mobilization around the issue, Brazil's capacity to create value through innovation is still limited.

Again, our goal is to increase IPT’s relevance and impact on Paulista and Brazilian industry and on society, now and tomorrow.

It is not enough merely to measure IPT’s impact. We must increase the relevance of IPT’s contribution to industry and society. It is our duty to help industry and government agencies to innovate. It has always been our duty to provide technical support to the State in planning and monitoring its works and achievements. Now, with Public-Private Partnerships, new ways of planning and technical support must be developed, and IPT wants to collaborate. We are participating in the conceptual design of the waterway ring, we already strongly support the São Paulo State Transport Regulatory Agency – ARTESP, and are strengthening our relationship with the State Secretariats of Energy, Transportation, Metropolitan Transportation and others, always seeking to determine how to contribute to increase efficiency in public management. Today, 40% of our revenues come from this type of work.

Increase IPT’s relevance and impact on Paulista and Brazilian industry and society, today and tomorrow. Paulista and Brazilian. Paulista is Brazilian. We must support Paulista industry. We have supported initiatives of the Investe São Paulo agency [São Paulo's Agency for the Promotion of Investments and Competitiveness], but we must expand this effort. With the support of this agency we will hold meetings with São Paulo’s automotive industry to discuss ways to facilitate the use of the Programa Inovar Auto [Automotive Innovation Program].

IPT‘s largest project today is linked to an important industrial segment in which Paulista production is enormous: the biomass gasification project, which is aimed at making better use of sugarcane bagasse and straw. The project has been negotiating with a group of companies for three years and its 80 million real funding is now very close to being approved by BNDES – Banco Nacional de Desenvolvimento [Brazilian Development Bank], FINEP – Financiadora de Estudos e Projetos [Research and Projects Financing Agency] and GESP – Governo do Estado de São Paulo [São Paulo State Government].

But IPT also supports industry outside the state of São Paulo. One of our inaugurations today refers to the furnace for solar-grade silicon purification by directional solidification, which involves an investment of 1.4 million reais. If IPT succeeds in producing solar-grade silicon by December 2013, our industrial partner in [the state of] Minas Gerais will be able to shift his position as an exporter of metallurgical-grade silicon, at 3 dollars per kilogram, to that of exporter of solar-grade silicon, at 30 dollars per kilo. In the last 12 years, the global market for solar-grade silicon has grown one hundred fold, from five thousand tons to 500 thousand tons per year.

Increase IPT’s relevance and impact on Paulista and Brazilian industry and society, today and tomorrow. Today and tomorrow. Our sales effort seeks to augment IPT’s impact today by selling services. This is doing well. But we must think of tomorrow.

Of the tomorrow of Brazil, of São Paulo, and of IPT itself. IPT’s investments in Bionanomanufacturing are clearly a gamble on Brazil’s future, a gamble on economic growth in these directions. But gambling means taking risks. Future investments in biomass gasification are also a gamble on the future of São Paulo, but they will depend on the evolution of international oil prices. If this project is not started today and the price of oil reaches 120 dollars a barrel in 2020, it will be too late. Investments must be made today.

But what about IPT’s future? This will depend heavily on increased partnerships with academia, especially with the University of São Paulo – USP in general and also with its Polytechnic School, because only thus will IPT perform its role as a link between university, industry and society. Richard Nelson, of Columbia University, demonstrated the importance of this for innovation in emerging countries.

IPT’s future will also depend on the effectiveness of a Job and Salary Plan. We need to provide a horizon for the professional growth of new generations of IPT employees hired through the latest civil service exams. And IPT’s future will also depend on a new agreement with the State Government, a multiyear contract that has heavyweight interlocutors on the Government’s side, interlocutors who can discuss the goals of the contract qualitatively and quantitatively. None of IPT’s international counterparts, such as Sweden’s SP Sweden, Korea’s KITECH, Taiwan’s ITRI, and Germany’s Fraunhofer Institutes, operate with a rate of self-generated revenues as high as that of IPT today. Forcing the revenue ‘today’ to such an extent undermines the impact and relevance ‘tomorrow.’

Increase IPT’s relevance and impact on Paulista and Brazilian industry and society, today and tomorrow. This goal will be achieved provided all of us, IPT employees and directors, articulate our actions very clearly with our business partners, the government and academia. We are counting on all of you.

Thank you.