LUPA3

Lupatech S.A., traded on B3 under the ticker LUPA3, is a Brazilian industrial company whose history began in 1980 with the founding of Microinox in Caxias do Sul (RS). Originally focused on casting investment-cast steel parts, the company expanded its activities over the decades through organic investments and successive acquisitions. In 1984, it consolidated its entry into the industrial valves segment with the creation of Valmicro and, starting in 1987, began receiving investments from venture capital funds, which supported a cycle of growth and diversification. In the 1990s, in addition to expanding its technological portfolio with the founding of Steelinject, the company began an internationalization process, acquiring companies in Argentina linked to the valve sector and, indirectly, to the oil and gas chain.

From the 2000s onward, Lupatech intensified its acquisition strategy, incorporating Metalúrgica Nova Americana (MNA) in 2000, which specialized in ball valves for the oil chain, and later Carbonox in 2005, which added investment casting capacity in Veranópolis (RS). In 2006, it carried out its initial public offering on B3, raising funds to finance industrial expansion and new businesses. In that same period, it acquired Metalúrgica Ipê (Mipel) and resumed industrial operations in Argentina, in addition to entering the offshore mooring rope segment through the purchase of Cordoaria São Leopoldo’s business. Between 2007 and 2008, the company consolidated a relevant presence in services for the oil industry with the acquisition of companies such as Gasoil Serviços, K&S, and Fiberware, while also raising funds in the international market through the issuance of perpetual bonds.

This leveraged growth cycle ended up generating high indebtedness which, combined with complex acquisitions such as that of San Antonio Internacional’s Brazilian operations in 2012, put pressure on Lupatech’s financial structure. The partial conversion of debt into equity and the attempt to rebalance capital were not enough to neutralize the effects of unexpected liabilities and operational deterioration. Starting in 2014, the combination of a sector crisis in oil, falling international prices, and domestic impacts associated with the Lava Jato operation undermined the assumptions underlying the out-of-court restructuring plan. In 2015, the company entered Judicial Reorganization, restructuring debt, divesting foreign assets, and discontinuing less strategic operations, especially in oil field services. This reorientation led to a stronger focus on manufacturing, a process that culminated in the formal conclusion of the Judicial Reorganization in March 2023.

Currently, Lupatech LUPA3 structures its activities into two major manufacturing business areas: the metal-mechanical segment and the high-performance synthetic fiber-based segment. In metal-mechanics, the company groups the manufacturing of industrial valves, other equipment, and steel casting activities, operating with different forming and machining technologies. In the synthetic fibers segment, it produces high-performance ropes for naval, offshore, and industrial applications, as well as items in composite materials such as fiberglass-reinforced polymer tubes and poles. Industrial operations are organized in specialized manufacturing units, with production processes tailored to each product line and integrated into a supply chain that combines domestic and imported inputs.

Lupatech’s units in Brazil play distinct roles within the portfolio. In São Leopoldo (RS), Lupatech Ropes is dedicated to manufacturing synthetic fiber ropes for maritime applications, towing, lifting operations, mooring hawsers, and anchoring oil platforms in deep and ultra-deep waters. In Nova Odessa (SP), Lupatech MNA produces ball, gate, globe, and check valves to order, focused mainly on oil and gas applications under the MNA and Tecval brands, as well as other equipment for the oil industry. Also in Nova Odessa, Mipel manufactures valves for fluid and vapor control, cocks, faucets, actuators, and industrial automation systems, and also acts as a distributor of these products, both of its own manufacture and third-party products, including components and spare parts.

The Veranópolis (RS) unit, under the Valmicro brand, concentrates the production and commercialization of industrial valves for several segments, using the Valmicro and Mipel brands and both direct and indirect sales channels. This plant serves sectors such as chemicals, pharmaceuticals, oil and gas, food, machinery and equipment, pulp and paper, and petrochemicals, among others. Through Mipel Microfusão, located in the same complex, the company supplies investment-cast components to customers in multiple industrial sectors, leveraging its expertise in precision casting. In Feliz (RS), Lupatech Fiber Liners produces fiberglass-reinforced polymer tubes for internal lining of oil production and water injection pipes, as well as fiberglass-reinforced polymer poles for electric power distribution and transmission, public lighting, crossarms, and service entrance poles. This combination of units demonstrates a portfolio with a strong presence in the oil and gas chain, but also with relevant applications in electric infrastructure and industry in general.

From a product standpoint, most of Lupatech’s revenue is concentrated in manufactured goods. Between 2022 and 2024, the products segment accounted for more than 99% of consolidated net revenue, with emphasis on industrial valves (ball, control, butterfly, gate, globe, and check), pneumatic actuators, special valves, Y-strainers, expansion joints, spare parts, synthetic fiber ropes, tubes, liners, poles, and other composite artifacts. The services segment, with a smaller percentage share of revenue, encompasses projects and development of components in composite materials, as well as solutions for internal lining and refurbishment of oil production and produced water injection pipes. The production process combines investment casting, precision machining, assembly, rigorous quality testing, braiding of high-performance synthetic yarns, and filament winding techniques for the manufacture of fiberglass tubes and poles.

Lupatech’s customer base is predominantly corporate and concentrated in capital- and technology-intensive industrial sectors. Petrobras and its subsidiaries stand out as one of the main buyers, often accounting for more than 10% of annual net revenue, with particular impact on the valve business for the oil and gas chain. In addition to Petrobras, the company serves engineering, construction, and procurement (EPC) firms involved in FPSO construction, gas transportation and distribution operators, other oil companies, purchasers of cast parts, and industries in the chemical, food, pharmaceutical, pulp and paper, and machinery and equipment segments. Sales take place through direct channels with large clients and through resellers and distributors in certain niches, supported by internal sales teams and commercial representatives. Geographically, most revenue is generated in Brazil, with occasional exports to countries such as China, Kuwait, and other markets, which represented a smaller fraction of total revenue between 2022 and 2024.

From a regulatory standpoint, Lupatech operates in an industrial environment subject to licensing at the municipal, state, and federal levels. Its industrial plants depend on permits and periodic renewals, especially related to urban and environmental aspects, although the company itself considers its activities not to be highly polluting. Obtaining and maintaining environmental licenses has become progressively more complex, with occasional requirements for offsets such as civil works around the facilities, adding layers of regulatory management. Operations do not depend on public concessions or licensing of third-party patents on a relevant scale; the company maintains registered trademarks in Brazil and, occasionally, seeks patent protection for certain elements of products and manufacturing processes. Regarding the environmental, social, and governance (ESG) agenda, Lupatech does not publish specific reports, does not conduct a greenhouse gas emissions inventory, and has not, to date, adopted formal materiality matrices or ESG key performance indicators, which is justified internally by the recent financial restructuring context and the activity levels of its manufacturing units.

Lupatech’s common shares, identified by the ticker LUPA3, remain listed and traded on B3, representing the main means of raising funds in the Brazilian capital markets. The company operates as a supplier of industrial components and solutions in advanced materials, focused on the oil and gas, process industry, and infrastructure segments, maintaining a set of integrated manufacturing operations in southern and southeastern Brazil. Its trajectory combines phases of expansion with acquisitions and internationalization, financial restructurings, and a strategic repositioning toward manufacturing businesses, notably valves, synthetic ropes, and composite materials for specialized industrial applications.