Last year will be one that will be happily remembered for decades to come by many at Companhia Vale do Rio Doce, the parent company of Brazil's leading metal-industry complex. Net income soared to US$857 million, and profit growth grew 36.2% from 1997 -- the best ever in its 57-year history. Gross revenues increased 5.8% and earnings per share went up 36.9%. The posted profit was the largest last year by any non-state-owned Brazilian company in any economic sector. A 2.3% improvement in iron-ore prices, a 7.7% devaluation of the real compared with the U.S. dollar (which boosted the company's competitive power in international markets), and a 15.9% revenue increase in the transportation business units explain the financial side of the 1998 happy ending. The contributor to success is strategy. "The company deepened last year a [review] process of its cost structure, launched soon after the May 1997 privatization," says CEO Jrio Dauster. "Contracts were renegotiated and staff reduced through retirement incentives that avoided labor disputes. Productivity increased." Between December 1996 -- the last full year before privatization -- and December 1997, the labor force was reduced by 4,618. Despite that reduction, several plants in 1998 registered records in the production of bauxite, aluminum, iron ore, and wood pulp. Railroad transportation also hit a record 50.1 million tons. The scope at Companhia Vale do Rio Doce's business is ambitiously broad. It extracts, processes, and transports natural resources. It is the largest holder of mineral rights in Brazil as well as the world's largest producer and exporter of both iron ore and pellets. The umbrella of activities also comprises prospecting, mining, and processing manganese, gold, potash, and kaolin. In addition, it is a top player in aluminum and pulp production. The company operates railroads, ports, and domestic and international maritime shipping services. Holding substantial interest in other companies, it stretches its industrial hands into steel and iron-alloy manufacturing. Since 1997, Companhia Vale do Rio Doce has operated in the energy sector, with plans in the works for gas and oil production. History puts some perspective on the current strategic moves. Economy liberalization in Brazil took off in the early '90s, bringing both opportunities and threats for local industries. Tapping into the global marketplace became a priority. In reality, a focus on the international market had always been a concern for Companhia Vale do Rio Doce. When the company was incorporated in 1942 as a state-owned corporation, international relations played a key role. During World War II, Europe badly needed iron ore to foster its weapons industry. With more than a little help from friends -- the UK and U.S. governments in this case -- the new company started producing and exporting iron ore. It grew steadily and by 1975 had become the world's largest iron ore exporter. Nevertheless, by the mid-'90s the company needed to become more agile to respond to globalization. It had to streamline operations, reduce costs, and face the new ownership structure defined by the government policy change toward privatization. The privatization-bid-winning consortium, headed by Harvard-educated Benjamin Steinbruch, now chairman of the board, reignited the company's engines in a leaner operation. Current joint ventures with U.S., Italian, Spanish, Japanese, and Korean partners are instrumental in the international strategy. International expansion this year may be difficult, however. "Our breadwinner, iron ore and pellets, is being heavily affected by the metal-industry recession, mainly in Japan," points out CEO Dauster. "Commodities like aluminum and bauxite face a dramatic price decrease. Our strategy is basically defensive, now, to hold our market share." Here and there, however, opportunities are being sought. A new pelletizing plant in Brazil and a minimill joint venture in Colombia may take off. While waiting for the business horizon to clear up, Dauster boasts a natural asset hardly matched by competitors anywhere else: "We manage some of the most extraordinary mines on this planet." Indeed, the ones located in the Caraja region of northern Brazil hold the largest iron ore reserves on earth: 18 billion tons.