Right Niche Key to Market Penetration

Q: What makes Tecnum stand out among machining companies in Queretaro?

A: Tecnum was created to develop machining solutions for metal-mechanics companies. It now has its own park with seven machining centers able to manufacture pieces up to 15m long, which is an unusual feat for a small company. Our machines have flexible cells, which are essential for the low volumes and great variety of pieces required by many industries, including aerospace. Our machines work with titanium superalloys, which are harder and more heat resistant than the alloys normally required for this sector.

Few machining companies in Queretaro, or even in Mexico, possess machines, with the necessary technology to develop added-value pieces such as landing gear and components for small and medium motors. We have machined prototype landing gear for the Airbus A380 using these materials.

Q: How did Tecnum use its experience in diesel motors and other sectors to penetrate the aerospace industry?

A: The aerospace industry was not a challenge for us in terms of technology and machining since its components have similar quality requirements to our other divisions. The main barrier to entry was the selection of the appropriate market niche based on our strengths and infrastructure. It was of the utmost importance for us to understand the bidding process for the aerospace industry because it differs from others sectors. This is due to the smaller number of pieces ordered at a time, which raises nonrecurring costs. These expenses can be very high as they represent the development of unique pieces for each specific client. Therefore, it is better for clients and suppliers to share risks. Mexican companies are often unaware of these processes or are unwilling to take them on because they do not consider them cost effective for their business model. In these circumstances, support from the government would be beneficial to help SMEs develop an aerospace business.

Q: What challenges did you face moving into the sector?

A: For Tecnum, acquiring instrumentation, including engineering and holding and measuring instruments, for the industry was rather simple. The development of appropriate processes for these new pieces was more difficult.

So far, we have not needed to hire any new specialized technicians but this may be necessary should our aerospace projects continue to grow. Entering the aerospace sector is not easy. It was much easier and faster for Tecnum to incorporate into other economic sectors such as the railway segment and became one of the leading industry players. For the aerospace sector, the conditions are distinct, as prices, timelines and conditions may be decided by other companies.

Q: What does the aerospace industry need for companies to consolidate in Mexico?

A: The local industry must generate a more integrated supply chain to be more than a manufacturing site. The government should identify small and medium companies, which have already developed the necessary processes, technology and infrastructure to enter the aerospace industry and support their development. The government should also take inventory of the well-established manufacturing plants in Mexico and invite international companies to collaborate with them through the creation of joint ventures, strategic alliances and even mergers.

It is unlikely that a Mexican company with high value metal-mechanic operations could enter the aerospace sector on its own, as it needs the support of suppliers with the necessary technological and commercial experience. This support would make it possible to avoid greenfield projects and to adapt existing companies instead. Any international company interested in investing in Mexico will have to dedicate a lot of time and resources to build a plant and hire personnel but it can save on both accounts by allying with an existing company in Mexico. This permits foreign companies to quickly adapt and respond to changes in the local market. There is a lot of work to be done by authorities to strengthen Mexican metalmechanic companies to integrate and assimilate into the aerospace supply chain.