Effective Energy Consumption: A Developing Market for OEMS

Q: Which Tier 1 companies are your key customers and what strategic alliances have you formed in Mexico?

A: Although automotive is our core business, we operate in many sectors in Mexico, providing equipment, automation through robotics, recycling reactor facilities, and products that include release agents and pigments. We sell nationwide and we have several customers in the automotive industry including Autoliv, TRW, Gonher, Dow, and Takata. In 2006 we developed another business branch oriented toward renewable energy and energy efficient products, leading to Grupo Desmex winning a contract with BMW. One of the advantages of our products is that our release agents are free of solvents, so their application is more efficient and ecological. Customers are beginning to lean toward automation, which is the best way to achieve the lowest possible costs. Therefore we offer a complete solution with the product, the system automation, and training for operators. Currently, we have 82 customers who specifically require microcellular polyurethane parts, and we expect a further 10-20% growth this year. This has resulted in a challenge for our logistics department, but we are working with the commercial alliances we have with Chromaflo and Acmos to store our products in fiscal warehousing. We designed the logistics program to supply material a month in advance to avoid late deliveries, and we have agreements with certain customers to make special deliveries when requested.

Q: How do the specifics for global parts like air filters, steering wheels, and spoilers vary from one OEM to another?

A: We always have to make sure the polyurethane’s formulation complies with the manufacturer’s requirements. Our testing facilities make sure that the pigments and release agents are in line with the polyurethane’s formulation through several trials before the chemical arrives on the production line. For companies that are already familiar with our products, this is simply a matter of adapting their existing solutions to local operations. Every OEM has its own specifications, but we normally have a window of one to six months between presenting the solution and obtaining the final results. Demand for high pressure machinery remains high among OEMs, and is particularly used for large parts of the vehicle that require high density and pressure because of their specifications. However, every segment of the industry is experiencing stable growth, so we are expecting more international entrants. Even so, Desmex’s focus is entirely on Mexico.

Q: What is Grupo Desmex doing in the clean technology domain?

A: Our three product lines in the area of renewable energy are solar PV, solar-thermal, and wind power. Most importantly, we are building our own solar park in Puerto Interior in Guanajuato to cater to Pirelli and Volkswagen,, which will be the first in the country to sell energy to private customers. This development will allow us to offer these companies fixed-priced energy for the next 20 years. Many companies are looking for energy efficiency solutions and most manufacturers are requesting LEED certifications for their facilities. Grupo Desmex offers consulting services to these companies to design the processes, enabling them to integrate energy efficiency solutions into the architecture. Many new entrants into the Mexican automotive industry are interested in investing in such projects. However, it is more difficult to approach existing plants because they want a faster return on their investment. Nevertheless, companies that have been operating in Mexico for between 15 and 20 years often have poor energy efficiency, so are exploring a renewed approach with small investments to improve their operations. Desmex is able to work with these companies by offering our modular solutions.

Q: Considering the rapid growth of the industry, what are your development priorities?

A: We are working closely with Germany and with the Mexican-German Chamber of Commerce. We know that there will be 182 new German suppliers in the market over the next two years, 110 of them with polyurethane products. We are currently trying to increase our workforce in light of this situation, both in terms of technical and sales operations. Our alliances with universities like Monterrey Institute of Technology and Higher Education (ITESM) and the University of Guanajuato (UGTO), as well as an interesting project managed by the Queretaro Cluster to build an automotive university, will help us prepare, but employee retention is our priority.