Electric Heaters for Injection Molding MachinesMon, 09/01/2014 - 16:32
The call of the automotive industry in Mexico is becoming so strong that it is attracting veteran entrepreneurs from other sectors. This was the case for Ernesto Limón Escalante, Director of Lemon Analyzers. After finding success by providing gas measuring equipment for industrial players to track their emissions, Limón Escalante was drawn to the automotive industry. Partnering up with Watlow Electric, Lemon Analyzers brought electric heaters for injection molding equipment to the Mexican market. “We sell electric heaters that help liquefy the plastic for injection molding machines,” explains Limón Escalante. “We also sell the temperature sensors and controls, thereby covering the entire loop. I wanted to enter this specific field to get involved in the automotive and aerospace industries.”
The benefits of the heaters themselves are what really convinced Lemon Analyzers to enter this new business. Limón Escalante narrates the process through which these are sold. “Our heaters can really help clients to reduce their energy costs. We visit the premises of our clients, work out what they are spending, and then advise them on how much they could save by using our heaters.” Lemon Analyzers was not seeking to bring a wholly unknown technology to the market. Watlow Electric’s heaters are already known throughout the industry, and many injection molding machines come with such heaters already installed. As this is not a universal practice, Lemon Analyzers has found a niche to break into the market through companies that do not already use the heaters. “In order to establish the brand, we focused on building customer relationships to make sure to establish trust in the product,” says Limón Escalante, who found working in the automotive industry very different to the mining industry. “With automotive companies, you really need to be on call 24 hours a day. We had a stroke of luck by being in the right place at the right time, and we managed to turn a profit more quickly than usual for start-up companies in this sector. We were lucky that we acquired a big project so fast.”
Although Watlow Electric has a manufacturing plant in Queretaro, Lemon Analyzers was its first distributor in Latin America. At first, despite experience in the mining and chemical industries, adapting to the automotive industry was a challenge. The company’s first sales were made through small quotes, while capital expenditure was also low. “When we got our first big project, our relationship with Watlow was very good. They allowed us 30 days grace for payments, which allowed us to collect the sales funds first. In this way, we never required a huge amount of capital to start,” says Limón Escalante. This sober financial approach allowed Lemon Analyzers to later reap the rewards. “Lemon Analyzers only has ten staff members but we have managed to turn the same profit as companies with five times our payroll,” he adds. That turnover was also down to high sales of the heaters. Given that Watlow’s heaters were already widely utilized on the market, it is not surprising that those companies approached by Lemon Analyzers soon saw the benefits as well. Limón Escalante talks of how “companies were amazed that we could halve their costs while providing a good service.” In its early days, Lemon Analyzers’ sales were modest, but reached US$500,000 in its second year, from sales to its first client alone. Such results mean that Limón Escalante has expansion in mind. “I was lucky with the automotive industry as we are based in Hermosillo, which is also the home of INC, a company manufacturing many plastic products for the automotive sector.” INC was an early client but Lemon Analyzers now covers three other states: Chihuahua, Sinaloa, and Sonora. “We are continuing to grow and we expect to open an office in Tijuana in 2014. This office will target the more than 1,000 maquiladoras in that region.” Setting up bases in Guadalajara, Sinaloa, and Durango is also on the horizon, although security conditions in the latter two have delayed this move.
Lemon Analyzers is also considering the potential of mixing and matching its two businesses by bringing its gas measurement technologies to the automotive sector. Heating and soldering plastic produces emissions and Limón Escalante sees his experience in the mining industry as being highly transferrable. “These emissions need to be measured like any others in order to ensure the health of the workers, which means monitoring systems are needed. A lot of emissions are also produced when OEMs paint and heat their vehicles, opening up a space for continuous emission monitoring centers,” he says.