Growth Through Segment and Market DiversificationFri, 09/01/2017 - 15:15
Change is part of nature, though that does not always mean it is easy or quick. Companies must adapt to new technologies and, as a leading innovator in the abrasives industry, Mirka understands how difficult a transition process can be for its customers. The company has found ways to show the advantages of clean and effective abrasive solutions and that success is now propelling Mirka toward new market opportunities.
“All companies seek to reduce costs but that does not necessarily mean buying the cheapest alternative,” says Adonai García, Managing Director of Mirka Mexicana. “Mirka’s products might not be the cheapest but they help our clients meet quality standards and increase efficiency and productivity.” With its unique technology of Abranet family products, the company found a niche among companies searching for a cleaner environment, better health conditions, cost reduction and improved dust-free sanding in their refinishing operations. Abranet proved to be at least 30 percent more effective than other abrasive refinishing products, providing a better cost-benefit relation. Today, Mirka’s sales are 70 percent oriented to the automotive industry, with 50 percent of its business in the original equipment sector. While remaining a Finnish family-owned company, Mirka is one of the most influential players in the abrasives market, competing with companies such as 3M and Norton Saint-Gobain.
Although the advantages of its products were clear, one of the main obstacles Mirka faced from clients was fear of change. The company also participates in the aftermarket segment, which is a much more traditional sector. “Clients are used to doing things in a particular way, so introducing new technology confronts certain reluctance,” explains Adonai García. Mirka leveraged its experience in the original equipment sector to permeate the aftermarket segment. As shops and distributors became aware of Mirka’s relationships in the original equipment segment they began to test the company’s products and Adonai García found that paint companies were particularly important when gaining the favor of potential new clients.
The original equipment sector currently represents half of Mirka’s business in Mexico but aftermarket or automotive refinishing trade (ART) segment is the company’s largest operation worldwide. This business accounts for 20 percent of Mirka’s Mexican operations and García has plans to level the field for both sectors. “We would like 30 percent of our business in original equipment, 30 percent in ART operations and 30 percent in other industries,” he says.
Innovation will be critical for Mirka to reach its goals and García is confident about the company’s capabilities. He says that Mirka’s facilities in Finland are among the most advanced manufacturing sites in the world for abrasive and micro-abrasive solutions. Micro-abrasives are most effective for manufacturing processes with narrow tolerances, like the production and rectification of engine and transmission components. The company already participates in these kinds of projects and in 2016, started working with MACIMEX on crankshaft production. The company was using abrasives incapable of reaching the tolerance required for the final product, forcing it to find a new solution. “Clients are looking for innovative products and specialized services, in line with what we have created in the automotive sector,” says García. “We use these technologies to strengthen our position in the automotive sector and to make our way into new industries.”
The company is already enjoying a fruitful period and it has high expectations for the years to come. García says 2016 was excellent for Mirka, with 25 percent growth compared to 2015 and 2017 looks to be one of the best years yet for the company. García says Mirka plans to maintain steady growth for the next five years, at approximately 25 percent per year. His priority is to consolidate the company’s existing client base, while looking for growth opportunities within these same companies. Mirka also has defined a plan to find new clients, including Chinese companies that will arrive to the country. The company already works with some of them and ART is its strongest segment. “We see definite growth opportunities considering the potential for Chinese manufacturing activities in Mexico,” he says. “These companies are looking to diversify their target markets and manufacturing and potential exports are definitely the most interesting factors."