Localized Automated Tooling Solutions for Bajio Growth

Q: How did you make the transition from the IT industry into the automotive industry?

A: I was one of the founders of the IT industry in Mexico, but after 30 years, I decided to change industries because I saw great potential in the auto parts market in the Aguascalientes area. In 2013, the local government asked me to form a cluster of small companies to kickstart the indirect supplier industry in Aguascalientes by acquiring state and federal grants and combining them with a long-term vision. This led to the foundation of the GIRAA (Industrial Group Related to Automation in Aguascalientes) cluster, of which I am the president. I brought together a group of 40 small investors to be part of Metalistik after I acquired the company, which was founded as a tooling and manufacturing firm, providing machining, stamping, and automated tooling solutions for OEMs and their suppliers. Our location in Aguascalientes puts us close to the plants of Nissan, Honda, Mazda, Volkswagen, and GM. Our grand opening in February 2014 was attended by the governor and big firms like Nissan and Flextronics. Although we are currently a Tier 1 supplier, it might be more profitable being a Tier 2 supplier since they do not exist in Aguascalientes.

Q: How are you assuring your competitiveness in the automotive industry?

A: We are trying to put best practices in place. We have been developing for two years, and we are already ISO certified and are implementing APQP (Advanced Product Quality Planning). We started from scratch but we have not faced much local competition. When Nissan came to Aguascalientes five years ago, it decided to work with Japanese suppliers. Therefore, my competition is found among the international companies that accompanied OEMs here. American OEMs establish their supply chain differently and develop suppliers locally, which has seen important Mexican suppliers rise in the northern states. That is not the case here as Japanese companies settled in the Bajio region. They have had to revise their original plans though. Given how Japanese OEMs are booming, they are struggling to find enough supply to meet their growing demand, which gave Metalistik the chance to get its foot in the door. We needed to demonstrate the quality of our machining and tooling solutions, which we have done by ensuring that our plant stays ahead of the curve technologically, by getting the right certification, and by creating an experienced team.

Q: What are your sales targets for the years ahead?

A: The amount of machines that Metalistik will buy depends entirely on the purchase orders it receives. The machines we have now came with the company but we are beginning to update the roster. In January 2014, we ordered a 200-tonne machining press. In terms of sales targets, we currently have letters of intent from Gestamp and Nissan. We expect to make a net profit in three years, as we will see returns in a short time through the aftermarket. Refaccionaria Rogelio sells almost US$2 million a day nationwide, but it does not have many providers of parts in Mexico itself. It is bringing in a lot of parts from China and the US, but Metalistik intends to push it to look locally and trust us. We also want to enter the aftermarket business by the end of 2015.

Q: Do Mexican companies entering the automotive market today receive enough support?

A: The support exists, but a graduate entrepreneur might not know that. A bright student graduating with the right idea but without the right contacts may find it very difficult to enter the industry. However, Mexico has a lot of money available for the right types of automotive projects. One aspect that cripples companies is the lack of consistency in their management teams, especially on a project basis. Automotive projects in development frequently change directors, sometimes a couple of times a year.

Q: What priorities would you set for the automotive industry in Mexico?

A: There are three types of providers in Aguascalientes. These are consolidated international Tier 1s, traditional, second- generation family-owned businesses, and newer, often small, companies that have difficulty accessing credit. The market of today has created a need for all these providers. For example, Nissan tells me it is in dire need of pipeline maintenance, for which it would be willing to pay millions of dollars, but it cannot find anyone to provide this service in Mexico. There are many needs to attend in different areas of the automotive sector. However, if we do not act quickly, foreign companies will come to take these jobs.