Patricio Gil
Director General & CEO
View from the Top

Manufacturing Capacity Reached as Foundry Gains Momentum

Tue, 09/15/2015 - 13:36

Q: What are the quality and process requirements that OEMs demand when approaching you with a project?

A: The medium- and low-volume market demands a lot of flexibility, which happens to be one of our competitive advantages in this segment. When comparing Blackhawk to other foundries in Mexico, there are companies that specialize in either high volumes or low volumes, but our supply level sits somewhere in the middle. We do not focus on light vehicles because their high volumes are very demanding, and although it is an attractive segment, it is not our niche. The customers’ demands are relatively similar, regardless of the OEMs country of origin, and generally require 100% compliance in On Time Delivery (OTD) and excellent casting quality. Additionally, it is becoming more common for customers to require added value, such as painted or fully machined castings and minor sub-assemblies.

In terms of heavy machinery, the trends are similar. With light vehicles, weight reduction achieves efficient fuel consumption, while in the heavy truck sector, companies look to reduce the weight of their vehicles so that more cargo can be transported. The end goals may differ, but all companies wish to reduce costs and optimize profitability and efficiency, so helping our customers to achieve this is our main aim.

Q: How did the financial crisis influence the international development strategy of Blackhawk?

A: In 2009, the market crisis caused us to lose some manufacturing and sales volumes, so we decided to concentrate our efforts on the US market. This was due, in part, to its size, but also because we were aware of the profound impact that the crisis had on US companies, which gave us a market advantage. Around 300 US foundries were closed as a result of the crisis, but, just as the market was starting to recover in 2010, products and processes in China became more expensive. Subsequently, manufacturing volumes began to shift back to the US market, and with so many closed foundries, there was significant potential for production in the country.

Q: What does Blackhawk expect from its operations in 2015, and what challenges will the company face?

A: We are extremely busy, and this year looks promising for the company so far, but we cannot lose momentum. We are operating at optimum capacity of three shifts a day, six days a week. Without the expansion into a third facility, our projected 30% annual growth will not be achievable because our existing plants are already operating at maximum capacity. We have the engineers ready for this development and we are evaluating methods that will enable us to finance the investment, while also taking into consideration the two-year timeframe necessary for construction. We do not foresee an expansion in terms of our value-added product offerings, but we are looking to increase the size of the company. Blackhawk will continue to offer an array of options at competitive prices in order to promote its steady growth.