An Open Mind Key for Business SurvivalSat, 09/01/2018 - 11:07
Q: What advantages can foreign investors gain from local players with design and engineering operations?
A: Besides being a more profitable country in terms of costs, one of Mexico’s biggest advantages is the continuous training of technicians and engineers focused on advanced technology, coupled with the establishment of engineering and design centers from local and foreign companies. Mexico is advancing toward a more technological participation in the automotive production chain thanks to the support of private companies, universities such as ITESM and IPN, as well as government R&D centers.
Q: How has Arbomex grown its collaboration with universities and R&D centers?
A: We are in the middle of an ambitious project to develop an iron camshaft which could compete with steel in automotive internal-combustion engine applications. We named this material Acehierro and our camshafts derived from it will lead to lower production costs, thus giving us an opportunity to grow our market share. We established a collaboration agreement with IPN in August 2017 that assigns us Ph.D. graduates in the topic of metallurgy. They have oriented us in our material development process and now we are testing our components at IPN’s laboratories.
Q: As a leading Mexican Tier 1 player, what advice would you give to new local players?
A: The biggest challenge for companies is to gain clients’ trust. In our case, being the camshafts manufacturers of choice, we deliver added value in terms of quality, cost, technology and timely deliveries. Local players must be ready to demonstrate that they can offer an added value to their clients. At the same time, companies must be open and creative enough to showcase their products and technology in other industries besides automotive. We work with the highest quality standards in the manufacturing sector, which can be applied to many different industries.
Q: What strategies does Arbomex have regarding diversification?
A: Internal combustion technology is not only applicable to the automotive industry. Many products such as lawnmowers and tractors also use the same systems. We are trying to attack this niche and we are showcasing our products and technology with the same level of quality and highest standard of performance that we deliver to other industries. As an example, we are already collaborating with Kawasaki Motors Manufacturing Corporation.
As an automotive supplier, the main advantage we can offer to clients in these new segments is our experience in quality and repeatability in our production process. Our cost structure has already been depurated to the minimum and our parts-per-million scrap generation is minimal, thus giving us an edge over any competitor in the market. We also have the advantage of being vertically integrated with foundry, machining and sub-assembly operations, which allows us to control the entire manufacturing process of our components from casting to machining.
Q: What are Arbomex’s growth expectations and what are your plans regarding inorganic growth in other regions?
A: We expect a good year in 2018. We are in the middle of a renovation tied with our strategic development plan set at the end of 2016. First, we are working on implementing a new foundry, which will bring more productivity, quality and cost competitiveness to our operations. We are working on ensuring repeatability throughout our entire process with the use of Industry 4.0 solutions. In terms of expansion to other regions, we are evaluating the Asian market. China is rapidly evolving, companies are making strategic decisions and the country is becoming the strongest economy on the planet. Meanwhile, India is also growing its presence in the global market. The US will always remain an important client for Mexico due to its proximity but we do not want to miss out on the opportunity to become suppliers for two of the strongest economies in the world.