Saulo Guzmán
General Manager
Wieland Metal Services Queretaro
/
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Securing Copper Demand Amid Global Shortages

By Sofía Garduño | Tue, 05/31/2022 - 10:30

Q: How has Mexico’s vehicle production crisis impacted demand for WMSQ’s copper?

A: Copper is required in many industries. Although the automotive sector went from representing 50 percent of our copper sales to only 27 or 30 percent, diversification has allowed WMSQ to keep its business running. Building and construction demand, for example, has increased, compensating for the decline in sales to the automotive industry.

Q: Considering the importance of diversifying the business, what are the challenges to enter the aerospace sector?

A: There are several barriers for suppliers to enter the aerospace industry. The AS9000 certification is difficult to obtain. While entering the automotive supply chain is not easy, due to quality and traceability controls, the aerospace industry is more restrictive. Every product is intensely inspected and, usually, you need to build relationships with OEM-approved brass mills. Even if a product meets all specifications, you can only buy it from approved suppliers.

Although products have a large profit margin, volume is very low. The aerospace sector is profitable but if your structure was created to serve the automotive industry and its high levels of required volume, it is difficult to transform into an aerospace supplier, where projects have a longer life span and volumes are much lower. Very few companies have the capability to adapt but WMSQ is one of them.

Q: What strategies has WMSQ implemented regarding EV growth?

A: The group has made a number of investments in recent years. In December, it announced a US$50 million investment to increase casting and the production of special alloys at our brass mill in Illinois. This project will begin production by 2025. In addition, the company has invested in secondary processes, which are important to give shape to castings.

Regarding strategies in Mexico, we will open a branch office in Juarez, Chihuahua, to position ourselves in the north of the country. Part of the strategy has to do with EVs because. While Juarez does not have a long automotive history, it is an industrial city and it can develop auto parts. In addition, we will be covering all central north region of Mexico from our new branch office.

Q: How has USMCA influenced WMSQ’s operations?

A: Copper was completely left out of the discussion regarding the rules of origin, which is understandable because vehicles have much more steel and aluminum than copper. In terms of regional content, USMCA did not help us; however, the nearshoring boom that the country is experiencing does benefit WMSQ.

Q: How has WMSQ benefited from its IMMEX status?

A: IMMEX certification is a great competitive advantage. Copper itself is an expensive material and paying an extra 16 percent for an expensive product would pressure any company’s cash flow. For WMSQ, IMMEX is almost like a requisite to operate and the biggest benefit is for our clients. This certification allows us to import products tariff-free from Asia, the US and the EU, where we have developed our supply chains.

Q: How is WMSQ securing its raw materials amid global shortages?

A: The world is experiencing copper shortages. Currently, we are the only company in Mexico that can supply high volumes of copper delivered in Mexico and with local service, thanks to our international supply chain. With mills in the US, EU and partnerships in Asia, we have taken full advantage of our global platform to secure raw materials on every continent where they are available.

Q: What are WMSQ’s top priorities for 2022?

A: WMSQ’s first priority remains the safety of our personnel. Secondly, we aim to continue strengthening our well-developed supply chain. Third, we will continue exploring new products and markets. Wieland has a wide product portfolio, which allows us to target market segments in which the company already works in other countries

 

Wieland Metal Services Queretaro is the Mexican Subsidiary of Wieland Group, which specializes in copper and aluminum alloys for a variety of sectors. In Mexico, it is a raw material supplier for the automotive sector.

Sofía Garduño Sofía Garduño Journalist & Industry Analyst