Q: What major steps have enabled DC Gaskets to become a local success story in the auto parts sector?
A: DC Gaskets is deeply entrenched in Mexico’s industrial and manufacturing history, tracing its roots back to the Second World War. At that time, the company was dedicated to the distribution of Hudson cars, but after a few years, the company moved to Leon, Guanajuato, to become a local auto parts distributor and an importer to the US, until 1961 when it began to manufacture soft and rubber gaskets. The company targets the aftermarket and Original Equipment (OE) segments, and at the moment we are focusing our strengths on increasing our presence in the OE sector to start supplying locally. Innovation and design have been at the forefront of the company’s business model. In 1962 we became the first company in Mexico to supply cork-rubber gaskets without pressure sensitive adhesive (PSA) backing, which is unique in terms of compressibility, recovery, oil resistance, and high quality. In 1968, DC Gaskets became the first company in Mexico to use NBR latex in its products, based on Kevlar, aramid, and fiber glass. To ensure success in the automotive industry, integration plays an important role especially when sourcing raw materials. One of the competitive advantages of DC Gaskets is that it produces its own laminated expanded graphite, used in manufactured components. The company has also invested in an R&D department, and at the moment we have developed two patents for water-based coatings. Another important step we took for further integration was to produce our own packaging, reducing costs considerably and providing an opportunity for the company to expand and diversify its business.
Q: What strategies have you put in place to increase the amount of local content in your components?
A: In recent years, there has been an influx of automotive companies, both national and international in the Bajio region. With DC Gaskets being strategically located in Leon, we are able to take advantage of the resulting development of the automotive supply chain, allowing us to source some of our raw materials locally. Copper and aluminum are easy to obtain in the region, but carbon and stainless steel are difficult to find according to the specifications we require. For that reason, we buy copper and aluminum directly from the mills and we import the rest. In order to further integrate our process, we have acquired equipment to laminate our own aluminum and to carry out aluminum and plastic injection molding. We have integrated our own rubber mixing plant, as well as our own compression, transfer, and rubber injection molding equipment. An important factor that distinguishes DC Gaskets from other auto parts suppliers is that it produces its own tooling. We have CNC machines to fabricate dies and molds internally, and our R&D center and quality control lab to maintain quality control and to ensure the proper functionality of the equipment.
Q: What are the key steps that DC Gaskets has taken to always be on top of innovation and R&D?
A: Innovation plays an important role in the growth strategy of the company, and we have promoted the development of new materials and the optimization of our production process. The latest product we have introduced into the Mexican market has been flexible graphite, which has several benefits and is highly resistant to high temperatures. We offer a wide range of products including brake pads, engine pistons, and gaskets, the latter representing the bulk of our revenue. In order to provide the best products on the market, we have entered the Friction Material Institute (FMI), where we can obtain quality specifications and consultancy. For Mexican companies, the best way to be competitive in the industry is to approach international companies with the adequate technology and knowledge.
Q: What important steps have you taken to increase your traditional client base?
A: DC Gaskets acquired the companies ROL and FASA Friction in 2010. The main driver behind this was the need to acquire blanking and forming dies and molding tools to further integrate our process. Even though ROL has a strong presence in the NAFTA market, we wish to expand our presence using our own brand name. Through FASA Friction, we have entered other segments of the market. At the moment we have 400 clients, most of them warehouse and large auto parts distributors. In the past, we used to have 900 clients including small shops, but we decided to focus exclusively on warehouse distributors since catering to them ensures that our products are spread throughout Mexico.