Alberto Terrazas Seyffert
Financial Director
Grupo Copachisa
View from the Top

Trusted Construction Partner for Automotive Plants

Mon, 09/01/2014 - 11:58

Q: How did Grupo Copachisa navigate the process of becoming a supplier for major OEMs and Tier 1 suppliers?

A: We have been doing construction for foreign companies in Mexico since the 1970s. Over the years, Grupo Copachisa has acquired all major international construction certifications. We created a parallel company to manufacture joists, as many of our foreign clients demanded that our joists, our processes and even our welders all be certified by the SJI in the US. This company is able to meet those standards and supply the joists to our construction sites. The same goes for electromechanics and security, as Grupo Copachisa has built a reputation in Mexico based on its adherence to international standards and certifications for all these areas. Once foreign companies know that you can meet their specific needs, they are more than willing to work with you. This attitude needs to be more widespread among the entrepreneurs of Chihuahua. If they want to play in the big league, they need to work as OEMs and Tier 1 suppliers require them to. It would be advantageous for Chihuahua and for Grupo Copachisa if more companies committed to improving in this way. While Grupo Copachisa might find itself facing more competitors, the whole economy of Chihuahua would improve and more work would come our way. A rising tide lifts all boats.

Q: How can Chihuahua’s clusters help this process to take place?

A: The automotive and aerospace clusters alike are working very hard to increase the entrepreneurship of companies in Chihuahua. A colossal amount of money is spent by those two industries on logistics in Mexico, importing needed materials and products from overseas. Having all their suppliers on the ground in Mexico would allow OEMs to save money and make them more competitive.

Q: How did Grupo Copachisa enter the automotive industry?

A: We started off by carrying out a number of engineering and construction projects for Delphi in the 1990s. Since then, our reputation has taken off and we have been involved in construction projects for Ford, Visteon and TRW. We were not part of building Ford’s original engine plant in Chihuahua but we have been part of two expansions since then. We handled the general construction for one of the expansions, including supplying the steel and all other construction materials. On the second expansion, we provided all the steel structures. We have maintained a strong relationship with Ford through the years. Since then, we have worked on building plants for OEMs around Mexico, such as Mazda and Nissan.

Q: How did you go from building for an American OEM in Chihuahua to Japanese OEMs nationwide?

A: If customers see that you focus on their needs, it does not matter where they come from. We have had construction projects with over 20 companies across Mexico in the last two years and these come from Japan, Germany, France and beyond. We are on the shortlist of any foreign investor looking for a construction company in Mexico. We do have a few competitors, such as Urvitec and Docsa, but we are happy to compete with them, the quality of their work is excellent so it drives us to be better.

Q: How much is Grupo Copachisa focusing on getting more automotive clients?

A: We saw the current automotive investment boom coming as early as 2007. Because of that, we set up steel production plants in Guanajuato and Queretaro to cater to incoming OEMs and suppliers. Our steel subsidiary gets the raw material from Ternium or other suppliers but it is cheaper for us to then manufacture our own steel close to where our customers need to build. 80% of our work is now outside Chihuahua and it is focused on where growth is happening, particularly the needs of the automotive sector in the Bajio region. The region is booming so much we now use only 25% of the steel we produce ourselves and 75% is sold to other projects. We are now in a position to supply other construction companies, not just produce the materials needed by Grupo Copachisa. For the moment, we are only producing steel for the construction business but we are not ruling out the possibility of becoming a steel supplier directly for the automotive industry, given the high demand OEMs have for quality steel. We also have a machining company, Altaser, which is already supplying automotive companies like TRW. The problem with the automotive industry is that it requires high volumes and provides low margins, as opposed to the aerospace industry which is about low volumes and high margins.