Wanted: Talent and Means to GrowFri, 09/01/2017 - 13:53
Before companies can develop higher ambitions, the market and the company’s achievements must provide fertile terrain on which to grow. Sumitomo has one side sorted: a 60-year history in the Mexican market with over 20 different investments in the country. But the market is threatening to falter. The company’s current focus is shown in 14 of its 20 investments targeting the automotive industry, and a maintained focus on manufacturing operations as it waits for the right conditions to expand further. Sumitomo is keen on developing engineering and added value activities and is eyeing up the means and human capital to do so, says Yugo Hashimoto, President of Sumitomo Corporation de México.
Hashimoto says the company’s main priorities are to improve its process quality and the skillset of its teams. “There is talent in Mexico but we find limited hands-on experience among specialists.” According to Hashimoto, the lack of specialization to fill middle-management positions, both in manufacturing and corporate activities, is a hindrance. His concerns are similar to those of C-level executives in the industry, demonstrated by Hays’ Labor Report for Mexico in 2016, which shows quality, operations and production manager positions as most in demand from companies with engineering and manufacturing activities. Sumitomo, among other Japanese companies, is indirectly collaborating with several universities in Mexico to improve academic programs, and specifically offers expertise to the industry from abroad, providing an example to automotive hires in Mexico. “We are working with other Japanese companies and the Japanese government to import experts to Mexican companies who can train locals,” Hashimoto says.
Hoping that the market evolves enough for Sumitomo to expand its capabilities in Mexico beyond manufacturing activities, Hashimoto says that Mexico should collaborate in technology development processes, but not enough talent is ready yet. “Once we stabilize our current operations, we could find new business opportunities in the Mexican market, for example in retail, transportation and even technology development segments.” The company has several subsidiaries that could enter Mexican niche markets, according to Hashimoto. Leasing and transportation solutions are particularly interesting for the manufacturing company.
But rather than starting from square one, Sumitomo’s goal is to develop the market it knows to its fullest and elaborate on the company’s previous expertise. “Each country has its own 161 needs and characteristics but it is easier for us to adapt our already successful business models from other countries.”
Green technologies could also have their moment in Mexico when Hashimoto considers the market ready for these initiatives. In Japan, the company is actively participating in the battery segment with a second-life proposal for used lithium-ion car batteries. Meanwhile, Sumitomo is one of the country’s developers of charging-station infrastructure. These technologies could be introduced in Mexico once the market matures. Although Mexico has integrated electric vehicles to its offering, it has yet to penetrate demand to the same degree as combustion engines and the national charging infrastructure only totals 154 stations. Meanwhile, Japan has over 40,000 charging points, exceeding the 35,000 gas stations in the country, according to the World Economic Forum. “We need consumers to lead the change but drivers inevitably need charging infrastructure that incentivize electric-vehicle purchases,” explains Hashimoto. “There is an opportunity to develop charging infrastructure for vehicles with fixed routes, which eventually would boost private usage, but we need the government’s cooperation to achieve this.”
There are other areas, however, that do not need previous market development processes in which Sumitomo is ready to participate. Hashimoto says that two of the corporation’s main interests are the internet of Things (IoT) and autonomous driving applications. “Autonomous technology will change the way we use and sell vehicles and we would love to be part of those changes.” The company has allocated venture capital in Silicon Valley in the hope of integrating IoT technology within its other business units. All these developments may only be plans but Sumitomo has not averted its focus from Mexico and its manufacturing advantages. The company is bringing new investment to support future production. “The value chain has evolved effectively and gradually more companies will engage in added-value activities,” says Hashimoto.