Diverse Portfolio Secures El Crisol’s Success During COVID-19

Q: What results have emerged from your recently launched e-commerce platform?

A: The platform started working this year. In the beginning, it was a challenge to understand all the metrics because it is a whole new market involving new policies and regulations. Also, response times and logistics are very different, which led to many challenges at an operational level. We were very lucky to have it available before the COVID-19 outbreak.

Q: How has El Crisol transformed its logistics operations? How have these changes strengthened your domestic and export operations?

A: We have started to expand our distribution center and construction will begin in 4Q20. This has driven us to reformulate our logistics, involving more technology, data collection and tracing our new distribution routes. We are adding another logistics area to have control over all distribution units and warehouse activities to improve our times and reduce costs and risks related to temperatures. El Crisol has started making significant investments in technology, first by incorporating a SAP system and IP telephone services and later implementing barcode systems, automation warehouse systems, robots and reorganizational systems. This investment has allowed us to keep our operations flowing at a normal pace, even amid the pandemic.

Q: What new trends are shaping the industry?

A: Derived from the pandemic, the emerging trend is the change to traditional business models that relied on presential visits. This will push digitalization on companies that were still resisting. As soon as the closures began, everything had to go digital or else you were left behind.

We work with pharmaceuticals, diagnostic chemistry companies, water treatment and water purification plants that were used to presential visits for any issue. This new normal has made them move quickly. This will help us evolve and finally accelerate our digitalization as a country.

Additionally, packaging solutions will have to evolve. Right now, everything is being sent home, which involves more packaging and an increase in waste, so the coming challenge is to create more sustainable packaging options. Mexico already prohibits some use of unnecessary plastic and encourages many sustainable measures, but these might need to be reinforced now that more waste is being produced.

Another trend that has been growing is market diversification. Supplier dependency has been exposed in many industries. This will lead to diversification, which Mexico can take advantage of to attract foreign investment seeking to establish in the country.

Q: What is the added value of your products?

A: This year we introduced two new strategies for our clients that focus on sustainability and cost reduction. The first is consignment sales, which is simply an agreement with clients to restock frequently used products monthly, instead of weekly, while clients pay only for what they consume during that month. The second scheme is financing support for SMEs that goes from three to 24 months to help them acquire quality laboratory equipment.

Q: How has demand and production of your products been altered by the COVID-19 outbreak?

A: None of our product segments represents more than 10 percent of our sales, which is healthy for our company as we do not depend on any of them on a large scale. On the one hand, we have segments that have stopped completely due to the pandemic, like mining, while we have others that have multiplied their demand, such as pharma, diagnostics, research, food and beverages and chemistry. This has allowed us to avoid major sales disruptions. At the beginning of the pandemic, we experienced high peaks in demand in the chemistry segment, including cleaning and sanitation products, shampoo, soap and toothpaste.

Q: How has the pandemic impacted your logistics operations?

A: There has been many limitations on freight and logistics communication. Ships and planes have limited their schedules and there was a supply chain crisis across the whole logistics sector. This has led to the creation of strategic stock and pushed us to hold constant talks with clients from the public and private sectors to plan operations and supply.

We experienced panic purchases from laboratories and chemists and we were able to supply them before the emergence of this new “black market” for products such as alcohol and sanitizers. This subject is sensitive as COFEPRIS has control over those products and these new people in the market do not comply with regulations. I understand this is a business survival thing and that many people in Mexico adapted their sales to something profitable but from the regulatory side, it might not be the safest solution.

It is worth mentioning that demand is heavily shaped by regions. Specifically in healthcare, demand differs greatly from the northern region of the country to the south, which experiences moderate demand and a poorer telecommunication service, which increaset logistics challenges.

Q: What new products will El Crisol introduce to the Mexican market in 2021?

A: Infrared thermometers, gloves and googles have been the most recent introductions. There was a very significant increase in manufacturers and given the actual context, it was very useful to have them. For the diagnostics segment, demand for clinical trials, analysis and research products has increased and those consumables are part of the offer that we have recently focused on improving. We are seeing the results of those efforts now that our quality is standing out in the market.

Before the pandemic, El Crisol had a very strong sustainable product offering to comply with environmental trends. These products are more expensive but companies are more willing to invest in these, rather than buying cheaper, more harmful products.

Q: What are your growth expectations for El Crisol this year and the priorities of the company for 2020?

A: We want to grow our monetary and time investment in our e-commerce platform. We have 3,000 products available and the goal is to have 13,000. Another goal is to finish our distribution center and therefore strengthen our technological investment and logistics operations. For the pharmaceutical sector itself, I expect double-digit growth due to the high peaks in demand following the tender results. As a supplier, we have realized this repetitive behavior and we are prepared to address the demand spikes following tender approvals. Lastly, we want to achieve the double-digit growth we have experienced each year, which will come thanks to our stable demand during the crisis and the big stock of laboratory products that El Crisol has.

El Crisol is a Mexican company with 59 years of experience in the commercialization and distribution of laboratory equipment for different industries. It has offices in cities including Mexico City, Puebla, Queretaro, San Luis Potosi, Monterrey, Guadalajara and Merida.