Trust Essential for a Succesful Distribution NetworkMon, 07/08/2019 - 17:12
Q: How are LG Distribuciones’ activities divided between its different business verticals?
A: Our focus is mostly on industrial activities, particularly in the food sector. Pork producer Keken and poultry producer Bachoco are among our biggest clients. One of our flagship products in this sector is testing material for salmonella, but we also work with hospitals and other health institutions, such as the Ministry of Health of Quintana Roo. Our products include medical devices, glassware and reagents. Our goal is to position ourselves as the best distributors among a strong field of competitors. Clients want discipline and certainty of delivery. We work according to COFEPRIS and its requirements, constantly implementing protocols to properly verify compliance to any new regulation.
Q: What territory do your operations cover and where would you like to expand?
A: Our network stretches from Veracruz to Campeche, Yucatan, Quintana Roo and Chiapas. We are not exporting to other countries but do have a presence in Guatemala. We are looking at possibly moving further south, toward Belize. Our expansion plans depend on market opportunities. We are conducting market studies on the alimentary industry, particularly linked to our clients Keken and Bachoko. We certainly want to grow our portfolio and number of clients, as well.
Q: What are the main challenges you have found in product distribution?
A: Our main challenge is keeping the product in the right conditions throughout the entire process. Our cargo normally needs refrigeration and using dry ice to cool the products can be challenging over long distances. These climate requirements also imply higher transportation costs, which is an extra hurdle when trying to maintain competitive prices. In terms of routes, road and weather conditions can cause delays, as well as customs. We need to be flexible and always anticipate potential problems. Sometimes we even need to negotiate delivery times with our clients, which we can afford since we have relationships based on mutual trust. Our policy is to immediately return to the supplier any product that arrives in an unsatisfactory state.
Q: What is LG Distribuciones’ participation in the health sector?
A: We have several partners in the health sector. One is Heisecke, which produces rapid-testing devices, such as pregnancy tests. Although foodstuffs are 70 percent of our business, safe products and good testing material is essential for public health in this sector. We also work with regional milk producers and distillers. Our strength is not necessarily hospitals, because there is a high level of competition there and some distributors offer better prices in this niche. Having said that, we do want to strengthen our collaboration with the Ministry of Health of Quintana Roo. We also want to start working with IMSS and ISSSTE and are analyzing if we can meet their fast-delivery requirements.
Q: What would be your three main goals for 2019?
A: Right now, we do not have a strong sales force. With only three sales agents and over 250 clients, we are constantly working to catch up with our backlog. Our growth has truly surprised us, after having tripled our client portfolio in six years. We will continue working to be considered the first option among clients and suppliers. In terms of territorial expansion, we want to cover the whole southeast part of the country in five to six years. It is worth mentioning that our growth has only been possible thanks to the immense support of our partner suppliers. They have helped us with lines of credit, consistent schedules of delivery and general trust in our ability to do our job.