Luis Hernández
Country Manager
View from the Top

Productivity, Efficiency and Safety Reduce Operational Costs

Mon, 11/05/2018 - 13:00

Q: How does Caterpillar help the industry to increase its efficiency and become more cost-efficient?
A: Caterpillar is evolving alongside the industry. We are introducing a new platform for hydraulic excavators for the Mexican construction market. This new generation of excavators increases productivity by up to 40 percent, reduces maintenance costs by 15 percent and fuel consumption by 20 percent in comparison to our previous series of excavators. With this offering, Caterpillar aims to change the construction industry by increasing efficiency, productivity and operator safety to altogether reduce total operational costs.
Our mission is to provide solutions to our clients to build a better world. Caterpillar can offer these products thanks to the excellent support of our three dealers in Mexico: Madisa, Tracsa and Matco. These three privately-owned companies distribute our lines for mining, infrastructure and energy generation. Caterpillar subsidiary Solar Turbines directly distributes gas compression turbines for the oil and gas sector and Progress Rail supplies locomotive, railcar products and services to the railroad industry.
Q: What main changes has the industry faced during the past few years and how have they influenced Caterpillar’s strategy?
A: The construction industry in Mexico has significantly evolved due to the country’s changing economy. While there is still investment in new equipment, economic fluctuations in the sector led us to increase our service offering. The construction sector was very strong following the recession in 2009, a trend that continued until 2014 when the industry peaked. After that, global trends hit Mexico, leading the government to reduce spending on civil construction, which in turn caused a significant contraction in the infrastructure industry as clients stopped investing in new equipment. 2015 and 2016 were hard but the industry began to stabilize in 2017. These economic fluctuations led our clients to improve their cost structures, so they are increasingly preferring to lease the equipment instead of buying it. Moreover, clients have also become more interested in refurbished equipment.
Q: Considering these changes, how do you expect the infrastructure sector to perform during the coming five years?
A: President-elect Andrés Manuel López Obrador’s policy proposals include interesting infrastructure projects. For that reason, we believe that the incoming presidential administration will bring great opportunities for us in the sector. Expectations change with every governmental transition but it is likely to include an increase in investment for the sector.
All governments in Mexico must invest in infrastructure, as this is essential for the country’s competitiveness. As a result, we expect the infrastructure market to continue developing. The only change we expect is for investment to be more concentrated in the south and southeast of the country, which was announced as part of the new government’s 25 main projects, of which many are infrastructure related. Furthermore, we expect an increase in PPPs. Overall, we are optimistic about the future.
Q: Caterpillar acts as an umbrella for other brands. Which of these provides the strongest added value in Mexico?
A: We have added many different brands to our portfolio, including some for the energy sector, such as the MaK brand for marine engines. Solar Turbines, MWM, Perkins, Progress Rail, SEM and Yellowmark are all in our portfolio. These are our strongest lines in Mexico but Caterpillar is by far our main brand. We continue to be leaders in the construction market thanks to design improvements that increase efficiency. Moreover, the Product Link system allows for all equipment to collect and send operational data on fuel usage, efficiency, productivity and maintenance to a server. Currently, we have around 14,000 assets connected, which allows us to determine what the market needs in terms of spare parts and where those are needed. This will allow us to better serve our clients.