Risk Mitigation Through Diversification

When the need for a new product or replacement arises, companies often struggle with the selection process and finding the time to filter through suppliers in search of the best quality and price. Agustín Monzón, Managing Director at GGD Bandas y Servicios, helps customers to reduce costs and avoid wasting time through a full package of services, both presale and aftersale. “We strive to understand our customers well,” he says. “If necessary, we will visit the manufacturing plant to properly assess their needs. We also offer samples for test trials before installing a product so that clients feel sure of their purchase.”

As a company that traditionally serves the Mexican mining industry, GGD Bandas is using its expertise in conveyor belts to complement the gaps in the country’s infrastructure industry. “Mexico’s economy is largely influenced by the infrastructure sector and we can facilitate the exploitation, grinding and transportation of construction materials such as gravel, sand, volcanic rock and basalt,” he says. “Our conveyor belts are measured by their capacity to transport material and not time, which creates a great deal of demand for our products.” By having a diverse portfolio and servicing different markets, the company greatly mitigates the risks of cyclical phases in the economy and the variation in the international prices of metals that weigh on performance.

“When construction investment rises, mining tends to fall and vice versa,” Monzón says.

GGD divides its business in the infrastructure industry between the public and private sectors. The public sector covers 30 percent of sales while the remaining 70 percent comes from the private sector, says Monzón. “We collaborate on projects with CFE or get subcontracted as part of the supply chain for companies already working in public infrastructure projects such as Carso Infraestructura y Construccion and COCONAL, which are both part of the NAICM project.” Along with its participation in the new airport, GGD Bandas played a role in PEMEX’s fertilizer plant in Coatzacoalcos.

The company’s ability to obtain these high-profile contracts is a mark of the quality of its products and the variety it can offer, says Monzón. The company imports most of the sourcing materials for its conveyor belts because only one company in Mexico manufactures the pieces. “The US used to be our main supplier but the facilitation of trade now allows us to obtain more material from China, India, Europe and South America,” he says. “We import according to the needs of our customers. Premium products from the US are for our most affluent customers while middle-quality products come from India and the most inexpensive from China.”