Jaime Contro
Director of Engineering and Industrial Relations
ADS Mexicana
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View from the Top

Vision Needed for Long-Term Water Solutions

Tue, 11/01/2016 - 16:36

Q: How significant is the infrastructure sector for ADS?

A: Infrastructure accounts for 60-65 percent of ADS’s business because our core business is in sewage and drainage. Sewage entails sanitary and storm systems within cities whereas drainage includes solutions for agriculture, highways and commercial developments, both from the public and private sector. The rest of our business comes from mining through piping sold to mining companies for leaching processes. Our piping can also be applied to agriculture, with piping for canals and drainage to increase land efficiency. We also provide conduit and telecommunications piping.

The original product we produce is corrugated highdensity polyethylene (HDPE) piping mainly for infrastructure applications. We manufacture diameters of 4-60in, meaning our piping has a great deal of outdoor applications. ADS is also starting to manufacture the same products with polypropylene resin (PP).

Besides these, we have many other product lines, including underground structures like manholes, which complement our pipes. Through these complementary products we are able to provide a complete solution rather than simply manufacturing the pipe. We also treat storm water, eliminating sand and debris and we work with both the public and private sectors.

Q: What is the balance of your portfolio between the public and private sector?

A: We have seen an important shift in the balance for infrastructure because the amount of government funding has been reduced to 25 percent from 50 percent of total project expenditure in Mexico. Most of the spending now goes toward flagship projects like the New Mexico City International Airport (NAICM). The problem is that there is little left for the majority of infrastructure projects and the private sector must assume the financing and the risk. Mining is a cyclical industry and experiences many peaks and troughs. Similarly, the housing segment has faced turmoil since 2008 but is now beginning to rebound. The automotive industry boom in the Bajio region has created a lot of business for our solutions. The few infrastructure projects the government is investing in are coming through PPPs, instead of full government investment, and the budget is not used efficiently.

Q: What advantages do HDPE and PP piping bring to the infrastructure sector?

A: To manufacture 1m of HDPE or PP piping, the carbon footprint is much lower than manufacturing the same amount of concrete piping. Secondly, the installation and construction is by far the fastest, meaning fewer delays and cost and time savings. Moreover, concrete pipe lasts between 20-25 years whereas our pipes have passed laboratory testing that shows they can be used for over 100 years.

Our technologies can also resolve the issues faced in Mexico City in terms of pipe leakage and lost water. This of course has a knock-on effect on the environment since our pipes are completely watertight, meaning they prevent soil contamination caused by leakages. The cost of the finished project may be similar to using concrete piping but when factoring in the product’s lifespan, we can help to reduce costs not in terms of the initial outlay but over the entire lifetime of the infrastructure.

Q: How deeply has ADS penetrated the market for infrastructure piping?

A: ADS Mexicana accounts for almost 80,000km of installed piping in Mexico. We have four plants in the country and our market share is around 50 percent despite the number of competitors that have tried to replicate our success. As an example, ADS supplied and installed around 80 percent of the storm sewers in Guanajuato’s automotive cluster.

We are providing piping for the Mexico-Toluca train project and we are prepared to begin working on NAICM. In Mexico’s largest wastewater treatment plant in Hidalgo, we provided considerable amounts of piping. Moreover, 90 percent of the piping installed in Nuevo Leon’s new KIA facility is ADS Mexicana piping. The turf drainage installed in the country’s new soccer stadiums, including in Aguascalientes, Torreon, Monterrey and Guadalajara, was provided by ADS, as well as the storm water drainage in the Formula 1 Hermanos Rodriguez race track in Mexico City