A Well-Constructed Powerplant Will Last Much LongerBy Jan Hogewoning | Fri, 04/10/2020 - 13:30
Q: What opportunities does the current economic and political climate offer to Kepler Constructora?
A: Hard times mean opportunities. Ever since the Peña Nieto administration amended the schemes for tenders and contracting, many companies have struggled and gone bust. On the one side, requirements became so strict that companies could not cope with all of them. On the other side, large companies offered very low payments to smaller subcontractors. They essentially put all these subcontractors up against each other to see who would accept the lowest pay. About 8 percent of constructors left the industry, hitting Mexican engineering capabilities in general. Kepler does not participate in government tenders directly. To do this, you need to provide extensive financial guarantees. We do not have that capacity simply because of our size.
Q: What is your strategy to thrive in these conditions?
A: We have a great deal of international prestige. Some will say we are expensive but when you look at the quality of the product, the short-term cost is insignificant. A well-constructed power plant, with advanced technology and high-quality material, will last three to four times longer. Power generation with a combined cycle and special technology can reach a level of efficiency of 60 percent. A conventional carbon-based power plant, in comparison, has an efficiency of 23 percent. The benefits are very clear.
We also deliver a project on time and within the budget. We can provide services to all phases of a project thanks to our engineering capabilities, our workers and having our own machines. This means that we can manage projects by ourselves. Having few subcontractors working together means only one party can be held responsible. It also makes the interphase transitions much smoother.
We put a lot of emphasis on extensive training and certification as well. We provide our workers with on-site medical consulting. We always provide safety training to every new employee, which has translated to a very low rate of work-related incidents. This reduces the chances of project downtime. In terms of the environment, we are able to provide our clients with environmental certifications due to the types of technology we apply. Worker safety and environmental standards are required by international companies. Lastly, we are constantly offering our employees, at the ground level and in the office, opportunities for training in Mexico and abroad to improve their capabilities in their field.
Q: What does Mexico need in terms of infrastructure?
A: We construct in the mining, energy and the iron and steel sectors. Together with water infrastructure and communications, these are the pillars that form the basis of the country’s economic development. What Mexico needs is more guarantees for investors. If a foreign entity is going to pour money into a project, they want certainty that the project will be completed, without interruption. The government sent the wrong message by canceling NAIM.
Mexico also has very large native companies that are very generous. But now we are seeing a drop in investment in infrastructure. Some companies were in the process of drawing up investment schemes and suddenly they are backing out due to changing interest rates and steel prices.
Q: What are Kepler’s objectives for the short term?
A: Given that the number of projects has dropped due to the economic climate, we have to ensure we control our finances and carry out a proper job in our seven current projects. In terms of sectors with opportunity, I see a great deal of potential in power generation plants. Energy capability needs to expand. After the government allowed private ownership of electricity plants, industrial development increased notably.
Another area where we excel is in working with companies that require very specific technology for their operations. One example is a Canadian gold mining company that is using liquified oxygen to extract metals. This is a project where our construction skill can bring a lot to the table in terms of added value. Lastly, we can also carry out maintenance work, which we have been doing for many years. What better party to carry out maintenance than the actual company that constructed the site?
Kepler Constructora SA de CV is a Mexican construction company founded in 1975 that has completed over 100 projects in the mining, energy, petrochemical and steel industries. Its clients include PEMEX, Siemens, Ternium and Gold Corp.