Xavier Madrazo Bonilla
General Manager

Changing Demand for Safety and Protective Equipment

Mon, 10/21/2013 - 11:10

According to the Ministry of Labor and Social Welfare the average number of workers in the mining industry increased by 59% between 2002 and 2011. However, accidents and work-related illnesses were also 36% lower. The entry of foreign companies into the Mexican market has led the industry to adopt best international practices. Safety is now seen as a critical matter, as is the wellbeing of employees. “Things changed in the Mexican mining industry after 2005 because most foreign companies that entered our domestic industry are Canadian and listed on the stock exchange,” says Xavier Madrazo Bonilla, General Manager of SIBSA (Seguridad Industrial del Bajío). “Therefore, any accident or incident that occurs has an effect on the stock value; a fatal accident can make it go down 10-20%, causing companies to make large investments in safety and protective systems.” These best practices have spilled over to Mexican companies, too, as safety becomes a matter of competitiveness. “Social security fines have also been established, which are added to the fees if there is an accident. Five years have to pass without incident in order for these fees to go down. It is cheaper to invest in better safety strategies than it is to pay high fees to the Mexican Social Security Institute (IMSS),” he adds.

As a company that distributes safety and protective equipment, SIBSA has witnessed how the industry has transformed and has grown alongside with it. Madrazo Bonilla remembers that after metal prices started to rise, demand grew very quickly. SIBSA started to receive orders and quote requests on Sundays, and in order to be able to supply its customers’ needs it had to establish solutions that responded to the industry’s requests: “10 years ago we had a 100m2 building and served 25 forestry companies. Now we have 1,000m2, which is mostly used for storage. We currently have stores in Durango, Torreon, Saltillo, Aguascalientes, and two mobile stores that service mine sites directly.”

Even though the company has always offered its services to the mining industry, before the previous mining boom demand was moderate. SIBSA faced a big challenge as consumption patterns changed. “When Canadian industries arrived and started operating in the Mexican market, a sleeping monster was woken up. The new conditions triggered the need for more human resources, as well as contractors, which played a very important role in the operations. The situation took us by surprise and we had to step up to the challenge, acquiring valuable knowledge along the way; for example, we learned that we had to plan purchases ahead in order to have enough supply,” Madrazo Bonilla underlines. Another important issue was learning about mining equipment. “Selling to the mining industry represented a challenge because, for example, we had to learn about breathing equipment, how it operated, the spare parts it required, and how to perform maintenance on it. We needed to learn quickly, at least at the same speed at which the industry was growing,” he adds.

In order to overcome this challenge, SIBSA teamed up with major brands to learn directly from them how to use the equipment, ultimately helping the company to sell it. “We test the products at a mine or tunnel so that we know how to commercialize it, since there is no better way of selling something than to be convinced of what you are selling,” Madrazo Bonilla says. The company does the same thing when a new product comes out; the brand’s technical consultant shows it to SIBSA’s sales staff who then test it. If the product works as the customer expects it to the company starts commercializing it. “We also have a technical division, which visits our clients and detects their needs before communicating it to the commercial staff,” he adds. In order to maintain its clients’ confidence and trust, SIBSA has created synergy with monitoring companies that perform studies to identify mining companies’ safety requirements.

One of SIBSA’s key advantages is that the company sells all different types of safety and protective equipment. “This is a benefit for the purchasing and safety departments of mining companies, because previously they had to deal with several providers for gloves, hard hats, and boots, among many other types of equipment. SIBSA provides an integral service and becomes a single provider that covers all of the user’s needs,” Madrazo Bonilla explains. He accepts that there are no big differences between SIBSA and its competitors in terms of product brands, which are mostly the same, however he believes that the key thing that sets the company apart, is its years of experience. “SIBSA has offered its services to the mining industry for years, and there are companies that started working for the sector only five years ago, when metal prices rose. What you learn in five years is substantially different than in a company with a culture of over 10 years,” Madrazo Bonilla says. As the global mining market faces a downturn, Madrazo Bonilla believes mining remains a great business opportunity for the company because of the constant improvements being made in safety procedures and the effect that accidents can have on mining operations.