Differentiation Through Customer Service

Q: How has Power Electronics cashed in on the increasing interest in renewable projects?

A: One of the noted implications of the Energy Reform is the drop in electricity prices. This year we have seen a slight drop but not comparable to what was seen in the industrial sector. Energy sources like hydropower, geothermal, and even wind have the potential to come to the forefront of the Mexican arena, especially for mining players. However, at Power Electronics we are slightly wary of the true opportunities renewable power may experience after this groundbreaking reform. In my opinion, renewables stand little chance in Mexico, especially the sector where we have a noted expertise, which is PV. The UK is our biggest market for PV and last year we installed 2GW, while in Mexico we expect the solar market to amass only 150MW. Power Electronics has carried out hybrid projects for electricity production that include a wide array of products from its portfolio, while in mining it is known for pumping and ventilation systems. In 2015, we encountered some obstacles mainly due to the royalties, and mining players are more cautious with their investments. We have a longstanding relationship with Industrias Peñoles and we wish to increase our participation with Goldcorp and Grupo México.

Q: Which project reflects the capabilities and competitive advantages of Power Electronics in the mining sector?

A: One of the competitive advantages of Power Electronics is its service, and the foundation for this has always been its value proposition. When the company was created 27 years ago, the founder stressed that it would not fight against giants like ABB or Siemens with marketing or production volume but rather on service. This strategy has proven successful and the client list is a testament, with companies like PEMEX, CEMEX, Schlumberger, and Baker Hughes. These are mostly clients with roots in the oil and gas industry, and this is mainly due to the limited opportunities in the mining sector. Nevertheless, we hope to remedy this situation. We had a client that decided to buy our product and after we carried out the installation. This success enabled us to sell another four products to the same client. In the fifth installation we encountered difficulties in the startup as it would not perform to the standards that we and the client wanted. We decided to seek the expertise of an engineer based in Australia and he surveyed the whole system, spotted the problem, and solved it. The error did not lie in our system but in the incorrect wiring of our client’s installation.

Q: How are you tailoring your value proposition given the desire of mining companies to lower energy costs?

A: Reducing energy consumption in Mexico is complicated because mines are located away from the needed infrastructure. It is almost impossible for CENACE to trace the transmission to these remote locations and for CFE to carry it out, so mining players must be inventive in their energy production. The technology in the mines is growing at a slow pace precisely because of these conditions. For mining companies, the priority is to ensure the flow of production because that is the heart of a mine. Some players even consider avoiding automation processes in fear that the production rhythm will not be maintained given the quality of the power onsite. The tide is turning and mining companies are beginning to understand that energy efficiency plays an important part in the production line and the equipment's life cycles.

We want to ensure the continuous presence of our products in the mines scattered across Mexico. The oil and gas sectors will surpass the mining industry, and with the resources we gain from the former we will continue to provide quality products and outstanding services to the mining sector, which is pivotal to Mexico’s growth.