Policy Flexibility Would Boost Mining Amid Uncertainty: PIINSA

Q: What needs does PIINSA satisfy in the mining sector and what are the most in-demand products?

A: We provide strategic supplies for the mining sector as distributors of key Mexican and foreign brands. We also import products directly from China. Our most popular products are filters, oil, and anti-wear steel. We supply products in two ways: through direct sales and through consignments. We work with a group of technicians who are responsible for the performance and durability of inputs, among other issues, allowing us to meet client needs.

Q: What differentiates the company from others in the market?

A: Our focus on employees sets us apart. We have an Organizational Development Department that has allowed us to innovate in our human resources area. Its objective is to create an internal system of continuous development for employees so quality always increases and they can adapt to any work environment. By extending this training to all employees throughout the country, the company grows as a whole.

Q: In which Mexican states does the company have a presence and where does it see more opportunities?

A: One of our areas of opportunity is marketing. When we started, this was last on our priority list but we learned from that mistake. We now have a good team that is promoting our presence and solutions across Mexico. We are present in Sonora, Chihuahua, Durango, Sinaloa, Zacatecas, Guerrero and Oaxaca. We have a strong presence in the south of the country since we believe the best opportunities are in the south, as significant underground mining is taking place because open-pit mining permits are at a standstill.

Q: How has the strength of the peso affected the company's earnings and what strategies are being implemented to address this issue?

A: The strong Mexican peso has significantly affected us because we are importers. This year, our net profit margin saw a 4% loss due to the strength of the peso. We were used to buying our inputs four months in advance. So the inputs we bought in late 2022 when the exchange rate stood at MX$19 per dollar, were sold at an exchange rate of MX$16 per dollar. The damage was limited, however, because most of our customers pay in dollars. 

To address this problem, one of our strategies has been to buy stock two months in advance instead of four. We are also considering acquiring exchange rate insurance.

Q: What are the company's medium-term plans?

A: We aim to become the leading distributor of our inputs, especially transformed steel. The next few years represent a challenge for the entire mining industry due to uncertainty. We hope that policies will become more flexible because the sector should be supported, as it brings wealth to the country. Despite the uncertainty, we are hopeful about the coming years because we have passion for what we do, as well as human capital that is taking the company to the next level. Another goal is to expand beyond Mexico and the US to Peru.

PIINSA is a supplier of materials and products for the mining and construction industry that operates in Mexico and the US. The company sells mainly filters, oil and anti-wear steel.