Power Electronics Delivering Energy Saving Tendencies,

Q: What are the pillars of Power Electronics’ commitment to providing solutions that reduce energy consumption?

A: Our commitment to lessen the industrial impact on the environment means that we aim to reduce the consumption of energy at an industrial scale. We want to help our clients focus on their main processes, whether they are mining related or oil and gas related, by taking care of the power electronics for them. The company is focused on correcting problems that are caused by the industrial operation of drives, which can lead to collateral problems during our customers’ processes.

Q: How are the Mexican mining industry’s perspectives on energy generation and consumption evolving?

A: Following the Energy Reform, companies now have the freedom to generate their own electricity and increase their production. One of the restricting factors in terms of growth for mining companies was the limited availability of capacity. CFE designated a specific amount of energy for mining companies that was dependent on the region where they operated, taking into consideration its obligation to provide electricity for housing and other non-industrial purposes. This limited a company’s ability to increase production. Now that companies can produce their own energy, they can grow more easily. This presents opportunities not only for us, but for the mining industry in general.

Q: What differentiates your value proposition during this time of change in Mexico’s industries?

A: Power Electronics was founded 27 years ago at a time when our largest competitors were already giants. However, ABB, Siemens, Rockwell Automation, and Schneider Electric all differ from us in terms of our level of service. When the founder of Power Electronics reflected on the competitiveness of his company, he realized that it could not compete solely based on the technology or marketing of its products. He then began to reflect on the major problems faced by his competitors, and realized that service was a common deficiency. In Power Electronics, everybody has a mobile phone and we are obliged to keep it on at all times. This way, we are able to offer service 24 hours a day, 365 days a year. We do not require a purchase order in advance to give support and we do not even charge for the service. This is the main reason why we grew by around 200% in 2014, relative to the previous year. To support this growth, we are opening a service center in Magdalena de Kino in Sonora due to the presence of major mining companies in that region.

Q: How challenging was it to break into the Mexican mining industry?

A: It has been a complicated process. We did not wait until we had sold a large number of units to approach big companies, but penetrated the market by allowing clients to test our products free of charge. If the equipment performed according to their needs, they would buy it. If not, we would take it back at our own expense. None of the companies that tried out our products returned them to us. Companies rely on the quality of our products and, most importantly, on our customer service. Yamana Gold was one of the first clients we had in Mexico because they were also our clients in Chile. When they opened the Mercedes mine, they sought us out and we provided variable-frequency drives for this operation.

Q: Last year, you were very interested in Grupo Mexico’s El Arco project. The project has not yet been fully developed, but is the company still betting on it to increase growth?

A: Everybody is interested in El Arco. This project has the potential to make Grupo Mexico the top producer of copper in the world, bigger even than CODELCO. However, the project is not developing at the expected speed. Mexico is losing its competitiveness due to a number of reasons, such as taxes, labor costs, and a lack of mining engineers. Yamana Gold has already cancelled certain investments destined for Mexico, while other companies, such as Peñoles, are still considering this option. Both Mexico and Chile are losing ground to Peru and Bolivia due to the rapid development of their mining industries. Mexico now has the opportunity to work on its competitiveness at the state and municipal level to improve conditions for the communities and for the mining industry. The key is to find a balance between employment, society, and the environment. Power Electronics and its products also go in line with these developments.

Q: As mining companies are increasingly interested in alternative sources of energy, what is the potential of Power Electronics’ solar inverters in Mexico?

A: Our solar inverters and power stations have the potential of being accepted in the Mexican mining market. Our photovoltaic panels are destined for utility scale power generation, but we are not aware of the required conditions to develop this solution being present in Mexico. The Mexican government is aiming to produce 25% of the country’s electrical energy through renewable sources. Today, over 20% of the country’s energy comes from renewable resources, though most of that comes from hydroelectric plants. Energy produced from photovoltaic panels amounts to 0.1%, which is practically nothing. We are expecting that this sector will grow, but the government is reluctant to provide incentives for such projects. Countries like Spain or Italy have had to close some of their solar energy plants, since they are no longer economically viable. This could be one of the reasons why the government is being so wary.

Q: How will Power Electronics position itself as a preferred supplier for the Mexican mining industry?

A: We are trying to do business in sectors where similar companies show little presence. In Mexico, the potential for new projects and new business is huge. This year we are looking to place our products in Goldcorp’s operations, while also looking to supply the water pipelines for Peñasquito. We are working to promote our products in the mining industry even when business is not at its best.