Strong Inventory Key to Weathering Economic StormBy Andrea Villar | Fri, 05/29/2020 - 17:22
Q: What are the main windows of opportunity that you see for the mining industry due to COVID-19?
A: The economic downturn in 2Q20 and the global recession after the pandemic subsides is going to be major. Nevertheless, mining is so essential to industrial development that there will always be a need for its products. For instance, mining produces inputs for the health industry, such as copper, gold and silver. If those minerals remain at a stable price, the mining sector will have a great deal of good business in the coming months. Cribas also provides equipment for the coal sector, which is crucial in energy generation and will continue to be so in the short term. The challenge for suppliers like us is to be strategic enough to survive the sudden economic downturn, while also retaining our employees so as not to lose hard-to-replace talent. If we manage to do that, we will be in a very good position to expand our market share and further consolidate our position.
Q: How has Cribas responded to the COVID-19 outbreak from a business perspective?
A: Our first priority is our employees. Therefore, we devised a strategy to guarantee the income of the 180 families who depend on Cribas, while also keeping them safe. To this end, we analyzed the industries that would be affected by the shutdown of non-essential activities. The first thing we identified was that it was very likely that most of the industries we work with would remain at least partially open. Therefore, we set out to determine their needs as exactly as possible. We then focused our efforts on being able to provide for those specific needs. The challenge was to successfully zoom in on those needs, while reducing our operational costs to a minimum and paying our workers consistently.
A hurdle that we had to sort out was the way we approach our clients. We are used to providing service in situ. That is a key part of our added value. However, given that access to mining operations is severely restricted, we had to devise a mobility strategy to service our clients from our office or from home.
We expect that in 3Q20 most of the Mexican industry will resume operations. Cribas’ objective is to be fully stocked with raw materials and with all of our staff healthy in order to be able to regain any lost market share or even acquire new customers.
Q: What challenges in the supply chain does Cribas face to keep inventories strong?
A: International supply chains are being severely affected as a result of the COVID-19 outbreak. Nonetheless, Cribas continues to import raw materials reliably. The two major disruptive factors for us are delays at the US border due to more rigorous controls and the rising US dollar. The latter factor means that we need to invest more money to replenish our inventory. Maintaining discipline with sales and payments becomes crucial in this scenario.
Cribas has gone through other crises. We have learned the lesson that there is no better investment for the company than in raw materials. We are already stocked up until August 2020. Having a strong inventory will allow us to respond quickly to our clients during the economic downturn. Furthermore, it allows us to sell at reasonable prices to our clients in mining. Knowing that we have enough supplies will let us relate calmly with our clients and forge stronger relationships with them. We are used to working in times of crisis and we believe that this strategy will help us to react and differentiate ourselves from the competition.
Q: How has the polyurethane screen that you recently introduced to the market done so far?
A: Some context is necessary to answer that question. Cribas was founded 55 years ago and initially focused on manufacturing wire screens, instead of bringing them over from France as was the common practice. Over time, the company began to integrate different screening media into its production line. We started out with wire screens, followed by perforated plates and stainless-steel dewatering screens. After that, we got into rubber modules and most recently started manufacturing polyethene. At first, we imported all synthetic products, but in 2000 we began to manufacture in Mexico our entire catalog of products. As a result, we are now able to manufacture and distribute the whole range of screening options for the mining industry. At present, we have the manufacturing capacity to provide our clients with polyurethane screens of various sizes. In fact, we have lines of products, like Loop Wire, of which we are the only manufacturers in the Americas. The added value that polyurethane screens provides us is that it makes our portfolio the most comprehensive in Mexico.
Q: What international partners and brands have you added to your product portfolio?
A: The technology that we use to manufacture our screening products is according to international standards, and our raw materials come from USA, Canada, Australia and Europe. That lets our customers know that we are a proud Mexican company working to the highest international standards. Furthermore, we have added products from international industry leaders, like Deister vibrating screens or Eagle Crusher mobile equipment, to our portfolio. Eagle Crusher has two differentiating characteristics: mobility and price. These mobile plants are transportable by means of wheels. They are mounted on the rolling chassis of a trailer truck. If you want to move them from Hermosillo to Saltillo, you can do that in a single day. Alternatives to Eagle Crusher need to be mounted on a truck to be moved. That is timely and cost-inefficient. Finally, their price is below the market’s average for equipment of similar quality.
Cribas y Productos Metálicos manufactures screening equipment for the mining industry. It has several locations in Mexico and Latin America. It was established in 1965 and consolidated in 1968.