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Supplier Reaps Rewards of Long-Term Vision

Miguel Guerrero - Proesmma
Director General

STORY INLINE POST

Wed, 01/18/2017 - 16:14

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Q: What changes have you felt in the industry and what impact has this had on Proesmma?

A: We know that the mining industry is extremely volatile so we designed the business to be flexible enough to adapt to ever-changing market conditions. There was undoubtedly an increase in confidence within the community in 2016, which boosts every player, including suppliers. As a company, we made a conscious decision to participate in the market when prices were at their lowest, understanding that at the time there was a need to do more with less. Essentially, we were betting on the recovery of the mining industry, while many of our competitors chose to hold back and wait until the prices improved. Our strategy has paid off because as operators begin to invest more in equipment, they remember that we were with them during the downturn. Companies trust us because we had the strength and the capacity to support them through tough times. In such a close-knit community such as mining, loyalty is a vital asset, the importance of which cannot be underestimated.

We now work with a total of 52 mining groups across the country and we are expanding into Central and South America as well as the US. We have also been investing heavily toward expanding the capacity of our production plants in Mexico, increasing our presence in the domestic market and focusing on exports.

Q: How do you see the renegotiation of NAFTA impacting the Mexican mining market?

A: It is something that we have to prepare for and the federal government should be ready to negotiate but it is important to remember that NAFTA works three ways. There are some clauses that benefit the US and not Mexico or Canada, and vice versa, and so we have to remember what our strengths in Mexico are. Not only are production costs in Mexico low, something that has been helped by the depreciation of the peso against the dollar, but there is a tremendous amount of high-quality labor available in the country, which is not easy to find. This is especially true in the state of Chihuahua, which has been a mining state ever since the colonial days. As the mining sector recovers, we need to take advantage of the fantastic infrastructure and human capital we have and be prepared to invest more to create more high-quality well-paid jobs. We want to convert Chihuahua into a one-stop shop where foreign companies can come with the knowledge that there is a wealth of opportunities for them. As a country, we need to stop depending on external markets, which is challenging because many of the extracted minerals are commercialized abroad.

Q: How do you make sure you remain competitive against overseas suppliers?

A: One thing that is a big help is the willingness we have seen from both foreign and Mexican mining companies to support the local supply chain where possible. Of course, this is easier to do in mining states like Chihuahua and Sonora but we have seen that even in states where mining is not such an established sector, like Oaxaca and Jalisco, foreign companies actively try to develop the local industry. This is very encouraging because it provides a welcome boost to the national economy in the long-term, which in turn helps the country become more self-sufficient. In Chihuahua, there are large mining corporations whose supply chain is 60 percent Mexican, which is unheard of in other mining countries. These companies have thrived because they recognized and tapped into the potential in Mexico. Proesmma has been the recipient of much of this support and we are truly grateful for the belief our customers have shown in us over the years.

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