Jorge Plata
CEO
Argentum Textil
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View from the Top

Textiles for Protection, Prevention

Wed, 05/08/2019 - 09:45

Q: Which industries does Argentum Textil target with its products?

A: Argentum Textil specializes in functional textiles. We participate in three markets: the electricity and energy sector, providing protection from electric arcs; the metalmechanics segment, particularly in the auto industry where our products protect against splatter from molten metal and the oil and gas industry where we provide protection from explosions. In metal-mechanics, for example, we provide anti-cuts made from the same material as bulletproof vests. We also supply products for automotive plants, where some processes are still manual and operators are exposed to a variety of dangers, such as high temperatures from welding. Our textiles are used for the sleeves that workers wear to prevent cuts and to protect their body against the welding heat.  
Unfortunately, Mexico is lagging in terms of safety equipment; the existing regulation is wide open and allows business owners to provide their workers only the protection that they deem necessary. As a result, around 80 percent of our production goes to Europe. 

Q: How does Argentum Textile tackle the operational challenges associated with producing differentiated products?

A: Producing differentiated products is complicated. You need to have the necessary technology, a flexible workforce and production processes that can be easily adapted. However, staying within a particular price range is the most difficult element. Since our production varies depending on what our clients require, we cannot employ a flat process that would allow us to set exact costs. Every product we design is different, so establishing fixed costs is somewhat complex. However, setting a higher price when offering differentiated products with added value is not a constraint since you are not fighting with a competitor over 50 cents. It is harder to make the required changes in the manufacturing process rapidly and effectively.

Q: What makes Argentum Textil’s business model different from its competitors?

A: The traditional business model we learned was based on price and time periods. The buyer pushed you to sell at deeper discounts and negotiations were, up to a point, hostile. However, when we started Argentum, we decided to do things differently and implemented a policy we call “Radical Transparency.” This policy ensures we are transparent with our suppliers regarding our costs and the profit margin we expect on each product. This might seem a disadvantage but in fact it has helped us to gain expertise. Suppliers sometimes advise us when they feel one of our processes is too expensive and offer their help to reduce costs. The implementation of this policy has created a relationship that the industry may not be used to but for us it has worked really well.   
We also have a German certification called OEKO-TEX 100 Class 1, which specifies there are no hazardous substances in any of the textiles we use. This certification allows for traceability, starting with the fiber and ending with the finished product. All our suppliers must have this certification, which ensures that there are no substances that pose a danger when in immediate contact with the skin. Having this certification is also a differentiator for our company in the Mexican market because companies are not used to having certifications regarding fair trade or sustainability. Having these certifications is complicated and expensive but they help position your company differently. 

Q: What are the challenges that Argentum Textil has faced as a Mexican company in a specialized market?

A: Most of our production is sent to Europe, although that does not mean that our products are not used in Mexico. Unfortunately, corruption continues to be an impediment to doing business in the country. The lack of regulation is another hindrance to our participation here. You cannot evaluate a product if you do not have a regulation to measure it against. The Energy Reform and the entrance