Juan Carlos del Río González
Director General
View from the Top

Alliances Lead SMEs to Success

Wed, 01/22/2014 - 14:15

Q: How have contracting opportunities changed for SMEs like IECESA in the last few years?

A: PEMEX changed its contracting model around five years ago when it began to implement ISCs, which required much higher volumes of working capital than SMEs, such as IECESA, possess. This meant we could not work directly with PEMEX under this type of contracting model. As a consequence, we had to change our business model so that we could work as subcontractors for bigger service companies that did have the capabilities to handle these larger contracts. We have managed to adapt successfully over time to these new terms and working conditions. I used to think that work would dry up and we would be in deep trouble if PEMEX did not sign a contract with us directly. Thankfully, things turned out quite differently when I started working with foreign companies that recently came to Mexico as a result of PEMEX’s constant need of certain services, growing investment budget, and new contract models.

Q: How has your portfolio of services changed in the last few years?

A: Our main area of expertise, along with most of our current work, is in vessel maintenance and assorted maintenance contracts. Our 20 years of experience make this the service where IECESA is the most efficient, although the way such maintenance services are provided has changed. PEMEX used to provide room and board for our people as we worked on repairing the vessels. Today, PEMEX expects us to provide these services for ourselves, in line with its current contracting model and the standards that guide these contracts globally. The process of adaptation to this modified operating environment has had its highs and lows. Along with changes in the contracting model, PEMEX’s expectations have evolved as well. In the past, should a factor prevent us from working on a vessel, we still got paid. Now, we are paid per square meter of the vessel that has been painted. This represented a learning curve but we have been able to overcome that and operate the vessels better by managing our work schedule and the consequential expenses very carefully. We have adapted to these new circumstances, and our collaboration with Grupo Evya now sees us compete for the maintenance of platforms as well as vessels.

Q: How has IECESA improved its offering to win more contracts, despite its small size?

A: A new world of opportunities has opened up in the last few years. In order to take advantage of these opportunities, we have created partnerships to make up for our size. Our association with Grupo Evya has seen us upgrade our work capabilities. It used to be hard to win those contracts since they were simply being awarded to contractors with a long track record working with PEMEX. Grupo Evya has a considerable fleet at its disposal, which has been a deciding factor in more work coming our way. We have seen steady growth over the last two years and we hope the Energy Reform will see that continue. The partnership with Grupo Evya allows us to have the right operational budget to get the work done in time. Most of the time, our competitive advantage involves the speed at which we can finish the job. We have a proven ability to meet our deadlines and prevent downtime by working efficiently. These are not technologically complex jobs as we adapt to the technologies that we have to work with, we import them and install them but we do not design them. This operational speed and flexibility allows us to beat competitors who are sidetracked by circumstances that IECESA has already dealt with. The maintenance we provide might seem basic but it is incredibly necessary.

Q: What role do SMEs from Ciudad del Carmen like IECESA play in the success of larger contractors?

A: We bring an entrepreneurial vision to the mix. These larger companies have taken risks and have incurred debt in order to achieve success, while companies like ours provide the right support for larger firms to see their gambles pay off. We are agile in our execution capacity and our capabilities are solidified by their capital; we support them by moving faster than anybody else and by taking care of the politics involved in dealing with PEMEX. IECESA wants to use this reputation to become a world-class company in the fields of construction and installation; we want the same trust in future clients that PEMEX places in us at the moment. You cannot deal with PEMEX if you do not know its modus operandi. We have shared with other companies the intricacies of how to deal with PEMEX, which creates bonds of trust. Finally, sharing technology is a necessary step for future growth.