Álvaro Ruiz
General Manager
GEMS
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View from the Top

Brand New Consultancy Looking to Raise Foreign Trust in Mexico

Wed, 01/21/2015 - 17:40

Q: As a consultancy created after the Energy Reform, what advantages do you hold over competitors that were created prior to it?

A: The Energy Reform directly triggered the creation of GEMS, as the country needed a company with an understanding of the latest regulations that could help guide foreign companies into the newly liberated sector. Many companies talk about their concerns with the rule of law, labor unions, and other matters, but it is somewhat difficult to find a consultancy with the right information and the right experience. Our role is to make such challenges easier by helping oil and gas companies to enter Mexico and make their business possible in this country. For this, we took the relocation working model, adapted it to Mexico’s business environment, and renamed it Soft Landing. Within this model, which has already proven its worth in the US, we take companies through the entire process of establishing their operations in another country. The focus of Soft Landing is to advise companies on how to deal with human capital, legal and regulatory compliance, and business practices in Mexico. As part of our commitment to the oil and gas industry, we have a strong focus on companies that are looking to enter Mexico from Houston. We mostly focus on SMEs since big corporations already have strong Mexican law firms helping them. Houston’s SMEs trust us because we know exactly what they need to do in order to be successful, plus, given the city’s dominance in the sector, it makes real sense to aid customers based there.

Q: As a new company, how do you prove your capabilities for addressing the needs of oil companies looking to enter the Mexican oil market?

A: Our customers require assistance in the fiscal, legal, financial, and labor aspects of doing business in this country. We can help with all of this so that they can get their businesses up and running in the shortest time possible. If we accomplish this, our reputation stands for itself. Despite the fact that GEMS is a newly created company, its people have a vast knowledge in many different areas of the Mexican oil industry. As an example, our fiscal team brings 15 years of experience in the energy sector to the table. When we built our teams, we brought in staff with global experience in oil and gas, which is why we are able to incorporate the changes made by the Energy Reform and quickly release a compendium of modernized solutions. There are currently three foreign companies counting on us to make their move into Mexico a lot easier, which represents clear evidence of our success when considering how recent the Energy Reform is. Additionally, GEMS has great experience in security and industrial safety. After the enactment of the Energy Reform, ASEA was created as an independent regulatory body that supervises how environmental and safety practices are being carried out in the hydrocarbons sector. Together with our partners, we can help customers obtain the right training in order to comply with ASEA’s safety standards, adding yet another string to our bow. In addition, we can help our customers attain the certifications they need to comply with the regulatory framework.

Q: What are the main concerns your customers have about entering the country?

A: Many companies want to enter Mexico while connecting with their regular partners worldwide. Companies still have doubts about how PEMEX’s procurement reconfiguration will affect them. We thoroughly explain to our customers that the Energy Reform transformed Mexico’s transparency, and that the level of competition involving domestic players will be no more severe or difficult than it is anywhere else in the world.

Q: How are you educating potential Mexican clients about how insurance can help them run their businesses?

A: First, we need to create a basic understanding of what the role of insurance is. This will demonstrate the clear advantage of transferring risk instead of keeping it. Companies essentially have three options when it comes to risk: they can keep the risk, finance it, or transfer it. Certain types of risk are better off being kept because companies know how to address them, other types should be financed through mechanisms such as a fund or an inflow of capital, and finally, certain risks should simply be transferred. Insurance is a perfect example of this last option. By laying out these options to our customers, and pointing out the potential costs of each one, we rapidly begin to create awareness about what insurance can provide. We even create hypothetical scenarios with certain clients, where we look back at their performance over the years and show them how much they could have saved with a particular structure or policy. In a way, we bring customers back to basics to create an initial understanding of insurance before crafting tailor-made solutions for them. After all, corporations are unique even if they operate in the same sector.