Couplings Company Looking for Long-term Success in Mexican MarketBy Peter Appleby | Tue, 08/25/2020 - 09:13
Q: How has Vulkan adapted to the Mexican market?
A: Four decades ago, Vulkan do Brasil began to focus on products for industrial applications, while our global crew is mainly focused on marine applications. Vulkan is the leading global provider of applications for marine power transmission. Our Brazil base has become the center of competence for the industrial side. We have around 2,000 products that we can apply to all kinds of industrial applications. Another of our strongholds is mining but we attend any type of industry where machinery is being used.
One of these industries is oil and gas. We apply components for mechanical power transmission to all kinds of driven machines. If you have a machine with a rotation system, then we produce couplings. Brakes are also needed to stop the machine. Installations in the oil and gas industry require many pumps, compressors, turbines and other machinery that, for Vulkan, are ideal areas of application for our products.
In our complete product portfolio, we are able to split products into two main areas: commodity products that many other suppliers also deliver and then specialized, customer-designed products. Our focus is on areas where we can apply our huge engineering know-how, design and manufacture, install and test products tailor-made for our customers. In many cases, machinery is very expensive and has high security requirements that are fundamental for the operation of our clients’ projects. In all of these cases, the state-of-the-art applications we design and produce can be used. A couple of years ago and for this reason, Vulkan developed its own “couplings family,” within which are certain couplings that clients in the oil and gas industry depend on. These include API-approved membrane couplings and high-performance couplings that are needed for machines with a high rotation velocity, such as turbines, compressors or high-speed pumps.
Q: What are the main avenues Vulkan uses to sell its products?
A: We have three main sales channels. For the industrial side, the largest group is the end customer, meaning refineries, FPSO constructors and companies involved in exploration. We attend the needs of these companies whenever it comes to replacement, improvement, substitution or extension of products. The second sales channel is for the resellers and distributors, through which we sell our standard couplings. EPCs and OEMs are the third sales channel. When an EPC project is begun, clients specify the products they need. We like to get involved with these projects from the very beginning to offer added value. This is the same case for OEMs when they package units. With PEMEX, like with any other NOC, we have to go through processes to get listed as an approved vendor so that we can begin to fill orders.
Q: How does Vulkan ensure its applications are up-to-date and in line with client requirements?
A: First of all, we developed this dedicated “coupling family” for applications in oil and gas. Our API-approved couplings line is intended exactly for application in the petrochemical and oil sectors. Generally, R&D takes two or three years and then there is another few years before the new product can be introduced into markets due to the intensive process. Our oil and gas focus began five years ago, so we are still at the early stages. We do not yet have high-levels of penetration into the market and are working to gain authorization of new products into many oil and gas markets worldwide.
Our biggest participation in Oil & Gas market are in the genset groups of FPSO’s and fixed oil platforms with our highly flexible couplings line and mounting systems solutions, once due to our large experience in marine applications, in addition to drive systems, we are also specialized in vibrations and acoustics. At this case our R&D has been working closer to the engines OEM’s following the most recent trends they are applying to their line to update our products as well. With the vast resources required to see out this process, a company of our size must pick and choose objectives and where to focus. We cannot support too many developments in parallel. At the moment, we are fine with what we have, though we want to win many more customers by showing them the value of our products.
Q: How do you approach clients to expand your footprint?
A: Our large product portfolio is also our selling point to the client. This reduces the complexity for the customer. Additionally, our specialty is engineering. We are not simply manufacturers of products; our specialty is to understand the requirements of our customers and offer tailor-made technical solutions for them. We have in-house development and testing areas and over four decades of experience. Frequently, customers get started with us by giving us a challenge to solve. For the most part, these problems are ones that other companies could not resolve. We solve the problems and gain the client’s trust. This is usually how our long-term relationships begin.
Another argument we use is that our cultural approach toward our customers is different. We are in the fourth-generation of a family-held the company. We are, therefore, extremely long-term oriented. We do not set out to make immediate, large-scale profits based on volume. We are more aligned with fostering long-term relationships that benefit both parties.
Q: What are the challenges that Vulkan will address in the next several months and what are the company’s plans?
A: COVID-19 has further complicated a situation in Mexico that was already very complicated in terms of oil and gas and energy. A few years ago, the industry had the very strong hope and conviction that with the Energy Reform, the big breakthrough would come. By this I mean investment into the industry from internationals to revive the national industry. Unfortunately, at the moment, we cannot see this movement. This is largely due to political decisions that have been made in the country. The current government has prioritized completely different goals to that of the previous government. The pandemic strengthens the problems that already exist in Mexico. The major question for me is not COVID-dependent but policy-dependent: where is oil and gas in Mexico going and how will that work?
For Vulkan, the next several months will be spent making sure we take the low-hanging fruits and opportunities that are presented to us. There have been many delays on projects and investments are being held back. We are lucky in that we have a diversified project, so we will pick up opportunities here and there to make sure we progress. But our approach considers the mid to long term. We do not require success tomorrow.
Vulkan do Brasil is a German company founded in 1889. Today, it is composed of three separate divisions: Vulkan Couplings, Vulkan Drive Tech and Vulkan Lokring. It employs over 1,200 at its 18 sites around the world.