Discounts, Dependability Are Top Priorities for Western RetailerBy MBN Staff | Fri, 02/05/2021 - 13:21
Q: How would you describe SECMEX’s services?
A: Sinergia Estratégica de Combustibles (SECMEX) was created to make bulk purchases of gasoline following the enactment of the Energy Reform and the opportunities that followed for the retail sector. We were founded by three groups of gas station owners located in the west of Mexico. We have become the largest and strongest bulk buyer of gasoline in western Mexico and are associated with PEMEX. Bulk buying and our connection to PEMEX meant we could offer high discounts on gasoline but we wanted to increase those discounts. To do that, we began speaking to independent gas stations and increased the volume we could purchase.
As a result, we now offer up to 80 to 85 percent of the discount received by PEMEX, outside of our own group, so that they can continue competing against international retailers who themselves enjoy discounts.
Today, we sell to approximately 500 stations in the west of the country. Colima, Nayarit, Michoacan, Jalisco and San Luis Potosi are particularly strong states for us. According to PEMEX, we are among the Top 4 partner marketers of gas in the country. Aside from local stations, we also sell to international chains that buy PEMEX products.
The platform we use is very similar to PEMEX’s own marketing platform. All details that the client needs are available and easily accessible on the platform. We offer clients transparency and certainty and are audited by KPMG each month.
Q: How did the company grow its presence in Mexico’s western region?
A: We began in the states where we were strongest: Nayarit, Jalisco and Michoacan. Naturally, this was where we knew the market best and the group represents the largest group of gas stations in these states.
Afterward, we recognized that the west was strategic for the rest of the country. On one side we have Manzanillo, to which the cheapest gas in Mexico’s western flank arrives. There are train tracks for transport and direct routes to the country’s central commercial zone, including El Bajio.
We decided to link ourselves to companies like Trafigura, BP, Repsol and others, and ally with their brands. There is a phrase in the industry that says the most expensive gas is the gas that is not here. By partnering with various brands, we avoid the risk of not delivering gas.
We also decided to associate ourselves with the PEMEX brand, and today it represents 90 percent of the gas we sell. Years after the Energy Reform, no company comes close to having the infrastructure that PEMEX does and it is still able to offer by far the greatest discounts on gas prices. Indeed, the discounts are so good that many global brands still use PEMEX’s gas.
Q: The group is also partnered with Valero. Why did SECMEX choose Valero?
A: Valero began in Mexico in the opposite way to virtually all other retail brands. It began by first bringing gas to Mexico before setting up its service stations. As I said, there is no gas that is more expensive than the gas that is not here. Valero had that problem solved before it even began retailing in Mexico.
We chose to align ourselves with Valero because it is a strong brand that we trust. We know it does not cut corners and it meets all legal requirements for businesses in Mexico. With Valero, we can offer an array of options to clients and underpin any supply concerns.
Q: How did the group adapt to 2020 and the change in customer behavior?
A: It was a very strange year for everybody. Nevertheless, we are lucky to be involved in a sector that was among the first to bounce back.
To battle the difficulties that the pandemic introduced, we took several actions. One was to expand the payment times for our clients. This was important during the first half of the year when many gas stations had full tanks because no one was consuming gas. Some independent stations have very casual working procedures and, effectively, operated day-to-day. Flexibility in payment, and removing penalties and interest that would usually be connected to late payment, was particularly important for them.
Although we offered extended payments for all clients, only around 20 percent actually used this option. The rest paid as soon as they had money, and we learned that many of our clients are extremely honest people.
We also reduced our profitability on gas sales as low as we could, while still remaining in operation to ensure that the discounts we gave others were at their maximum so that regions were not left without gas. The absence of gas does not only impact citizens, but all services that rely on gas for movement.
Sinergia Estratégica de Combustibles (SECMEX) is a gasoline marketer, selling directly to gas stations. It has over 500 stations in its client portfolio, centered in the west of Mexico.