Eaton Crouse Hinds Series Aims to Make Most of Market UpswingBy Conal Quinn | Fri, 07/22/2022 - 12:54
Q: What changes in the market have you observed and how has Eaton’s Mexican portfolio evolved accordingly?
A: The biggest factors that have influenced our portfolio in Mexico have been the government’s reforms in the oil and gas sector, the development of the Dos Bocas refinery and the increase in oil prices. Undoubtedly, Eaton had to change how it does business, especially in terms of where we allocate resources. With these new circumstances, we have placed more emphasis on the oil and gas sector, which previously made up a smaller portion of our portfolio but has become increasingly relevant since the start of the pandemic.
The reactivation of oil and gas projects is a phenomenon we are seeing across the region. In Colombia, Ecuador and even Venezuela, such projects have been jump-started again after a downturn in activity in previous years. This reactivation has obviously had an impact on Eaton’s Crouse Hinds series global portfolio. Nevertheless, Mexico still makes up 80 percent of our business in the region. While these markets are all growing, they are growing at equal rates. Therefore, our emphasis has remained consistent, too.
Q: How would you define the company’s manufacturing capacity in Mexico?
A: Our core business is aluminum smelting. We have international competitors but none with the manufacturing capacity installed here locally. We also have local competitors but their operations are not the same size as ours.
Of all our sales, 70 percent of the equipment continues to be manufactured locally in our Mexico City plant. Regarding installed capacity, we have undertaken an ambitious program since 2013 to replace equipment and machinery, which has not only increased but optimized our manufacturing capacity. Implementing Industry 4.0, which comprises levels of data analysis and process efficiency, has made us even more competitive. Eaton Crouse Hinds series is using about 60 percent of its installed manufacturing capacity. This means the company has the potential for further growth, which ensures it is always prepared to meet the needs of the markets should they change.
Q: How have you adapted your product development to the new needs you have identified in the Mexican oil and gas market?
A: We have two new lines of industrial lighting products that cater specifically to our oil and gas clients in the country. The need for sustainability and cost-efficiency of the oil and gas sector led the push toward the adoption of LED technology. Previously, we had to import these products but now we are manufacturing them here in Mexico.
Q: Worker safety and security is of huge importance in this industry but how much has awareness grown on the part of companies?
A: There has not been a major change in this regard. We have neither increased nor decreased our attention paid to the issue of health and safety in such a dangerous industry because we have always made it a priority. Rather, the industry maintains its high levels of awareness regarding health and safety issues. This is reflected in demand for our products that enhance the safety of operations.
Q: How has your relationship with operators developed now that they seem to be more focused on field development?
A: Our relationship with established EPC companies has strengthened recently, though we work just as closely with newcomers that are getting started in the Mexican market. When there is more activity, we will be working more closely. We supported the conceptualization phase of projects for many years, which allows us to grow together with our engineering clients both old and new.
Q: Have any of your products seen a noteworthy success or a particular increase in demand recently?
A: With the ongoing construction of the Dos Bocas refinery, all our explosion-proof products are in high demand. The bread and butter of our business has always been observing the demands and meeting the requirements of the oil and gas industry. We have also seen a welcome upsurge in demand for products related to maintenance as other refineries undergo renovation.
Q: What goals do you hope to achieve by the end of 2022 and how do they reflect your longer-term development plans in Mexico?
A: Principally, we aim to continue meeting the needs of our clients. Getting this done is highly time-sensitive and complicated by supply chain issues. However, thanks to Eaton’s Crouse Hinds series high level of local integration as well as its ability to work with component providers from around the globe, we can overcome such challenges to fulfill our commitments.
Regarding our long-term vision, we do not wish to lose sight of the clean energy transition. Mexico appears to be paying less attention to this transition for the time being but we have observed important changes and emerging trends elsewhere in the region in terms of green hydrogen as well as wind and solar energy. It is, therefore, imperative to strike a balance between making the most of all the activity in the oil and gas market while not losing sight of these imminent future developments.