Oscar Mendoza
Director of Oil and Gas Division
GENSA
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Insight

GENSA the Pressure on Growth

Wed, 07/12/2017 - 16:30

exico’s natural gas demand is growing but a few companies have set their sights on the more mature market north of the border. Gasoductos y Estaciones del Norte recently became the first Mexican producer of natural gas decompression stations in the US. “We officially received US government authorization to export the products we make in our plant in Monterrey,” says Oscar Mendoza, Director of the company’s gas division. “We make different product lines such as risers, domestic connection elevators, transitions, simple and double-meter sets and we now have 10 warehouses in the US.”
GENSA’s products are now sold in Home Depot and its plant in Monterrey is working at 130 percent capacity, producing 390,000 pieces in 2017 and working three shifts. The company’s natural gas plant in the State of Mexico has been keeping pace with 250 stations built in 2017, up from 180 in 2015, says Mendoza. The company’s main clients for such stations are Gas Natural Fenosa, ENGIE, Transcanada, Fermaca and IEnova. For major clients like these, GENSA builds between 100 to 140 stations per year. “The largest project we built was Agua Prieta II, which has a capacity of 400MW. We completed the project in a record build time of 14 months,” he says.
According to Mendoza, GENSA was the first company in Mexico to design and build natural gas decompression systems. “Up until this point, they were only built in Italy, the US, Canada and Colombia.” The company has sold seven projects and has projects with Bimbo in Mazatlan, Underger in Puerto Escondido and hydroponic green houses in Tlaxcala and Puebla.”
The company plans to start making decompression stations for fast-food restaurants, which require natural gas and are currently charged on the basis of estimates. Mendoza adds that GENSA has designed a station so that distributors can charge for the gas consumed by fast-food restaurants, adapting their designs for stations serving large industrial plants to the needs of smaller companies. “We expect to do 50 of these projects in 2018,” he says. 

All in all, Mendoza says GENSA owes its rapid growth to a variety of factors, including timing, with the construction of new gas pipelines creating greater access to natural gas. The company is also able to keep costs low because its engineering, manufacturing, construction, operations and maintenance and transport are in-house and local. The strategic location of the company’s plant in the State of Mexico also factors into GENSA’s added value, and the automatization of this plant even created a 15 percent reduction in retail price – a saving the manufacturer could pass on to clients. “All these factors have allowed GENSA to become a more proactive company,” Mendoza says. “The operational costs were lowered and we stopped leasing transport and started buying our own trucks. Such measures reduced fixed costs to competitive levels.”

In the domestic market, the company has also been growing its operation and maintenance activities, signing contracts with companies such as Clariant, Cementos Cruz Azul and Procter & Gamble. Aside from adding this new product to its domestic product line, GENSA has also made incursions into international markets. “We have transitioned from being a company that only built and operated systems at the request of clients for the 12 months of the contract,” says Mendoza. “Our clients now seek us out to operate systems that were built by other companies.” 
GENSA’s steady growth has allowed it to look to new markets. Right now, Mendoza says the company is examining an expansion into Colombia. “We just closed two contracts in Colombia to supply decompression stations for high-volume usage because in Colombia they only build for low-volume consumption.”