Abraham Baruch Zepeda
Commercial Director
Grupo Hosto
View from the Top

Power, Uninterrupted

Wed, 01/20/2016 - 11:31

Q: What has allowed Grupo Hosto to become a leader among EPC companies working in the Mexican market?

A: Grupo Hosto was founded 25 years ago by Jorge Alberto Zepeda Grajales. At that time, contractors were hired directly by the plants, so the founder decided to start offering maintenance services to refinery managers, and this way, Grupo Hosto started obtaining its first contracts. After eight to ten years of experience, the company finally managed to secure a contract for providing reactor maintenance, becoming the first private company in the country to offer this service. Following its successful incursion as a provider of maintenance services for refineries, Grupo Hosto identified a new market niche in the construction of gas terminals. In this area, the company benefited from its expertise in providing maintenance to refining equipment and building infrastructure projects in Mexico City, a parallel business Grupo Hosto had at the time. Later, during the LPG boom, the company managed to construct 50 gas bottling facilities as well as four gas shipping centers.

Q: What opportunities have allowed Grupo Hosto to grow in the market since then?

A: In 2002, the refining sector experienced low production rates, which lowered the demand for maintenance services. Nevertheless, that same year, we started collaborating with the private sector, which represented a promising opportunity for the company. In 2006, the construction of new refining plants underwent a boost in the country and Grupo Hosto used its experience working with PEMEX and private parties to become an EPC company. This decision promoted the success of the company as the contracts for EPC projects represented a higher influx of revenues, allowing the company to improve its offering. Moreover, we are extremely competitive in the current state of the industry, which we consider an excellent opportunity for growth. In this sector, competitiveness is a function of cost, quality, and delivery time. To accomplish this balance, we have been working to certify all of our value chains. We are also able to offer our clients different schemes for up to 20 years for financing infrastructure projects, which is possible due to our partnerships with banks and financial consortia. Overall, the company’s growth has been heavily influenced by the development of the Mexican oil and gas market, especially after the announcement of the Energy Reform. In the case of PEMEX, the liberation of the market encouraged the parastatal to invest in its infrastructure, a situation that brought more job opportunities for Grupo Hosto, especially as there were few companies that could compete with us in this area.

Q: What new technologies have you brought to Mexico, and what advantages do they provide for your clients?

A: In our recent experience, there are three technologies that are especially impacting our clients’ operations. The first is the reactor cyclone, which is used to recover the unreacted catalyst from reactors used in the gasoline refining processes. The use of cyclones is essential, as the catalyst used in this process accounts for the highest share of gasoline production costs. In order to introduce this technology in an efficient way, we decided to perform an in-depth analysis of the cyclone equipment used in Mexico in collaboration with Buell, a leading cyclone producer based in the US. As a result of this project, Grupo Hosto is now the only Mexican company able to produce cyclones under the Buell brand.

The second technology is the loading nozzles, also used for catalytic reactors, which have a considerable impact on the equipment’s efficiency. In this case, we obtain the technology from Technip, one of our international partners. The final technology that is gaining momentum among Mexican companies is the Uninterruptible Power Supplies (UPS) system, which is a synchronizing machine with an inertia flywheel used to regulate voltage for avoiding power outages. Besides preventing operations from halting due to power outages, using a UPS is important for protecting the refinery’s equipment, as the usual voltage variations in the national transmission lines can cause real damage in electric assets, especially in fine machinery, such as measurement units. By installing a UPS system, the lifespan of the equipment can be incremented from ten to 25 years while avoiding the occurrence of a power outage in the plant. We studied this product for two years, and we finally decided to import it from a supplier based in Germany.