Refining Sector Set for an UpturnWed, 01/20/2016 - 12:09
Q: How much growth opportunity has the Mexican Energy Reform created for the petrochemicals market?
A: The Mexican industry is entering a new era, and positive changes will come with PEMEX’s new strategy and the implementation of the Energy Reform. Considering that the market was closed for over 70 years, international and domestic companies will need time to adjust to the newly implemented rules and regulations. Nonetheless, Mexico is the best-positioned country in Latin America for growth, and at Alpine Services we see this is a tremendous opportunity.
Q: How does Alpine Services differentiate itself from other competitors?
A: Alpine Services’ core product is valves. We offer specialized products using state of the art technology and our products have been redesigned to offer overall better results. Our customers are varied, but the majority of our business has been for PEMEX. We also tend to prioritize local participants and distributors. We differentiate ourselves through a quality customer service that excels in response time. Our clients appreciate the attention and training we provide on newer and safer equipment. Alpine Services maintains constant communication with the manufacturers and engineers of the valves it sells. Furthermore, Alpine Services customizes valves in reasonable quantities. Manufacturers usually do not customize smaller purchases and operators ultimately feel obligated to buy more pieces than needed.
Q: What is PEMEX doing to adapt to the new oil and gas landscape of Mexico?
A: The environment is changing dramatically and in response, PEMEX’s productivity has declined. Analysts point their fingers exclusively at budget restrictions, but Alpine perceives the company as going through an adjustment period. It is making an effort to develop new strategies and evaluations that will maximize project concentrations. Everything from regulation, assessing potential areas, and new procedures are becoming key elements in operations. We have seen several upgrading and revamping projects being tendered in the refining market, which seems to be the most opportune time to carry out this type of maintenance. Projects in Tula, Cactus, Pajaritos, and other facilities need to receive continued attention, and Mexico must focus on maintenance and expansions to meet capacity. In 18 months or so, once Etileno XXI is brought online, we will start seeing more activity.
Q: How can Alpine stress the importance of investing in equipment upgrades to its clients?
A: Convincing customers who traditionally purchase lower-grade equipment or outdated technology to invest in costlier products is quite a challenge. The price of upgraded valves and other oil and gas related equipment can cost between 5-15% more than traditional ones from 15 years ago. When it comes to technology, these price variations are normal. Even cellphones tend to be more expensive as new functions and technology develop. We explain to our clients that the newer designs have gone through many changes that make them lighter, safer, and increase production.
Q: To what extent do you plan on broadening manufacturing capacity to serve the Mexican market?
A: As the opportunities grow, we increasingly invest in training people, and in materials and machinery. In Germany, RITAG is expanding and developing its portfolio and product designs at a brand new facility that was built to expand its engineered products. RITAG offers exceptional product quality and design. In Texas, Sunbelt Valve Services is participating by training qualified service technicians to go offsite. The opportunities are endless, and we see potential in opening offices in Mexico in the future.