A Shifting Strategic Focus for Mexican Manufacturing

Q: Walworth is described as a historic brand with a modern management team. How does this unique combination of heritage and a forward-looking approach shape your business strategy in Mexico today?

A: This description of combining heritage with a modern approach is accurate on many levels. Walworth is a brand with over 180 years of history, yet our current management team remains relatively young. This is true at the leadership level, where key partners and directors are of an age that allows us to combine traditional values and business practices with a constant search for disruption and new opportunities, technologies, and business models. This unique blend of extensive experience and a forward-looking mindset is a core part of our strategic DNA.

Q: Walworth recently opened a new production plant in Dubai. What was the strategic rationale behind this expansion, and how will it influence your global competitiveness and supply chain?

A: We chose the United Arab Emirates, specifically Dubai, as our first location for a self-owned, on-the-ground presence for several reasons. Key among them are the favorable business climate, the receptiveness to foreign private investment, and the brand's long-standing acceptance and positive reputation in the region.

We found highly committed and valuable commercial partners and collaborators in the Emirates. The decision to invest in a plant was also heavily influenced by the high degree of "national content" that the Emirati government grants to local products. This provides significant benefits, discounts, and competitive points in tenders and allocation processes for products and services. All these factors combined led us to invest in the Middle East. While the Emirati market is attractive in its own right, Dubai also serves as a strategic platform for more ambitious and larger markets, such as Saudi Arabia, which is the crown jewel of the region.

Q: What is your current business portfolio's focus, particularly in the midstream and upstream sectors, and where are you seeing the most growth?

A: Walworth’s corporate DNA is Mexican. We carry this to the Middle East, the United States, and all the markets where we operate. We want to continue making our mark and contributing to the many challenges and opportunities.

For the group and for the business strategies I oversee, midstream is undoubtedly one of our most important targets. I see significant opportunities and challenging needs in transportation, distribution, and storage of natural gas. Given our region, natural gas production and combined cycles will remain a crucial part of the energy mix, which necessitates transporting gas via pipelines, compressed natural gas, or liquefied natural gas to these power generation centers.

In our last interview, I spoke about the difference between energy sovereignty and energy security, and I hold the same view. We should be seeking energy security with the highest possible degree of energy sovereignty. It may not be in our best interest to be 100% sovereign in every aspect, and I believe that is an unachievable goal anyway. This is similar to supply chains, as Donald Trump attempted to create a fully sovereign supply chain but was eventually forced to ease his tariffs.

Regarding upstream, it would be great if, given better security conditions in the country, the transportation of liquids like gasoline and other liquid fuels were to be reactivated. For reasons known to all, there has been very marginal investment in liquid pipelines. The same applies to liquefied petroleum gas. It is clear that the main opportunity continues to lie in natural gas, whether in its gaseous, compressed, or liquefied form.

Q: Walworth supplied a significant package of Mexican-made valves to the Dos Bocas refinery, which you called a "cornerstone" project. What does the successful completion of this project signify for Walworth's capabilities and its reputation in the industry?

A: Regarding Dos Bocas, there are new opportunities that perhaps were not as clear in our last interview.

Walworth was one of the first companies in the oil and gas sector to obtain the Hecho en México (Made in Mexico) certificate from the Ministry of Economy. Our involvement in Dos Bocas benefited from this program, even before the formal program existed. It gave us the chance to demonstrate what we have always said: Walworth is the most important valve manufacturer in Mexico and Latin America, and a strategic partner for PEMEX and the oil industry in Mexico.

We operate like a local player for major projects, and we proved it. We built new industrial facilities to serve the Dos Bocas project, hired local crews, installed test benches, and provided installation support. We completed the project on time and within budget, with minimal deviations, which is a source of immense pride for our thousands of employees and the project's managers, who trusted us.

The successful completion of this project, which remains a global benchmark within the Walworth group, is incredibly satisfying.

Furthermore, I am very enthusiastic about downstream. Mexico's refineries and petrochemical plants are filled with our valves due to our legacy. Today, we are seeing tangible petrochemical projects, such as the fertilizer plant in Escolín, and hearing about rehabilitations that PEMEX plans for facilities like Camargo. These projects, whether through traditional PEMEX contracts or mixed models, have us very excited. In the context of a complex global geopolitical landscape, we have the technicians, the land, and the resources right here. We are eager to participate in large-scale downstream projects like Escolín.

Q: With rising global costs for raw materials like steel, how does Walworth's local manufacturing capability provide a significant competitive advantage? What advantages does being in Mexico still offer, both for the domestic market and for serving North and South America?

A: If you had asked me this question a few months ago, my answer would have been different. However, the recent government report by our president was correct in stating that Mexico is one of the countries least affected by tariffs. For us, manufacturing in Mexico has been a tremendous advantage. The fact that we can certify that our products are made in Mexico, that we are not merely a logistical bridge, and that we have full traceability, has opened up many more opportunities for us in the North American market.

Perhaps, even unintentionally, the government's policies (Donald Trump's tariffs combined with the capable management of the Ministry of Economy and the president) have created conditions that give Mexican manufacturers a competitive edge in the United States. Of course, this did not come without challenges. There were moments of great uncertainty where manufacturing in Mexico seemed like a disadvantage. But the government was quick to act, and after a few very tumultuous months, the waters are now calmer, and our sector has emerged stronger. While we faced challenges with supply chain adjustments, impacted customs, and collapsed trade routes, much like the early days of COVID-19, today's situation is much better.

However, this does not mean that every strategy follows the same path. For instance, our new plant in the Middle East operates under a different strategy. While we do use products made entirely or partially in Mexico, we also leverage supply chains and manufacturing, both in-house and third-party, from closer regions like India and Asia.

Q: What are Walworth's key strategic objectives for the remainder of 2025 and into 2026?

A: I would be dishonest if I did not place the normalization of PEMEX financials as our No. 1 priority. This has strong consequences, both upstream and downstream. My first expectation would be to enter 2026 with certainty and clarity. 

Beyond that, I am an optimist. I am enthusiastic about mixed contracts. I am excited about the new leadership taking the reins in the sector, including PEMEX, CENAGAS, and CFE. Traditionally, the second year of a presidential term is when action begins, and our plans are designed to align with that.

Walworth provides services, equipment and parts for the integration of fluid management solutions in the oil and gas, power generation, chemical, mining, pulp and paper, cryogenic, geothermal, drinking water, drainage, and wastewater treatment sectors, among others.