Steel Demand to Grow, Bring Opportunities to Mexico: TUVANSA

Q: What does nearshoring mean for TUVANSA’s operations, and what role do you expect to play in this scenario?

A: The hangover from the pandemic and the war between Russia and Ukraine have changed the global geopolitical map, which implies the formation of regional blocks and the relocation of companies. One of the most affected sectors is steel. Mexico could take advantage of these opportunities. There will be a greater demand for steel and specialized tubes for various industries, such as automotive and gas. 

The distribution chain has always been challenging due to its complicated nature. We are in the middle of the chain, between national producers and customers who urgently need the products. Time is critical, and this is where we can excel by ensuring that materials and products arrive on time to avoid delays in construction. We must also carefully manage imports to avoid harming domestic production.

These changes imply a strategic redesign of the company. After 60 years, there are always areas of opportunity that must be reviewed. For example, we have evaluated our valuable human capital, understanding that we also need to incorporate young talent. 

Q: What is the most important challenge that oil suppliers face in Mexico?

A: Suppliers all have one problem in common: cash flow, which is also a financing issue. The business of distribution is complicated because it requires having material on hand to sell it when it is in demand and having the logistics to supply it when necessary. Having the right stock at the right time is difficult and often requires financing. A supplier can invest millions in a project that then falls apart, meaning they do not get paid because suppliers are the last to get paid. The lack of payment has been affecting suppliers in Mexico in recent years.

Q: How has TUVANSA embraced digitalization and e-procurement systems to streamline its operations, enhance transparency, and foster collaboration with clients and suppliers?

A: AI and technology, in what is known as the digital economy, will be essential to survive. In this sector, having first-hand information to make accurate quotations is key to concluding sales. AI can be trained to be of great help in this area by helping sellers to make accurate quotes and provide them information on product availability. There are many systems for this on the market, although they still have certain shortcomings. Regardless, if users do not adapt to AI, they could disappear. There are already programs that large companies use for logistics and these will likely reach the distribution chain.

Q: How does TUVANSA contribute to the broader goals of Mexico's energy sector and national economic development?

A: We support industrialization by knowing well the specialized uses of the products we sell. There are nearly 9,000 or more types of pipe and flange connections that we must master. We need to know how to convince clients and developers that specialized national production is superior, even in terms of quality.

TUVANSA has always believed in Mexico. We import less than 5% of our portfolio because we want to support national products. If we did not believe in the country’s industrial policy and did not want to help, we would have already changed our composition. We have bet and will continue to bet on the national industry.

Q: What are TUVANSA's key objectives and growth strategies for the coming years, considering the evolving landscape of Mexico's energy industry and global market trends?

A: We are certified by ISO 9000, and we are ready to diversify. Due to payment issues in the sector, diversification has been key for enterprises. There is great opportunity for this strategy since there are more than 100 national and international private contracts. The challenge is to reconquer the market, especially natural gas, which will be the transition energy after oil. 

We have also diversified beyond steel tubes to include plastic pipes, all made of thermoplastics. We also sell fire systems through a US brand. We are also present in mining and other sectors, this market is steadily growing as the world seeks alternatives to fight climate change. Our core business is and will continue to be tubes for the oil and gas industry, but that does not mean that we are not attentive to what is happening in the world.

TUVANSA is a leader in the marketing of pipes, valves, connections, and hollow bars, with over 60 years of experience in the oil and gas industry.