Francisco Soto
President
Bulkmatic de México
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Insight

Transferring Knowledge for Storage Terminals

Mon, 05/14/2018 - 08:05

Recent regulations published by CRE and mandating fuel storage requirements has created a clear business opportunity for companies willing to take it, says Francisco Soto, President of Bulkmatic de México. “The new regulation determines that by 2020 all companies that distribute fuels in Mexico must have a storage reserve of five days availability,” he says. “This quantity will gradually increase up to almost 15 days by 2025. The development of all the required terminals cannot be handled entirely by PEMEX due to its limited capacity. This is where private companies come into play.” 
Soto says Bulkmatic has already found three excellent opportunities in Mexico: Salinas Victoria, Tula and Hermosillo. “Because of its proximity to the US border, Salinas Victoria will allow us to bring fuel from the refineries in Texas and other US states,” he says. “The closeness of Salinas Victoria to Monterrey and the demand for fuel in that area make this project even more attractive.” In the case of Tula, the city is well-located to serve the high demand of a metropolis like Mexico City and its surroundings, he continues. “Finally, the north of Mexico has huge demand for fuels, but lacks storage, meaning that the region is under constant pressure to bring fuels as quickly as possible from other regions. To secure that market we plan to build a terminal in Hermosillo.” 
Bulkmatic specializes in transferring materials from railroad cars to trucks. It has been working on that niche for over 20 years in Mexico, and now has 12 transfer terminals representing a capital investment of US$70 million, 200 tractors and 150 pneumatic trailers in the country, with which it handles over 1.4 million tons of bulk products annually. Bulkmatic de México is a unit of Bulkmatic Transfer, a Top 10 North American cargo transfer company with a 50-year history in the US.
Moving into storage is a natural progression for the company, considering its history of handling several types of petroleum derivatives, Soto says. “We have handled both petrochemicals and fuels, which has allowed us to perfectly come to grips with the needs of our Mexican clients that work in those sectors,” he says. “We already have all the knowledge, experience and certifications to handle those products, so we have an advantageous position over many other companies looking to develop storage terminals in the country.

To improve efficiency as it expands its business line, Bulkmatic is working toward automating its transfer facilities, a feature that will then be implemented at its storage terminals. “Our transfer facilities are being overhauled to become fully automated” he continues, “With the proper automation, a truck that enters the terminal will be able to leave fully charged and weighted in less than two hours. Currently, that process can take several hours.” 
While clear demand and efficient operations is extremely important for storage terminals, it is equally important for the terminals to have a proper logistics infrastructure that allows the fuels to come and go. For that reason, Soto is looking for strong partners willing to provide easy access to every facility. “For the terminal in Salinas Victoria we are looking for a strategic commercial partner that can help us with the railroad infrastructure to facilitate logistics.” 
Soto believes the market needs both railroad and maritime connections but Bulkmatic’s experience makes it wiser for the company to focus on the development of onshore infrastructure. “Railroads are much faster and more flexible than maritime facilities,” he explains. “While a vessel has to be full to make the shipment viable, a train can be shipped starting from 90 cars.” 
Another advantage of installing railroad terminals is the flexibility they provide for supplying fuel to different regions. “Onshore terminals in the country will be needed no matter what, because we cannot depend only on maritime terminals for storage,” he says. “Doing so is like placing a burden on regions with lower demand or that are far away from terminals since they will be dispatched last and will therefore not be supplied with the fuel they require in times of need.” He says the construction of railroad terminals provides flexibility and increases the security of the fuel supply.
But this is not to say Bulkmatic is completely overlooking maritime infrastructure. “We can operate the facilities for companies that are developing maritime storage terminals but that do not have the fuel-handling expertise,” he says. “We are already talking with several companies interested in developing projects in Lazaro Cárdenas, Tuxpan and Altamira.”
Regardless of the type of storage infrastructure, Soto says the most important factor for success is a long-term vision. “We can see ourselves in 10 years as the most important operator of storage terminals in the country, for both our own terminals and those of third parties,” he says. With that in mind, he is setting tangible goals for the end of 2018. “For 2018, our plan is to have the first stage of the Salinas Victoria terminal ready, which will offer service to Monterrey and its surroundings,” he says. “The terminal should start operations by the beginning of 2019. By the end of 2018, we want to have everything ready to start the construction of the Tula terminal.”