Young Leaders in Diversifying Product SolutionsWed, 01/22/2014 - 16:19
Since being founded in 2009, Flow Control & Measurement (FCM) has become quite the connoisseur of process equipment for the oil and gas industry, and is now the exclusive provider in Mexico for a stable of manufacturers. FCM began as a distributor for Oklahoma-based Kimray’s equipment like pressure regulators and control valves but two factors soon led it to grow. The demand for such control products became widespread across Mexico and FCM became a trusted point of contact for PEMEX. Today, while it does have some sales in PEMEX’s South Region, FCM focuses primarily on the North Region, stretching from Burgos to Veracruz. The increase in demand has seen it secure exclusive distribution rights to other international product lines. FCM’s line of products now includes those from companies such as Canalta Controls, Bruin Instruments, Mercer Valve, and Taylor Valve. 2012 was a good year for FCM, says its CEO Rolando Maggi Versteeg, with close to 300% growth coming in Mexico through its expansion strategy. The results for 2013 were more sobering, although FCM managed to retain its market position in a tough economic climate. In the meantime, the company has hit on a pricing strategy to sell the merits of its product portfolio, from pressure-relief valves to glycol pumps. Maggi Versteeg explains that FCM provides factory prices for all its products to any company working in Mexico, believing this will spur demand. “Since we are direct distributors and not resellers, we do not markup our prices. We have kept this strategy with all the brands for which we have exclusive rights,” says Maggi Versteeg.
FCM is now looking to use its position as an exclusive provider to broker lucrative contracts for itself and those it represents. After negotiations lasting 18 months, FCM signed a three-way contract with PEMEX Procurement International (PPI) and Kimray. FCM’s role in this endeavor will be to deliver and invoice Kimray’s products to every division of PEMEX, securing more attractive pricing for the NOC. Maggi Versteeg states that should this contract proceed smoothly, FCM will look to extend the same opportunities to Canalta Controls and Bruin Instruments. As investment in the oil and gas industry increases, Maggi Versteeg is confident FCM’s marketing and sales division will find itself called upon more than ever before. “As new facilities are built and existing ones are revamped, the market for FCM’s products is expectedto grow, although it could take another 18 months given our company’s upstream focus,” he predicts. Moreover, Maggi Versteeg feels that the upcoming changes in PEMEX’s procurement framework will lead to positive results. The configuration of this new framework has not been established yet but the FCM CEO thinks it will provide incentives for local manufacturers and provide opportunities for the contracts with PPI that FCM is looking to sign.
Maggi Versteeg explains that working with private firms requires FCM to adapt to new contracting terms, often involving purchase and services orders, which do not offer the long-term stability as PEMEX does. The overview that FCM has of contracting in the private and the public sector leads it to believe pricing will drive competition in the market. “For Mexican firms to compete fairly in this environment, alliances between them are required to secure PEMEX contracts,” he recommends.
Regarding future contractual terms, Maggi Versteeg says that “the upcoming contracts are supposed to be handled differently, hopefully more focused on increasing production. PEMEX should only pay companies when they deliver positive results.”
Maggi Versteeg’s experience with PEMEX led to FCM creating a new division that is currently working on an integrated maintenance contract at PEMEX’s storage and pumping facilities located in the Tajin oil processing center at Chicontepec in Poza Rica. 90% of Chicontepec’s production passes through these storage and pumping facilities, which require a wide range of processing equipment ranging from separators to valves. This new endeavor has allowed FCM to develop significant expertise as a service provider, and is the first step in becoming a maintenance service provider,” says Maggi Versteeg.