Taking Off for Europe
With an annual growth rate of 17 per cent, the Mexican aerospace industry is among the fastest growing markets in Latin America. According to estimates by the Mexican Office for Economic Affairs, it will be in tenth place worldwide by 2020. The aviation industry is located primarily in selected federal states, including Baja California, on the border to the USA. This is also where Sergio Segura established his firm InnoCentro Aerospacial. In 2018, he participated in the MP and, as a result, invested in a German firm in order to boost his business with Europe and to become less dependent on the US market.
“We are purely an export business; 90 per cent of our exports are to the USA and Europe”, says Segura. So far, the 47-year-old mechanical engineer has fared well with this strategy. There is strong demand for suppliers of aircraft components in the American market, which is dominated by the industry giant Boeing. In addition, Mexico benefits from preferential tariffs through a free trade agreement with the USA and Canada. Back in spring 2018, InnoCentro’s order books were therefore full when Segura took part in the Manager Training Programme of the Federal Ministry for Economic Affairs and Energy whilst also keeping his eyes open for new business opportunities. At the time, business with the US accounted for 90 per cent of his turnover; he generated roughly 10 per cent through German sales. “Up to then, we had always only had temporary projects with German firms, no long-term dealings”, Segura adds.
In Germany, he got to know AviaWerks GmbH in Bremen, a medium sized enterprise strong in the field of technical flight simulation. “We have specialised in aircraft interior design, and a simulation system is the perfect supplement to that. With it, we can find out in advance how we can, for example, improve passenger comfort even further”, Segura explains. Together with his business partner Roberto Corral, who is also an MP alumnus from 2015, he decided to acquire AviaWerks. “In the beginning, the German personnel had reservations”, Segura says. In the meantime, he has been able to dispel their concerns. As he proudly reports, he has already even heard that “a Mexican boss is better than a German one”. He says that the MP helped him and his partner with this intercultural challenge as it taught them a lot about the German business environment. Moreover, the two business owners are now learning German to improve the communication with the team and with customers and hence the long-term development of the firm.
Aeroplanes are not assembled in Mexico; the country supplies aeroplane components to the USA, Canada and Europe. The umbrella association for the Mexican aviation industry – of which co-founder Segura has been a member since 2006 – estimates that demand for supplies amounted to about US$500 million in 2018. “It is currently difficult, but not impossible, to conclude new agreements” says Segura. He adds that there is primarily demand for components for turbines, aircraft fuselages and landing gears but also for plastic parts, composite materials and other special materials. “The duopolists Boeing and Airbus determine the market development in the aviation industry; as suppliers, we are dependent on them. If Boeing is not doing well, as is currently the case, this has an effect on our business too”, the entrepreneur says. He adds that orders are partly decreasing because less aeroplanes are being produced; at the same time, demand is increasing for cabin refurbishments. He met with several potential cooperation partners in Germany in the area of interior equipment and fittings, including a manufacturer of aeroplane tables, seat coverings and interior equipment made of synthetic materials. Due to the poor order situation at Boeing, he has had to put his established contacts “on ice” for the time being. Now, with the help of the new firm, InnoCentro is concentrating its energy on expanding its European business, which is dominated by Boeing’s main competitor, the German-French company Airbus.
Pictures: ©InnoCentro/Segura, Shutterstock
Mexican Honey for Germany
Elisabeth Rosado is not your typical entrepreneur. At the age of 17, she decided that she wanted to study anthropology. She never imagined that she would one day take over the family business and that the work would even fascinate her. Today she is 32 and knows pretty much every beekeeper on the Mexican Yucatan peninsula in person. The fact that honey from Yucatan sweetens the breakfasts of many Germans is thanks to her and her family’s commitment.
Mérida. “My grandfather was a doctor and kept bees as a hobby. He took my father along from a young age. When grandpa gave up his hobby, my father took over the colony. Over 15 years ago, the family hobby then became a family business called ‘Tropical Honey’,” explains Rosado. The honey that the company sells today comes from their own colonies as well as from honey purchased from beekeepers in the region. Beside honey in its natural form, the company also produces honey products such as sweets, soap and shampoo. Over half of the honey is exported, with around 60 percent reaching Germany via wholesalers. In 2014, the small business shipped 544,000 euros’ worth of honey to Germany. It is sold by retailers under various brand names.
Rosado wishes to develop her own label in the future. She therefore met with a number of wholesalers during her time in Germany, including Fürsten-Reform and Heinz Grube e.K. “My aim was to find at least one new retailer and to build long-term, efficient business relations with them – as we have had for ten years now with Hamburg-based NOREVO GmbH,” reveals Rosado. She is currently working on obtaining the certification needed for direct exports, and wants to resume negotiations as soon as she receives authorisation. To date, Tropical Honey has always been exported via NOREVO’s Mexican subsidiary. This allowed the honey retailer to outsource the elaborate certification process.
Rosado relies on the support of German technology in the production of her honey. Several years ago, she purchased a machine for the manufacturing of honeycomb from natural materials. This has helped to increase honey production. Tropical Honey uses the honeycomb itself and also sells it to local beekeepers. In Germany, the entrepreneur met with Bernhard Rietsche GmbH, the manufacturer of this machine, and has since purchased a second artificial honeycomb machine for 52,000 euros.
Over the past ten years, Rosado has invested a great deal of time in developing her entrepreneurial skills to fill any gaps in her knowledge and to remain up to date with the industry. This includes various training courses in management and business administration and, most recently, the MP in Germany in 2013. “It is important for me to always be up to date with the latest developments and to continue furthering myself. I want to lead my company with the best strategies,” she says. She likes to prove that she can also do this, too. Since participating in the MP, she has doubled the number of employees to a total of 20 and increased her turnover by 30 percent. Impressed by the systematic German approach, she has had new software developed to enhance company procedures and to be able to better plan and manage purchasing and sales, for example. “The MP inspired me to become better organised. The software is just one example of this,” says the young company manager.
“No Unique Recipe for Success Concerning Industry 4.0”
Luis H. Sánchez Ocampo is a project manager in the automotive industry. He has studied in Spain, Mexico and the U.S.A. Three years ago he and his father founded Metalistik, a tool making works. In the following interview he reflects on his experiences, new plans and investments in connection with industry 4.0.
GIZ: Mr. Sánchez, you took part in the BMWi Manager Training Programme in February 2016. What were the highlights for you during the training in Germany?
Luis H. Sánchez Ocampo: For my commercial purpose, my highlight during the training program was a workshop meeting between Daimler Mercedes and the suppliers that are planning to install their equipment and machines in Mexico. It was a great opportunity to network and present myself to several potential customers, at the same time, as a trusted supplier with the capabilities to produce parts for them, close to their new facilities.
Additionally, I had the opportunity to meet people from RWTH Aachen University. We had a tour of several facilities in which they are developing 4.0 applications for different purposes such as logistics, production control, process optimization, quality control and maintenance. We also received a guided tour around the Laboratory for Machine Tools and Production Engineering (WZL) tool shop which is a research centre that focuses on selecting the best technology available and training their partner’s personnel for tool manufacturing. Before the end of May 2016, part of the WZL team will visit Metalistik and other tool shops in Mexico to learn more about the Mexican market opportunities.
Industry 4.0 facilitates the vision and execution of a “Smart Factory”. How could this be implemented in your day to day business?
At the moment, Metalistik is developing its own production control system. First and foremost, the system must be very flexible and react to changes, in order to ensure optimal production processes. In order to do that, Metalistik needs to overcome two main problems. Firstly, our machines are not up to date technology; they are not fitted with a communication channel. Secondly, online analysis accelerates activities; supervisors will therefore need the most up to date information in order to be able to respond as quickly and flexibly as possible.
To solve the first issue, we are considering a low cost device patented by the University of Navarra that is able to give online information about the production line status and the different events that might be happening, such as failures or quality issues. Using this information, we can immediately take effective action. From our database of “Lessons Learned”, the supervisor will receive the instructions through an augmented reality system.
You started a private equity fund with your company Metalistik in Aquascalientes, Mexico to invest in industry 4.0 technology. Would you like to tell us more about your plans?
A spin-off project might be the result of this development. We are looking forward to analysing two other industrial companies that have very similar production conditions but different types of products (types of processes and controls), this research will complement and validate the final result of our system. For the development of this project we also have strong support from Asymmetric Business Dynamics which is a consultancy and an IT developer. If the system turns out to be successful for the first companies to use it, we will consider selling it as a low cost product to other industrial companies. This will be positive news for our shareholders since we are not only solving our production control difficulties but also generating additional income.
Modern information and communication technologies like cyber-physical systems, big data or cloud computing will help create new possibilities to increase productivity and improve quality – where are the challenges?
Many research centres are developing technologies that can compete with and replace existing technology. Also, there is not one specific recipe for success with industry 4.0; we can see several paths and ways to implement new forms of technology.
In my opinion, one of the main challenges is to choose the correct approach for your firm’s needs. Traditional concepts such as lean manufacturing must not be forgotten in order to avoid making the wrong investments in for example, “waste automatization”. Results have to be oriented towards the competitiveness and profitability of your business.
Thank you for the Interview!
Washing up brushes from Mexico gaining ground in Germany
Carcal is a Mexican family-run business with an over sixty-year history that specialises in the production of cleaning brushes. The colourful washing up brushes, scrubbers, nail and toilet brushes have ensured cleanliness from Mexico to Australia for many years now. Since recently, they can also be found in Germany.
This is the work of Laura Elena Ruiz Lopez. At the end of 2013, the 28-year-old export manager and granddaughter of the company founder participated in the Manager Training Programme for Mexican managers in Germany. “I find it a shame that we didn’t come to Germany any sooner,” says Lopez. “Somehow, our products are German, as all our production and packaging systems now come from Germany.” Indeed, Carcal has invested ten million euros in modernisation of its systems alone in the past six years.
Despite this, it was not easy to get a foot in the door in Germany, Lopez continues. They above all had to battle prejudices towards Mexican quality. During business meetings, she had to work hard to persuade potential clients and build trust in her company and products. “The fact that the economics ministries in our countries support the programme and the participants are selected with care was like a quality seal for our products.”
Following successful negotiations with wholesale company TEDi GmbH, she was able to secure a contract for the supply of washing up brushes. The qualified economist estimates the supply volume at low six figures by the end of 2014. They are also in talks with other buyers, such as the wholesalers, HAST group International GmbH and Edeka. Without the negotiation and presentation training she received in Germany, the talks would not be such a success, Lopez believes. And with her new knowledge of the quality and certification requirements, she is able to secure deliveries to Germany in the long term. This is not only in her own interest though.
“The programme allowed me to build trust in our products. And I help enhance Mexico’s image as a reliable business partner in the process,” says the 28-year-old export manager.