TBY talks to Ygor Guilarte López, President of Yokogawa Mexico, on the importance of safety systems services, the shifting demographics of the industry, and the advantages of the Vigilant Plant approach.
TBY How important is the Mexican market to Yokogawa?
YGOR GUILARTE LÓPEZ It’s very important. We expect Mexico to be among the top 10 economies in the world by 2020, even in the worst-case scenario. Whatever happens with the forecast, the reality is that we were glad to see that the economy has grown by 4.5% in 3Q2011. The economy is very robust, and the right macroeconomic decisions are being made. We believe that Mexico is in the right position economically. Some sectors are our targets and our core business, such as energy, particularly oil and gas. Based on the population and the modernization needs of the country, we can contribute to Mexico’s growth, as it becomes one of the great emerging countries. This is why we decided to invest in Mexico and to place our headquarters here for Central America and the Caribbean.
What trends can you identify in the demand for your products and services here in Mexico?
Mexico has a great need to decouple the safety functions that are typically embedded in traditional control systems. To follow the current best practices worldwide, these should be installed as a separate system in order to protect assets and employees. PEMEX is taking the lead in introducing safety instrument systems to improve security, and in installing gas detection systems. In many cases, the control systems are becoming obsolete due to abandoned R&D and innovation, and so many of our customers cannot maintain operational continuity and they have to replace them earlier.
What are the pillars of your business model, and how is it responding to the Mexican environment?
Our execution methodology is unique. Globally, we are moving from being a hardware manufacturer to a solutions provider with a strong focus on the capability to offer our customers an extended range of solutions in the test and measurement, industrial automation and control, and information systems segments. This represents the core philosophy of Yokogawa’s value proposition called Vigilant Plant, which aims to provide customers with the best solutions and services to allow our customers to reach operational excellence. We began operations in Mexico in 2009, carrying out this business model. We are pleased to report that we quadrupled our traditional instrument business in the fiscal year 2011. We are planning for sustainable double-digit growth by 2015, and to become the preferred automation partner.
How will your mid-term strategic growth plan be implemented in Mexico?
By the end of January 2012, we had opened our first service center in Coatzacoalcos for downstream oil and gas, and by mid-year we expect to open another in Monterrey through joint development with our business partners. We aim to deploy an offshore oil and gas service center in Ciudad del Carmen by 2013, and that will be a good foundation for us as a service-oriented company. Our customers are moving to deep water as the industry moves in that direction. Mexico is doing a good job of assessing the potential of both deep and shallow water, but there continues to be developmental needs.
How has Yokogawa adapted to the environment, and what competitive advantages does Mexico offer international companies?
Mexico is an environment that is aware of international standards and best practices. I believe that the fact that Mexico is a member of the Asia-Pacific Economic Cooperation (APEC) forum is creating good momentum. The concern for everyone is security, though we have noticed improvements over time. Multinational companies are transitioning from manufacturing to more service-oriented operations, and Mexico is no exception. It is important to explain to the customers that the service is the product. Now that a new generation of young Mexicans is being educated in great universities, the country can support services for all of North America. The company expects that by 2020, 50% of the professionals in the oil and gas industry in the US will have retired. The experts we have relied on in this industry are leaving, and there is no upcoming generation in the US. I believe that Mexico will be more prepared to face the challenges in this field in the next few decades than any other
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