Mar. 16, 2021


Pedro Luís Fernández

Spain

Pedro Luís Fernández

President, General de Alquiler de Maquinaria (GAM)

TBY talks to Pedro Luís Fernández, President of General de Alquiler de Maquinaria (GAM), about international expansion, managing such a broad portfolio, and the importance of Spain in the global market.

BIO

Pedro Luís Fernández obtained a law degree from the University of Oviedo in 1989, and went on to get Master's in General Business Management International MBA at ESDEN, Madrid, and Value Creation and Valuation of Companies at IESE, Madrid. He is the founder of General de Alquiler de Maquinaria S.A., where he has served as Chairman and CEO since 2003. In addition he is a Member of the Northwest Regional Advisory Council of BBVA in Spain; Member of the Jury of the Princess of Asturias Awards for Concord; Member of the jury of the Luis Noé Fernández Awards of the Alimerka Foundation, in the "Fight Against Hunger" category; shareholder and member of the Investment Committees of venture capital companies PRINCE CAPITAL PARTNERS and TORSA CAPITAL, and in the latter he also acts as a Director. He is also a participant in the NEOCAPITAL Fund and Chairman of the Advisory Council of said company, and a Member of the Board of Directors of various companies in sectors related to leisure, food, and the industrial sector.


Founded in 2003, GAM has had sustained growth, first through acquisitions, then in 2006 with an IPO and in 2007 with its international expansion. How has GAM evolved, and what are some of its main milestones?

GAM was founded in 2003 within a disintegrated sector in Spain. It made sense to create a larger, more global project, influenced by the construction sector. We went public to raise more capital and shareholders, and in 2008, we began our international expansion. Starting from 2014, the company began to offer new services for a far more industrialized world, with longer-term and predictable contracts, but with more complex services. This is the way things were moving until 2018, when we experienced an important change with the entry of Francisco Riberas. The growth stage we were going through was an important value proposal for customers, and we wanted to have a strong and healthy balance sheet to be able to face this stage. The internationalization aspect stemmed from the fact that we had to leave Spain out of necessity, and we learned a great deal from this. It led to us modernizing certain aspects of the company.

GAM offers a wide portfolio of products and solutions covering sectors such as the metallurgical industry, automotive, agriculture and food, aeronautics, ports, mining, logistics, and more. What are GAM's main solutions?

Supply is one of our most important solutions. With regards to machines, we offer machine rentals. We have some 20,000 machines around the world, plus another 5,000 managed by customers, so we can provide a service. We also have a particularly important training department. First, we train staff to operate the machinery as well as how to maintain them. This is crucial because we have 25,000 of our own machines and many technical staff. We have a buying and selling portal for machinery for when our customers need to dispose of machines or need machines from us, as we have many customers in purchasing. Many brands have entrusted us with their distribution. We have also closed deals that have led the world to adapt to the new parameters that the industry requires. We have a robotics project that makes driverless machines, in which we have drones that we use for work carried out at a height. We have departments specialized in industrial ecology, energy generation, events, and so on. In terms of events, we have a division that covers everything from the microphone to the screens for production companies such as El Hormiguero, concerts, or festivals such as BBK Live, among others. Every time there is an event, the organizers need people to set it up, provide a power supply, and many more things, and we supply that engineering role. Now, we have a number of corporate events.

The pandemic has pushed industrial and construction sector toward digitalization. How important is digitalization for GAM?

In 2021, our aim has been to digitalize all our processes, and for that we need better data quality and better practices in order to manage it. We want a company that makes its own management decisions and does things digitally, more efficiently, and with fewer errors. We want to make data an asset. This is undoubtedly the biggest challenge for us if we want to become a more sustainable company.

How has the pandemic affected GAM? What strategies did you employ?

We have shown ourselves to be a resilient company, as the industry never stopped moving. If you have a problem, you look for efficiency; this is what GAM does. During the pandemic, we performed well. We have made our costs and structures more flexible. We knew customers were going to suffer, and our strategy was to be more aware of them every day and let them know we were there to help them with whatever they needed. On top of this, we provided flexibility and relief regarding payments and collections and so on. We stayed close to our customers and tried to interpret what they needed at all times.

How did GAM close 2020, and what are the company's revenue expectations?

GAM closed the year with a 6% drop in sales. However, if the company lost EUR5 million in the first half, it gained EUR6.5 million in the second. That is the efficiency of our model, which took us many years to get right. I do not think we will open in new countries, though we will grow in the ones in which we are already present, homogenizing the service more in foreign countries to standardize them and make them more complete.

Which market offers the most revenue, and how important is Spain in the global market?

Geographically, we are divided into two large areas. One is Europe, where we are present in Spain, Portugal, and Morocco. We use the same machinery in all three countries, and they account for 70% of our activities. The remaining 30% is Latin America. We will grow in all countries in the coming years, although Latin American countries will likely grow slightly more in percentage terms. This is a major challenge in Latin America's macroeconomy. We are present in countries that are highly dependent on raw materials, such as Peru and Chile, and this could work well in the short term. In Portugal, we work independently. Portugal is one of the most interesting countries for us and is a big commitment for us this year. There, we have focused specifically on the automotive business.

Are there any projects planned that have been allocated European funds?

Yes. We are taking part in five or six projects. In some projects, we are the main players, and in others we simply are the guests. Some projects are related to the digital world, and in others we are partners, such as that of the National Shipyards Association. That said, the projects are well focused on what the industry needs.

What is GAM's main priority for 2021?

We want to become a more sustainable company. We do it out of conviction and social commitment, though we do have to keep up with the competition.

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