COMMITTING TO THE FUTURE

Mexico 2016 | ENERGY & MINING | INTERVIEW

TBY talks to Francisco Javier Vargas Elizondo, Director General of Petrogas, on the company's expansion, the secret to its success, and future goals.

Francisco Javier Vargas Elizondo
BIOGRAPHY
Francisco Javier Vargas Elizondo was born in Monterrey in 1988. He studied architecture at the University of Texas and is currently the Director General of Petrogas.

What is Petrogas' current role in the market?

Petrogas is now a full service provider of design, construction, compliance consulting, environmental services, equipment sales, and electric and fuel technical services to meet any client need. Recently, we began expanding our business in the US, starting in Texas. Currently, our company specializes in equipment for service stations, image and building design, construction of fuel terminals and gas stations, POS and payment management systems, preventive and corrective maintenance, oils, and derivatives. We have learned over the years how to become better, growing our business from Monterrey to a national-level presence.

What is the average profile of Petrogas' customers?

We have a wide variety of customers, from large corporations with a network of over 300 gas stations to companies with just one or two stations. At the moment, we have a 65% market share in terms of providing these services to the retail gas industry. We were able to reach this point of consolidation thanks to the trust our customers have in us and our trustworthiness. Our current customers include independent gas stations, gas distributors, major oil companies, convenience stores, supermarkets, local governments, general contractors, and commercial end users.

What has helped Petrogas expand so successfully over the past 25 years?

One of our main advantages is that we know the market well, which helped us benefit from regulatory changes implemented by the Mexican government in the sector to increase safety standards. Changes in the safety framework and an increasing level of safety-consciousness in the sector drove the modernization of the industry and many players invested in new equipment. One of the main things we brought is innovation and business strategies; we introduced a certain change in the way the industry operates, making a commitment to the future of our customers. This meant a great deal of investment at the beginning in order to have the inventory needed to reach the national market with full capacity to serve it. In the early 2000s, we held the leading position in the industry at the Latin American level as well. Currently, we are the number one distributor at the global level for certain companies. The other element is that we are close to our customers and they value this greatly; we offer personalized services with high levels of proximity and transparency—something other players in the market lack. My clients know how to reach me directly at any time. Our success is built on trust and reliability.

In which foreign markets are you active?

We work in the US as well as other Latin American countries. We do the same type of business activities everywhere. In the US, we cover the area around Texas and the Gulf of Mexico. Because of high competition in the US, many Mexican companies have faced some challenges. However, through strong effort and dedication we have been able to succeed in the US market. At the moment, we sell a lot of fuel tanks in both Mexico and the US, where companies value our delivery schedules and terms; on average it takes approximately eight to 10 weeks for most companies to deliver fuel tanks in the US. For us, it takes between eight and 10 days.

What is your vision for Petrogas for the future?

Our goal is to open more offices and locations in the US—Houston, Dallas, and San Antonio. There are plenty of opportunities in the US. Due to our competitive advantages, we have a privileged position there. We are a disciplined company and will continue to further consolidate the strength of our operations everywhere. We will continue to expand our activities in the Mexican market as foreign companies demonstrate more interest in this market, especially midstream and downstream fuel companies. Finally, we have diversified our portfolio over the years and it is important to continue those efforts.