BUSINESS AS USUAL

Mexico 2017 | INDUSTRY | INTERVIEW

TBY talks to César Jarero, CEO of Arzyz, on the importance of the automotive sector, the advantages of Nuevo León, and its focus on environmental issues.

César Jarero
BIOGRAPHY
César Jarero has been the CEO of ARZYZ since 2014 managing the company and contributing to the institutionalization by redefining its organization and culture. From 2007-2014 he was the CEO of Desarrollos y Proyectos JBC advising strategic purchases in the steel industry. From 2000-2007 he acted as President of IMSA Steel Corp. From 1989-2000 he held responsibilities as New Business Development Director of IMSA. From 1981-1989 he served as head of project engineering for HYLSA. He is an industrial engineer from UANL and holds an MBA from UDEM.

What is the importance of the automotive sector for this industry?

In Mexico, we consume approximately 1.8 million tons of aluminum per annum. The automotive industry is one of the largest consumers in Mexico, with approximately 1 million tons going to that sector. Car engines are aluminum based, and we work with one of the largest engine companies in the world in Mexico so that a big part of our business. In addition, suspension parts and transitions and other car parts are growing. In Mexico, the automotive industry has been growing rapidly and depending on the US political situation the automotive industry could grow much more or not at all. In this facility, we produce aluminum alloys that fill companies that supply directly to the automotive industry. Organically, we grow in that fashion with more capacity in these different units. We also have some related projects in mind, where we will start producing aluminum flat sheets. These sheets are the most promising products in the future because the body of cars will be aluminum. These materials are currently imported in Mexico. This entails around 550, 000 tons per year; therefore, we foresee an opportunity to do something with that and start a production facility in Mexico to produce those sheets. We are in the process of analyzing different technologies to determine the most convenient and most productive in terms of cost and raw materials.

What is the advantage of manufacturing and doing business in Nuevo León?

Monterrey is near the US border and it is easy to export from here. Labor is abundant in terms of knowledge and technicians as well, which is not easy to find in other parts of the country. Additionally, there are over 20 universities here in Monterrey. We have energy here in terms of power and natural gas. The state government also helps to develop new companies. Companies in the canning and sheet manufacturing industry in Monterrey are large consumers of aluminum. In Monterrey, there are two lines in construction that are also large consumers. We have been in talks with them and they are keen to have suppliers; this is another reason why we installed our facilities here.

How do you integrate environmental issues into your operations?

A secondary foundry company like us does not use a great deal of power, though we use a large amount of natural gas. It is helpful to have a company like us when it comes to environmental issues because we use a large amount of scraps. We recycle and our raw materials are also recycled products. As a company, we are conscious about the environment and will keep that as a part of our philosophy for future installations. Right now, we are in the process of installing an expensive system to reach the standards of Europe in terms of air emissions for this facility. It is a huge investment of USD2.6 million; however, it is great for the environment and humanity. We are committed to society and will invest in things that will not increase pollution in the city.

What are your other major goals for the company in the next few years?

We want to be technology developers. Currently, we have a patent for a byproduct from the diffusion process in our melting furnaces. When aluminum is melted, not 100% of the product is of a good quality; there will be some dross. The dross cannot be used, but we have developed a patent in Spain and will use that specific facility to produce calcium aluminate that is basically used for steel companies. We realized this would be a profitable project and we will have a great community. We want to design new processes in other areas in the company and R&D in order to seek better ways to use byproducts and better ways to produce the actual products. That will be our goal.