INDUSTRY 4.0

Mexico 2019 | INDUSTRY | B2B

Mexico's manufacturing sector has attracted investment from major foreign firms that are taking advantage of its growing economy and geography.

Juan Ignacio Díaz
JUAN IGNACIO DÍAZ
President & CEO
Siemens
Anuar Barake
ANUAR BARAKE
Vice President & General Manager for Mexico and Northern Latin America
Emerson

What are the main projects you have developed in Mexico?

JUAN IGNACIO DÍAZ Siemens has been present in Mexico for 125 years and has built remarkable projects that contributed to the development of the country. Some of the most iconic ones were the installation of the entire electric lighting system in Mexico City in 1897, the country's then-largest hydroelectric plant on the Necaxa River in 1903, and the electrification and expansion of the railway line connecting the city of Pachuca with silver mines in 1914. More recent projects developed by Siemens include a contract for the extension of Metro Line 2 in Monterrey in 2005, two contracts for the turnkey construction of the combined cycle power plants La Caridad I and II in Sonora State in 2011, the automation and electrical infrastructure solutions for one of the world's five biggest mines, and the inauguration of the “Ingenuity Lab," a PLM Training Center at the Technological University of Queretaro, which was equipped with Industry 4.0 in 2017.

ANUAR BARAKE Mexico is essential for Emerson for several reasons. First, the company has been here for more than 60 years, and everything we do in Mexico is with a long-term perspective. Mexico is an important manufacturing hub for the company; we have 19 factories where we manufacture all our technologies and have over 13,000 employees. Second, Mexico is one of our top 10 countries from a sales perspective. We can successfully meet the needs of the market, not only in Mexico City but throughout the country. We have local infrastructure and capabilities to serve the different industrial clusters throughout the country. Emerson has seven offices and three service centers, and we strive to provide excellent coverage for our customers to ensure we become their trusted advisor. Emerson had five business platforms, though our CEO and executive team decided to redefine and focus Emerson's portfolio into two core areas: automation solutions and commercial and residential solutions automation. In terms of automation solutions, we have a strong platform with an expanded offering. Two examples of the recent acquisition are Pentair and Paradigm; Paradigm provides software for the characterization of oil fields, namely analyzing fields from a geophysical point of view. Pentair Valves & Control established Emerson presence globally in control, isolation, pressure relief valves, and actuation.

What can you tell us about how Mexico's regulatory environment has affected your operations?

JID The actual government has some visible priorities, compliance and fighting corruption being the top on their list. We are actively contributing in its field, making sure that clean business is our business and that this is only true for the entire value chain, from providers to customers, including best practice sharing with other companies through collective actions. The positive effect of these measures can make the country more open, competitive, fair, and equal to all. Other opportunities in which we can really make an impact are in digitalization. Mexico is very industrialized, and we can help most industries in their transition to becoming digitalized. We have the technology and right people to help our customers become more productive, faster, and more flexible in their go-to-market efforts. The same is true for electrification; we can provide clean and stable energy solutions from generation to consumption

AB As a result of Mexico's energy reforms, we have seen a wave of investment in terminals and production platforms by international oil companies that has resulted in an expansion of our addressable market. With the new government's efforts to strengthen Pemex and CFE, we see that wave continuing to grow. In downstream, the government wants to reduce imports, and we will see not only the construction of the new refinery, but also investment due to the overhaul of the six refineries. That is Emerson's sweet spot because it has expertise not just in Mexico, but globally. We have the products, technology, and know-how. Our main mission is to help our customers reach the top quartile, namely operating in the top 25 percentile. This terminology is typically used in refining, upstream, and mining because in these industries, you want to operate at efficiency rates of 90-95% to achieve the required returns on investment.