ANER GARMENDIA

Spain 2021 | INDUSTRY | VIP INTERVIEW

TBY talks to Aner Garmendia, General Manager of EGA Master, on three decades in business, withstanding the pandemic, and opportunities in emerging markets.

Founded in 1990 by your father, how would you describe the evolution of EGA Master, and which particular milestones have marked the direction of the company?

The evolution of our company has gone hand in hand with needs of the most important industrial users in the world. We focused on them because our sector, tool manufacturing, already started to see competition from other places such as Turkey, Mexico, and Asia in the 1990s. In order to avoid that change in which the product was becoming a commodity, we sought the area where the users of the tool not only valued the price of the product but also other characteristics. We wanted to focus on those clients that value the efficiency and safety of tools. The main industries that value these tools are aeronautics, defense, automotive, energy, oil and gas, mining and heavy industry, among others. We thus decided to focus on those areas in an attempt to offer a solution that was different. Our focus has been to transition from products that were turning into commodities into offering a comprehensive solution providing all the needs that the industries require under the umbrella of a single brand. We are able to offer tailor-made services for our clients that seek products beyond basic tools.

Sales for EGA Master fell between 10-11% in the first nine months of 2020 compared to the previous year. How has COVID-19 impacted the company?

Our sales fell by 10% through September. This is a tough impact, but we have managed to reduce costs. One's strategy does not have to change because of a pandemic. The strategic orientation has to remain the same, and that has been the case for EGA Master. The sales decline is a blow, but we have to take into account that the sector has experienced an up-to-20% decline in revenues on average. The most important things for us have been the people and the clients. We have an international presence, and that allowed us to anticipate what was to come. In February, we gathered hydro alcoholic gels and masks even before the state of emergency was issued. Our office workers were sent home to work remotely, but we did not do that with other jobs that required a presence in our facilities. This was a delicate and volatile situation, so our workers were concerned, and there was a high degree of uncertainty. We sought to eliminate that stress and anxiety by showing that people are our most important asset. We told our team we would not lay off employees, and we guaranteed that everyone would receive their salaries on time. We also increased our liquidity to ensure we can meet our commitments with our employees and clients. As of October, we have a positive portfolio of requested products, and we are in good shape for 2021. We are extremely optimistic and have the confidence and satisfaction of being able to meet our commitments to clients and our people.

How has the pandemic impacted your logistics?

The most important area for us, in Europe, is land transportation. In the international area, it is sea transportation, but an important demand from our clients is supplied through air transportation. The logistics have continued to work, though costs have increased significantly. The cargo normally travels on passenger flights, and passenger traffic has plummeted. We have not faced problems handing over our deliveries on time since we work with end customers, to whom the price does not matter that much. They are more concerned with timeliness, so they are willing to accept a more expensive cost as long as it ensures the product will be delivered on time.

What sectors are the most important for you, and what have been the most resilient?

One of them is the aerospace sector, because less planes are being built, and some deliveries are not even being received. Also, maintenance is being affected, because there are few planes flying. The automotive sector has also been impacted due to several factors, including the transition toward electric vehicles. The most resilient sector, in addition to mining, is oil and gas, despite the low price of oil barrels. Saudi Arabia and other countries have attempted to add value to the commodity they produce and have important ongoing oil and gas petrochemical projects. We currently export 90% of our products to more than 150 countries.

EGA Master has offices in Dubai, France, Italy, Portugal, Peru, Mexico, and Australia. What are the company's international plans?

At the end of the 1990s, we made the decision to focus on emerging markets because they had a greater chance of growing. In that regard, we understood that the greatest projects would be developed in those countries, as was the case. In addition, there is another factor that is extremely important, which is that the competition in emerging markets is less compared to Europe. Having a smaller competition allows us to obtain more attractive margins. We are focused on the Middle East, Asia, and Africa. We want to focus on countries that have appealing growth rates, as well as where there is a larger middle class that will require larger investments. Emerging countries also have extremely large projects in mining or oil and gas where we can participate.

EGA Master has also received the double seal 'Calculo + Reduzco' from the ministry for its commitment to reducing its carbon footprint, the first company in the sector to do so. What is your commitment in this line?

There are huge opportunities for renewable energies and in the hydrogen sector. The companies that can adapt to them will have a tremendous competitive advantage. This will not be an expense, but an opportunity. There are huge wind projects in offshore in South Korea, Vietnam, Europe, and the US. Also, solar energy will have a huge development, and we are looking into the needs of these industries in order to develop the tools that meet their demands. We are already working with the main companies in this regard, providing them with specific tools for work at height or anti-magnetic tools that can be used with certain engines.

What is your key priority for 2021?

For 2021, we want to continue being the first option for our clients by offering a comprehensive service. We want to keep being their first option to ensure their safety and efficiency. We have identified all those international big projects, and, not like our competitors, we are working to establish a direct connection with end customers. Our competitors work only with the distributors. In our case, we like to have fluid communication and direct relations with the end customer as well. This allows us to know first-hand their needs and create specific solutions for each of them. Our objective, more than a quantitative priority, is a qualitative priority.