José Ornelas Infante, managing director of Motores e Ingeniería Mexmot, talks to The Energy Year about new opportunities opening up in Mexico’s power sector and the company’s work on milestone power projects for the Federal Electricity Commission (CFE). Mexmot provides electrical equipment and integrated solutions.
What ties do you have to GE and in what ways are they helping you secure contracts?
We work hand in hand with GE, offering our services using their equipment except when the end user would rather work with another brand or the execution timeframe doesn’t allow us to use GE. Yet, generally, the first offer we propose to our client is GE. We are not forbidden to use other brands, provided that GE cannot comply with all of the client’s requirements. Overall, we would say that Mexmot has a leading position in the Mexican market when it comes to representation of GE’s products.
In fact, we are currently defining our strategy to achieve the highest possible participation in the CFE’s seven combined-cycle plants and their associated networks. These will require work in terms of transmission lines, underground lines and overhead lines, as well as all the control, protection and measurement, which is so specific that only three brands can provide these services: SEL, GE and Hitachi. As representatives of GE, we believe we will be able to get a big portion of these projects.
What makes you competitive enough to participate in milestone power projects?
First, we always work together with top-level technology companies such as GE, Proenergy and Wood Group Pratt and Whitney. These companies have large contracts, as well as control centres that allow us to monitor our turbines 24/7. Secondly, in the company’s trajectory, we have been sanctioned for not meeting the contract delivery deadline only twice. This doesn’t mean we didn’t execute the project properly, only that we were late in the delivery – the first one by 13 days and the second by 17 days. This means we have a clean and transparent record. We offer average market prices with timely execution.
Apart from this, we have a solid financial backbone in terms of labour capital, good lines of credit and agreements with strong banking institutions, which is key to operating in this sector. When you are awarded a contract, you normally get 20% as a down payment, and the rest is paid only when the project is delivered. This is why financial strength is crucial.
We also have a very strong in-house expertise. Our employees are continuously training. In the first three months, when project development is slower, people are always following training programmes such as vibration analysis courses or programmes where we send them to the US. We have highly trained employees, which has enabled us to keep the business afloat, matching our competition.
What increasing objectives do you have in terms of product and service sales for 2022?
Our main challenge is to capitalise on the highest number of combined-cycle projects planned by the CFE. We are very ambitious, which means that from the seven that are planned, we want to secure work in five of them. We are hoping that this year our sales will hit USD 70 million, which would represent around 30% growth. This includes both products and services.
A few years ago, our products represented 20% of our sales while services accounted for the other 80%. Products, however, are gaining terrain in this equation and we have a star product, which is the engines area, including induction motors. Here, we have a very good market penetration in the mining industry. In fact, part of the new structure we are setting up foresees more people going to Sonora, where we’re opening up a management office.
We are also opening up a northern management office focused solely on Grupo México and some mines in that region of the country. There, we focus on equipment sales of engines and transformers. We believe this new focus in the north will also help us achieve our objective.
What bet has Mexmot made on new technologies and how receptive is the market to high tech?
We have focused on technology for some years now. Even within the CFE there are very ambitious projects regarding IoT [Internet of Things]. For example, with the LM6000 we are trying to implement the first remote monitoring system.
Today’s turbine display gives you information about certain parameters. However, we want to implement a system that analyses all data that the turbine is sending out: oil temperatures, vibrations, gas entry, etc.
We thus analyse any information that might help you make a specific decision while avoiding routine ones such as having to take the turbine to maintenance after 5,000 hours. With the analysis of all these parameters, one can determine whether it’s necessary to stop a turbine at a given moment, or if it can keep on operating for another 5,000 hours without a problem.
Players such as the CFE are embracing technology and making great advances on that front. This is seen, for instance, in projects like REI [Smart Grid]. CFE is betting on migrating to new technologies – SCADA, cybersecurity, etc. – so we are ready to collaborate with them.
What advances is the company making in terms of alliances and establishing its own repair shop?
The company’s objective in the next couple of years is to keep on working through the alliances we have and others we are working to establish. We are looking to strengthen our ties with companies like EthosEnergy, which is a very strong player in the area of large turbines.
Additionally, we are investing in a turbine-focused repair shop in Querétaro so that we can do repairs locally, and not necessarily go to the US to do them. As for this new venture, we already have the location and have invested in equipment. With it, we want to become a solid player within CFE for the repowering and maintenance of their turbines. The aim is to have it running by the end of 2022.
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