POWER May 2010 - 86

POWER IN MEXICO
government, to an environment in which
Mexican service companies were left to
sink or swim, was radical and painful. Although
the advent of NAFTA meant that
the cheaper manufacturing costs in Mexico
proved advantageous in certain circumstances,
Mexican labor is not cheap when
compared with that in Vietnam or China.
Mexican entrepreneurs are well aware of
the dangers of relying on price to remain
competitive. This puts Mexico in a difficult
situation: How can it compete in the global
economy when it can't compete with East
Asia on costs or the U.S. on technology?
As Fernando Calvillo, CEO of Fermaca,
a gas pipeline company, explains, " There is
a lot of potential in Mexico. We have 5,000
kilometers of land bordering the U.S. and an
internal market of 114 million people. We are
an integral part of NAFTA, and we have free
trade agreements with many European and
Asian countries. Mexico is a land of opportunities. "
The proof of this statement is demonstrated
by a large number of Mexican service
companies that have learned how to grown
and prosper under the new conditions.
Innovation
Some Mexican firms have been able to adapt
or enter into partnerships with international
firms to help them meet the new market realities.
Indigenous technologies are quite
limited, and a foreign partner can supply the
innovative edge. Rolmex, an example of a
successful Mexican company now operating
in Brazil, Columbia, and Venezuala as well
as domestically, provides additives-based
solutions to the CFE and PEMEX. Rolmex
General Manager José Luis Chávez says, " If
you want to work in Mexico, you need a local
partner-not just a local supplier or consultant,
but someone who will share the risks
and rewards with you. "
According to Santiago Barcón, director,
Power Quality and North America for
Arteche, " Mexico hasn't been at the forefront
of innovation in the past. If you look
at the statistics you can see that Mexico
has to do better in terms of innovation, in
terms of research, and in terms of investment
in knowledge. I'm very clear in my
view that the best way to combat the current
recession is to promote innovation. "
He insists that investment in innovation
has been key to the growth of the local
company Inelap, which Barcón cofounded
and nurtured before teaming up with multinational
Arteche.
Mexican companies don't have the
resources that U.S., Japanese, or European
companies have to produce groundbreaking
products, but they can advance
specific niche markets. By focusing their
86
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POWER May 2010

Table of Contents for the Digital Edition of POWER May 2010

Contents
POWER May 2010 - Cover1
POWER May 2010 - Cover2
POWER May 2010 - Contents
POWER May 2010 - 2
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