Mexico is experiencing a new revolution, but this time, unlike what happened in Pancho Villa's time, what is causing it is the great demand of this market for security technology.
by Julián Arcila
On April 27, the fifth version of Exposeguridad México culminated, which was constituted as the largest of the editions that have been held to date at the Banamex Hipódromo Center in the Mexican capital.
The figures were more than positive and only served to corroborate the good image that is generally had of the Mexican market. Fortunately, the electronic security segment did not go out of tune and year after year it has been presenting remarkable growth, both in investments and in terms of the percentage of GDP that the Mexican government allocates each year for national security.
The development and growth of the segment has been so notorious, that today there are about 1500 companies dedicated to the installation of security systems, as indicated on the website of the fair. In general, there are some figures that can give a better idea of what is being talked about, and among them can be included the growth of 10 to 15% per year that the security segment presents, in addition to the 100 million dollars that banks will invest in the medium term to update their protection systems and CCTV.
Additionally, imports of equipment in this sector are expected to exceed 150 million dollars, while it has been reported that in the medium term in the Aztec country more than 100 million of the American currency will be invested in identification programs. It is worth saying that the figures mentioned above correspond to a market study that can be found on the ALAS website, more precisely in the link www.alas-la.org/estudios.htm.
VENTAS DE SEGURIDAD was present at the most important security event in Mexico and undoubtedly one of the most influential in all of Latin America. There he interviewed officials of well-known foreign companies that are present in this country, but also some of the new ones that represent the new blood of security in this market. The evolutions are great and that is what the editorial staff of this medium exposes in this note.
Mixed sensations
The truth is that the situation currently presented by the Mexican market shows nuances that go in opposite directions, because if on the one hand there is a better environment for businesses related to the security segment, on the other it is also true that what has motivated the increase in investments in this area is directly linked to the increase in organized crime and threats to tranquility. by various actors, something that is not exclusive to this nation.
Gumersindo Zúñiga, sales director of the US firm NVT in Mexico, agreed with what was proposed and said that the dynamism of this niche is due to two factors, one positive and the other negative. The first type included the emergence of greater security awareness among Mexican citizens, but in contrast it signaled an increase in crime across the planet. "There is one thing that is certain and that is that technology evolves every day and people are more aware of their safety today. The Exposeguridad Mexico show is the proof of this, because the manufacturers are bringing the latest in technological production, because we see that it is increasingly accessible to the people, "he said and added that currently this country represents the best market in the region for this manufacturer.
Then, Ricardo Abreu, CEO of Electronics Security & Control, said that the moment that the Mexican electronic security industry is experiencing is due to the fact that this country represents the largest commercial interest that the United States has in Latin America, in addition to being the third country that captures the most imports from the country. n of the north, with about U$10 billion annually, just behind Japan and Canada. But Abreu contributed a very important element and that is that he suggested that Mexico is currently an extremely attractive market from the technological point of view, since it has a fairly high rate of young population, compared to other Latin nations and even compared to the United States, which facilitates the acceptance of the technology.
In this regard, Mirna Castañeda, everfocus sales manager for this market, also spoke, who mentioned that another factor that has influenced the revolution of the Mexican market is the reduction in the prices of security equipment, which is mainly important because "Latin American countries are always looking for prices and we are entering a stage. where products are becoming more affordable for an increasingly large number of market segments," said the official.
Atypical industry?
Historically, the Mexican economy has had cyclical behaviors depending on the period of analysis. The last months of vicente Fox's government showed certain tints of recession, which goes in the same direction as the trend observed with the same periods of previous governments; in the same way, the first months of each government suffer the rearrangement of some economic forces and this means that in many cases the economy does not work at the top of its productive capacity, as has happened with some segments in Mexico.
However, the electronic security market seems not to have followed the trend, and marking a clear contrast has offered very positive data for those who have decided to invest in this segment, following the constant of the sector throughout the world.
Castañeda confirmed this by stating that Everfocus has been presenting, since the very entry into the country, double-digit growth in this market and was emphatic in stating that the goal is leaning towards an increase of 30% for 2008.
This was confirmed by Boris Varela, general manager for Latin America of the Israeli firm, which specializes in the manufacture of wireless security systems, who commented that since the last three years the company has had annual growth of 25% in the region and added that they hope to continue with those numbers, this would be possible to the extent that they manage to realize certain alliances in the region with some of the most important clients they have in Europe and other developed markets.
The most remarkable thing about Mexico is that it has not only represented growth for large manufacturers, but has also led to the foundation and development of new business initiatives, as happened with Q Digital, a wholesale company that has just two years in the market, but which already has its own brand: Sigma Integral; its president, José Miguel Orozco referred to the results of the firm in the first four months of the year, of which he said that from 2006 to this year sales, the hiring of personnel and the ability to provide technical support have doubled, which was described by this professional as the path to follow.
A company that claimed to have started this year with better figures compared to what was obtained in the first months of 2006 was Pelco, who through its business development manager for Latin America, Alex Mathieson, said that this company had an excellent 2006 and that at the end point of the first quarter of 2007 already were above what was achieved at the same time last year. "We expect this to continue, we expect the market to continue to grow and that Pelco will continue to do the same, even exceeding the growth of the market, which would be natural since we have been in Latin America and Mexico since before any other company or manufacturer," Said.
A dollar that generates concern
So far this year, the U.S. currency has presented fluctuations that have added all kinds of uncertainties to Latin American economic debates. For those who are in the security market, the situation poses several situations, because for those who bought some time ago to export, perhaps today the situation leaves them with some losses. But for those companies that import technology, the issue is much more comfortable, because they can buy much more technology with the money that they could not do before.
This is partly something that will contribute to further boost sales of security technology in the region, however it is important to know the opinions of experts on the matter.
Steven Walin, CEO of GVI/Samsung, a company that after facing difficult times at the beginning of last year is now presenting both net and operational returns, described the fluctuations of the American currency as a normal and cyclical process, which in some circumstances favors some and in others others. "We will continue to look for ways to make our products so competitive and to make the market a competitive environment. So we work in a very integrated way with our suppliers, Samsung in this case, to make our products more competitive and I do not mean exclusively the issue of price, but also how to make these products easier to install and maintain, because integrators are always looking for a total installation price, " Said.
Javier Silva Robles, sales manager for Latin America at AG Neovo, was not so pessimistic about the current environment and said: "We are aware that there are risks and for us one of them is that devaluations occur. Either way we see that the economies are very independent and we are seeing economies that are very solid, which have presidents with liberal economic policies and with tendencies oriented towards free trade and business, as Lula did in Brazil and Calderón is doing here in Mexico (...) The largest economies in Latin America have the positioning and strength to provide confidence to a company like ours."
But who did see this situation in a positive way was Aaron James, president of Security Cameras Direct, who said that this benefits American manufacturers and suppliers in the face of business in Latin America, because this could somehow bring a "boom" in terms of the purchase of security technology, by increasing the purchasing power of the currencies of this region.
100% technological region?
Every time an event brings together manufacturers, almost always from the first world, and buyers, originally from developed countries but also from what are known as developing nations, huge questions arise regarding whether a region like Latin America would be prepared to adopt the latest technologies, mainly in regard to what was seen during the last version of ISC West and that was related to technologies such as intelligent video, on demand and solutions for behavioral analysis.
In that sense, some questions were asked of the protagonists, whose answers add more interesting elements to the already extensive debates on the subject.
In relation to this topic, VENTAS DE SEGURIDAD interviewed Mimmo Micalli, general director for Latin America of the Swiss company Securiton, who recognized that this question is not only asked in these latitudes, but also in the ancient continent. Referring specifically to the possibilities of Internet security, Micalli commented: "Recently there was an important conference in Europe around IP security and how it will change the future; it is important to note that communication over IP does not provide security as long as there is no device designed for this purpose. So the question is how far we can go or where we place the safety criteria."
He added that fire detection devices are, within the spectrum of safety, the only ones perhaps designed to take care of people, while the others are fundamentally designed to protect values. So beyond whether or not it is possible to link systems over IP, the truth is that many manufacturers do not yet have it very clear about whether to go to IP or not.
In contrast, Darío Bellido, international director of Impact CCTV, pointed out that to answer this question it would be necessary to analyze the reality of each market in the face of technology; To begin with, he assured that Mexico, in particular, does have the possibilities to apply state-of-the-art equipment, as well as Brazil, countries that have remarkable advances in different fields. "In general, we could say that Latin America has grown a lot technologically speaking and, of course, it is going in the direction that the whole planet is going," he said.
DSC for example was represented by officials such as Carlos Mecca, sales manager of the district of Mexico and Latin America; Bruce Naggy, marketing manager for the DSC and SurGard brands; and Mark NeSmith, director of international sales for Latin America, Asia and the Pacific. These officials commented that all types of security systems are moving indistinctly towards IP and invited not to doubt the ability of the region to adopt it, because although many times this technology is difficult to understand, it is quite friendly to users and profitable from the financial point of view. Additionally they explained that it is necessary to take into account that within each market there are different classes of customers and that some of them will choose to stay with the old technology, so the important thing for a manufacturer and passing through for the market, is to offer a 100% reliable technology, regardless of the media by which it broadcasts.
But analyzing the entirety of a market is never an easy task. However, the comments made by professionals who have to face the same volatilities every day are quite useful to make predictions about what could happen in the short term in the most important markets in Latin America. The fact is that now the Aztec niche is experiencing a real revolution, which seems that in a matter of years it could spread throughout the region.
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