After a very complicated 2009 for the Mexican security industry, 2010 is presented as a year in which the Latin American nation will seek to improve and recover the positioning for which it is recognized in the sector. By: Duván Chaverra A.
Mexico cute and dear! How can we not remember that memorable phrase when a culturally recognized and economically well-positioned country within Latin America comes to mind, and that in the security industry is a nation that serves as an important measuring point to know what the behavior of the sector is throughout the region.
SECURITY SALES will be present at the next Expo Seguridad México 2010, which will be held from April 20 to 22 in Mexico City and for that reason we wanted to take advantage of the event to make an article focused on the current moment of the Mexican security industry, in which we seek to know the perspectives of this sector, even more so considering that the economy is just emerging from the crippling crisis of late 2008 and much of 2009.
Therefore, we invite some well-known companies in the Mexican security industry to use as a measurement parameter of a market that was quite affected by the crisis, but that since the beginning of this year already has its goals consolidated first in resurfacing and then in growing, if possible.
Guillermo Hernández, magocad account manager; José Luis Caballero, manager of the security division of Exprescom; Rafael Hernández Luna, finance manager of SIP, and Carlos Casares, representative of Syscom, will be our guests on this occasion to talk about the Mexican security industry.
What left 2009
Before starting to talk about this year, it is worth making an introduction and a small balance of the results that left in each of our invited companies in 2009, a year that will not only be remembered in Mexico for the economic crisis but also for the AH1N1 Influenza virus.
For example, for Rafael Hernández these two factors caused his projects to be paralyzed until everything returned to normal: "We had a stanby status in project quotes from october. From the knowledge of the influenza virus to the perspective of the North American market, annual sales resulted in a decline of 48%."
Similar numbers accompanied the management in sales in Exprescom, and like our previous appointment, investments and projects were forced to be stopped: "According to our plans we had a deficit of 30% in sales. The effects we recorded in sales were reason enough to not be able to make our growth plans 100% effective," said Caballero.
Otherwise, Guillermo Hernández, from Magocad, said that the company he represents exceeded all expectations in 2009, although they must also recover from the economic phenomenon: "Magocad Security Teams reinforced in the year of crisis its proximity to its commercial allies, which allowed it to obtain better results during the first nine months and grow by 12%. I think the worst part of the crisis has been left behind in the minds of many people. Confidence in the industry has grown, however, the recovery will not be easy and we are working towards it."
Positivism in 2010
It is unconcealable that the crisis has left several scars that are just beginning to be erased in the Mexican security industry, and therefore, the businessmen stood up and looked to the front thinking of putting aside this economic phenomenon and start working to recover the lost ground, a task that will take a long time to see positive results again.
Our guests have several perspectives according to the beginning of this year, because four months are more than enough to make balances of a quarter that can be a mirror of what the future has prepared for us.
Initially, Rafael Hernández, of IAPA, said that the cases of violence that have occurred in his country have had an impact on the business development of that nation, although he emphasizes that people are beginning to understand the importance of protecting their assets: "The news regarding the growth of crime in Mexico is not entirely good for society, however, this news allowed the quotes stopped by the economic issue of the country to be processed in this first quarter of 2010. The concern of people both for their physical integrity and for their assets and properties makes a proactive or preventive perspective, unlike in 2009 that was only reactive".
José Luis Caballero said that in his company 2010 started "with the closure of pending projects of 2009, but with a 'semi-similar' start according to the beginning of the year."
While Guillermo Hernández has been struck by the continuous technological developments that have occurred in the industry, which could generate good dividends. "This year has started with many technological advances, and even more, with a wide demand in projects where technology and security are involved. As an entrepreneur, it is inevitable to plan your growth if you do not rely on some technological tool, and this is aimed at networks either local or Internet in order to give a complete and integral solution".
Despite the fact that the year is already four months old, there is still time to talk about the plans and expectations that our sources have for this year. An atmosphere of positivity runs through the minds of our guests.
For example, José Caballero, from Exprescom, hopes that his company will be able to complete all of its plans: "We hope to cover 100% of our business plan and exceed it, in order to continue with our growth strategy in Latin America."
Guillermo Hernández expects his company to grow by around 16% in 2010: "We believe it will be a good year, we know that we have our entire organization and commercial structure to do it together with business partners, channels and manufacturers, and thus become successful."
Similarly, optimism also accompanies the SIP representative: "Until today there is a positive movement and an activation of projects that were paralyzed in the last quarter of 2009; that is, we could recover 25% of last year's sales, considering 30% to 45% of what is generated in 2010."
Commitment to technology and marketing
In many industries in Latin America, the marketing department was one of the most affected the previous year with budget cuts and investments due to the crisis; However, new year is new life and our experts have agreed that this year investments will be inclined towards technology and marketing, seeking to recover what was lost.
José Luis Caballero indicated that his company has also been dedicated to training, in order to better prepare its employees for what is coming: "We have invested in the training of our engineers so that they are certified in products with technology, which in the future will allow us to continue being the option that the market needs; another investment point is our marketing management, an area that we are confident is vital to our growth and market development."
The representative of Magocad also assured that the bet for this 2010 is focused on innovations and marketing: "In 2009 we invested in both technology and new products and this year the strength will be put in marketing and technology".
In the same way, Rafael Hernández, from SIP, said that the investment this year will be based on technology, in order to offer several options to the consumer: "Technology is one of the main areas in which it is invested, having more than one option for customers and being able to solve problems without having to migrate the entire solution is one of the objectives of SIP. Offering more than one way to solve security requirements allows us to achieve income for more than one product."
IP Trend
Finally, we will talk about the products that will be better positioned in Mexico during 2010. Everything seems to indicate that IP-based systems will show representative growth during this year.
"It is well known that CCTV and IP video products continue to be one of our best segments in sales," said José Luis Caballero, of Exprescom, and also said that a striking but expensive technology still needs to be positioned: "Megapixel technology still does not achieve its best positioning in the security markets, it is excellent but there is still not enough demand for prices to be more suitable for our Latin market."
For his part, Hernández, from SIP, said in this regard that "satellite or GPS tracking in the vehicles and values of citizens will be what achieves a remarkable growth; the management of inventories and assets through automatic control systems is another priority area. CCTV and remote security controls, access controls and any hybrid system will be able to position themselves in terms of users' need for products with growth."
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Decline in imports in 2009
We consulted with the statistics portal TheDatamyne.com, to analyze how imports behaved in one of the segments of the security industry in Mexico: fire alarms and other similar devices, comparing 2008 with 2009.
According to the table, imports into the United States (the main market for Mexico) grew by 18% during 2009, but China, which registered 39% in 2008, fell the previous year to 23%, in terms of the amount of equipment imported.
To complement the statistical table, Carlos Casares, from Syscom, will talk to us from the experience of his company about which were the equipment that marketed the most and how imports behaved in this segment during 2009.
On the products of greatest demand in Mexico currently, Casares commented that they are "those of smoke detection, ionic and photoelectric as basic devices, followed by gas, flame and thermal detectors, and one of the main reasons why the fire safety sector is booming is because the country has realized that it is necessary to obtain results in the short term, so they are regulating, certifying and adapting fire detection systems that help save lives. This process represents a human effort to make the customer see that it is necessary to invest in these safety products, in the same way to implement prevention and safety measures for the occupants".
Regarding the behavior of imports of fire alarm systems, our guest commented that "for a long time the trend was low because we did not know how to distinguish the urgency and need to implement a security system. The cycle that has left more teaching unfortunately had to cost lives. However, the trend has ventured into a period of growth, for example, the Latin American region constitutes about 6% of the global economy and its proportion is growing. By comparison, China's share of the global economy was around 5.5%. Mexico currently occupies the 20th economy in the world."
Mexico was one of the countries that suffered the most from the economic crisis and one of the consequences was the fall of the currency: "One of the external phenomena that affected imports was precisely the devaluation, since nobody likes to invest where there is an economic crisis. The marketing activity is not fully developed, in most economic entities there is no staff that is dedicated to this task, so the realization of these studies must have the factor of knowledge of the market ".
Finally, the syscom representative reveals the strategy to remain competitive despite the fall in imports: "It is evident the price change that security equipment has suffered, however, it is one of the markets where more has been invested, what is the reason? It's simple, whoever doesn't invest doesn't win, that's why the manufacturer's tendency is to offer a better quality item and a better delivery and support service, that's the key."
