– Jose Miguel Aparicio Ferrer, Chief Executive Officer – Mexico
With the liberalization of Mexico’s energy sector, domestic service providers such as Catermar highlight the importance of investing in the development and professionalization of their businesses in preparation for the waves of international investors and operators expected to soon reach Mexican shores.
Catermar is a Mexican leader in the Catering and Accommodation segment for upstream platforms in the domestic hydrocarbons sector. In your own words can you explain the motivations behind the founding of the company in 1993 and where it stands today?
Catermar Mexico was in fact initially a part of the international catering group, also known as Catermar, which was on par with other global players like Sodexo. In 1993, we founded the Mexican entity as a joint venture together with the Portuguese owners of the Catermar group. A couple of years later in 1995, the owners made the decision to withdraw from the Americas market and offered me ownership opportunity of the local entity. Shortly thereafter, the Catermar group closed its doors and ceased operations leaving us only carrying that name today.
With over two decades of experience under our belts, Catermar Mexico is today a fully owned local entity and is held by two shareholders. Since the very beginning, we have been keen to building Catermar into a company capable of competing in the international arena. As a consequence, we are the first Mexican company to in our field to earn ISO 9000 certification for quality management systems as early as 1998. Over the years, our ambitions continued to be strengthened by improving installations, training and the services we offer to clients. In fact, we are currently in the final stages of having integral certification that would include ISO 14000 certification which addresses various aspects of environmental management, as well as OHSAS 18000 occupational health and safety certification the ISO 22000 standards which addresses innocuity of food. These standards will all be integrated into our ISO 9000 certification to demonstrate our commitment to quality throughout the organization. Again, Catermar is the only Mexican, if not worldwide, company in its field to have earned such qualifications.
Today, Catermar is focused on serving the Mexican market alone and our core business lies in the industrial catering and hospitality services. There are far too many opportunities in the domestic market for us to be looking outside of the Mexican borders. Catermar currently serves in the neighborhood of five thousand meals daily and this represents only a small fraction of the local market. The potential growth opportunities are simply immense.
Concurrently, owing to my international experience in the exploration business, Catermar has also successfully represented several drilling companies, including most importantly Pride International for which I was the legal representative and commercial manager for a decade. During that time, I successfully contracted Pride rigs to Pemex that generated USD 1.1 billion of revenues over that period of time.
What does the liberalization of Mexico’s energy markets mean for Catermar?
It is rather interesting and exciting indeed. For the past 15 to 20 years, Pemex has monopolized catering services for their own exploration and production rigs, as well as the private ones contracted by them, for offshore exploration.
In effect, the energy reforms will downsize Pemex’s participation in the catering market, among others, and likely limit it to only their production rigs as well as those fields it seeks to explore on its own. Having invested in the professionalization of our business in order to compete on the international stage, this unlocks a wealth of opportunities for Catermar thereby expanding our pool of clients. Prior to the reforms, we were highly dependent on Pemex’s contracts and the opportunity to work with private companies was limited. As soon as private rigs were on-contract with Pemex, the state-owned company was in charge of securing their catering which meant we had to go through Pemex. Although they had their reasons to follow that process and centralize their catering, we believe this is not the most efficient way to go about it and are excited that their control over the catering business will gradually dissipate and the market will be increasingly driven by competitive forces.
To what extent can you cope with the expected increase in demand for catering services in Mexico?
Bearing in mind that once Catermar began applying for the range of quality certifications, dealing with quality management, environmental issues, safety issues and food innocuity, we started looking at the company as multidisciplinary organization. We have had to professionalize our entire supply chain and develop our managements skill set to enable them to work in a ‘just-in-time’ type of environment. While some companies seek to invest in larger facilities and inventories, we instead aim to optimize our demand and supply chain to a point that allow us to shift large quantities of supplies as they are needed while holding minimal stock for short periods of time. For this to be possible, the competencies of our human resources become critical. In other words, we have opted to invest in our skills and capabilities of our people in order to build an efficient organization, rather than investing in larger warehouses and inventories.
A lot of companies in Mexico we have met with are looking towards alliances and joint-ventures for growth to gain capital resources or international expertise. Is this an option Catermar is pursuing?
Although we have not yet actively pursued any partnership opportunities, it certainly is an option we would be willing to explore. As an entrepreneur, I would like to continue developing Catermar into a world-class organization as much as I can and I believe we have the capacity to continue doing that. Although partnerships with large multinationals in our field do offer obvious advantages, so does remaining an independent business. Agility, flexibility and closer relationships with customers are some advantages companies like ours can offer over the larger players. Nevertheless, we will carefully explore any and all opportunities that might arise for the benefit of Catermar as an organization.
Now more than ever, for those international players looking to be a part of the Mexican energy reforms, its rather simple; work with Mexicans!
To make the energy reforms a success, there also has to be a real shift in the mindset of Mexicans. Given your professional experience, domestically and abroad, how optimistic are you they will be able to achieve that?
That is absolutely correct; change starts at home and from within. For us Mexican’s, Pemex is home. Fortunately for Pemex, newer generations of businessmen and leaders are heading the country’s premier business. This is definitely an important advantage that Pemex now has. For many years, as the union exercised its strong influence over the national company, training and new comers were few and far in between. Over time, Pemex was drained of its experienced people and had many of its key positions taken up by inexperienced individuals, despite their best intentions.
However, what we see today is a growing pool of newer generations that have both the skills and the eagerness to transform Pemex into a nimble 21st century oil company. So long as there is a shift in mentality and in the outdated business-as-usual ways, I am confident that the newer generations at the helm of Pemex can and will bring about real change.
Besides accessing capital, this is why we see many Mexican businesses seeking partnerships with international players; in order to gain access to efficiency promoting technology. Ciudad del Carmen, as one of Mexico’s leading exploration and production hubs, is full of Latin American oil and gas workers. The only human resources we have here that may compete with the technical abilities of the foreign workers here are either expensive, scarce or retired. Mexicans unfortunately lost its regional technical leadership in the oil and gas industry many years ago. All we have to do now is look towards Brazil and the leaps it has made in deep water capabilities. Only a few decades ago, Brazil sent a delegation to Mexico to imitate its model of the oil industry; they thought we were the best. Today, I truly believe that we are on the right path to re-establish Mexico’s leadership in the oil and gas industry.
With offshore developments said to be among the first to benefit from the wave of international investments, what challenges do you foresee in unlocking their fullest potential?
Offshore is certainly where the action will be but for that to happen, investments in onshore infrastructure to accommodate these are critical. Pemex has communicated its intentions to begin developing the country’s virtually unexplored deep waters around 2016 or 2017. However, this will not work without putting in place the required infrastructure, on time. It serves no purpose to invest and explore in the Gulf of Mexico’s deep waters, only to plug the wells and wait another decade until the proper infrastructure to handle it is in place. Sure, Mexico has the people, infrastructure and capabilities to handle shallow to medium depth projects. However, I am doubtful of whether we now have the ports, for instance, capable of managing the size and weight of deep water equipment.
Although some would see great challenges here, we see great opportunities. Building the infrastructure to accommodate deep water developments alone represent great growth opportunities for countless business across the value chain. These opportunities are further multiplied once we take into consideration the investment opportunities in the mid- and downstream as well.
What are your ambitions for Catermar during these unprecedented times of transformation in Mexico’s energy sector?
Having embarked on a mission to professionalize Catermar and gain international accreditation some two years ago, we are ecstatic to have successfully reached our goal. When we first started that process, many around us scoffed at our ambitions and never saw the long term benefit. Today, we know that Pemex will soon start mandate that its suppliers in our field have these very same certifications, giving us at least a couple of years’ head start over those that chose not to invest in the development of their business. Sure, we have had to sacrifice a good proportion of our profits, but this was done in lieu of being there first. Some of the most successful businesses in the world made their break through by being there first and being there at the right time. Considering Mexico’s historic energy reforms that have attracted the attention of investors from across the world, we are adamant that now is the right time for Catermar to begin a new chapter in its own history.
For investor’s eager to participate in Mexico’s fast emerging opportunities, I would like to offer a simple piece of advice. In the same way that travelers to new destinations first seek to sample the local foods and visit the cultural centers of the host country to see it for what it is, investors should seek to establish partnerships with established local businesses. Working directly with Mexicans is undoubtedly the best way of ensuring that investors become a part of the country’s historic Energy Reforms.
*Note: Shortly after conducting the interview, Catermar was presented by the Campeche state governor Fernando Ortega Bernés with the Annual Award of Business Merit 2014 (Premio al Mérito Empresarial 2014) on behalf of the Coordinating Business Council (Consejo Coordinador Empresarial, CCE) of Ciudad del Carmen for outstanding services and continued growth.