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Interview

Rodolfo Gonzales – President, Tecmaco, Argentina

The president of TECMACO, the Argentinean leader in heavy lifting machinery, highlights how current country developments will enable the company to more than double their revenues in the next five years. Moreover, he explains how investments into their employees enabled the company to become the partner of choice for globally leading brands.

Could you please introduce yourself to our international readership?

“President Mauricio Macri is really opening up the country and the relationships with important countries such as the US are as good as never before.”

I studied civil engineering and technology, machinery and construction has always been my passion; hence why in 1987 I set-up TECMACO. I travelled to the Netherlands and the United States to acquire second hand machinery to sell in Argentina, because importing new machinery was impossible at that time. Through these regular visits I established my first partnership thus could start to import cranes into Argentina serving big Argentinean companies such as Techint. These companies were in need of 40 to 50 cranes at once every time they acquired which provided the necessary economics of scope to enable importing. I commenced visiting the major trade fairs in Germany, China and US starting to build up relationships with some of the leading global brands –JCB for instance—establishing TECMACO as exclusive dealership for them in Argentina. Today, we are the only company in Argentina that can provide services in the area of the heavy lifting business simultaneously to be the exclusive dealer for significant names such as Bauer or Tadano among others.

You have founded TECMACO 29 years ago and are the pronounced market leader in heavy lifting machinery. How would you define TECMACO today?

We are a family company momentarily preparing the second generation to continue the business. Currently, we employ 250 people across our operations and have a fleet of over 200 cranes and much more of smaller machinery. My three sons are aggressively driving our business and have brought the next level of professionalism to the company. We have recently changed the entire structure of the company, clearly defining our horizontal business functions and clarifying responsibilities within the family as we feel that we need to have a structure that allows to maximize the growth opportunities which will result of the countries growth in the short term future.

President Mauricio Macri is really opening up the country and the relationships with important countries such as the US are as good as never before; prior to the political change importing has always been a fighting effort because we only engage in morally straight business and always refused to be part of any kind of bribery or nepotism. We have already acquired grounds in Uruguay’s Montevideo in an effort to diversify geographically! The rational is simple: we work with first class companies around the world, which is only possible as we have a spotless track record! We have already felt the changes of the new government in the last five months and we see how our business is going forward rapidly.

Argentina’s political development and efforts to attract investments promise upcoming opportunities in a multitude of sectors including oil and gas, infrastructure, construction and much more. Can we expect TECMACO to pursue all of these opportunities or will you choose a more tailored approach?

In the last 20 years Argentina was completely closed to the world, naturally business development was rather slow paced. When the new investments are coming and our president continues with his politics I am confident that within the next two years our capacities will be fully booked—even with our strong partners we will not be able to cover all of the opportunities coming up in Argentina. Our current turnover is approximately USD 50 million – 60 percent through our rental services and 40 percent through sales— and we expect to grow our turnover to USD 120 million within the next five years. Our greatest limitation is the lack of financial support within the country; as each crane costs several million dollars and funding inside the country isn’t available our growth will be limited to the capacities we have established already.

What will be the significance of the oil and gas industry towards your ambitions to achieve USD 120 million in turnover?

The oil and gas industry is significant to our operations; we work with all the refineries, YPF, Royal Dutch Shell, Exxon and many more players of the industry. In response to the upcoming needs of the industry, we just recently opened a new facility in Vaca Muerta offering a tailored portfolio of machines needed for its development. Throughout the past three years we have been analyzing Vaca Muerta from the perspective of our clients, finding out what will be needed in its development, bringing the appropriate machinery to Argentina and bundling it together for our clients. One dimension considered in this process, for instance, were the high costs of unconventional development in Argentina in comparison to other countries. Therefore, we brought highly innovative machinery that will enhance the efficiency of our clients in their development efforts. We are confident that within the next two years we will be the leading supplier in Vaca Muerta.

What kind of special machinery will be needed in Vaca Muerta?

One needs to consider the current development of the Neuquén province and the Vaca Muerta basin: both are logistically challenging terrains. In Argentina, the typical offering is ‘all terrain cranes’, typically developed in Europe. The latter is the crux: Europe’s infrastructure—or what they consider to be ‘all terrain’—does not apply in Argentina! Therefore, we started to bring rough terrain cranes to our offering specifically tailored to Vaca Muerta’s development needs as well as specially equipped trucks and trailers to reach even the most remote locations among many other machineries. We bring a lot because we are 100 percent confident that the introduction will fit the need and be highly successful!

Especially the oil and gas industry is currently pursuing a cost containment strategy. How do you navigate such a mindset and promote your products successfully?

Frankly speaking, the only way to reduce operating costs is investing in new technology which enhances efficiency—there is no other way! In the last 20 years these investments in technology haven’t reached Argentina simply due to its political instability. There was no consistency in rule of law, the legislation changed every three to four years and investors’ confidence was simply not a given. It is not easy to invest in a country if you cannot predict farther than two or three years.

Bringing innovative technology that enhances efficiency therefore is the opportunity you will seize?

This is a tremendous opportunity for us! Of course innovative technology has a price and all of the products we bring –due to their technological leadership—are accompanied by a significant investment as well. But that is what it is: not just a price, but an investment with real return on investment! Our products look costly to our clients as the initial investment is high, we show them how our product will create efficiencies for their operations, how it will help them to save money thus amortizing itself swiftly. For instance, when we gained Sennebogen as partner and introduced their highly innovative products in the country, it was an initial struggle to successfully market their products. Eventually we gained clients at the port and within a matter of weeks we were overrun with procurement request as the products at our initial client spoke for themselves due to their tremendous impact on our client’s productivity. That is why our products are not pricy, but investments: they will bring down your costs and return on investment will be tremendous.

Which partners support you the most here in Argentina?

All of our partners fully support our operations here in Argentina! I visit Europe and our partners three to four times per year learning about the newest innovation and understanding the global direction of our partners; these partners include Bauer, JCB, Fuwa, Tadano, Magni and Sennebogen. All of our partners currently recognize the heralding of a new Argentinean era and we are confident that in the future our common business will prosper even further!

To what extend are services regarding maintenance of the equipment significant to your operations?

This is one of the most significant challenges of Argentina. In the last decade, our people have neglected education regarding caretaking of costly equipment to a certain extend. We are actively counter this development; most recently we established a partnership with AESA and one of the leading universities in the country in an effort to raise awareness and change the way equipment is seen by the workforce. As company at large, we invest a lot in our people and the new generation of people starting to work in the industry. The ‘old generation’ is blocking some developments which makes needed improvements and business opportunities impossible. For example, if an old machine which needs six employees to operate is replaced by new technology which only needs two people to operate the unions make sure that the new machine will still be operated by these six employees. This way of thinking must end and –especially given the current economic situation—overhead needs to be reduced, efficiency must be gained and the game must be changed by professionalism. To change of the mindset of our people will take years; investments are not enough to develop the country, the people need to align with the future as well.

President Mauricio Marci said that Argentinean companies will need to act as role model for investors in order to develop the country. To what extend is TECMACO a role model?

As aforementioned we introduced a lot of highly innovative products which undoubtedly will help the country’s ambition as we ease the process for companies to engage in necessary developments of Argentina’s vast resources. The most important investments we have undertaken, however, are the investments we place into our people. Among in-house training possibilities, we offer to send them abroad to our partner’s facilities to receive training in an effort to maximize their know-how and preparedness for customer’s needs. This is of utmost significance in order to achieve sustainable growth for the company, we need a working team ready for the future. Our people recognize the efforts and in response are highly loyal, reliable and trustworthy! They see that we do not drive a Ferrari or own a plane because before we place money in our own pocket we look at our people’s needs for development; this simple philosophy is the reason why we have grown that large over the years and it is also the reason why we are market leaders. Our people—therefore our company—is genuinely behind our customers, offering genuine solutions as partner, not only trying to squeeze money from them. We are recognized for quality and for always seeking win-win situations and that recognition starts with my people!

You have some of the largest companies in the world trusting you with their brands, how do you create this trust and what is the value you provide to them?

Frankly speaking, establishing this trust comes naturally to us; we are accountable, reliable, achieve excellency in everything we do and have a genuine track record of decades to prove that. This level of trust has helped us tremendously over the years. Just one of many examples is the financial support we receive from our partners; whereas a loan from a bank in Argentina would come with at least a 20 percent interest rate, we are receiving a two percent rate from our partners—this is only possible via a trusting relationship. One of the values we provide to them is that we can show how to successfully introduce products in one of the most challenging markets in the world—Latin America—some of our partners regularly send their staff to us for training which genuinely honors us. I believe that also shows the potential of Argentina’s future; if we can be so successful in a challenging country, think of how successful we can be in a ‘normal’ Argentina! With our partners and with our efforts and investments, we have positioned ourselves at the pole position to this ‘normal’ Argentina; we do not need to adapt to the future anymore—we have already arrived in the future!

Speaking to other companies looking for a dealer in Argentina, why should they choose you and why should they come to Argentina in the first place?

You will always need a company that knows the Argentinean market. About a decade ago, one of the largest machinery rental companies in the world came here and tried to establish themselves without a partner and swiftly lost more than USD 50 million. A couple of years after, they asked us to be their partner explaining that the reason they failed in Argentina simply was that they did not understand the market dynamics well enough. Now, Argentina is transforming, opening up to the world and offers unmatched opportunities! We are the natural partner of choice because we already have the trust of some of the largest brands in the world, which showcases our high expertise. Moreover, we do not have any debts with our partners, we always pay on time because we never play with the trust we have been given. And lastly, we have unmatched know how of the domestic market, how to be successful in the country and –most importantly—know where the money is!

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