Once again this year, the U.S. Commercial Service will have a presence at POWER-GEN International 2014, with approximately 35 foreign buyer delegations attending that have been recruited through U.S. Embassies abroad as part of the U.S. Commercial Service’s International Buyer Program. Leading one of these delegations is Claudia Salgado, a Commercial Specialist with the U.S. Commercial Service in Mexico, who discussed market opportunities in that country.
Q: How large a delegation are you bringing to the POWER-GEN International 2014 conference? What types of companies and organizations comprise your delegation?
A: To date, we have recruited 69 delegates, all of them from the private sector. The companies vary from power generation, engineering and maintenance services, project developers, consultants, renewable energy, electricity generators leasing, manufacturers, large franchising firms (probably looking to self-supply their own electricity), distributors, etc. We may also be joined by Mexican government representatives who have been invited.
Q: Why should U.S. energy suppliers be looking at Mexico market?
A: It is a very relevant market. Comisión Federal de Electricidad (CFE) is Mexico’s national electric utility (100% owned by the Mexican Government). CFE is among the world’s largest integrated utilities, and the largest in Latin America. The total installed capacity of CFE is 52,512 MW with a gross production is 257,887 GWh (as of May, 2012). The total revenue of CFE in 2011 was US$23.48 billion, with total assets worth $64.80 billion.
The key premises for CFE planning in the long/medium term are:
– Additional capacity based on the least cost alternative
– Compliance with environmental mandates/policies.
– Cost reduction and increased productivity.
– Provide certainty to investors and financial markets.
It is projected that the installed capacity (public service) will double by 2026 with special focus on clean energy and natural gas. In addition to CFE, there are other opportunities in the private sector for power-generation, self-supply of electricity, cogeneration, distribution, etc.
Q: Do U.S. energy products have any type of competitive edge over energy products from other countries?
A: U.S. technology is highly valued as it represents high-quality and compliance with the standards. The price is also important in the Mexican market, and this is the reason why competition from other countries, especially Europe and Asia, is very strong. However, U.S. products are very successful in this market.
Q: Could you provide a few tips for US. businesses looking to sell to Mexico? What important things do they need to know to increase their chances of success?
A: It is very important to take the culture into account. The communication in Mexico sometimes is indirect, meaning that there is a difficulty to say “no.” US companies should be able to read between the lines. Not meeting business deadlines does not necessarily mean that the Mexican company is “not interested.” Some projects, contracts, sales, or export transactions take a long time in developing, but it doesn’t meant that they won’t be finalized. I recommend maintaining constant communication with Mexican partner and don´t assume that they will remember you if there is no interaction. Patience pays off.
Q: What are some of the benefits to U.S. business and foreign buyers in having your delegation at the show?
A: There are great benefits for both U.S. and Mexican companies. For U.S. companies, the possibility of meeting with qualified buyers interested in acquiring specific technology, products or services for their current projects and activities in Mexico. In addition, they can register to participate in the show time, where I will meet directly with U.S. firms to counsel them on the Mexican market. Furthermore, they can participate in the seminar on areas of opportunity in the Mexican Electricity Sector. Mexican companies can benefit from the free entrance to the exhibition and the discounted price in the conference program, and other benefits provided by show organizers. I am also helping some of them to organize a meeting agenda with specific U.S. companies that can supply the technology they are looking for.
Q: What other services does the U.S. Commercial Service offer U.S. companies and foreign buyers?
A: The U.S. Commercial Service has offices in 100 U.S. cities and U.S. Embassies and Consulates in more than 70 countries. We offer market intelligence and counseling according to individual business client needs. One of our most widely used services is matchmaking, also known as “Gold Key” service, where we can specifically locate business partners in the marketplace. In addition, throughout the year, the U.S. Commercial Service Mexico recruits U.S. companies to participate in Certified Trade Shows in Mexico and Mexican Buyer Delegations to participate in leading trade shows in the United States.
If you would like to learn more, please contact Claudia Salgado, Commercial Specialist of the Energy Sector, at Claudia.Salgado@trade.gov.