Breaking ground in Mexico
UK Trade & Investment (KTI) helped construction and mining equipment distributor AREAL CE to hit the ground running in Mexico. It made targeted connections for AREAL CE with potential partners that allowed the UK company to secure an immediate order for hydraulic hammers
Since 1978, Arrowhead Rockdrill’s UK manufactured hydraulic hammers have combined innovation, quality and value. They are simple to operate and can be mounted on any excavator vehicle or rig, including those of popular construction brands such as JCB and Caterpillar. Based in the UK, Arrowhead Rockdrill’s in-house designers ensure that all products are state-of-the-art, and its dedicated support teams around the world reduce downtime to ensure that clients soon see a return on investment.
Ciaran Convey had been successfully selling Arrowhead Rockdrill branded products for a multi-national Original Equipment Manufacturer (OEM) with headquarters in the UK. For two years he was responsible for selling hydraulic hammers achieving a five-fold increase in world-wide sales. Looking for a new challenge, Ciaran approached Arrowhead Rockdrill with a proposal to become its sole distributor in Portugal, Spain and across Latin America. He got the go ahead and in 2007 set up Arrowhead Rockdrill España América Latina (AREAL CE) in Barcelona to manage sales and offer full service support, including warranties, replacement parts and logistical advice to customers.
“From my years selling Arrowhead Rockdrill hydraulic hammers, I was confident in their quality and durability,” says Ciaran. “As successful as sales were in Eastern Europe, I felt that there was strong potential in south western Europe and throughout Latin America that had yet to be explored. Arrowhead Rockdrill was willing to support the initiative and awarded me exclusive rights to Spanish and Portuguese speaking markets.”
An Andes Trail
In September 2008, AREAL CE visited Chile, Argentina, Brazil, Peru, Panama and Costa Rica on a 28 day trip around the Andes to explore the potential of these markets for its products. As a result, the company decided to focus on mining and construction sectors across South America. With this renewed commitment outside of Europe, it moved headquarters from Barcelona to Warwick and registered as a UK company.
AREAL CE’s first significant contract was in Peru, where it reached an agreement with an established import distributor, Headmark Corporation, who took a first container of stock in May 2012. With a further contract in Chile soon after, the company gained the confidence to consider Mexico, a much larger market with established mines, a strong construction sector and many potential customers.
In May 2012, Ciaran attended the Latin America Trade Show in Birmingham in the West Midlands. There he met representatives from UKTI in Mexico who put him in touch with UKTI’s Advanced Engineering team in Monterrey for specific in-market support.
“Latin America was a key target market where I felt there was great potential for our hammers to be sold,” says Ciaran. “The Andes mountain range contains vast natural resources that are the foundation for several countries’ mining sectors. Having secured major contracts in Peru and Chile, we felt confident approaching more established mines in Mexico, and were keen to enlist in-market UKTI support in planning our approach.”
Mexican focal point
As a starting point, UKTI in Monterrey provided AREAL CE with general information about Mexico’s mining and construction sectors that showed how Mexico’s strong economy and open-market conditions were optimal for business. Then, in May 2013 the company commissioned an Overseas Market Introduction Service (OMIS) from UKTI’s Advanced Engineering team, asking for a more detailed market research report, including a list of potential distributors and customers. UKTI identified and contacted more than 20 Mexican businesses, before providing a shortlist of interested parties. It also helped to arrange an itinerary of eight meetings in and around Mexico City for the end of May, when Ciaran planned to make his first visit to the country.
In the first of these meetings, AREAL CE secured a substantial purchase order from local distributor, Machinery Power. The company also went on to lay the groundwork for future orders with the other businesses it met. The first container of Arrowhead Rockdrill hydraulic hammers and spare parts was delivered to Mexico in July 2013 and Machinery Power already had several interested clients lined up within two months of commissioning the OMIS.
With a local presence in Mexico City secured, AREAL CE now plans to use UKTI’s services again to identify and meet business prospects in the northern regions of Mexico, where the mining and construction industries are key to the country’s development.
“Thanks to UKTI, on our very first trip to Mexico we found an excellent local distributor and were able to reach an agreement at our initial meeting with them,” says Ciaran. “It would usually take a few meetings to establish a relationship and build trust, but UKTI’s Advanced Engineering team were spot on in identifying and warming up suitable leads. UKTI used their local knowledge and industry expertise to work out exactly where our product range fit into the Mexican market. On a practical level, they also provided logistical and travel advice before our trip, which was very useful and made the whole thing easier for me. We have been delighted with UKTI’s service and look forward to working with them again very soon to further expand on the opportunities that exist for us in Mexico.”
The UK and Mexico
Mexico is the UK’s second largest trading partner in Latin America and there has never been a better time to consider Mexico as a place to do business. Mexico regularly ranks in the top three emerging markets in which to do business, and is the fourteenth largest economy in the world.
Over the past decade, the country has seen economic growth and stable inflation. With its impressive network of Free Trade Agreements (including North America and the EU) and its strategic location in-between the US and Latin America, Mexico has the potential to act as a springboard into the region as well as being an attractive proposition in its own right.
For further information about business opportunities in Mexico, please go to www.ukti.gov.uk/mexico