December 26, 2008 Heating Up the Market

Volume 11 | Issue 6

When it comes to water heaters, Mexico-based Cal-o-Rex sports the most diverse product line in all of North America, ranging from traditiona

For water heaters south of the U.S. border, a new era has arrived. Workers at Cal-o-Rex, a Mexican company specializing in units that heat water, recently developed a line of products they refer to as New Age. “We worked toward developing systems with better gas efficiency,” says Manuel Cueva, engineer and general director of Cal-o-Rex. “The New Age line is a result of that.” A New Age unit only turns on when there is a demand for water; the rest of the time it remains off, reducing the amount of energy used. By installing one of these, a family can save anywhere from 75 to 100 percent in gas consumption.

By adding New Age heaters to its portfolio, Cal-o-Rex leads the way in giving Mexico’s water heating industry a much needed makeover. While many Mexican companies produce traditional water heaters that run on gas and electricity, Cal-o-Rex is delving into products that use less energy and run on renewable sources, such as solar power.

According to Cueva, some of the company’s current product designs are based on trends that have developed in Europe. One of the company’s latest products, named SOLAR, combines solar energy and gas to provide hot water. “One of the issues many solar heaters face is that they have problems on cloudy days,” explains Cueva. “SOLAR runs on solar power, but also uses gas if needed.” This guarantees that homes with SOLAR will always have hot water available.

“The most important brand in Mexico is Cal-o-Rex,” says Cueva. “Our brand Cinsa is the second most powerful.” The company produces a wide range of products, from traditional water heaters to units with cutting edge technology. The water heaters vary greatly in volume to accommodate different needs. For residential products, the heaters come in all sizes, ranging from 10 to 100 gallons. The company also provides many different options for the commercial sector.

The water heaters are produced in the company’s two plants. One of these is located in Mexico City, and covers an area of 250,000 square feet. The other, found in Saltillo, has an area that is close to 300,000 square feet. “Our Mexico City plant mainly focuses on selling to the Mexican market,” Cueva says. “In Saltillo our operations are directed more toward exporting. The Saltillo plant also serves as a complement for certain brands for the domestic market.” Approximately 1,250 workers are involved in the process. Each year, the plants produce an estimated 1,500,000 heaters.

These two plants manufacture products that are taken to places in Mexico and other countries. To help support its operations, Cal-o-Rex has offices in various locations, including Guadalajara, Saltillo, and California. Company headquarters are based in Mexico City.

The company distributes products to all regions in Mexico. “We work closely with some of the new players in domestic goods, such as Home Depot,” says Cueva. “We also work with other channels so that the Mexican consumer can have access to our products anywhere.”

Cal-o-Rex also has more than 140 customer service centers located throughout the country. These are designed to help consumers with the installation process, as well as maintenance. The focus on strong customer service has brought many benefits. Consumers are able to see that the company is very trustworthy, which is an important issue in Mexico.

In addition to catering to customers’ needs, Cal-o-Rex is focused on continually improving its product line. “We have worked hard on the process of innovation,” says Cueva. “We’ve looked for ways to improve efficiency and make use of renewable energy sources.”

Seven years ago, the company began manufacturing products that operate on demand. When a consumer turns on the hot water, the heater works quickly and supplies a continuous flow of it. This type of heater is much more compact and efficient than previous models.

During the last three years, the company has worked on developing more units that heat water instantly. These models do not have a tank. The water simply flows through a small area where it is quickly heated, and then passes on to the user.

BREAKING INTO NEW MARKETS
Cal-o-Rex not only plays a leading role in Mexico; it is also working its way into the market in the United States. “Cal-o-Rex began exporting a line of heaters for commercial use to the United States,” Cueva notes. “We have strengthened our presence there, and now work with distributors in places like California.” The heaters are distributed under the label American Standard, a highly-recognized brand in the plumbing industry.

Starting in 2007, Cal-o-Rex has also exported residential water heaters to Mexico’s northern neighbor. The company has been able to meet all of the complex requirements and regulations for water heaters in the United States. Additionally, Cal-o-Rex exports to Central America, Colombia and Argentina.

In the coming years, Cal-o-Rex wants to use its leading role and innovative mindset to help educate customers. “We want to increase communication with consumers in Mexico to tell them about the benefits of using renewable energy,” Cueva explains. “These products tend to be higher-priced, but they have a higher value as well.” Customers may pay more to purchase a product that incorporates renewable resources into its heating system. Over the following three or four years, however, the amount they save in electricity and gas will be greater than the initial expense.

The company also wants to increase its customer base. “We are focusing efforts on strengthening our position outside of Mexico’s borders,” says Cueva. “Our participation in the North, Central, and South American market has had much success, and we want to start establishing strategies to add more brands to these markets.”

“As a Mexican company, we’ve been able to lay a foundation for the future based on innovation and growth,” Cueva says. “While we want to expand, our utmost priority is to bring comfort to the homes in Mexico and beyond.” With its unique balance of cutting edge products and customer service, Cal-o-Rex will be able to do just that.

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