With an investment of $500 in the last year, Deacero is positioning itself to increase its presence in the American market. A 100 percent Mexican owned group, Deacero’s steady transformation and growth serves Mexico’s needs and 20 other countries’ in the advanced metal transformation industry. Susana Baumann reports.
We frequently hear of American companies moving “south of the border” but it is not so common to find out about the reverse. However, when a company processes 2.7 million tons of steel a year, and is the second largest producer of steel wire around the world, then it is ready to step out and target competitive markets.
Such has been the case of Deacero S.A. de C.V., a private Mexican company owned by the Gutiérrez family in the Monterrey region. The company started as a small shop owned by César M. Gutiérrez Lozano in 1952. Today, the group has 14 plants in Mexico, one in the United States, a research and development center in Barcelona, Spain, seven steel scrap yards, 12 distribution centers in Mexico and two in the United States. It employs 6,200.
The company serves farming and agriculture, residential uses, building and construction and industrial uses. It has grown to produce 1.2 million tons of wire, 500 million of wire rod for industrial applications and one million tons for the construction industry a year. Deacero has been exporting its products to North America, Central and South America, the Caribbean and Europe for the last 25 years.
The Gutiérrez brothers entered the company in 1976, bringing the necessary structure, organization and technology to further grow the business.
“My father never finalized his engineering studies in Austin, Texas so I was the first engineer that entered the company,” said Raúl Gutiérrez, general director. Thanks to the efforts of Gutiérrez’s father, who started buying “rejected” wire in the United States and sorted it to produce chain link fence, field fences and screen-mesh, and annealed the remnants for construction wiring, the company grew enough to start buying first class wire, wire rod, and to integrate other types of processes such as galvanized wire.
In 1981, Deacero decided to integrate and produce its own steel, and for that purpose, it launched its own facility in Saltillo, state of Coahuila. Several manufacturing facilities were added by acquisition. In 1997, a larger steel plant was launched in Celaya, Guanajuato. Currently, the group is expanding at the same location with a second steel producing plant.
Some of the companies acquired through the years by Grupo Deacero were long-standing enterprises in the Mexican market. For instance, Aceros Nacionales S.A. (ANSA) a steel company founded in Tlalnepantla, state of Mexico since 1906, offered products made of wire rod.
Through the years, ANSA acquired 12 warehouses strategically located in different parts of Mexico, serving the industrial, farm and building markets with a line of over 170 different products, and positioning itself in the national and international markets at-large. After acquisition by Deacero in 1999, the company highly improved the quality of the products as well as a customer service, and it developed a more effective processing turnaround time.
Before acquisition by Grupo Deacero, and originally named G.F. Wright, this American company started operations in 1921 manufacturing galvanized steel wire products. Located in Worcester, Mass., Wright mainly produces landscaping and home products named “Home and Lawn Fence.”
In 2004, Deacero acquired PASLODE, a company recognized for its high quality standards in pneumatic tools, nails and staples for building and industrial use. PASLODE introduced the first pneumatic tool in 1959, and innovated with several other products such as GunNailer™, Impulse™ and PowerMaster™.
ALPROSA became part of Deacero in 1999. A 100-percent Mexican company that started operations in 1987 by manufacturing high carbon steel products, it was a leader in innovative products and recipient of the 1990 Premio Nacional a la Calidad (National Quality Award). Since then, ALPROSA has continued to search for improvement in products and in its human resources, as a part of the Deacero family.
In addition, the group acquired Automat, a technology oriented company founded in 1987 in Barcelona, Spain, which specialized in the design and manufacture of steel wire production machines. The facility was used to launch a modern Engineering, Research and Development Center, Commercial Services, Administration and Production areas to produce competitive machines.
In 2003, a new industrial nave was purchased in Granollers, Catalonia, and it is used for assembling of all new machinery and for testing and developing new products. Presently, the facility manufactures machinery for wire production, galvanizing and stretching lines, and automation of the end line. “We chose Spain because we wanted to establish relationships with the best technology manufacturers and engineering facilities in Europe, specializing in development of capital assets. In order to keep up with our growth and market demands, we needed the latest technology that only Europe could provide,” said Gutiérrez. According to the general director, the industrial area around Barcelona offers an array of technology suppliers that include heavy industry, electric arc and gas furnaces technology, and innovation in other areas such as plastics, air, water and handling acids, which all are part of the wire industry.
In order to provide support for all different companies, Idea Solutions was founded in Monterrey in 2002, as a company devoted to the creation and development of new software, specialized systems for business, and assistance in business process. The company develops software, service and support to build solutions and to create tangible benefits for the group.
PRODUCTS OF STRENGTH
Commercial brand names RANGEMASTER and BUILDMASTER have always been part of Deacero. They name the products the company exports to the United States and Canada. RANGEMASTER products are farming oriented, and BUILDMASTER is focused on the construction market.
From its warehouses in Laredo, Texas and Indianapolis, Ind., the company exports 20 percent of its production; 75 percent of this goes to the United States, and the rest to Central America, South America and Europe. In addition, the company has recently acquired a plant in San Antonio, Texas, that is manufacturing some products directly for the American market to complement what is done in Mexico.
“We want to increase our regional presence in the United States with manufacturing and employment opportunities, offering some specialized products. These products are related to the farming activity and include high carbon wire,” explained Gutiérrez.
The group produces over 600 products within all its plants and brand names in several different lines. The line of fence and mesh includes reinforced and ornamental hardware cloth, mosquito mesh and hexagonal netting to sheep flooring, cattle and hog panel and chain link fences. The wire products include baler, electric fence, galvanized, soft galvanized, horticulture, pre-stress, high tensile barbed, black annealed, straight and cut and tie wires.
Industrial products include low carbon products such as galvanized, bright, annealed wires, cold heading forging and rod, while the high carbon products offer galvanized and bright, pre-stressed concrete wire, strand and ropes, straight and cut and rod.
Some popular products include the field fence, for instance, with design advantages in the hinge joint that prevents deformation when animals lean on it. Three times more galvanized than regular fences, it is more resistant to corrosion and allows putting posts every six meters, making it more economic than labor and material for barbed wire.
The reinforced field fence offers a grading design with small squares at the bottom to prevent the entrance of animals that attack the cattle, and allows posts every five meters. Two different designs are for containing poultry and sheep. Areas that require protection for major heights such as hunting fields and ostrich breeding places require the deer 2.00 and 2.50 meter high fencing.
Another flagship product is the Deacero fence, in hot dipped galvanized panels with premium quality welding V-braces to add strength to the panels, powder coating to ensure a uniform layer, great durability and incredible looks. The panels are powder coated with UV protection, and are maintenance free.
Forty percent of the group’s production serves the construction industry, 30 percent for agriculture and farming, 20 percent goes to industrial uses and 10 percent covers general uses. “With 65 families of products, the company is constantly expanding to supply the growing demand of consumers, while competing in new markets and creating products that are in sync with new technologies,” said Gutiérrez.
The Asian competition is turning the market around, according to Gutiérrez. “We believe our number one competitor is Bekaert, a company based in Belgium. Competitors such as China are subsidized in every way, shape or form, from currency to labor to taxes, so it is impossible to compete with them in terms of pricing,” he explained.
Therefore, the group is making headway in advanced technology with new products and more added value. “Regionalization of production is a function that the market demands, so we can supply our customers as efficiently as possible,” he said.
Internally, the main goal is to make products and processes as competitive as possible in the areas of administration, costs, innovation and quality. Constantly standardizing, simplifying and becoming more efficient to achieve a better position in the market, Deacero, which follows the Six Sigma method, is strong at investing in labor force and new technology.
Despite the expansion that the group has experienced in the last decade, it still maintains its simple, functional, straight and non-bureaucratic organization due to the direct involvement of the three Gutierrez brothers in executive positions. The areas of finance, manufacturing and sales have a simple and practical organizational structure that does not require excessive personnel.
Deacero’s pursuit of success might show in its financial results,its strategies and its assets but all is the result of the support and commitment of its human resources, said Gutiérrez. During all these years, the willingness of its people to work as a team has allowed it to reach the outstanding level the company now holds.
While personnel have accepted its responsibility to carry out their jobs with initiative, quality and excellence to ensure that the objectives proposed are achieved, Deacero’s management team is responsible for providing a healthy and pleasant work environment with good opportunities for training, and personal and professional growth to share company goals and benefits.
“When I entered the company, I had not envisioned the place where we would position Deacero in the international arena over the next 40 years. However, we worked hard as a team, with a sense of fairness and equality among the members of our staff, where everyone is practical, respectful, productive, and simple, without regard to their position. Moreover, the higher the rank, the more they must set an example and keep in mind that status does not exist, but leaders do,” Gutierrez concluded.