In a very competitive market, CINSA took advantage of a global opening to export its already successful line of products manufactured in Mexico. Sixteen years later, the company continues to create leadership and respond to any type of demand. Susana Baumann reports.
When don Isidro L¢pez Zertuche and his brothers Carlos and Ricardo started their small aluminum foundry in the mid-1920s, little they knew that the company was going to develop into one of the largest Mexican conglomerates, Grupo Industrial Saltillo, S.A., (GISSA) serving three industrial sectors: construction, motor and auto-parts and household goods. The company reached $900 million in sales in 2005, with household goods comprising $100 million, garnered 45 percent market share and hired over 12,000 employees.
The conglomerate is the eighth revenue-producing group in Mexico, while it is one of 40 leading export companies in the country and one of the 500 largest companies in Latin America.
The construction sector includes subsidiaries Vitromex, a manufacturer of ceramic floor, wall tiles, and bathroom fixtures; CINSA, a company dedicated to manufacture water heaters under the CINSA Boiler brand for low-end housing in the construction market; and Calorex brand, the leading water and ambient heaters manufacturer; and Fluida, which commercializes pipe fittings.
The automotive sector includes CIFUNSA, the world’s leading independent foundry that produces grey iron diesel and gasoline engine heads and blocks, and auto parts for breaking systems, and Castech, a joint venture with Norwegian Hydro Aluminum that operates a modern foundry for production of internal combustion aluminum engine blocks and heads.
The housewares division is the oldest of the group. CINSA started business in 1928 manufacturing aluminum cooking pans and pots and developing additional products such as bathtubs. In 1932, the company became a corporation under the name Compa¤¡a Industrial del Norte S.A. (CINSA).
By 1937, CINSA incorporated enamel laminate technology and switched its line of products to enamel steel cookware products. This technology started a true revolution in the making of household cooking goods because it brought a bright, smooth and hygienic surface, which do not hold residues and is/was easier to clean.
In 1992, the company acquired Santa Anita, a ceramic tableware manufacturing company that carried Japanese technology. In 1997, the group (GIS ) also acquired ABSA, a competitor in enamel-on-steel products.
Today, the company has expanded into three plants, two for enamel-on-steel products, and non-stick aluminum cookware (mainly fry pans ), and the third for domestic (daily use at home ) and hospitality stoneware. Located in Saltillo, capital city of the state of Coahuila, the headquarters and plants cover a surface of 97,112 square meters on a property of over 200,000 square meters. The company hires 2,400 employees and has distribution centers in Saltillo, Mexico City and Guadalajara.
LOOKING FOR NEW OPPORTUNITIES
“One of the company’s goals is to compete in the global market. We are leaders on the national market and very competitive, so we are looking for other growth areas to conquer new markets abroad,” said Teresa Morales, marketing director.
This strategy resulted in a distribution agreement with Columbia Home Products, a United States distributor that works with chain and club department stores and clients such as Target, Wal-Mart, Sam’s Club and K-mart.
The successful penetration in the American market has positioned CINSA among competitors such as Tefal, a registered trade mark of Groupe SED, a French world leader in small domestic equipment, domestic appliances and cookware, and EKCO, of the Mexican EKCOr Housewares Co., which, since the 1960s, has evolved as the largest non-electric houseware manufacturer. With these contenders, opposition is intense.
However, Morales believes that CINSA’s competitive advantages are based on its constant innovation and drive to bring new products to the final consumer at an affordable price. “The company established a very aggressive penetration with a new product sales campaign, with 25 percent of total sales goal based on constant motivation. We introduced new and creative lines, and very cost-effective production based on the principles of lean manufacturing and continuous improvement, which allows us to offer the most competitive prices in the segment,” she affirmed.
Over time, the group has been able carry the 47-percent market share for cookware and 33 percent of market share for Santa Anita’s products in Mexico; the rest is being exported to the United States, Central America, Europe and Canada. The export products carry brand names as CHP or Martha Stewart abroad.
In Mexico, the company sells 40 percent of its production through self-service and chain stores such as Wal-Mart, Soriana, Sam’s Club and Comercial Mexicana, with an impressive national coverage. “Our marketing strategy has shown excellent results in the last five years, and we plan to continue to achieve 21 percent growth in the next triennium,” said Morales.
The strategy relies on innovation and quick turnaround of products. All distribution channels are very solid and extended throughout the republic, said Morales, and the group will take advantage of such situations by pushing new products through these channels. “We set our product life to one year of use, not because of the quality, which allows the product to be used many more years, but because of the attractive designs and strong point of sale campaigns that entice people to buy new trends,” explained Morales.
While consumers look for performance when they buy cookware products, that will last a certain amount of years without wearing off and without losing their cooking qualities, they look for designs and colors when they acquire a new line of tableware.
PRODUCTS THAT SHINE
CINSA’s products include five lines of cookware with a substantial amount of pieces for different uses and shapes. Light porcelain on steel, Novacero, heavy porcelain-on-steel, non-stick aluminum and stainless steel line are the basic combinations of materials and technology offered in a range of beautiful colors and attractive finishes.
The enamel-on-steel line is made of extra thick-gauge to deliver optimal heat distribution, especially for slow cooking or steaming food. It eliminates hot spots and cooks with less water or without it. It also prevents warping for a lifetime and maintains the natural flavor of food. The company manufactures per year:
35 million pieces enamel-on-steel pieces of light gauge;
35 million pieces of Novacero linea;
6 million pieces of heavy gauge enamel on steel;
2.5 million of non-stick aluminum pieces;
36 million pieces of stoneware.
Santa Anita’s plans for expansion are on the way, said Morales. “We are a company concerned with pleasing our final consumer and maintaining leadership in the market. We have been working over our capacity in the last five years so we believe it is time to offer new possibilities to our clients. As a final consumer, I have them all over my house- I can testify they are great products!,” she concluded.