From street signs to construction cones and speed bumps, Semex S.A. covers nearly every aspect of traffic control products and services. Rachel Hartman investigates this firm’s dominant presence in Mexico and its recent efforts to become a world player in the traffic arena.
Travel to Mexico, and chances are high that you’ll see a road sign created by SEMEX. As Mexico’s leading company in the traffic control market, SEMEX has a strong presence throughout the country. “There is practically no urban area in Mexico that does not have a SEMEX product installed in its streets,” says Gerardo Vildosola, manager of traffic control systems at the company.
And SEMEX does not just sell street signs; the company is highly involved at every level of production. “We offer a complete service, from designing the sign to installing it,” says Vildosola. “We even include maintenance if it is needed.”
Being a one-stop shop for traffic control products has helped SEMEX maintain its top position in Mexico, where it has been operating for more than 45 years. “We’re a company that strives to be the most integrated as possible,” notes Vildosola. “By doing so, we have control over the manufacturing process, and are able to give our clients the wide range of solutions they need.”
From its plant in Monterrey, SEMEX produces almost every traffic-related product available on the market. It specializes in street signs, traffic lights, and traffic control systems. It also has a division for roadwork protection equipment and an area that focuses on horizontal marking. When clients place an order, SEMEX manufactures the product and then installs it.
BEYOND MEXICO’S BORDERS
SEMEX started out as a small company in 1961. It consisted of three employees, one truck, and capital of around 5,000 pesos ($400 USD for that time period). The company initiated its operations in Monterrey, a large city in the northeastern region of the country.
Today, the bulk of the company’s manufacturing processes still take place in Monterrey. The makeup of the firm, however, has changed considerably. SEMEX now has nearly 900 employees and 250 service vehicles. Its main plant is located in a large section of land that spans nearly 26 acres. On the section of this property that is used for manufacturing purposes, the company has five buildings. Each takes up 2,750 square meters.
In addition to Monterrey, the company has branches in five other cities in Mexico: Guadalajara, Mexico City, Mérida, Villahermosa, and Hermosillo. According to Vildosola, the locations in Guadalajara, Mexico City, and Mérida also have small areas where manufacturing takes place. Additionally, the company has sales offices located throughout the country.
And its products can be found virtually everywhere within Mexico’s borders. Vildosola estimates that the company holds between 70 and 80 percent of the national market in the area of traffic lights. For traffic signs, SEMEX controls roughly 50 percent of the market, and in horizontal marking, it has a share of around 40 percent. All of these factors are evidence of the company’s dominant presence. “We are the leader in every sense of the word,” says Vildosola.
While it paves the way in traffic control products in Mexico, the company has also established a presence in other countries. “We have expanded into Central America,” notes Vildosola. “Our company has offices in Guatemala, Costa Rica and Colombia.”
Company officials have plans to build a presence in even more places. Currently, SEMEX sends products beyond Mexico’s borders on a regular basis. “We export to a number of countries, including the United States, Chile, Spain, the United Kingdom, Australia and Turkey, among others,” Vildosola explains.
ACQUISITIONS AND EXPANSION
Vildosola credits much of the company’s success to its high levels of technology. In every area of production, the company strives to incorporate cutting edge processes and equipment. One of its recent high-tech achievements came in the form of synchronized stoplights and traffic surveillance cameras. “In the last seven years, we’ve installed around 22 synchronized traffic light systems in Mexico,” Vildosola explains. “We’ve also put in closed circuit surveillance systems in 16 cities.” These projects totaled around 2,400 traffic lights and 250 cameras.
Technology, coupled with a keen ability to spot opportunities, has boosted growth for SEMEX.
“We just opened a new market niche in the form of railroad signs,” says Vildosola. Previously, railroad markings were not regulated in Mexico. The current government, however, has a plan to establish railroad signs throughout the country. “This is an unexplored market, and one that we will be leaders in as well,” he adds.
In recent years, the company has looked for ways to expand on both an internal and external basis. “Within the company, we’ve made improvements in the areas of production and sales,” says Vildosola. Offering to adjust products to fit clients’ differing needs has proven beneficial. According to Vildosola, when a city wants to set up a new traffic control system, it requires a great deal of specialization. Many urban areas have specific needs when it comes to traffic lights, and SEMEX uses its technology and individual attention to install the right system for each area.
The company has also recently acquired a number of existing firms in order to expand operations. In 2003, SEMEX purchased a company based in the United States. This company had been the second largest manufacturer of reflective road studs in America, and by purchasing it, SEMEX was able to transfer some of the production to Mexico. The technology that came through the acquisition has greatly enhanced production levels at SEMEX. “Today we’re the second largest manufacturer of reflective road studs in the world,” says Vildosola.
In the summer of 2008, SEMEX made another purchase that brought two more American companies into its group. “This acquisition helped us gain a company that is dedicated to the manufacturing of stoplights and traffic control,” notes Vildosola. The company plans to bring some of these companies’ operations to Monterrey in order to reduce costs. Vildosola says, “Through this we will become a strategic distributor for these businesses in Mexico, as well as Central and South America.”
Company officials feel these improvements will help take SEMEX to the next level. In the coming years, they want to see the company become a key participant in the traffic control market at a global level. To help get there, company officials have worked hard to fulfill various international standards and regulations. “We have ISO 9001:2000 certification in the areas of traffic lights and reflective road studs,” notes Vildosola. The company also has taken steps to meet certain regulation standards and requirements in different areas, including Texas and Florida.
“In the short and long-term future of the company, we want to consolidate our leadership in the market,” says Vildosola. “And we don’t want to just be leaders in Mexico and Central and South America; we also want to be a key player in the international scene.” With its recent improvements and acquisitions, the company is on its way to do just that.
Drive through Mexico, and you will almost certainly pass a traffic light manufactured by SEMEX. In the coming years, that same statement could be true for even more countries. With its focus on technology and ample service packages, SEMEX plans to help control traffic throughout the world.