When Vallen Proveedora Industrial began operations in 1985, its products were new to the Mexican market. “Our founder realized, through a number of studies, that there were many safety products available on the international market that hadn’t been introduced in Mexico,” explains José Luis Kuri Con, commercial director at the company. The reason for this, according to Kuri, lies in the fact that Mexico’s economy was in many ways closed off to the rest of the world in the 1980s.
The Mexican-based company took advantage of the opportunity, and began selling industrial safety products. As Mexico’s borders began opening up through trade agreements such as NAFTA, Vallen Proveedora Industrial thrived. Today the company carries out operations throughout Mexico.
The company offers clients a wide range of safety products, including gloves, helmets, goggles, clothing, boots, and lamps. Its product list also features ear protectors, harnesses, fire-resistant clothing, and safety signals. Clients can also find, through Vallen Proveedora, products for cleaning, emergency drinks, safety training videos, storage units, and padlock systems, among other items.
Headquarters for Vallen Proveedora are located in Tampico, a city that rests along the Gulf of Mexico. The company has a total of 34 branches located throughout the country. Vallen Proveedora currently employs approximately 1500 workers.
STRATEGIES TO GROW
Between the years 1992 and 1994, Vallen Proveedora went through a period of rapid growth. NAFTA had just been signed, and the company benefited from the results of the agreement. Another key factor for the company was that it became associated with Vallen Corporation, a company specializing in industrial safety products in the United States. “Vallen Corporation had 50 years of experience in the market,” says Kuri. “We were able to benefit from that experience, and also started a distribution channel in North America.”
By working with Vallen Corporation, the company was able to offer products in Mexico that many of its competitors did not have access to. “This became a competitive advantage for us,” notes Kuri. Another strong point that Vallen Proveedora received from the U.S. company was access to top clients in North America such as General Motors.
When an economic crisis hit Mexico in 1995, Vallen Proveedora was able to remain in business. It also learned some valuable lessons as a result of the crisis. “We decided to focus on diversifying,” explains Kuri. “Before the crisis, we were focused on the auto industry and the petrochemical industry. After the crisis, we set up strategies to incorporate other areas such as the pharmaceutical and mining industries.”
Even though Vallen Proveedora first began operations by selling safety products, during the late 1990s the company incorporated a more thorough approach to the business. “Starting in 1997 we decided to develop a business model we refer to as an ‘integrated solution for industrial safety,’” says Kuri. “Instead of just selling safety goggles, we began selling vision safety.” The area of vision safety includes not only goggles, but also eye exams and materials to keep track of eye exams and results.
A few years later, the company took this integrated approach one step further. “Starting in 2000, we started an integral solution division,” says Kuri. “This covers the management and administration of all the products our clients need.” Vallen Proveedora offers to purchase all the products a client needs, as well as maintain and manage the products.
JOINING SONEPAR GROUP
Another change for the company occurred in 2000, when Hagemeyer purchased Vallen Corporation and Vallen Proveedora. The company switched hands once more in 2008, when ownership of Hagemeyer split into two groups. Today, Vallen Proveedora is part of the Sonepar Group.
Sonepar Group is an international firm with headquarters in France. Sonepar Group operates in the electrical equipment industry in a variety of markets, including residential, commercial, industrial, and utilities. The group has a presence in 35 countries worldwide.
Due to the recent downturn, electrical equipment industry as a whole recorded a decline in sales of nearly 20 percent in 2009. Sonepar, however, reported a drop in growth of just 12.9 percent. It carried on operations and consolidated its global market leadership, and closed 2009 with revenue of €11.9 billion ($15.4 billion).
Being part of such a large international firm has benefited Vallen Proveedora. The company has access to top quality products that it can offer clients in Mexico. “We hold 35 percent of the market,” Kuri estimates, noting that the safety market in Mexico is quite fragmented. In the area of industrial safety products, the company holds the top position in Mexico.
To stay on top, the company makes customers its number one priority. “We tell them, ‘focus on running your company and we’ll take care of the safety products you need,’” says Kuri. In doing so, Vallen Proveedora often covers every step of the process, from purchasing the products to managing them, which saves clients time and often money too.
Another strategy that has been effective for the company involves adding value. “We don’t just buy and resell products; we add value along the way. We believe that distributors should offer a complete solution for clients.”
EXPANSION ON THE HORIZON
Since the time it first began operations, Vallen Proveedora has been considered a pioneering company. It introduced new safety products to the Mexican market and carried out strategies that offer complete safety solutions to clients. As a leader in its industry today, the company is starting to look beyond Mexico for future growth.
“We were getting some pressure from clients to think about expanding into other countries. They see our business model and the results it has produced, and want us to create that same model in other regions.”
During 2010, Vallen Proveedora took some initial steps toward expansion. That year, the company began operations in Brazil. The setup used for business in Brazil is modeled after the company’s current business structure in Mexico. According to Kuri, operations in Brazil are off to a great start. “We’ve had a lot of short-term surprises there. Business is going much better than we had originally planned.”
Brazil may be going well, but the company doesn’t plan to settle with just one additional branch in South America. Company officials are planning to open additional bases in Colombia. They’re also looking at expanding into Guatemala, Puerto Rico, and the Dominican Republic in the near future.
As it carries out these new plans, the company also expects to continue to grow in Mexico. “We want to grow at an accelerated pace, and also expand our portfolio to offer more products to clients.”
By doing so, Vallen Proveedora will remain a top company in the Mexican market. It will also begin to make its footprint in other countries as it focuses on expanding operations. In all that it does, Kuri notes that the customer continues to come first. “We pay attention to clients’ exact needs, and provide solutions accordingly.”