How Mexico's Proesmma is grinding its way to global success

Mexican steel ball producer Proesmma is ready to enter the African market and start operations in the US and Canada in 2024.

In Central America, Europe and Asia, the company built a reputation by optimizing the grinding circuit. It also uses artificial intelligence, develops simulation software and manufactures other equipment. It has plants in Mexico and China and an office in Managua to serve Central America and the Caribbean.

With the mining sector as its main business, the company, which originates in Chihuahua, has managed to differentiate itself by following a vision that allowed it to understand that if clients do well, Proesmma does well, CEO Carlos Dávila tells BNamericas in this interview.

BNamericas: What is Proesmma's relationship with Acermex11 and its history in Mexico?

Dávila: Proesmma is a company 100% Mexican-owned that began operations 15 years ago and is dedicated to the manufacturing and marketing of steel balls: forged steel balls, low-chromium steel balls and high-chromium steel balls.

The company belongs to the Acermex11 holding, which was formed five and a half years ago as a corporate entity. Before, the companies operated independently, and Acermex11 has six divisions.

The first division, which is the most important, is the industrial division and houses companies that are basically oriented towards the mining sector.

Just as we have the manufacturing and marketing of all grinding instruments in the grinding circuit, we also have the commercialization of Total brand oils and lubricants for the entire mining industry in Mexico.

We have a unit called Exmin, which is dedicated to the commercialization of explosives in... the north of Mexico because that is how it is delimited by our constitution and the regulations which we follow. You can't do it throughout the country. And that same company is also dedicated to the commercialization of chemical reagents.

This activity is developed under different companies within the industrial division of Acermex11.

And what is Proesmma? Proesmma operates in the entire mining industry in Mexico. It is a company with 100% Mexican capital, Chihuahuan in fact, but it has had a tremendous impact on the international environment, I believe due to the way it does things.

That is why we've achieved the penetration of new international markets. We've tried to differentiate ourselves from being just another supplier of steel balls to being a company that is dedicated to optimizing the grinding circuit.

BNamericas: How have you achieved this differentiation as a supplier to the Mexican and global mining industry?

Dávila: It has to do with the fact that we have a comprehensive vision of the client. We have learned something that is very, very important, which is that the client's results are our results. If the client does well, we do well, and if the client does poorly, we do poorly. 

Previously it was like a black box where material goes in and material comes out. What happens inside the circuit, not many of the operations were understood, [many] did not understand what's happening inside, but our metallurgical engineering department, seven engineers, are precisely dedicated to this.

If we achieve a result, we know why, and if we make a mistake, we know why.

This philosophy is what has allowed us to differentiate ourselves from the competition in this fast-growing segment in the Americas and almost, I dare say, one of the fastest growing globally due to how we do things.

It's not what, it's how we do it. We have a vision of immersing ourselves and getting involved with the client in a 360-degree view of the grinding circuit.

BNamericas: How has Proesmma's expansion in Mexico and internationally advanced?

Dávila: We started working with local companies, I mean in Chihuahua state. Later, growth began to occur with companies in the north of Mexico, which is a fairly strong area in mining, such as Sonora, Sinaloa.

Afterwards, we continued expanding to the central and southeastern part of Mexico, where we entered Zacatecas, Mexico state, until we reached Oaxaca.

We currently work with 62 mining groups in the country, and we began to see other needs in markets such as Central America.

I'm talking about four and a half, five years ago, when we began to establish ourselves in the Central American market. Basically, we are in Honduras, Nicaragua, El Salvador, Guatemala, Costa Rica and Panama.

In the process of working with companies, first of all in this country, we realized that many of the companies we worked with began to like the way we do things. It began to be very significant for these companies to say “Hey, it turns out that I also have operations in Europe. I would like us to look at them;” “Hey, it turns out that I have operations in Asia and I would like you to look at that operation as well, not just my operations in Mexico and Central America, or in North America.”

And in that way we began to reach other markets and realize that the way we worked in Mexico could be replicated in other markets, since the quality, the level of service and commitment we offered was truly at an international level.

BNamericas: How does the company plan to expand? What will be your next steps?

Dávila: This year we’re working to penetrate the African market, which is obviously one of the strongest markets in terms of mining, with the presence of the main global companies, and it represents a fairly significant challenge for a Mexican company to conquer or penetrate a market as competitive and demanding as the African one.

We’ve been visiting countries such as Namibia, Botswana and South Africa. We’ve been in talks and doing some market studies, obviously from across the continent.

But now yes, if you want to be world champion, you have to realize that you have to beat all rivals and all opponents under all conditions. And a significant number of the companies we work with have their origins in both the US and Canada, and we have received several invitations from them.

So now we believe that the company is ready to strategically approach the US and Canadian market, taking advantage of the trade agreements Mexico has, offering more advantages than many other markets that have certain tariffs. Having this free trade agreement between Canada, the US and Mexico offers certain benefits that we have to capitalize on, and that will also be in 2024.

In fact, we’ve just come back from the meeting of the Society for Mining, Metallurgy and Exploration, which was held in Phoenix, Arizona, from February 25 to 28, and something that has been very significant, very important for us is the attention we got from North American companies that are beginning to identify Proesmma as a company with capacity and a differentiated service in the market. As I told you, we stopped being just another supplier of balls and became a company that optimizes the grinding circuit.

BNamericas: What is your view on the hostile situation this industry is currently experiencing both in Mexico, where no new concessions have been granted in the last five years, and in some Central American countries, for example, Panama?

Dávila: Let me make two clarifications before starting. When I talk about Central America, it’s Central America and the Caribbean. We work not only in the countries that I mentioned, we’re also in contact with Cuba, with the Dominican Republic, with Jamaica, with Trinidad and Tobago and right now we’re looking at Guyana and Suriname. We also work in Venezuela.

In the case of Mexico, with the political conditions you mentioned and the economic conditions in terms of an increase in interest rates, in terms of currency appreciation, I believe that at the end of the day what that tells us is that we need increasingly efficient operations. It’s no longer the big fish that eats the small ones, it’s the fast one that eats the slow one.

The ability you have to adapt to economic conditions, to political conditions and to resolve the situation is what in the end will give you sustainability, not only in environmental terms – which is important now with the new regulations at a global level – but it will also give you economic sustainability.

[Economic sustainability] is the first thing we have to strive for because only businesses that are financially viable can share that wealth or that opportunity they’re generating not only from the point of view of communities in which they operate but also generating these spaces that are so important for communities to participate in planning and in the benefits generated by the sector, which is essentially the true sustainability of all processes.

BNamericas: Despite the hostile legislative mining framework, has demand for your products and services grown in Mexico and Central America? If so, by how much?

Dávila: Looking at it globally, it has been steady, yes. And in the particular case of Mexico and Central America, demand for our services has remained steady.

Of course, it has become an increasing requirement to have companies like us. I'm going to tell you something. For example, in the last two years we have grown by 50% in revenue, in coverage. Why is this? I mean, the way we have differentiated ourselves from the rest of the market, in doing things differently.

BNamericas: What are the best practices you see in markets like Africa and Asia, or in places like Dubai where you export to, that you would like to encourage in Latin America?

Dávila: I think that the logistics part is a very important issue. Anticipating economic conditions and situations – but above all the logistics issue, which in these markets is resolved more quickly.

I just said that it's not the big fish that eats the small one, it has to do with how quickly I'm able to adapt.

In that sense, we’re creating an economic bulletin where the majority of companies, especially in the supply and provider area, are reporting precisely on economic conditions, how the ports are doing globally, how maritime transport is doing, how the price of steel will behave and what is our expectation of what will happen.

All of this allows them to also join agile decision-making, so that they have more information so their participation in decision-making is increasingly more solid.

BNamericas: How has the halting of Cobre Panamá affected business after the supreme court declared the contract with the government unconstitutional last November?

Dávila: Look, we believe that it’s a temporary issue, that it’s an issue in which the private player and governments have to sit down with the will to achieve a commercial agreement and prioritize precisely what we talked about: that there are many people that were benefiting from this economic development and that we have to understand that there are other established operations, not just Cobre Panamá.

There are other operations that were serving them, those markets, and they have to start working on that. I believe that it’s time to see the political will to work on these issues to ultimately benefit the population.

It's always said in English where there's a will there's a way. And if the political will is there we have to find a way to work, and I believe it can be achieved.

Both the private player and the government side must be aware of the issue, and in that case they can benefit greatly from involving the communities in the planning of these developments so that they don’t feel neglected later or they don’t feel they were not part of [the process] or taken into account in the planning and, subsequently, in the benefits generated.

That would be under the new government, since the elections are in May.