EconomyFinancialGIS appoints a new CEO and prepares strategies to...

GIS appoints a new CEO and prepares strategies to deal with inflation

Jorge Rada will be the new general director of Grupo Industrial Saltillo (GIS) as of January 1, 2023. The executive, who is currently the company’s director of operations, promises to continue the current strategy proposed by his predecessor Manuel Rivera.

“The idea is to take advantage of the opportunities that the market presents us through acquisitions and consolidate ourselves in the industries in which we already participate,” says Rada in one of his first interviews after his appointment.

GIS has two main businesses. Draxton is the unit that designs, manufactures and markets products for the automotive industries; while Cinsa is the business dedicated to cookware and pewter dishes. The disincorporation process of the Vitromex business, announced on June 3, is still under review by the authorities.

After the stoppage of activities in 2020, derived from the closure of assembly plants in the midst of sanitary confinement, the automotive business unit has resumed its rhythm and has closed global contracts for 153 million dollars of new business so far this year.

Rada explains that the end of lockdowns in most markets, a slight improvement in the supply of semiconductors and electrification have triggered more orders for brakes, suspensions and chassis, as vehicle manufacturers continue to struggle to bring inventories back to normal levels. prior to the pandemic.

The manager assures that operations in North America have recovered more quickly than in Europe, a region that is still strongly affected by the lack of chips and in which the operating costs of companies have risen due to the increase in the cost of energy.

“We had to sit down with clients to negotiate in the fourth quarter of 2021,” says Rada.

GIS has managed to cushion the increases in electricity thanks to a strategy of indexing this input in the prices of the components. If the price of the energy required to manufacture a component doubles, the percentage that this input represents within the total price of that component also doubles. The same criteria apply when energy drops. “That has allowed us to stabilize margins,” says Rada.

Smaller cookware to keep prices down

The business unit dedicated to cookware and pewter dishes has experienced a slowdown due to strong inflationary pressure on the consumer. GIS claims to have partially mitigated cost increases in raw materials and energy with operational and supply efficiency.

The company is already preparing some strategies to maintain the prices of kitchen batteries and dishes. For example, by launching smaller kitchen batteries or with fewer pieces -if before I sold a saucepan with a lid, now I only sell the saucepan-, or slightly reducing the size of the pots. This is known as reduflation.

“If I remove a centimeter of depth it will be almost imperceptible to the consumer, but in terms of costs it will have a favorable impact, because you save a centimeter of steel and paint. And that is multiplied by thousands,” Rada said.

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