VIEW FROM THE TOP |
CONSTANT INVESTMENT SUPPORTS TRANSPORTATION SECTOR ANTONIO TEJEDO Vice President of Investors Relations with Traxión
Q: What is Traxión’s strategy to grow in the
Q: What factors could hamper Traxión’s growth in the
transportation industry?
transportation industry?
A: The two most important transportation segments
A: The transportation industry is a pillar of the Mexican
we cover are cargo and logistics, on the one hand,
economy as all consumption products are transported
and personnel and student transportation services,
by truck at some point. This means transportation is
on the other. Traxión takes advantage of new business
deeply intertwined with Mexico’s domestic consumption,
opportunities in these and other segments covered by
disposable income and the country’s growing middle class
our seven subsidiaries to continue growing in the Mexican
and demographic bonus.
market. In 2019, we plan to invest approximately MX$1.8 billion (US$94 million). This will help us expand our
Macroeconomic trends could pose the biggest challenges
revenue by 20 percent and our EBITDA by 25 percent.
for growth. Although we cannot control exchange
Around 75 percent of our capital expenditure will go to
rates, interest rates or political risks, we need to have
the personnel and school transportation segment and
contingency strategies for each of these macroeconomic
the remaining 25 percent will focus on the renewal of our
trends to mitigate risks and maintain continuous and
cargo and logistics fleet.
profitable growth.
Q: What segments do you expect will experience the most
Q: How is Traxión reducing operating costs to counter the
significant growth?
impact of rising diesel prices?
A: We project great demand for student and personnel
A: Grupo Traxión negotiates a wholesale price for diesel
transportation services in industrialized areas such as
with fuel importers from the US that deliver diesel at the
northern Mexico, the Bajio region and the Mexico City
company’s yards and terminals. We also apply passthroughs
metropolitan area. Traxión plans to increase its share in
of fuel price increases to our clients. Traxión also reduces
these markets and create new opportunities as industrial
operating costs by centralizing the noncore, back-office
regions develop a taste for competitive transportation
areas of its seven subsidiaries and concentrating regional
services. Our size enables us to make strong investments
operations of its companies in less facilities.
in the acquisition of new units and to close large contracts for large clients in this specific transportation format. In
These efficiency strategies have yielded positive results.
1Q19, we invested MX$350 million (US$18.3 million) to
In 2018, Traxión added 71,210m2 of storage to its installed
purchase 100 Hyundai CNG bus units to meet specific client
capacity and increased the efficiency and productivity of
requirements.
its cargo fleet. Despite having 1.7 percent fewer trucks than in 2017, our fleet covered 16.5 million kilometers more. In
In the cargo and logistics segment, we expect reasonable
other words, Traxión covered 9.5 percent more kilometers
growth in demand in 2019. Traxión plans to adopt an
with fewer trucks and increased its revenue per kilometer by
asset-light business model to attack more logistics
10 percent, while only increasing its costs per kilometer by
segments such as last-mile delivery, e-commerce and
5.3 percent in 2018, which translates into more productivity,
freight-forwarding. To grow our logistics umbrella
output and efficiency.
service and offer a one-stop solution to clients, Traxión is strengthening the management, fleet and infrastructure of its Redpack subsidiary. By adopting an end-to-end,
Traxión is the only transportation company listed on the
integrated logistics solution, clients will no longer
Mexican Stock Exchange. The group has seven subsidiary
need to hire four or five suppliers to cover different
companies that target various segments of the transportation
logistics needs.
and logistics market in Mexico
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