Luis Gerard

TBY talks to Luis Gerard, President of Bohn de Mexico FB Group, about entering Mexico as an international brand, competition, and nearshoring.

How did Bohn enter the Mexican market as an international brand?

The company was established in 1994 as a 50-50 joint venture between a Mexican company called Frigus and the US company Heatcraft Refrigeration Products. Frigus Bohn, now known as FB Group, initially started with one plant in Querétaro, where we manufactured refrigeration equipment, heat exchangers, condensing units, and cooler units primarily focused on the food industry. Our business extends across various sectors, including agriculture, transportation, food storage, food processing plants, distribution, supermarkets, and convenience stores. We are involved in the entire cold chain process, from the fields to consumers’ homes. Our product range caters to businesses of all sizes, from small butcher shops to large-scale cold storage facilities that freeze over 40,000 tons of products. Our process begins with pre-cooling agricultural products to extend their shelf life. Once the harvest begins, we cool down the products before shipping them to warehouses or supermarkets. Supermarkets are among our biggest clients, and we provide refrigeration equipment to all major supermarket chains in our region.

Given that Mexico is becoming a more competitive market, what are your main differentiators compared to similar players?

We have been operating in the market for 29 years and have a strong manufacturing base. Our supply chain, with over 600 selling points in Mexico and more than 200 selling points throughout Latin America through our distributor network, has been tried and tested. In simple terms, it works. We are able to offer high-quality products at competitive prices, backed by a proven track record of quality and service. This distinction is crucial because many companies claim they can deliver, but we have a track record of actually doing it. We have a solid reputation for supplying products to the US and South America. In Mexico, we are market leaders, and we intend to maintain that position. We have been targeting the Latin American market for only three years, and our success has been remarkable, with double-digit growth in Mexico and the Latin American region.

Where do you see opportunities to grow Bohn’s business when it comes to nearshoring?

For expansion, we are focusing on companies that are coming to Mexico for nearshoring and are seeking suppliers. We see great opportunities to grow our business because many new companies are establishing themselves in Mexico. Most of these companies are potential customers for our Monterrey plant. In Monterrey, we produce components for air conditioning and refrigeration systems and work with prominent brands such as Lennox, Carrier, Rheem, JC, Mitsubishi, VERTIV, Follet, AO Smith, Copeland, as well as some newcomers from Europe and China who are setting up operations in Monterrey and Saltillo. Our proximity to these companies allows us to take advantage of the situation and attract new customers. We have acquired new customers from Matamoros to Mexicali and are partnering with them to become their supplier. Last year, we also acquired a company in Chile that operates in the industrial and air handling sectors. Our future plans involve continued growth, increasing market share, and supplying high-quality products. One of the major challenges ahead is the technological shift prompted by concerns about global warming. These changes are already underway, albeit with varying timeframes in different countries. We are transitioning from fluorocarbons to natural refrigerants wherever and whenever required, which represents a significant technological advancement. We adapt to meet market demands. Natural refrigerants may have lower costs, but the equipment itself is more expensive, and there are several technology-related challenges that need to be addressed. In 2024, our focus will be on expanding our Monterrey plant to serve the nearshoring business. We have already expanded the plant and are starting to onboard new customers. Additionally, we are opening a new plant in Mérida in August, which will be three times the size of our existing plant and will cater to large-scale refrigeration systems for supermarkets and other major projects. We will manufacture the equipment in Mérida and sell it globally. We chose to maintain a plant in Mérida because our workers there possess exceptional skills, exhibit low turnover rates, and have high technical expertise. We also aim to consolidate our acquisition in Chile and leverage our expanded technical capacity, taking full advantage of our unique situation of being present in Mexico and Chile, and serving the markets in between, including Guatemala, Costa Rica, Colombia, Ecuador, Peru, and the Caribbean.