79.8% of our clients are foreign companies: Sergio Chufani

One of the most important builders in Mexico. His grandfather and father had their own construction companies. "I grew up listening to my father talk about construction and accompanying him to construction sites during my vacations. Ever since I was a child I had the conviction to be a civil engineer." Graduated from Tecnológico de Monterrey as a civil engineer in December 1988, he founded his own company Constructora Chufani in 1991. At fifty-nine years of age, his company is celebrating its 32nd anniversary.

He was president of the Mexican Chamber of the Construction Industry in Querétaro from 2007 to 2009 and Secretary of Urban Development and Public Works of the state of Querétaro from 2009 to 2013. In 2018 he represented Mexico at the WEOY (World Entrepeneur of the year) event in Monaco, organized by the firm EY (Ernest & Young) with more than 70 countries.

His company has received international certifications and has been recognized and awarded as a leading company in the design and construction of sustainable buildings. To date, the company has more than 7,200,000 m2 of constructed surfaces and has expanded to the United States, Panama and Guatemala. Currently Constructora Chufani is considered one of the national companies with the International LEAN CONSTRUCTION certification.

 

How was the start of your own company?

SCH: It was a small company with about eight people, and my only client was Celanese. We started there doing sidewalks and trimmings, and gradually we were given more responsibilities. At that time I was doing everything: driving, moving materials, supervising the work... but I was worried about depending on a single client and I had the concern of looking elsewhere. It was in 1997 when the Querétaro Industrial Park opened, where the great opportunities began. More factories were installed and we began to offer services as subcontractors of large contractors; companies with very solid methods and processes. And I can say that, in the context of Nafta, I had a vision and I was not wrong: many foreign companies would arrive in Mexico needing industrial construction companies with bilingual teams that knew the American code. I prepared myself by gathering a group of professionals and we started to offer our services. Contracts with important companies multiplied, which gave us national prestige and... we did not waste it. We worked very hard to create intelligent solutions according to the country, because many times clients came with specifications from their countries of origin, and we gave them a good solution. We specialize in the construction of large industrial buildings and warehouses for the production of various products. To date, we have built plants mainly for the automotive, aeronautical, petrochemical and food industries. One of our distinctive features is that we do everything from design to construction, which has had a high impact both in Mexico and in the United States, with a plant we built in Waco, Texas, for an important company. We built the can plant for an important company, many brands use these cans, which allowed us to leave Mexico and successfully enter the United States and other Latin American countries.

 

What were the exogenous conditions that favored the growth of your construction company? 

SCH: I have lived in Queretaro for more than forty years. I had the opportunity to see its transformation from agricultural to industrial, to see what it has become today with the industrial parks: an industrial city with a resounding success. Speaking of logistics, Querétaro has an impressive geographic location, skilled labor and the vision to stimulate the development of industrial parks. The center of the country is very well connected with other states such as Guanajuato, San Luis Potosí, Aguascalientes and Jalisco. The absorption of foreign direct investment in the Bajío region is very important, with values above 50%. The educational offer is another important factor; we have prestigious universities. The arrival of Bombardier was another trigger, we had to build a plant for them there at the airport, and we saw the whole process of their installation, which was done in a brilliant way, a great job... the seed of a great Canadian company in Mexico was sown there. And with the creation of the Aeronautical University it has definitely been a win-win.

 

On the financial side, did you adapt to the budget of foreign customers?

SCH: Our price was lower than the budget they brought, and by obtaining a small profit margin, the volume of work increased. There were years in which we had up to fifteen projects at the same time and in several parts of the country. This implied a very strong organizational and process challenge. It worked for us, although it was very tiring. Today we prefer to go for two or three large projects; we decided to focus our strategy on larger projects that imply a greater technical and financial challenge. We learned to make financial formulas to be able to have the resources, we opened lines of credit with the banks and we also became financiers. These are challenges that life throws at you and if you solve them, you learn.

 

What endogenous factors consolidated your company and positioned it among the competition?

SCH: For me the most important thing is that you have to make the best group of collaborators, I am talking about all levels, from the director to the specialized technicians. This has been an important challenge for me and also the key. I have a very low staff turnover. I am proud to see people who have left in search of other opportunities and have returned saying: "Hey, I think my place is here". There are people who have worked with me for twenty years... So, I always thank all of them for their work and I have the philosophy that, if the company does well, everyone has to do well. I don't believe that only the company has to do well. Today we have a brand that also generates a sense of identity; thus, when a project ends, those who participated feel proud. Why? Because they were there, they made decisions and their efforts had an important impact.

 

 

Besides the team, is there anything else you would like to highlight? 

SCH: I think the advice was also very important. Even though my father and grandfather closed their construction operations, I had an advisor in my father. For me, the need to learn has always been important and when you are convinced of that, you listen, you hear and you approach whoever can give you advice or where you can learn something new. Life has put me in many positions: I have been a business leader and even a public official, without looking for it... All these experiences have allowed me to meet valuable people from many fields that have enriched my way of being a leader and of running a company as well. I was president of the Mexican Chamber of the Construction Industry (CMIC) and I have always been linked to business organizations, including the College of Civil Engineers. This interaction has always allowed me to learn something new. My grandfather used to tell me: "Get together at a certain time of the day with someone you can learn something from". My life has been a constant learning process and that has been a passion for me, too.

 

In terms of advanced engineering, in terms of construction, worldwide, where do you stand?

SCH: For me one of the important points is our engineering, the engineering we do here is first class. In the last few years we have been very involved in a very important area which is the Data Centers of very important American companies, which demand very rigorous standards and a high level of specialization... not just anyone can do them. We are already building our eighth Data Center in Mexico, which has strengthened our experience, the handling of high technology and, above all, the interaction with large teams from other countries, from which we have come out very well qualified. After many years of experience, having expanded our range of services with the construction of Data Centers, positions us internationally. 

 

What other services or specialties does Chufani's portfolio include?

SCH: We have a very versatile range of services. After thirty-two years, the company has grown, has strengthened and has allowed us to offer rental projects to our clients.  There are projects where a client comes to us and asks us to build and rent to them on a long-term basis, that we make the investment of buying the land to build the project and, with a long-term contract, rent it to them for their operations in Mexico. We have been doing this successfully for some years now. Likewise, there are those who hire us for engineering, or construction, or as project managers to help them build with our processes. As we have heavy machinery, sometimes they hire us for a part of the project, the earthwork, for example. It is a company that we manage institutionally, although we are not listed on the stock exchange, but it is as if we were listed; our processes are like that, we are audited by triple A companies, and that shows that we are complying with our commitments. We are a socially responsible company, we have many certifications, and these are values that generate confidence in our customers. Many years ago we had an area dedicated to promoting the company and today it is the customers who look for us. For us it is an important synonym of trust that 79.8% of our clients are foreign companies.

 

In this construction industry, how do you consider the competition in Mexico?

SCH: I respect my competitors a lot, because they were the first ones who gave me work, I was a subcontractor, I learned a lot from them and I continue learning a lot from them. They are very generous with their knowledge, companies that have sixty years or more of experience. Cemex has a Board of important clients and convenes us three times a year, and in those meetings the director of the leading company is always open to share his knowledge and experience. They are all very generous because they give me advice and being able to receive feedback from my competitors is appreciated. This is not a very big market, I am talking about eighteen to twenty-five companies in the whole country, that are dedicated to this, that we are continually seeing each other's faces. I consider that we have a healthy competition. 

 

In the context of a complicated scenario, what could you say to young entrepreneurs who want to start their own business?

SCH: I believe that the first point to be able to start a business is to understand that it will not be easy, that it is complicated, that it is uphill; then, if you understand that, you already have the idea that the level of tolerance to frustration has to be high. You have to start that path and know that it will be uphill for some time. For me, the key to sustaining yourself is passion. If you love it, you have to do it and fight for it. It's about daily work, daily attention, being very alert and reacting in a timely manner to events as they occur, and that will take you to a point where you can offer a reliable service.