FERREYROS
Keeping the motors running in Peru’s critical sectors

The growth of Peru-based machinery supply company Ferreyros reflects a booming economy across the board and marks the beginning of new corporate giants in the country

	Strong partnership with Caterpillar underpins success

“Last year was an excellent year for the efficient Peruvian companies,” says Oscar Espinosa Bedoya (INTERVIEW), general manager of Ferreyros. “Our company grew almost three times as much as the Peruvian economy in 2006. Sales reached $450 million, a really important figure for the Peruvian market, and one that places Ferreyros among the top 20 companies in sales on the Lima Stock Exchange.”

As Peru’s leading supplier of heavy equipment for the mining, fishing, agriculture, industry, energy and construction sectors, Ferreyros is the distributor for some 20 international brands in the country, including Caterpillar, Ingersoll Rand, Massey Ferguson, Atlas Copco, Iveco and Kenworth.

Although 70% of its revenues is derived from the mining sector, Ferreyros has a dominant presence in various sectors, and its sales last year are a positive reflection of the Peruvian economy, according to Mr Espinosa, who says, “The company’s sales are tied to several key productive sectors, and this constitutes an excellent indicator of the evolution of the economy. Our perception is that Peru is on the right path for growth.”

Ferreyros has been the main distributor of Caterpillar products in Peru since it formed a partnership with the US company in the 1940s – a defining moment as it changed the course of Ferreyros’ business activities, which had previously been in packaged food products. The company began to diversify its activity base, taking on new clients, and in short, redefining its future. By the 1960s, it had become a diversified distributor for various sectors, and began to ambitiously conquer market share. It listed on the Lima Stock Exchange in 1973.

Its partnership with Caterpillar, however, still forms the base of Ferreyros’ business. Caterpillar products represent just over 90% of its sales, and this year, the two companies will celebrate the 65th anniversary of their partnership. Mr Espinosa states, “We have a high market share in Peru in spite of competing with almost all machinery brands, and our relationship with Caterpillar has been sustained more on the results we obtain than on renewable contracts.”

One of Ferreyros’ greatest strengths lies in its post-sales service. Mr Espinosa says that this is what differentiates the company from its competitors. Although its products may initially represent a higher investment, excellent post-sales service extends the life of the product and cuts down on costly delays in production.

“At the end of the life cycle of the machinery, the benefit that the client has obtained from our machines is very high because operation cost is what really matters,” he states. “We have designed post-sales support programmes such as maintaining inventories of components for the larger mining and construction operations. If an engine in a truck breaks down, it is replaced within 24 hours. We have even built a warehouse of components in the jungle of Peru where a highway is being built.”

Ferreyros also operates its own repair shops and salvage factories for equipment recovery, and has over 600 on-site mechanics in construction areas and mines all over the country. In addition, its spare parts inventory is unparalleled in Peru. As Mr Espinosa adds, “This is what has allowed us to position ourselves as leaders. We take care of our clients, who are willing to pay a little extra because they know they will fully recover it in operations.”