FEMSA’s strategic business companies are leaders in their industries or sectors, playing a vital role in the communities where they operate.
Deploying industry-leading capabilities and cost-effective strategies that amplify FEMSA’s competitive advantage, FEMSA Strategic Businesses provide logistics and transportation; specialized janitorial, cleaning and sanitation product distribution; cooling and refrigeration systems; and foodservice solutions. Across each of these businesses, we prioritize the development and integration of low-carbon products and eco-efficiency services, such as increasing the content of recycled materials and identifying energy-saving solutions and opportunities.
In 2020, FEMSA Strategic Businesses contributed in different ways to the needs of the company and to support the community during the COVID-19 pandemic. Through deep experience, high performance engineering capabilities and a spirit of innovation, our employees contributed on-the-ground solutions to those in need, including the design and delivery of a new mechanical respirator for critical patients in need of respiratory support.
The Mission to Save Lives
The Mission to Save Lives
After Mexico recorded its first case of the coronavirus at the end of February 2020, the demand for medical supplies – including masks, plastic face shields and mechanical respirators – grew quickly, despite limited supplies. To address this critical need, Juntos por la Salud was launched as a public-private initiative to protect the health of hospital personnel, Mexican security forces, and the employees, suppliers, customers and consumers of participating companies and organizations. As part of this effort, the Secretaría de Relaciones Exteriores (Ministry of Foreign Affairs) and the Salvador Zubirán National Institute of Medical Sciences and Nutrition INCMNSZ, by its Spanish acronym) called on private industry to design a mechanical respirator to be manufactured in Mexico. When FEMSA was presented with the opportunity to save lives in our community, there was no hesitation in answering the call of duty. In addition to the FEMSA Foundation, we also tapped FEMSA Strategic Businesses to take a leadership role, joining a team of 16 other companies and academic institutions, including Metalsa, GSE Biomedical, and the Tecnológico de Monterrey.
In a span of 10 weeks, the group combined their talents to design, produce and secure approvals for the low-cost, 100% Mexican made, automatic VSZ-20-2 model ventilator. Torrey, normally focused on the manufacture of food processing equipment, transformed itself to be able to design and engineer a completely new type of product with many specialized parts. Imbera supported the investigation of mechanical ventilation for critical patients and REPARE contributed to setting up the structure of a post-sale technical support service. In partnership with other engineers and medical advisors from the automotive, biomedical and academic arenas, the FEMSA Strategic Businesses team contributed to several important differentiating features in the final product, including a direct connection to an oxygen tank to avoid dependence on wall outlets; an intuitive interface requiring minimal training; and a specialized alarm and data tracking system to ensure reliable diagnosis and patient monitoring.
The first set of mechanical respirators were manufactured for public hospitals in Mexico beginning in August 2020. Since then, more than 125 mechanical respirators have been delivered to clinics in Mexico and at least eight more to countries in Central America and the Caribbean. Once the mechanical respirators were ready, Solistica took the lead in transporting and delivering the prototypes and finished products to waiting hospitals. In total, Solistica traveled more than 25,100 kilometers to deliver important medical equipment and supplies for COVID-19 relief in support of both the #JuntosporlaSalud and #ContagiaSolidaridad initiatives. In addition, Solistica delivered nearly 36,000 wellbeing kits (including face masks, sanitizing gel and medicines) to hospitals in Mexico through the IMSS-Bienestar program.
“Without a doubt, of all the learnings, the biggest one that I take away is that large companies can come together, work as a team and act with agility when the objective is clear and strong - when we do it for our community.”
Salvador Almaguer Rentería
Director of Operations of AlPunto Food Service.
Solistica is a leading third-party logistics (3PL) solution provider for Latin America, serving more than 4,000 customers in seven countries across diverse industries, such as: pharmaceuticals, automotive, technology and consumer goods. Our more than 22,000 employees offer comprehensive solutions in three areas of expertise: Transportation, Warehousing and Other Value Added Services. Approximately 30% of our business is made up of the services we deliver to FEMSA companies.
Solistica continues to advance our vision of being the preferred 3PL partner in Latin America, recognized for our regional expertise and innovative solutions, and for consistently exceeding customer expectations. We continue to advance this vision by leveraging expert talent in the region and consolidating our capabilities and infrastructure.
Following the acquisition of AGV in 2019, Solistica greatly expanded our warehousing and distribution capabilities in Brazil, making us the first fully integrated 3PL solution provider in the Brazilian market. This year, by leveraging the synergies, gains and opportunities that this industry milestone has provided, we have further unified our new capabilities to significantly enhance our customer value proposition in the Latin America region.
Operational Effectiveness and Business Continuity
In 2020, COVID-19 affected the logistics industry, from disruptions in global supply chains and border closures to new safety protocols amidst a sharp rise in e-commerce. By taking bold steps to enhance our customer value proposition through our operational effectiveness model prior to the pandemic, we were well positioned to respond to this year’s challenges with resilience. This model strengthens and enables four key areas of excellence across our organization: safety, health and environmental; quality and processes; performance management; and continuous improvement. Having this strong foundation also allowed us to focus on business continuity to ensure that all cargo entrusted to us reached its destination safely and on time. We aligned basic standards across geographies, adapted operational resources to meet the most pressing needs of the business, strengthened cost discipline to manage risks and cash flow, and used scenario-based stress tests to inform financial planning.
To support our customers, we maintained close communication and developed flexible transport and storage solutions, including establishing new routes or temporarily reassigning services. For example, in Brazil and Colombia, as several clients suspended operations, we reallocated employees to maintain their jobs until operations resumed in the third quarter.
Solistica’s Business Model ensures cross-functional collaboration and alignment to deliver a unified offering as a single team.
Sustainability Progress and our Commitment to Safety
At Solistica, we have always been committed to ensuring the safety of all our employees and everyone connected to the supply chains that we support. During 2020, we implemented two programs for more than 2,000 middle managers in all Solistica regions and cross-functional areas. The first, “ZEIF,” is a culture building program to strengthen safety behaviors through engaging and reflective activities. Second, we launched the “5 Minutes of Safety” program for facility employees in all operations, consisting of brief training conversations held on a regular basis to reinforce the “golden rules” for having a safe operation.
Of course, safety also took on an important new meaning in 2020 through the lens of the pandemic, and our first priority continued to be the wellbeing of our people. We implemented strict hygiene and sanitation practices in compliance with all health regulations in the countries where we operate. We provided personal protective equipment to all teams and launched awareness campaigns for employees, which also served to extend knowledge to their families at home. Face masks were required of staff and we provided paid temporary leaves of absence to potentially vulnerable employees, including those over 60 years old, those with underlying medical conditions, those pregnant or with parental leave. To continue to protect our employees, we also invested in new technologies and infrastructure capabilities to facilitate remote work arrangements, as well as to provide enhanced visibility of logistics operations in real-time.
Our Environmental Impacts
As a logistics company, we are highly aware of the environmental impacts of our operations, and we have established targets to decrease our energy needs, water use and waste generation. Through our Sustainable Mobility program, we are reducing our fossil fuel usage by optimizing transportation routes. Our transportation management system utilizes data and analytics to automate business processes and integrate planning into a single application. With real-time tracking, mapping and planning capabilities, we identify inefficiencies and opportunities to decrease our fuel consumption and reduce carbon emissions while maintaining client satisfaction. In 2020, our vehicles avoided the emission of 33,332 tons of CO2.
In 2020, our progress on our sustainability strategy was recognized by various external organizations:
In 2020, FEMSA acquired a majority controlling interest in a newly combined company comprised of two market leading distributors of consumables with a focus on the janitorial and sanitary (“jan-san”) supply and packaging solutions industry in the United States: WAXIE Sanitary Supply and North American Corporation. The transaction was consistent with FEMSA’s expertise and capability set in managing supply chains and distribution systems for diverse business and retail customers.
Founded 75 and 100 years prior, respectively, WAXIE and North American were both family-owned and operated with complementary market footprints in what is still a highly fragmented industry. Together, they represented significant scale, operating a network of 26 distribution centers and serving more than 27,000 customers in various industries, including building service contractors, education, government, retail and hospitality. Headquartered in San Diego, California and Chicago, Illinois, respectively, WAXIE and North American have decisively expanded FEMSA’s footprint in the United States.
As COVID-19 began to impact our clients, the WAXIE and North American teams reacted quickly and decisively. While certain customer segments were put under severe pressure, such as hospitality, other opportunities arose that offered us the chance to capture fast growth. Demand for cleaning and sanitizing solutions, involving not just chemical products but also delivery systems, increased significantly. Protective equipment, such as disposable gloves, suddenly became a necessity for clients that historically had not required them in such quantities. We were able to leverage our supplier network and our newly acquired scale to capture these opportunities.
The long-term strategy for this operation has always included a consolidation component. We aspire to create a national platform that will best serve the needs of our customers across the United States. With that in mind, in late 2020 we successfully acquired Southwest Paper Company, Inc. (“SWPlus”), based in Wichita, Kansas, and Southeastern Paper Group, Inc., based in Spartanburg, South Carolina. With these transactions, we will expand our footprint while gradually making progress in our effort to consolidate the national platform.
FEMSA Strategic Businesses also include a group of companies focused on providing solutions in foodservice equipment, commercial refrigeration, material handling and integral services at the point of sale in Latin America and the world, through AlPunto Food Service (Torrey, Cooking Depot and Imbera Food Service), Imbera/REPARE and PTM. With our five manufacturing plants, eight distribution centers and 13 retail stores, we produce and distribute high-quality products to 50 countries in five continents.
AlPunto Food Service
Torrey, Cooking Depot and Imbera Food Service manufacture and market the equipment to process and preserve food and beverages. We understand the needs of our users in order to develop profitable solutions with the best functionality.
Torrey
Since 1960, Torrey has utilized an extensive distributor specialist network to deliver high-quality food processing, preservation and weighing equipment for butcheries, small retailers, supermarkets, convenience stores, hotels and restaurants in more than 50 countries worldwide. In 2020, Torrey took a leadership role in the fight against COVID-19 by contributing to a multi-sector initiative to develop the first Mexican-made mechanical respirator for respiratory patients. Learn more here.
Cooking Depot
For 50 years, Cooking Depot has been meeting the kitchen equipment and accessory needs of the market’s points of sale and consumption centers through continuous innovation in service and by making hundreds of useful products available to its customers. Visit our e-commerce platform to learn more: https://store.cookingdepot.com/
Imbera/REPARE
As the world leader in the commercial refrigeration industry, Imbera/REPARE’s more than 4,500 employees export equipment to 60+ countries from three production facilities in Brazil, Colombia and Mexico. Through innovation and high performance engineering capabilities, Imbera has enabled faster, smarter and more sustainable products and services solutions. For example, Imbera’s refrigerators consume 85% less energy than 2009 models did, thanks to upgrades such as energy efficient LED interior lighting. Accelerating the transition to the circular economy, Imbera is committed to supporting steps for the responsible disposal of manufactured equipment, and Imbera’s coolers use R290 refrigerant, which has a low environmental impact. REPARE is the largest division of comprehensive maintenance and sale of parts and spare parts services in the American continent. It provides maintenance and installation services for Imbera, Torrey, Coca-Cola FEMSA, OXXO and various other clients in the industry. Our REPARE facility recovers, reuses or recycles up to 99% of the parts of refrigerators at their end of life.
PTM
Plásticos Técnicos Mexicanos (PTM): Through its high-performance engineering and recycling capabilities, PTM’s more than 1,000 employees design and manufacture plastic transformation projects tailored to each customer in support of their operational and marketing strategies for materials handling, food, beverages and automotive. Its facilities include modern production capacity for processes such as injection, thermoforming, extrusion and blow molding. In 2020, PTM contributed to FEMSA’s COVID-19 relief initiatives and added to its own portfolio of market offerings by manufacturing plastic face shields. PTM’s business model, products and services address the waste challenge and promote the principles of the circular economy. In 2020, PTM redesigned new plastic boxes made from 100% recovered material, recovered more than 30,000 tons of plastic resins, and recycled more than 25,000 tons of plastic. In addition, 80% of PTM’s products — including plastic pallets and plastic crates, among others — were made from recycled materials in 2020.
