Impco Signs Mexican Deal to Convert Gasoline Engines
The deep brown haze that obscures much of Mexico City much of the time is starting to look pretty green to Bob Stemmler.
The president of Impco Technologies Inc. signed a pact last week with the government of the state of Mexico, which includes Mexico City, to help develop a system for converting tens of thousands of vehicles there to natural gas and propane--fuels that are far less polluting than gasoline or diesel.
Impco, which is headquartered in Cerritos and has its research and development facility in Irvine, is a major developer and manufacturer of alternative fuel systems and components. It sells to original equipment manufacturers such as General Motors Corp., and to aftermarket companies that specialize in converting gasoline engines to propane and natural gas.
Stemmler says business is booming because of the worldwide drive to clean up the environment. In the U.S., Japan and Europe, car makers--pushed by government policy and public opinion--are spending billions of dollars on development of alternative fuels and alternative power plant technologies.
In Mexico, the government instituted rules three years ago that prohibit daily use of gasoline-powered vehicles in major urban areas such as Mexico City, Stemmler said. “The only privately owned cars and trucks that can drive into the cities seven days a week are those that use alternate fuels,” he said. “That’s creating a huge potential for us.”
Truck fleet operators such as Coca-Cola and Frito-Lay have to convert their fleets to alternate fuel, he said, because they have to make daily deliveries. “Coca-Cola has 20,000 delivery vehicles in Mexico that drive every day of the week. They have to because most stores don’t have the cash flow that allows them to buy a big supply and stockpile it.”
Impco recently won Mexican government certification for its fuel system conversion products and is one of a handful of companies that can sell alternate fuel systems there. Last year, it booked $10 million in sales in Mexico to private companies. The new pact with the state of Mexico could boost that to $15 million this year, Stemmler said.
“There is a potential market of 70,000 vehicles in the government transportation fleets in Mexico state over the next five years, and there are 700,000 vehicles that are candidates for conversion in the whole country.” he said.
Establishing a base in Mexico, he said, will help Impco expand sales into all of Latin America.
Impco, which has 450 employees, including 120 in Irvine and 180 at its headquarters and manufacturing plant in Cerritos, had gross revenue of $72 million last year and expects the total to jump to $85 million this year, Stemmler said. The company sells its products in 35 countries.
