Manufacturing Digital learns that, for Mexico’s carpet forerunner Terza, success is a matter of style, versatility and daring
Written by Anne-Frances Hutchinson & Produced by Giselle Brown
Established in 1980 by Mexican industrial giant Alfa, S. A. B. de C. V. as a business unit of their pethroquimical division, floor covering manufacturer and distributor Terza® has literally become a household name in Latin America. Thanks to an aggressive export strategy, the firm is a significant player in international markets as well.
In addition to manufacturing and distributing polyester, nylon and polypropylene carpets, Terza offers a complete line of hardwood, laminate, vinyl, rugs and porcelain tile flooring for its residential and commercial clients. Terza’s distribution network includes more than 800 distributors.
With a reputation for high quality, diverse product offerings, and a level of responsiveness often uncommon in the industry, Terza has emerged as a tough player in a tough environment, turning heads with a brand strategy designed to maintain their dominance in the Mexico floor covering market while taking a hearty bite out of foreign market competition.
DISTINCTIVE DECOR
Many of the raw materials essential for synthetic carpet and rug making are developed by sister company Akra Polyester and parent company Shaw in a range of deniers, filaments, and finishes. Backed by Akra’s fiber making technologies, Terza began introducing innovative carpet and rug designs into a domestic market that was suffering from a serious lack of product diversity. In 1995, Terza acquired rug-maker Luxor® to become the largest carpet and rug manufacturer in Mexico and Latin America.
Today, Terza offers more than 100 carpet and rug styles in more than 800 colors, with a range of textures that include Berber, frieze, multilevel cut piles and loops, and twisted yarn In 2009 Terza launched its Collection for the Hospitality segment.
The firm has also developed a proprietary stain repellant technology for carpet fibers. Ultragard® is an environmentally safe, odorless stain blocker that adds life and cleaning ease to Terza carpet and rug products.
In addition to offering carpets and rugs manufactured in-house at their facilities in Monterrey, Nuevo Leon, Terza supplies hardwood, laminate flooring and porcelain tile, distributing imported wood products from heavy-hitters Mannington® and Nordstar®, which is marketing under the Terza brand.
“Our strategy has been to develop partnerships with market leaders in each business; for laminate, we have a commercial agreement with Kronotex, which is one of the leading German companies. We sell laminate flooring from them with our own brand, Terza laminate and are now the second largest player here in the laminate market here in Mexico,” CFO Diego Garcia Villareal explains.
They also offer porcelain tile flooring from Stonepeak, Domestic customers get custom product directly from Terza’s manufacturing and distribution hub in Monterrey within 24 hours of order placement.
In addition to responsiveness and agility, the Terza approach to success hinges on offering superior products. “Quality is one of our main reasons why new customers will buy from us,” he adds. “The quality of the product they see in the marketplace has really helped us open up more channels.”
GLOBAL VERSATILITY
Terza imports the materials and products needed to support domestic demand and exports top quality products to meet international demand. Managing hundreds of thousands of SKUs requires a robust and expertly executed supply chain, which is overseen by Terza’s operations manager, Jesús Guajardo. “We compete with companies that are 100 times larger than ours, so we are particularly flexible in our supply chain. Service and supply are very important.”
On the export side, Terza succeeds by understanding customer demands, customs and tastes. “Custom manufacturers apply a secondary backing of cloth that goes underneath the carpet,” Francisco Orozco, Exports manager explains. “In Australia they use natural jute backing. In North America and Europe the most common secondary backing will be synthetic.” The availability of custom jute-backed rugs caught the interest of importers and gave Terza a foothold in the region.
According to company President Gustavo Talancon, building a presence in export markets has given the firm “a chance to fine-tune our advantages. We have the flexibility to produce custom products, custom colors, and that has been very successful tool, because that has opened us up to different countries that have no idea there is a carpet company coming out of Mexico,” he reveals. “For us to open new markets and say that we are located in Mexico created a little bit of curiosity and at the same time, a little bit of concern. But we have overcome all those concerns adding value – our value added is flexibility and customization.”
EVERGREEN, EVER BEAUTIFUL
Says Orozco, “we are aligning ourselves with the new tendencies in green and environmentally stable or sustainable, friendly products.” Sister company DAK is a major player in the development of PET fiber and recyclable fibers; Terza products are certified by the Carpet and Rug Insititute, and the company participates in the CRI Green Label Plus program.
The development of synthetic turf for sporting grounds, urban spaces, and environments where water supplies are a concern will help the environment – and Terza’s entering into the artificial grass marketplace. Terza’s line of realistic, resilient grasses are made of 100 percent recycled material, and represent a bold step ahead for the Mexican market, where demand for the product is beginning to take root.
“Even in a difficult economic environment we are committed to offering the market new products,” says Talancon. “We offer a different kind of synthetic grass for sports, residential and public areas. This is a market that we feel will continue to grow about 20 to 25 percent a year. It’s time to attack the market because we can use our own systems that we have in place. We have issues with water here in Mexico, and synthetic turf allows people to have year-round green gardens and the water usage is no longer an issue. It’s an investment that people can recuperate in a short time, and benefit by having nice gardens and safe places where children can play.”
The idea of bettering the environment extends to the company’s culture. In 2007, Terza received Familiarly Responsible Company Certification from Mexico´s Secretary of Labor. The certification is part of international movement whose goal is to find innovative methods to achieve work/life balance and provide equal opportunity to all. In September of this year, the firm was named “Best Company in Nuevo Leon” by the state’s governor for excellence in employee training and education.
For Terza, success is much more than simply aesthetics – it’s the ability to improve the quality of life for employees, end users and customers.
FACTS AT A GLANCE:
COMPANY NAME: Terza
NUMBER OF SITES: Four
OPERATIONS: Producer & exporter of carpets in Latin America,
FAST FACT: Terza S.A. is a joint venture between Mexican conglomerate Alfa, S. A. B. de C. V. (ALFAA:BMV) & Shaw Industries Group, Inc., the world’s largest carpet manufacturer.
ESTABLISHED: 1980
EMPLOYEES: 550
REVENUE: $80-100 Million
www.terza.com
View Digital Corporate Profile of Terza in Manufacturing Digital November 2009