The New Trend in Latin America: Total Cost of Ownership

Elaflex entered the Latin American market close to 10 years ago, and found a market totally oriented toward prioritizing purchase Price over any other factor in the purchasing decision-making process. But that has slowly changed and Total Cost of Ownership (TCO) is now as important as the original purchase price.

Factors contributing to this change include the ‘professionalization’ taking place at most oil companies in the region. Teams of highly skilled professionals are now evaluating the quality of the equipment, the mean time between failures (MTBF) and the life expectancy of the product. Also factored into the equation is the negative impact of equipment down time and the deterioration of image and customer loyalty when equipment is not working properly or not working at all.

Another factor impacting the growth of TCO in Latin America is the privatization of many state-owned oil companies. In most cases those oil companies are bound by strict government purchasing rules that demand public tenders with awards going to the lowest price. As those companies have privatized or have faced fierce competition from the private sector, TCO, quality, image and product performance have played a more important role in the purchasing decision.

At Elaflex we have embraced the TCO concept as a way to enter the market and grow our presence. For example, after extensive data gathering and field experience we have determined that Elaflex nozzles have an average life expectancy of over 8 years compared to the standard one-year life of most nozzles used in the region. The difference is even more accentuated with hoses and breakaways.

To deliver a strong message and back our claim of the importance of TCO, Elaflex offers in Latin America extended warranties. This marketing tool has allowed us to establish credibility, to service our customers in a highly differentiated way, and to experience growth in the market.

For further information, please contact the team of ELAFLEX Latin America – see contact details on the right.