An intense focus on digital transformation, hand-in-hand with customer experience, might not be things one immediately considers when it comes to the cement industry – but for Cementos Pacasmayo, Peru’s top player in the market, it’s absolutely vital in preparing for the future. Luis Miguel Soto Valenzuela has been CIO of Cementos Pacasmayo for around three-and-a-half years, after 13 years in SAP consulting, and his varied career has allowed him to work in Bolivia, Colombia, Puerto Rico and the Dominican Republic – experiences he describes as “really enriching”.
“I gained a lot of experience in different industries – health, insurance, manufacturing, mining, automotive,” he explains. “They all enriched my depth of knowledge of how you manage different industries through IT solutions.” When he joined the Cementos Pacasmayo team, his primary objective was also related to SAP, because the business was planning to migrate to the latest version. However, that objective evolved, and became just one element of a long-term digital transformation journey, with the ultimate goal being better customer experiences.
The new vision
Cementos Pacasmayo had, in fact, already been planning its digital transformation before Soto stepped in. In 2017 – the year he joined – the business stated its new vision, which was to provide solutions and experiences to customers, not simply products. “It was also stated that we were going to provide building solutions that differed from our main product – cement,” Soto says. “An innovation area was built in order to help establish the mindset of our people in order to go towards our digital transformation, but that was before I arrived.”
Soto joining the business saw the IT team becoming the digital transformation function, because its capabilities were required alongside the innovation team. “As I said, that was mainly focused on setting the mindset of our people, and also instated the practice of working in agile teams,” Soto explains. “But until I arrived, there were no digital products being made. It was all an idea, a theory; now, we have several digital products already on the market.”
Seeing beyond cement
This innovative mindset of moving away from products and into experiences, which existed prior to Soto, is a fairly novel one for the traditional cement industry. Fortunately, Cementos Pacasmayo has a forward-thinking CEO who knows even cement isn’t always going to stay the same. “We’ve been doing this for 63 years,” says Soto, “we’re number one in the region – but it’s because we’re on top that we have to change in order to anticipate further competitors that arrive in our geography and start offering something we don’t. Our CEO isn’t worried about other cement competitors – he’s worried about the next building material that’s going to come and take over the cement industry. That’s why he stated the new vision – to provide building solutions, not just cement-based ones.”
That kind of innovative future-thinking is what keeps a business one step ahead, regardless of the changes happening around it, and sets Cementos Pacasmayo apart from other players in its industry. In fact, the business is so serious about keeping a close eye on the future of building materials, it has collaborated with a university (UTEC) to fund research into the topic. “They’re investigating different materials in order to look towards what we’re going to make in the future,” says Soto. “Connected to this is our pledge to reduce our CO2 emissions because, I’m sorry to say, cement is a primary contributor to that problem. We want to drop our emissions to 0% by 2050, so part of why we’re doing this investigation in this laboratory is to reduce those emissions on our traditional products and operational processes.”
For all the changes Cementos Pacasmayo is undergoing, and how it’s preparing for an as-yet-unknown future, one thing it doesn’t have to worry about is customer loyalty. As previously stated, the business is at the top of the game in Peru; its customers are, in Soto’s words, “in love with our brand”. In fact, the digital transformation it’s been going through has cemented (pun very much intended) this, as it has enabled bespoke services for everyone – from huge construction companies to individuals just wanting a few bags of cement for a single project.
“We have developed a digital ecosystem, Mundo Experto, in order to deliver tailored solutions for everyone,” says Soto. Cementos Pacasmayo has Ferrexperto for hardware stores, Agentexperto for grocery and multi-purpose stores, Tiendexperto for B2C customers, Aliado Pacasmayo for master builders and masons, Vecinas Pacasmayo for the brand consulting network, and DINOexperto for direct-to-customer stores. This venture has required Cementos Pacasmayo to become very much a data-driven company. “It involves tons of data from which we’re going to develop our loyalty strategies.”
Cementos Pacasmayo even has an app solution – Pacasmayo Profesional – which focuses on the specific pain points of construction companies. “They now have real-time tracking of our ready-mix trucks, including notifications of when they leave our facilities, when they arrive on-site, and when concrete discharge starts and ends. This is a perfect example of how our agile teams from business, innovation and IT work together in order to provide tailored solutions to our customers. The app allows us to receive enormous amounts of data, enabling further development of the solution.”
Additionally, Cementos’s three cement plants are automated with its IIOT platform, which is integrated with its ERP solution, making real-time tracking across the board possible – not just in terms of the product journey for the customer, but also things like material consumption and indirect manufacturing costs (e.g. energy and maintenance inspections). “We receive millions of data tags that allow us to monitor our key asset management in real time and make decisions on the run,” Soto explains. “All of this is part of our Big Data and analytics programme, which will allow us to final delivery our Operational Intelligence solutions.”
All customers, big and small
All these different types of customers have different requirements, which is reflected in the various services Pacasmayo now offers – but they also have to be managed differently, on a more personal level. Before this became the focus thanks to the new vision, Cementos Pacasmayo was very much a traditional B2B company; it has 300 customers made up of big hardware stores or construction materials distribution companies, as well as construction businesses themselves.
“When we changed our vision, we stated that we were going to look towards every single one of our customers, because the construction companies are not the final users,” Soto explains. “Our real customers are the families buying a few bags of cement to build their home, so we opened ourselves up to knowing these customers – and what we’ve found is they’re more diverse than we thought; they have different needs.”
The business was split in two, so that part of the Cementos Pacasmayo team could focus solely on consumer, and part on industrial. That allowed the business to learn what each type of customer’s needs and wants were, before splitting the groups further to create the new range of digital services. The challenge comes with the actual delivery of the products, but even that is an exciting opportunity for Cementos Pacasmayo; the business doesn’t have its own fleet, and it knows that its customers can’t wait for cement – they have projects happening now. So, Cementos Pacasmayo partners with other services in Peru that do the last mile delivery, and make sure it’s always on time, which also creates a mutual support network for local businesses.
And that – the wellbeing and future of Peru – is something that’s hugely important to Cementos Pacasmayo. It is a business that feels responsible for the development of its country, because many areas of it are under-developed. “We feel a primary responsibility in developing the cities in order to unite them with roads or highways or bridges, because they don’t really have those capabilities,” Soto says. “With our knowledge, products, and solutions, we know that we can make a difference. Our vision is to push forward this development by 2030.”
None of this shift towards greater customer understanding and service would be possible without the kind of company culture that supports it. Back in late 2019, Cementos Pacasmayo stated its purpose – it stated its vision in 2017, but it didn’t have a purpose. So, the company decided on a purpose and created six culture principles to support it.
Cementos Pacasmayo purpose: ‘Build together the future you dream of’
Six cultural principles:
People come first
We are conscious and upright
Our diversity is our essence
We experiment and learn
United we’re unstoppable
Good vibes and energy for what we do
“By acting by six principles, we fulfill our purpose as a company,” says Soto. “We do also have a cultural transformation program that is going along with the digital transformation journey, because we know that one can’t happen without the other. So, we’re really focused on developing that mindset and developing that driver of purpose towards our transformation.”
As Cementos Pacasmayo transforms itself, it helps transform Peru – and, in that way, it is building a future the whole nation can dream of.