Mabe: at the vanguard in household appliances.

You can learn a lot about Mabe by the company it keeps. The household appliance producer has partnered with General Electric for several decades, filling many of the U.S. company's orders even before Nafta kicked in, and eventually growing into GE's designated manufacturer for Latin America.

The relationship has worked so well that Mabe has become not only Mexico's leader in the "white goods" category--with a reported 48 percent of the internal share--but also its top exporter.

Of a total of US$1.8 billion 2004 sales, US$1.1 billion took place outside of Mexico. Most of that (US$0.8) was from direct exports from Mexico. The rest (US$0.3) was from external operations--that is, made abroad and sold abroad.

In fact, if you buy a washing machine or stove or refrigerator anywhere from Alaska to Brazil, there's a pretty good chance Mabe made it. That's true even if it's not called Mabe or GE. About a dozen other brands sell Mabe-manufactured units.

Despite the rich rewards of its relationship with GE--and the latter's minority interest in the company--Mabe is no mere arm of a foreign corporation. It is orgullosamente mexicano. And it's been proudly Mexican since its founding in the 1940s by Egon Mabardi and Francisco Berrondo, two visionaries who quickly tapped into the export market.

While its presence in the U.S. market was a win-win proposition, such ambitions weren't as common among Mexican manufacturers in those days as they are now. Mabe was global before global was cool.

So when the Nafta-Nineties arrived, Mabe's trade situation with the United States had little to gain. Instead, the company turned its gaze in a logical direction--southward.

Sustaining Success Abroad

South America at the time was a fragmented and underserved market that was just beginning to get serious about free trade. For Mabe, buying up troubled appliance makers in several countries in the region made sense for a lot of reasons. CEO Luis Berrondo cites "cultural synergies" and free trade as the two most important.

The first factor qualifies as a no-brainer. Mexico and most South American countries share a common language, as well as at least the broad outlines of a common history and an overlapping, though surely not identical, business culture.

The result is that now Mabe has a solid presence in such countries as Colombia, Argentina, Brazil and Venezuela, with manufacturing plants scattered around the southern continent. And some of its Mexican plants, such as the recently built US$280 million facility in the state of Guanajuato, manufacture appliances for export only.

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Of course, sustaining such success abroad, especially in a competitive market like household appliances, is more than a matter of milking the new trade climate. At some point, your product has to be as good or better than everybody else's. To make sure that happens, Mabe follows a leadership-maintenance strategy based on what it calls its "four principals." They are Advanced Technology, Manufacturing, Marketing, and Service.

Technological advancement is more prevalent in Mexico than many outsiders think. Mabe's research and development facility, located in Queretaro, is understandably busy. For example, Mabe's recently introduced "Id System"--computerized intelligence that makes washing machines run more efficiently, get clothes cleaner and virtually eliminate the possibility of damage--was a 100-percent Mexican innovation.

Mabe has also worked to improve its packaging design and even changed its logo design to reflect its new, expanded presence.

The outlook? Well, the home appliance market rebounded in 2004 after a down year. But the future still holds challenges for Mabe. Maytag has recently moved into Mexico, with its sights set on eating away at market share.

But Mabe has never been a company to sit still, and it's doubtful that it plans to do so any time soon.