A Sustainable Future for Mexico’s ESSA

SAP ERP for Mexico's salt company (photo: Fotolia)

Mexico’s state-owned Exportadora de Sal (ESSA), the world’s largest salt-processing company, adopted SAP ERP to radically transform the company’s corporate processes. Through the implementation of the SAP Environment, Health, and Safety Management (SAP EHS Management) application, the organization can now manage hazardous residues (such as oils, grease removers, and solvents from its machinery and shipping fleets) that must be disposed of in accordance with strict federal regulations. Furthermore, since 2009 ESSA has been building on an integration project that combines SAP transactional functionality with a single database. The project involves financial planning, human resources, and business intelligence (BI) modules, with the goal of allowing company executives to track the organization’s performance.

ESSA, headquartered in the state of Guerrero, has about 1,000 employees. Through its own seaports on Mexico’s continental coast and neighboring Cedros Island, it exports a yearly average of seven million tons of consumer and industrial salt (iodized, low-sodium, and fluoridated salt) to countries around the world, including Japan, the United States, South Korea, and territories on the Pacific Rim. In the last fiscal year, ESSA reported a surplus of over US$65 million.

Environmental Protection a Priority

For over half a century, ESSA stood out as an organized, efficient, and sustainable entity. However, throughout decades of increasing data complexity, the company began to lag behind in its data requirements, as it continued to deliver official reports electronically. Through the implementation of SAP EHS Management, ESSA automated the processing of information on hazardous residues from all of the company’s facilities. This made it easier and more effective to control the amounts and final destinations of these residues, while complying with the strict regulations defined by Mexico’s environmental and natural resources agency . Now, with SAP ERP, all corporate data are updated in real time, safety documentation is optimized, and all key stakeholders can gain access to information whenever they need it.

“This is a multicomponent transformation, since we are dealing with a federally-owned agency that, besides operating as a profitable company, must also comply with stringent public sector regulations, particularly those regarding environmental protection, given that the company is headquartered in one of the country’s protected natural reserves,” said Pedro Martín Domínguez Valdez, the manager responsible for quality, ecology, and safety at ESSA. To guarantee long-term sustainability, environmental issues are the top priority and are an integral part of the company’s business model.

Budgets in Half the Time

The company implemented the SAP ERP Financials and SAP ERP Human Capital Management solutions, and SAP BusinessObjects Business Intelligence to integrate its processes and transactional base and to comply with regulations set forth by Mexico’s Federal Public Administration regarding budget management, operational sustainability, and integrated human capital management. As a result, it automated environmental management processes, improved accounting records, and enhanced analytic capabilities to turn data into strategic information. Furthermore, it enhanced cost and financial planning processes through budget integration, material location and follow-ups, and internal transport optimization, among others.

Previously it had been a challenge for ESSA to manage its extremely complex operating landscape – one that includes an airport, two seaports, a vast fleet of ships and land trucks, and a series of maintenance workshops. Working with SAP partner Accenture, ESSA adopted the SAP NetWeaver technology platform and implemented SAP BusinessObjects tools (including SAP BusinessObjects Explorer, Xcelsius, and SAP Crystal Reports software). It now boasts an executive information system that allows managers to analyze strategic information based on indicators defined by higher-impact processes.

Also within the project, ESSA adopted the new public administration accounts plan, which was enforced by Mexican authorities as of January, 2010. “We used SAP migration functionality to become the first public sector entity to comply with the new regulations,” says Domínguez. “Now our accounting and budgetary processes are fully aligned, so auditing efforts are easily performed, while we effectively avoid compliance issues. Also, staff workloads were drastically reduced, so overall conditions dramatically improved,” he adds.

In the past, budget integration took nearly two months at ESSA. The SAP BusinessObjects Planning and Consolidation application however has now cut that time by more than half, making it a dynamic, multi-option process. “Today, we are capable of delivering on better financial planning, a key element in the definition of our yearly budgets. Therefore, we can model alternative scenarios and quickly compare them against previous periods,” explains Domínguez. “The days when we had to deal with dispersed, isolated databases are now gone for good.”