Menu Close

Chemical industry, the basis of manufacturing growth in Mexico

By Veronica Alcántara

The Mexican chemical industry provides 96% of the manufacturing industry, but only has the capacity to meet 25% of domestic demand.

In 2019, it accounted for the second largest GDP-largest industrial sector at 2.1%, which accounted for an annual consumption of $42 billion, however, due to the scarcity of raw materials it only had the capacity to serve 25% of the domestic chemical market, and this year because of the pandemic as of July apparent consumption fell 12%.

José María Bermudez, president of the National Association of chemical industry (ANIQ), unveiled this during the LII National Chemical Industry Forum, which was held virtually.

The industry leader asked federal authorities to work together to achieve the supply of the different inputs needed in the country. In her participation, Energy Secretary Rocío Nahle accepted the proposals of the chemical industry and agreed to meet with ANIQ once a month to advance the solution to the problems faced by companies in this sector.

Currently the chemical industry in Mexico has a deficit of USD 32 billion by imports, so they consider it key to its reactivation, reduce dependence on imports with specific projects involving the parastatal Petróleos Mexicanos (Pemex), which today is in a difficult situation and is not able to supply the domestic market.

At the same event, Luis de la Calle, general manager of the consultancy De la Calle, Madrazo, Mancera (CMM) and who has participated in the negotiations for Mexico’s trade agreements, assured that the country has all the conditions to become a global manufacturing power, where the chemical industry will be key to it.

“If we increase the capacity and complexity of the chemical industry, this is going to be the basis for the growth of the entire manufacturing industry so that Mexico can then be North America’s export platform,” he said in video conferencing.

He noted that the Infrastructure Plan presented last week by the Mexican government includes several important chemical projects, including a fertilizer plant, an ammonia plant, and a terminal for the importation of ethane, which reflects an important change in the government’s strategy.

In its view, Mexico should take advantage of the country in the region of the world where energy is the lowest in the world, so it suggested that chemical companies collaborate with the government in boosting investments for this sector.

“North America is going to be the region of the world with the largest and most successful petrochemicals in the coming years because in this region are the cheapest inputs in the world and Mexico has to become a country where not only are we waiting for US purchase orders to arrive, but we have to become a country where the private sector proposes solutions to the United States to compete successfully around the world and the possibilities are huge.”

Luis de la Calle emphasized that the country has advantages that other countries do not have, not only being in the region of the world with the most vibrant energy sector, but is the only emerging country with the greatest number of trade agreements with all regions of the world.

In particular, the entry into force of the Treaty between Mexico, the United States and Canada (T-MEC) provides opportunities for all industrial sectors, so the specialist felt that companies and the government should focus efforts on working on what is needed to capture these opportunities.

Another advantage of the country is that global manufacturing companies are diversifying their supply chains due to the high risk of relying on China, so in the future they will seek to invest in other destinations and Mexico may be an attractive alternative to it.

“Mexico is a great industrial power with little gas, if we had a lot of gas, we would be hugely productive and powerful. So, we need logistics, cheap energy, and thirdly, we need technology,” De la Calle said.

He added that companies should lose the fear of investing in technology and take advantage of Mexico’s young country and bet on training the best engineers in the world, to move to an economy where creativity, ideas and knowledge prevail.

Posted in latin america

Artículos relacionados