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1、MEXICOCHEMICALS2024Economy-Chemicals-Petrochemicals-AgrochemicalsSpecialty Chemicals-Paints and Coatings-Distribution&LogisticsGBR SERIESIn 2023,the United States imported more from Mexico than from China for the first time in decades.As businesses focus on securing their supply chains after a perio

2、d of logistics challenges and amid continued geopolitical upheaval,Mexico is poised to ben-efit.The country is well positioned for economic growth,with several new infrastructure projects such as the Interoceanic Corridor of the Isthmus of Tehuantepec.The chemical industry is a core player in a stro

3、nger Mexican industrial sector.Nonetheless,2023 was a challenging year for Mexicos chemical industry.Prices across the chemical and petrochemical industry were depressed globally.Locally,feedstock shortages continued to hamper growth,with Pemex remaining an unreliable source of raw material.New gove

4、rnment regulation,including a ban of glyphosates and stringent restrictions on drug precursors,have complicated operational planning.In a complex political and economic landscape,the Mexican chemical industry has tried to develop a unified approach to policy and government relations.The countrys div

5、erse array of chemicals businesses focused on incorporating advanced technologies and im-plementing their ambitious sustainability agendas.A focus on operational efficiencies led to investment in capacity building and innovation.The Mexican chemical industry is in a good position for growth in 2024.

6、This is the macroeconomic picture in which Global Business Reports(GBR)is pleased to present the 2024 edition of its guide to Mexicos chemical and petrochemical industries.To compile this report,we interviewed more than 90 business leaders and representa-tives across the complete value chain of the

7、chemical industry,including associations,producers,distributors,logistics providers,and service companies.The report provides an in-depth look at key sub-segments of the industry including specialty chemicals,crop protection,and petrochemicals.We are grateful to our interviewees who have taken the t

8、ime to give their valuable perspectives.To all our readers,we encourage your feedback and welcome interest in participating in our future reports.Alfonso TejerinaDirector and General ManagerGlobal Business ReportsWELCOME LETTERGBR SERIES|MEXICO CHEMICALS 20243 Dear Readers,OceanGulfofMexicoGulf of C

9、aliforniaUNITED STATESGUATEMALABELIZEHONDURASEL SALVADORMexicaliHermosilloChihuahuaLa PazCuliacnDurangoTepicGuadalajaraColimaMonterreySaltilloVictoriaSan LuisPotosZacatecasAguascalientesCiudadMridaGuanajuatoMoreliaTolucaCuernavacaQuertaroPachucaPueblaJalapaTlaxcalaCampecheChetumalVillahermosaTuxtlaG

10、utierrezOaxacaChilpancingoMexico City00300 MilesNMexicoMexico Chemicals 2024Introduction to Mexico8Making the Most of Strategic Location12Interview with National Chemical Industry Association(ANIQ)13Interview with CanacintraSustainability16Sustainability18Interview with Acadian Plant Health19Intervi

11、ew with Ecolab20Interviews with Tecnoindustries and Cemex22Interviews with Cryoinfra and Linde23Interviews with Topsoe,nestas and Air LiquidePetrochemicals26Petrochemicals28Interview with Braskem Idesa29Interview with Grupo Idesa30Circular Economy on the Global Stage31Interviews with Avient and Poli

12、oles32Interviews with Resirene and Grupo Petroqumico Beta33Interviews with Pentac de Mxico and CastrolAgrochemicals36Agrochemicals38Interview with Mexican Union of Agrochemicals Manufacturers and Formulators(UMFFAAC)39Interview with Proteccin de Cultivos,Ciencia y Tecnologa(PROCCyT)40Interview with

13、Amvac41Government Involvement42Interviews with FMC and Syngenta43Interviews with Bayer Crop Science and Valent de Mxico44Interviews with Grupo Versa and ViakemSpecialty Chemicals48Specialty Chemicals50Interview with Croda51Interview with Charlotte Chemical53Interview with Momentive54Interviews with

14、Covestro,CFS Dresen and Epoxemex55Interview with Evonik56Interviews with rgano Sntesis and Arkema57Interviews with Cyplus Idesa and DVA58Flavors and Fragances59Interviews with Robertet,Bell Flavors&Fragances and AZ Fine ChemicalsPaints&Coatings62Paints and Coatings64Interview with Asociacin Nacional

15、 de Fabricantes de Pinturas y Tintas(ANAFAPYT)65Interview with Reacciones Qumicas67Interview with Kemikals68Interviews with Wyn de Mxico and Allnex69Interviews with Chemetall Mexicana(BASF)and CarbolineDistribution72Distribution74Interview with Vinmar Plastichem Mexico75Interview with Qumica Delta76

16、Interview with Pochteca77Interviews with Nexeo Plastics,IMCD Mxico and Quimi Corp81Interview with ICS Group82Interview with Kigo Chemicals83Interview with First Quality Chemicals84Interview with Trade Chemicals&Products 85Interviews with Helm de Mxico and DisanLogistics and Services88Logistics 90Int

17、erview with Leschaco Mexico91Interview with FR Terminales93Interview with Logstica Integral en Transportacin94Interviews with Union Pacific and Logward96Interviews with Yokogawa,Aspentech and Grupo Stin97Company Directory99CreditsChemical Distribution 70-85Specialty Chemicals 46-59Petrochemicals 24-

18、33Research by Mariolga Guyon,Maeve Flaherty and Eneko Johnson.Report interviews conducted between September 2023 and January 2024.Edited by Mungo Smith Graphic design by zgr Ergney and Kaori Asato.Cover design by Gonzalo da CunhaA Global Business Reports PublicationFor updated industry news from our

19、 on-the-ground teams around the world,please visit our website ,where you can suscribe to our newsletters,and follow us on X(Gbreports)and Linkedin.MEXICO CHEMICALS 2024GBR SERIESGlobal Business ReportsInternational BoundaryState BoundaryState CapitalNational CapitalGBR SERIES|MEXICO CHEMICALS 20245

20、 TABLE OF CONTENTSMiguel BenedettoManaging DirectorANIQFrom the perspective of the chemical industry,the macroeconomic position of the country is very strong.Introduction to MexicoGBR Series MEXICO CHEMICALS 2024Image by Alonso Reyes at Adobe StockMexico competes for foreign capital Image by Alonso

21、Reyes at Adobe StockMaking the Most of Strategic LocationAugust 2023 was the first month in which Mexico was the main exporting commercial partner of the US,a major vic-tory for the country over China.Commerce between the US and Mexico is currently valued at US$779 billion/y.Since 2018,nearshoring h

22、as been the word on everybodys lips,and as it continues to take off it will carry the Mexican chemical industry with it.According to World Bank data,the value of FDI invest-ment in Mexico has not changed significantly since 2018.However,2023 data has shown more profit reinvestment.Interestingly,the

23、sources of the FDI are diversifying,demon-strating a recognition of Mexicos benefits at a global level.In 2018,almost 53%of FDI in Mexico came from the US,while in 2022,that percentage was only 43%,although the amount of investment in dollars remained similar.Mexico is expected to attract US$40 bill

24、ion in FDI in 2024.One factor is the comparatively low cost of labor.In 2023,the average US salary was US$28/h,while Mexicos average sala-ry was only US$12/h.That status quo has,however,changed.On January 1,2024,the national minimum wage was raised by 20%to US$14.50/h.Miguel Valdivia,commercial dire

25、ctor of Trade Chemicals,commented:“Political issues in Mexico have six-year time frames,and in the previous term,we were worried about gasoline and raw material supply,but in this six-year term,I think labor is the most relevant.”Cheap labor,no longer a guarantee,is nonetheless not the most importan

26、t factor companies take into consider-ation when making nearshoring and reshoring decisions.Productive labor is equally critical,requiring a serious in-vestment in the development of specialized technicians and English-language proficiency,both of which the coun-try currently lacks.According to the

27、Mexican Institute for Competitiveness(IMCO),out of 43 economies studied,Mexico is currently ranked at 37th in competitiveness.This is the lowest the country has ever been ranked,following a decline in re-sults since 2018.Mexico ranked well for labor and employ-ment,but low rankings in health,quality

28、 of education,and the state of law,among other factors,weakened the coun-trys position.Mexico compensates for these challenges with its favor-able position in relation to the US not just geographically,but also in terms of trade.The United States-Mexico-Cana-da Agreement(USMCA)is a driver of the Mex

29、ican economy.However,the agreement will be revisited in 2026,and its future in its current form is by no means secure.A variety of factors including economic nationalism in the US,the radicalization of the Mexican government,and complicated domestic dynamics put the USMCAs position in some doubt.How

30、ever,the trade relationship between the US and Mexico is secure,bolstered by logistics crises that have driven companies to secure their supply chains to the US by basing themselves in Mexico.The US is not,however,the only core player when it comes to nearshoring.Leschaco,the global logistics pro-vi

31、der,has observed an increase in the Asia-Mexico chemi-cal trade.Francisco Glvez,managing director of Leschaco,said,“Historically,northern Europe was the global hub of chemical production,but Asia is becoming the new core of this market,and companies from that region are establish-ing operations in M

32、exico.”For the chemical industry,which is extremely capital-in-tensive,the establishment of new operating units is difficult,with companies entrenched in other locations.The choice for a major chemical producer to enter Mexico can only be made with a long-term supply chain strategy in mind.“The deci

33、sions that global companies make regarding moving chemical plants from other parts of the world to Mexico are truly complex and are decisions that normally take years,”said Jos Luis Urrutia Segura,president of the industry asso-ciation CANACINTRA.“One of the greatest challenges for the chemical indu

34、stry in Mexico is how to insert itself into these positive nearshoring trends as a capital-intensive industry.”Energy in the eye of the electorateGlobally and nationally,the coming years will be years of political change and electoral uncertainty,which will shape the economic situation and investmen

35、t climate nation-ally and regionally.The US,for example,will have a piv-otal presidential election in 2024 with ramifications for the Mexican economy.Esteban Guqueta,LATAM market-ing director for Nalco Water,an Ecolab subsidiary,noted:“Globally,approximately 50 countries will have elections.That wil

36、l impact the industrial sector.”Mexico will be among them,and Mexicans will head to the polls on the 2nd of June 2024 to elect a new president.The incumbent,President Andrs Manuel Lpez Obrador(AMLO),is barred from a second six-year term due to a one-term constitutional limit.The upcoming election ha

37、s two frontrunners:The governing,left-wing party Morenas candidate,Claudia Sheinbaum,a former scientist and mayor of Mexico City widely touted as the current Presi-dents prodigy,and opposition candidate Xchitl Glvez,a self-made businesswoman and politician with indigenous roots who will represent th

38、e National Action Party(PAN).Polling data suggest that the Morena coalition will retain the presidency in 2024.Since the nationalization of Mexicos energy sector in 1938 and the creation of the state-owned oil giant PE-MEX,energy policy has been a political battleground for EDITORIALEDITORIAL8 9 GBR

39、 SERIES|MEXICO CHEMICALS 2024GBR SERIES|MEXICO CHEMICALS 2024right and left.The Mexican state relies on PEMEX,cham-pioned by resource nationalist AMLO,to generate billions of dollars in revenue annually.However,a US$100 billion debt pile and chronic underinvestment in PEMEX facilities,where refinery

40、 utilization rates have declined yearly,has left the chemical industry in a challenging position.Given the energy-intensive chemical industrys need for low en-ergy prices and dependence on petrochemical feedstocks supplied by PEMEX,the industrys fortunes are tied to po-litical developments in energy

41、 policy.Structural inefficiencies in the energy market extend be-yond PEMEX.The electricity market is dominated by the Fed-eral Commission of Electricity(CFE),which generates most of the electricity for the country and is reliant on natural gas imports from the US.This presents a core challenge to t

42、he industrys competitiveness,according to Miguel Benedetto,managing director of ANIQ:“When looking at natural gas,we are competitive,with much the same price that Houston has,plus distribution costs.When looking at electricity,how-ever,we have a huge differential.Electricity costs are be-tween 25%to

43、 30%higher compared to the Houston area.”These elections could define the chemical industrys fu-ture.Glvezs energy policies are reminiscent of the Nieto era:Reforming PEMEX,encouraging private energy sector investments,and promoting green energy investments in hydrogen and solar power capacity.She h

44、as proposed creating a new state energy company,Energas Mexicanas,which would focus its operations on renewable energies.By contrast,Sheinbaums statements suggest an ap-proach similar to AMLOs,stressing energy sovereignty and the role of PEMEX.Both candidates have highlighted the importance of green

45、 energy and the transition towards renewable energy sources.However,the candidates differ in the methods.One favors private investment,while the other supports state intervention.These elections will impact the future of renewable ener-gy in Mexico.The country has incredible renewable energy resourc

46、es,but the current government,to protect PEMEX,has not provided support or approvals for a significant in-vestment in renewable energy.Of the lack of renewable energy policy,Dieter Femfert,commercial director of Cryo-infra,said:“In the long-term,this will disadvantage us in front of other countries.

47、”Hugo Villareal,VP of energy and engineering at Linde,described decarbonizing industrial processes as Mexicos most pressing political challenge.“The government has to promote this wind and solar power industry,”he said,add-ing:“Regulators have to catch up.”Government investment in energy will be cri

48、tical to mak-ing Mexico attractive for nearshoring.“Electricity prices are relatively high in Mexico compared to the US,”said Patri-cio Gutirrez,chairman of the board of Grupo Idesa.“If we cannot lower these energy costs and promote a renewable energy matrix,there is a risk that our industry will be

49、come uncompetitive and unable to meet the environmental de-mands of clients.”DEMOGRAPHIC DATAGDP PER CAPITA(PPP)US$24,980INFLATION RATE,AVERAGE CONSUMER PRICES5.5%CAPITALMexico CityHEAD OF STATEPresident Andrs Manuel Lpez ObradorGDPUS$1.81 trillionTOTAL INVESTMENT(%OF GDP)21.3%GENERAL GOVERNMENT NET

50、 LENDING/BORROWING(%OF GDP)-3.9%CURRENT ACCOUNT BALANCE-US$26.62 billionSource:IMF 2023GDP PER CAPITAUS$13,800UNEMPLOYMENT2.9%POPULATION131.2 MILLIONMEXICO AT A GLANCESource:IMF 2023Source:U.S.Census Bureau20112013201720152019202120238006004002000VOLUME OF GOODS TRADE WITH THE BIGGEST TRADING PARTNE

51、RS OF THE U.S.(IN BILLION U.S.DOLLARS)36.332.08.37.66.04.13.42.2%12.610.92.92.62.11.41.20.7Billions of pesosSectorPetrochemicalsSynthetic resinsInorganicsLubricants and greasesAgrochemicalsIndustrial gasesAdhesivesPigments and colorantsMexicoCanadaChinaGermanyJapanSource:ANIQ,INEGI MEXICAN CHEMICAL

52、INDUSTRY PRODUCTION(DEC 2023)798.8774.3575.0236.4223.520182020202220192021201780060040020002023Source:Census BureauUS TRADING PARTNERS BY VOLUMEMexicoCanadaChinaVolume of trade with the biggest trading partners of the US,billion US$EDITORIAL10 11 GBR SERIES|MEXICO CHEMICALS 2024GBR SERIES|MEXICO CHE

53、MICALS 2024FACTSHEETCan you update us on your recent operations?ANIQ represents 95%of the chemi-cal and distribution companies estab-lished in Mexico.This year,some of our core activities are related to energy ef-ficiency,trying to help companies work towards the energy transition.We are working wit

54、h the Ministry of the Envi-ronment on defining the objectives and goals of the chemical industry re-lated to emissions reductions.Another core focus of this year is raw materials supply.At the moment,60%of chemical imports are coming from the US,and 67%to 70%of ener-gy,with intensive natural gas imp

55、orts.We are working with Pemex and the federal government to improve the production of natural gas and,conse-quently,ethane and other derivatives,to increase competitivity and reduce imports from the US.Additionally,we have federal elec-tions next year in Mexico.ANIQ is work-ing with the authorities

56、 in the present government,as well as with teams that will be candidates in the election,showing them the benefits of a strong chemical industry for the country.What is the situation in regard to energy?A core challenge is energy prices.When looking at natural gas,we are competitive,with much the sa

57、me price that Houston has,plus distribu-tion costs.When looking at electric-ity,however,we have a huge differ-ential.Electricity costs are between 25%to 30%higher compared to the Houston area.Additionally,we would like to have more energy generated from renew-able sources.Miguel BenedettoManaging Di

58、rectorNATIONAL CHEMICAL INDUSTRY ASSOCIATION(ANIQ)We are working with the government to help the development of the south,focused on three needs:Raw materials supply,development of talent,and infrastructure.How does CANACINTRA serve the Mexican industrial sector?CANACINTRA is one of the oldest chamb

59、ers in Mexico,and was found-ed with the mission of representing the interests of the industrial sector.CANACINTRA is a national chamber of the processing industry,with a headquarters that brings together 76 different delegations from all over Mexico.We are the State of Mexico delegation and we are l

60、ocated in To-luca.One of our strengths is that we have visibility throughout the national territory through 12 sectors,including the food sector,the plastic sector,the automotive sector,the metalwork-ing sector and the chemical sector,among others.The services we offer can be divided into four main

61、parts:being an inter-locutor with the authorities,business linking,information generators and strategies to improve competitiveness.What are your priorities in terms of government relations?The 76 delegations are represented by a national president,who has a particular agenda with the federal author

62、ities regarding priority issues of the industry.At the local level,we help companies in managing the pro-cedures that are necessary for their state and municipal operations.Why is the capital-intensive struc-ture of the industry a challenge in the context of nearshoring?The main problem of the chemi

63、cal industry when it comes to offshor-ing is that it is a capital-intensive in-dustry and the establishment of new operating units is very complex.The Jos Luis Urrutia SeguraPresidentCANACINTRA The main problem of the chemical industry when it comes to offshoring is that it is a capital-intensive in

64、dustry and the establishment of new operating units is very complex.How can infrastructure be im-proved?Infrastructure has long been a chal-lenge for us,but we believe that we have major opportunities.The Long Beach Port in California is completely saturated,with no possibility of in-creasing cargo

65、capacity.We have two ports on the Pacific,Manzanillo and Lazaro Cardenas,and the distance be-tween Manzanillo and Lazaro Carde-nas and Houston is shorter than the distance from Long Beach to Hous-ton.We could be an excellent hub,not just for the chemical industry,but for many other industries.What i

66、s your perspective on the larger economic situation?From the perspective of the chemical industry,the macroeconomic posi-tion of the country is very strong.We continue to grow the levels of invest-ment.This year,for example,between January and September foreign in-vestment was up 30%,with last year

67、reaching US$45 billion.How can the chemical industry sup-port underdeveloped regions in the country?When you analyze the country,you will find two Mexicos.From Mexico City to the north,there is significant infrastructure,a long history of in-dustrialization,and factories and support to implement inv

68、estments.The south,on the other hand,has not received as much investment.Partially,this is because it is lacking in infrastructure.Additionally,talent is not well developed.The chemical industry is one of the only industries settled in the south.When you analyze the south,the industries are agricult

69、ure and chemicals.Coatzacoalcos is the larg-est hubs for the chemical industry in Mexico,and it is where Pemex in-frastructure is based.The industry could provide more benefits to the south.ANIQ is making a strong effort to communicate to the government that if they would like to develop this region

70、,an industry to start with is ours.We have been there for a long time,we have trained people,and we have worked with universities to prepare students to work in our plants.We believe that we could pro-vide this development.We have not invested in the last sev-eral years in Coatzacoalcos because our

71、capacity is underutilized.We uti-lize only 69%of the capacity in Coat-zacoalcos,so it is challenging to make an investment.We are working with the government to help the develop-ment of the south,focused on three needs:Raw materials supply,develop-ment of talent,and infrastructure.What are ANIQs upc

72、oming activi-ties?ANIQ continues to be very focused on training,with our own training insti-tute.We will be training close to 6,000 people in the different areas I have mentioned,and we are developing 12 different diplomas.Our Sistema de Becarios,which is the training that we provide to students,is

73、increasing,with more than 2,000 students allocated across different companies.ANIQ has six conferences annually.In May,we will host our general con-vention.We will also host our confer-ences on foreign trade,logistics,en-vironmental security,labor,and our Annual Foro.decisions made by global compani

74、es regarding the transfer of chemical plants from other parts of the world to Mexico are truly complex and are decisions that normally take years.Many of these players are rooted in plants in China,India or the US.The decision to move to Mexico has to be a long-term supply chain issue.In this sense,

75、one of the biggest challenges for the chemical industry in Mexico is how to insert itself into these positive nearshoring trends as a capital-inten-sive industry.It is important to note that when an industry is capital intensive,it re-quires access to credit on preferential terms.Not all industries,

76、especially those in Mexico,have access to credit conditions that offer an opportunity to compete.What is needed for a better nation-al energy matrix?Mexico needs to invest much more in transmission lines and energy genera-tion.For example,today,transmission generates real bottlenecks that lead to bl

77、ackouts in some areas of the coun-try.It is not strange to find Industrial Parks or companies in some industrial areas that require more energy than what is currently supplied.Another priority is the generation of much cleaner energy.We know that many companies are very focused on meeting the SDGs a

78、nd are increas-ingly seeking access to clean energy sources.Mexicos energy matrix de-pends on natural gas coming from the shale gas in the US;Mexico has taken advantage of the shale gas boom in the region,and a lot of pipes have been constructed and are currently in construction;but a lot of investm

79、ent will also be required in other energy sources,such as solar,wind,etc.and technologies that can support to man-age its intermittency,such as storage with new generation batteries.I believe we will see a lot of invest-ments related to energy in Mexico in the upcoming decades;the indus-try will nee

80、d more competitive ac-cess to energy,and the solution to this equation is genuinely complex.I think the solution lies in the com-bination of current energy sources and new technologies currently be-ing developed/implemented world-wide.The path to the zero-emission goals will not be as quick and abso

81、-lute as thought.What are CANACINTRAs priorities for 2024?We are working to achieve the objec-tives of our 2030 agenda.This year we will inaugurate our Energy Effi-ciency Club,introducing our mem-bers to technologies and good prac-tices to help them implement and achieve greater energy efficiency.We

82、 are doing similar work with wa-ter efficiency.One of our beliefs is that the more informed the indus-trial sector is,the better decisions it will make,and providing that infor-mation is one of CANACINTRAs cen-tral functions.Overall,our goal is to continue strengthening our membership base to gain g

83、reater representation.The other core focus is to stay close to our members,continue to build the tools and channels to understand what they need and generate those needs.INTERVIEWINTERVIEW12 13 GBR SERIES|MEXICO CHEMICALS 2024GBR SERIES|MEXICO CHEMICALS 2024Esteban GuquetaLATAM Marketing Director fo

84、r Nalco WaterECOLABThe industrial sector has a fundamental role in providing tools and facilitating investment to create the infrastructure for a more sustainable future.GBR Series MEXICO CHEMICALS 2024Image by HayyanGFXat Adobe StockSustainabilityImage courtesy of EcolabSustainabilityOscar SacoMana

85、ging DirectorSGS MEXICOWe have seen there is a trend towards circular economies in the extractive industries.In recent years,concerns about green-washing have led to greater expecta-tions for sustainability reporting and a need for companies to take tangible steps to reduce their resource usage and

86、carbon footprint.“We have noted that environmental and societal concerns are more genuine now and taken seriously,”said Oscar Saco,managing director of SGS.“Greenwashing will not disappear,but many companies are genuinely con-cerned and investing in technology to re-duce things like their water usag

87、e.”SGS,a testing,inspection and certifi-cation company,offers services that al-low the general industry to measure its footprint and resource consumption.SGS has seen greater demand from cli-ents for assistance determining where a company currently stands,and what steps can be taken to improve its s

88、us-tainability.As sustainability certificates become more of an expectation,there is greater focus on data collection and measurement of key sustainability metrics such as water usage.To accomplish this,there has been a surge in demand for innovation-driven solutions,companies seeking cutting-edge t

89、echnological advancements to address their needs.The future of sus-tainability is at the heart of this global focus on R&D,with niche segments be-coming areas of major opportunity for specialty chemicals providers.Arkema,for example,offers a variety of sustain-ability solutions,and recognizes oppor-

90、tunity in specialty chemical solutions for construction.“We are looking to exploit some of the global megatrends in decarbonizing the built environment(the so-called cool surfaces technol-ogy),”said Manuel Garca,president of coating solutions for Mexico,Central America,and the Andean region.For Ceme

91、x,materials for construc-tion and urbanization solutions are ripe for sustainable innovation.The company,which focuses on cement,concrete and aggregates production,is using innovative additives to re-duce CO2 emissions.These additives demonstrate the potential of chemi-cal innovation to decarbonize

92、the con-struction sector and improve build-ings energy efficiency.The companys Vertua line of lower carbon products has a 30%reduction in CO2 content compared to traditional cement and concrete.Vicente Sais,vice president global sustainability at CEMEX,said:“Using additives cre-atively to reduce CO2

93、 emissions is our key focus and will determine the future profitability of our industry.”The companys target was that 50%of the companys total sales by 2025 be lower-carbon products,but demand has been such it they reached the threshold at the end of 2023.The construction industry is conservative ab

94、out adopting new formulations,but these types of solutions can be the future of sustainable development.There are,however,regulatory inhibitions slowing the growth of these products.Sais explained:“In some markets,local building codes or regulations have not yet accepted lower carbon products.”Tecno

95、industries produces materials for bricks and other housebuilding tools,with a large carbonates division.Each of the companys divisions has its own sustainability targets.Javier Garca,director of operations at Tecnoindustries,said:“We have benefitted from large multinational clients with stringent en

96、vironmental standards,which they have passed down so we can do business with them.We are doing the same further down the value chain,creating a virtuous cycle.”For Arkema,investing in sustainable solutions is at the core of meeting future demand.Salvador Soria,president of Mexico,Central America and

97、 the Andean region for Arkema,stated:“There is a rising demand for eco-friendly,sustain-able alternatives that minimize ecological footprints and support responsible practices.”Biological products for a more sustainable food systemConsumers are now more focused on the safety of the food they consume

98、 and the impact of growing techniques on the land.In response,the crop protection industry has been investing heavily in sustainable alternatives to tra-ditional agrochemicals.This is an industry-wide trend,as Luis Eduardo Gonzlez Cepeda,former president of the Mexican agrochemical industry associat

99、ion UMFFAAC,ex-plained:“There is a growth in the registration of new or-ganic and biological products.It is now part of the fabric of the companies we represent.”Acadian Plant Health produces products from a seaweed called Ascophyllum nodosum,which is grown in the North Atlantic.The company,which re

100、cently launched a product called TOGGLE to enable grains,cereals and industrial crops to be more resilient against abiotic stress,supports its clients in the agricultural sector in increasing yields sustainably.Ser-gio Aburto,director Latin America North for the company,explained:“Our Canadian seawe

101、ed has a high concentration of bioactive compounds,providing a high bio-stimulant tech-nology that helps the crops abiotic stress resistance.”There is immense potential for the biostimulants market in Mexico across several segments.Sugar cane prices are rising,so sugar cane producers are more willin

102、g to spend money on products to sustainably improve yields.Demand for agave,driven by tequila and mezcal,is also continuing to rise.Additionally,Mexico is strong in high-value crops such as berries and vegetables,and some specialty crops like walnuts,all of which have the money to invest in advanced

103、 biological technologies.Delayed permitting approvals have been a challenge to navigate,and there is no positive end in sight.Companies wait years for product approvals,dramatically slowing the pace with which the industry can bring innovations to mar-ket.AMVAC,for example,has 14 registration applic

104、ations waiting for a response,and another 15 for which COFEPRIS needs to review the information,some of which are as old as 2018.“We are trying to work with the authorities,devel-oping products with greener technology and trying to com-ply with their demand to develop alternatives to agrochemi-cals,

105、”said Marco Salcedo,director of AMVAC.“If they want to have better,greener technology,they must speed up the process of registrations.”There is great opportunity for technological innovation in developing more sustainable crop protection products.FMC,for example,is in the process of bringing its new

106、 BioPhero pheromone technology to Mexico,currently working with the government to gain approvals.Carlos Jurado,Latin America North business director at FMC,stated:“BioPhero developed the technology to replace expensive synthetic pheromones using highly specialized pheromones in smaller volumes,which

107、 will significantly reduce operational costs for farmers.”In the coming year,development of advanced,natural crop protection products will continue to be a priority across the industry.The trend towards sustainable and biological products is irreversible,pushed both by strict regulation and consumer

108、 demand.Looking forward at 2024,Luis Osorio,ex-ecutive director of industry association PROCCyT,said:“This years mission is vital:To support the development and in-vestment in sustainable practices,new products and technol-ogies,such as biotechnologies that support this transition.”Metrics rather th

109、an greenwashing 21EDITORIALEDITORIAL16 17 GBR SERIES|MEXICO CHEMICALS 2024GBR SERIES|MEXICO CHEMICALS 2024How do Acadian Plant Healths products reduce plant stress?Our products and extracts are unique,coming from a seaweed called Ascophyllum nodosum which is naturally grown in the North Atlantic Sea

110、 in Canada.It is the worlds best-known seaweed,offering the greatest benefits and uses.Although Ireland and Scotland have Ascophyllum,our Canadian seaweed has a higher concentration of bioactive compounds providing a high bio-stimulant technology that help plants thrive,improving the crops abiotic s

111、tress resis-tance.Crops are stressed by everything,including wind,temperature,dust,pests,diseases,weeds,etc.Therefore,for a crop to express the maximum potential,every element of the agricultural process needs to be done correctly fer-tilization,irrigation,pest control,and stress control.How has dro

112、ught impacted agricultural activities?It has been a very challenging year due to extreme drought.The northern regions have suffered the most.The climate situation will particularly impact cereals,including corn,wheat and sorghum.The government tends to prioritize the people when there is insufficien

113、t water for both(popu-lation and agriculture).However,Acadian Plant Healths most hardy market is specialty crops:Berries,avocados,tomatoes,agave,and other vegetables.These crops have irrigation systems,so they are not impacted by drought to the same degree.Can you discuss your perspective on the pol

114、itics around GMOs?This government claims that genetically modified corn is dangerous and harmful for peoples health,but that is a flawed perspective.Genetically modified corn is not pro-hibited in the US,Canada,Europe,Brazil,or Argentina,all of which are major corn producers.None of those areas view

115、 GMO corn to be harmful to health.It is unclear what evidence the Mexican government will provide to support its claims when tons of studies outside the country show that genetically modified corn is safe.The problem of genetically modified corn in Mexico is political.The current government seeks to

116、 reactivate cer-tain economic sectors of the country.Agriculture is an essential segment in this project,given that agriculture is an industry in which people have the least resources.The government wants to reactivate production in other Sergio AburtoDirector Latin America North ACADIAN PLANT HEALT

117、HWe harvest our Ascophyllum nodosum manually to maintain the seaweed beds,as machine-harvesting may damage the seaweed.What are Ecolabs recent updates?Ecolab is a global leader in health,hygiene and water ser-vices.We are active in more than 170 countries,and we are proud of our strong presence in M

118、exico.The company has two large segments:Institutional and industrial.For everyone in the industry,2023 was a challenging year.However,Ecolab is proud of the 2023 acquisition of Flottec by Nalco Water,an Ecolab company.This acquisi-tion will supplement our portfolio of mineral processing and flotati

119、on solutions with important new technologies.Flottec allows us to expand our horizons in mining,par-ticularly in the extraction of gold and copper,which are instrumental in Mexico and Latin America overall.How do Ecolabs digital tools enable better water man-agement?When thinking about the value asc

120、ribed to water,water seems to be a very cheap resource on average,it costs a Mexican national$250 pesos per month per cubic me-ter.For the industry,water costs are comparatively mini-mal.The perception of the value of water is something that we must change so that we are appropriately valu-ing the r

121、esource.For example,if a company discharges a cubic meter of liquid into a river,they may contaminate four cubic meters of water.If nothing is done,the impact can be extremely high.And this is where the issue of perception comes into play.In Mexico,almost 50%of people think that companies are not do

122、ing much to save water or be more sustainable,but if you go to the companies,it is clear that companies are doing far more than people perceive.That disconnect is where Ecolab can provide solutions.Our offering ECOLAB3D places all the operations sys-tems on one platform,continuously measuring a comp

123、a-nys industrial processes.This allows the client to under-stand how they are managing their water and how their current water management aligns with their continuous improvement plans in terms of sustainability.The solu-tion uses AI to predict how a system will perform in the future and guides acti

124、ons to prevent deviations.ECO-LAB3D allows us to convert sustainability ideas into mea-surable,actionable plans that can be implemented on the clients sites.Esteban GuquetaLATAM Marketing Director for Nalco WaterECOLABThe perception of the value of water is something that we must change so that we a

125、re appropriately valuing the resource.areas.Still,if they pull people with low economic resources to produce corn,they will produce it only in small,sub-sistence-level quantities.Without GMOs these farmers will not have access to improved plant varieties that produce yields sufficient to survive and

126、 generate profits.The issue is more complex than the government imagines.Where is Acadian Plant Health seeing growth?The company has been very strong in vegetable crop bios-timulation products for quite some time.Acadian has also launched a new product this year,TOGGLE.This new prod-uct was designed

127、 to target grains,cereals and industrial crops,allowing crops such as wheat,corn,cotton,sugar cane and others to be more resilient against abiotic stress,helping producers to gain higher yields in a more sustain-able manner as well.Sugar cane is also experiencing a prosperous growth,with prices incr

128、easing.Sugar cane producers are investing in technology that will increase their quality and produc-tivity,and using our technology has been a high point for them due to the benefits they are able to gain.Agave has also been a key crop for the past three years.The market continues to grow.We expect

129、that agave will be one of our most important markets in the next two years.Finally,walnut trees are another specialty crop in which APH sees potential growth here in Mexico.Can you discuss the companys approach to sustain-able harvesting?Sustainability is one of Acadians essential foundations,part o

130、f the companys day-to-day business.We harvest our Ascophyllum nodosum manually to maintain the seaweed beds,as machine-harvesting may damage the seaweed.The availability of seaweed com-pared to its demand is a significant challenge,so we have a dedicated department in Halifax that manages our har-ve

131、sting to ensure that we are looking after the seaweed properly,allowing us to supply our clients demands.What is Acadians process of innovation?Innovation is key for our business.If you get stuck or de-layed,you will lose your market.To ensure we stay ahead,we work simultaneously on three product li

132、nes,ensuring that we have at least one ready to launch to the market each year.Can you describe what the company observed at COP28?COP28 was an interesting meeting because it was held in a region where crude oil dominates.Ecolab participated in the meeting,and we observed a clear evolution in the ex

133、-pectations for corporate sustainability.The change in ex-pectations for corporate sustainability has been noticeable since COVID,and was apparent at COP28.The private and industrial sector has a fundamental role in providing tools and facilitating investment to create the infrastructure for a more

134、sustainable future.The governments,on the other hand,play a facilitation role.How do you expect macroeconomic forces to shape the industry in the short term?In the short-term,inflationary issues are a challenge,but at Ecolab are focused on longer-term priorities.I predict that the currency will rema

135、in more or less stable during 2024,which will provide our clients operations with peace and allow us to better help them to focus on providing services and products that positively affect the planet.The next two years are going to be marked by political change.Globally,approximately 50 countries wil

136、l have elections.That will impact the industrial sector.What are the companys priorities for the coming two years?In Mexico and Latam North there is a definite increase in investment in technology.Companies have a greater ap-petite for investing in technological issues and sustainabil-ity.Ecolab is

137、no different we continue to invest US$200 million annually in innovation and sustainability.Ecolab as 11,200 active patents today,and we will continue investing in R&D.Internally,Ecolab will continue improving our opera-tions and digitalizing operations at our plants.As a sus-tainability company,it

138、is crucial that we provide an ex-ample of sustainable internal operations.The company intends to advance on our sustainability goals,lowering our greenhouse gas emissions across our operations.We will not take our foot off the accelerator.Ecolab will con-tinue improving operations and investing in s

139、trengthen-ing our structure and innovation.INTERVIEWINTERVIEW18 19 GBR SERIES|MEXICO CHEMICALS 2024GBR SERIES|MEXICO CHEMICALS 2024Could you introduce our readers to TecnoIndustries?We have five major divisions.Our brick,mineral and cement divisions have a considerable market presence in the US.Our

140、products are used to produce mainly construction materi-als but are also used in other indus-tries,like the chemical and energy markets.The minerals division is par-ticularly large;it includes ceramic min-erals.Our logistics wing(TecnoLogis-tics)is a vital division that adds much value to our servic

141、e.It provides the foundational supply chain that drives all the other divisions forward.We operate our own transportation units to serve our clients across the US and Mexico speedily and efficiently.What trends in demand are you wit-nessing?The petrochemical industry is undergo-ing fundamental chang

142、es.As the transi-tion towards electrification continues,demand for petroleum as a combus-tible fuel will decline.This transition will be an excellent opportunity,with a greater abundance of petrochemicals,and new applications for petrochemical products will be developed.Javier GarcaCEOTECNOINDUSTRIE

143、SCan you give us an overview of CEMEX?CEMEX is a materials company,and our core businesses are cement,con-crete and aggregates production.In addition,we offer urbanization solu-tions,such as admixtures.We are find-ing attractive opportunities to reduce emissions using additives creatively to reduce

144、CO2 emissions.Decarbonizing our operations is our key focus and will determine the future profitability of our industry.There are two main emission types in cement production:combustion and process emissions.Process emissions are roughly 60%of our direct emissions,and combustion emissions are 40%.We

145、 are offering new cement blends and concrete so-lutions with special attributes and us-ing admixtures proactively to offer the market lower carbon products.Could you comment on the VERTUA line of concrete solutions and its benefits?Our lower carbon products have at least 30%reduction of CO2 content

146、compared to traditional cement or concrete.VERTUA is helping develop-Vicente Sais VP Global SustainabilityCEMEXSource:Ministry of EconomyUSD Billions20062007200820092010201120122013201420152016201720182019202020212022202314.619.718.611.417.719.412.735.222.628.416.729.731.632.929.131.635.336.1FDI IN

147、MEXICO(Figures as of Q4 each year)Image courtesy of EnestasDemand for our carbonate products has been robust this year,as our car-bonates service numerous industries,including paints and plastics,mas-terbatch and in the energy industry.Another area of strong demand has been from the petrochemical in

148、dus-try,where we see innovations in the application of petrochemical products and plastics in engineering works.What are some significant challeng-es that Mexicos chemical sector and economy face?There is an increasing amount of friction at the US-Mexico border.Po-litical issues and a state of insec

149、urity have resulted in ever-longer waiting times for transports.The situation in the north of Mexico is troubling,and nearshoring opportunities could be derailed by the realities of congested borders,insecurity,and inadequate infrastructure.What are the companys priorities for the coming year?Althou

150、gh our core business remains in Mexico and the US,we will keep growing our presence in Central and South America and the Caribbean.ers reduce the overall embodied CO2 in their construction projects.It has achieved a very high customer adop-tion rate in developed and developing markets.Our target is

151、for lower-car-bon products like VERTUA to repre-sent at least 50%of our total sales by 2025.By the closing of 2023,we will reach the 50%threshold in cement,two years ahead of schedule.What are the greatest challenges to decarbonization in the industry?In some markets,local building codes or regulati

152、ons have not yet accepted lower carbon products,and the con-struction sector is conservative in adopting new formulations.One of the key levers we are implementing is using alternative fuels,using waste from other activities or industries such as non-recyclable municipal waste,as a fuel substitute f

153、or our kilns.In 2022,35%of our fuels were alternative,but there is still room to grow,which de-pends on developed waste policies;in some of our European facilities,we have alternative fuel substitution rates of 70 to 90%.The industrial gas sector gears up for green hydrogenA cheaper and greener ener

154、gy sector is the holy grail for Mexicos entire industrial sector,but the path forward is winding.For industrial gas producers seeking to provide low carbon gas,the lack of access to electricity from a renewable source is a major inhibitor.In the long-term,a greener en-ergy matrix in Mexico will requ

155、ire energy production from a wide variety of renewable sources,including wind and solar.Even in the past three years,the interest in developing a green hydrogen segment in Mexico has grown dramati-cally.Cryoinfra,a Mexican company,has a strong presence in hydrogen,and in 2024 the company will open a

156、nother hydrogen plant in San Luis Potos.Hydrogen,in all its forms,is currently seen as potentially the future for decarbonizing many industries,with many companies in Mexico looking into blue hydrogen,with the focus on reducing the carbon intensity of hydrogen.Green hydrogen will be important in the

157、 future,but there is currently no market because of the high costs and lack of legal security.Dieter Femfert,the commercial director of Cryoinfra,is also vice president of the Mexican Hydrogen Association,which works with the government to support green hydrogen projects.Femfert stated:“Other countr

158、ies are beginning to use green hydrogen for mobility,such as cars,trains,ships and planes,and we need to move in the same direction.”Energy and gas providers in Mexico are focusing more closely on the countrys green hydrogen potential.The po-tential for solar,wind and water energy generation would a

159、llow for the production of a fully green hydrogen.Indus-trial gas producer Air Liquides team participated in a study of the potential for green hydrogen in Nuevo Len.Raphael de Montfort,general director of the company in Mexico,explained:“There were several core conclusions:The most important point

160、is that the interest of all key stakeholders was confirmed and we see the progressive emergence of an ecosystem to promote green hydrogen.”Topsoe has,likewise,witnessed interest in the countrys green hydrogen potential.The company always participates in the hydrogen exposition in Monterrey.Florencia

161、 Vitelles-chi,general manager Mexico at Topsoe,explained:“We are starting an industry that currently does not exist in Mexico from scratch,but Mexico has a very large automotive sector and strong industrial sector,so the markets exist.”Mexicos position next to the US also positions it well to benefi

162、t from green subsidies the US is giving out through the IRA.“I was at a US embassy event the other day,and they were demonstrating the incentives there are to carry out projects in Mexico,”said Vitelleschi.“The US is well-posi-tioned for hydrogen,and Mexico will benefit.”To overcome the high-startup

163、 costs for green hydrogen projects,there is a need for subsidies at the beginning of green hydrogen projects to ensure their viability.This call for financial support was mirrored by a larger call among the executives interviewed for this report for investment in infrastructure to provide renewable

164、power,allowing the country to produce green hydrogen at a competitive price.This requires a collaborative effort between the govern-ment,industry and the citizenry.The demand for green hydrogen is driven by sustainability priorities,but to develop a green hydrogen industry would be a smart economic

165、move for a country with as much re-newable energy potential as Mexico has.This energy poten-tial,combined with the countrys privileged geographic posi-tion,positions it to supply green hydrogen to markets such as Korea and Japan.“Mexico has an excellent opportunity to become a hydrogen producer and

166、supplier to these Asian markets,where there is lots of industry but no indigenous energy base,”said Hugo Villareal,vice president of energy and engineering at Linde.“There needs to be a collective stakeholder effort to jumpstart this industry and incentivize capital to make it a reality.”Despite pos

167、itive signals,an active green hydrogen pro-duction segment is still a long way away for the country.Currently,green hydrogen technologies are not economi-cally viable in Mexico,and so liquid natural gas(LNG)will continue to be central to the countrys energy matrix.Car-los Boone,director of business

168、intelligence and corporate affairs at nestas,said:“There are other,greener energies in play,but in Mexico public policy has not yet encouraged the transition to those alternative sources and we are not actively developing it.”From Boones perspective,LNG is both the present and the future.Infrastruct

169、ure for natural gas has increased across Latin America,but particularly in Mexico,including investments in terminals.Boone explained:“Natural gas is often thought of as a transition fuel,but with everything that is happening in the world,including the war in Russia and trade issues between China and

170、 the US,natural gas took over.Today,LNG is being imported to any country that can receive it.”17 EDITORIAL21 GBR SERIES|MEXICO CHEMICALS 2024INTERVIEW20 GBR SERIES|MEXICO CHEMICALS 2024Can you provide us with an update on Cryoinfras operations?Last year,we opened a new cryogenic plant in Ciudad Jure

171、z.We inaugurat-ed our second plant in San Luis Potos to supply the areas steel and growing electric&automotive sectors.Cryoin-fra has more than 30 plants through-out the republic.What trends in demand have you observed in the chemical sector?Fortunately,we have experienced growing demand for all of

172、our prod-ucts.I see exciting growth in the in-dustry,but growth will depend sig-nificantly on the energy policy and political situations.Right now,Mexico power policy is not significantly focused on renew-able energy.In the long-term,this will also disadvantage us in front of other countries.Can you

173、 elaborate on Cryoinfras use of green fuels?Green hydrogen lowers emissions when utilized in different ways,in-cluding mixing green hydrogen with Dieter FemfertCommercial DirectorCRYOINFRAWhat is the Mexican energy indus-trys biggest challenge?The most pressing challenge for Mexi-can industry is dec

174、arbonizing industri-al processes and developing suitable clean energy solutions.We are helping companies to de-carbonize with alternative energy so-lutions and carbon capture technolo-gies.Linde has lots of experience and knowledge of carbon capture technol-ogies and the processing of CO2.What does

175、Mexico need to do to strengthen and promote green hy-drogen?We are privileged with the right weather conditions and land to build solar and wind parks nationwide.The principal challenge to making green hydrogen competitive is eco-nomic;we need to invest heavily in infrastructure.The government has t

176、o promote this wind and solar power industry.Regulators have to catch up.Mexico has an excellent opportunity to be-come a hydrogen producer and sup-plier to Asian markets,where there is lots of industry but no indigenous Hugo VillarrealVice President of Energy and EngineeringLINDEFlorencia Vitellesc

177、hiGeneral Manager Mexico TOPSOECarlos BooneDirector of Business Intelligence and Corporate AffairsNESTASRaphal de Montfort Managing DirectorAIR LIQUIDEenergy base.There needs to be a col-lective stakeholder effort to jumpstart this industry and incentivize capital to make it a reality.What is Lindes

178、 commercial strat-egy for the coming year?Our company strategy is straightfor-ward:To keep our clients competitive in their markets.To do this,we will keep reinvesting into new research and development for technical solu-tions and applications.The market constantly changes,and we want to remain in f

179、ront of it so our clients can thrive.Linde is implementing sustain-able practices to achieve our 2030 and 2050 net zero and zero waste tar-gets.Making our energy consumption green,reducing the companys car-bon footprint,and reforestation and recycling programs we participate in are crucial.Helping o

180、ur customers reduce their carbon emissions and our own is vital to this strategy.Linde remains com-mitted to developing green technolo-gies and updating existing processes to make them more environmentally friendly and operationally efficient.What trends do you observe in en-ergy generation?Natural

181、gas is the future.It is often thought of as a transition fuel,but with everything that is happening in the world,including the war in Russia and trade issues between China and the US,natural gas took over.Today,LNG is being imported to any country that can receive it.I see a trend in increasing infr

182、a-structure for natural gas,includ-ing investments in terminals.We are seeing it in Mexico,but also through Latin America.What is the relationship between the US and Mexico in terms of energy?We import most of our gas from the US.However,it is complicated because what happened with Texas during the

183、ice storm could happen again.The US will always prioritize its internal demand,and then send the natural gas that is left over out for export.This places us in a vul-nerable position.That is why we must start developing infrastruc-ture in Mexico to produce LNG.What are your priorities?Our priority i

184、s Mexico.We are in nineteen states,and we are focused on give coverage to all the country.In the long term,we are also inter-ested in Guatemala and Panama,with the potential to open to the rest of Central America.What trends in demand for indus-trial and medicinal gases have you observed?The first t

185、rend is a confirmation of the nearshoring momentum in Mex-ico,and its positive impact for our industry.The second trend is the importance of the energy transition.I had increasing numbers of meet-ings with our clients this year to as-sess how we can help them lower their emissions.What are the most

186、important chal-lenges facing industrial gas pro-ducers in Mexico?The first challenge is access to elec-tricity from a renewable source.It is of utmost importance as otherwise we cannot produce low carbon gas.What is Mexicos green hydrogen potential?It has a significant potential,as Mexi-co benefits

187、from all utilities which are required such as solar,wind and wa-ter.This year our team participated in a study of the potential for green hydrogen in Nuevo Len.There were several core conclusions:the most important point is that the interest of all key stakeholders was confirmed,and we see the progr

188、essive emer-gence of an ecosystem to promote green hydrogen.However,we also identified two barriers:regulatory issues and financial issues.Indeed,producing green hydrogen will re-quire subsidies at the beginning to ensure the viability of the projects.Can you update us on your recent operations?This

189、 year,Topsoe has continued to position itself in the refining and petrochemical sector in Mexico.We offer catalysts and technologies to produce low sulfur fuels,ammonia,methanol,and hydrogen.We also offer catalyst to reduce and miti-gate sulfur emissions.We are well-positioned in several crucial are

190、as,including the production of sustain-able fuel for aviation.What is the state of the energy transition in Mexico?Mexico has excellent solar and wind potential,positioned in a good place with great renewable potential.The challenge is the delay in electricity generation permits for this type of ene

191、rgy.Can you discuss green hydrogen?There are several companies in Mex-ico,particularly in the steel and ce-ment industries,that are looking into blue hydrogen.Green hydrogen will be important in the future,but there is currently no market.The costs for green hydrogen are very high,and there is a lac

192、k of legal security.What are your priorities?We are very strong in Mexico,and what Topsoe is doing in Mexico will be replicated throughout Latin Amer-ica.We seek to position Topsoe as a technology expert for the production of low-carbon hydrogen.natural gas or using solely hydrogen in some processes

193、.We strongly focus on hydrogen,and at the beginning of 2024,we will open another hydrogen plant in San Luis Potos.What differentiates Cryoinfra?First,we are differentiated by our many locations,which puts us closer to our clients.We have solid logistics and personal customer service,not just where w

194、e are but on-site,where our customers have operations.Addition-ally,Cryoinfra has a technological de-velopment area with a large group of specialist engineers in different indus-trial sectors such as automotive,aero-space,electronics,food,beverage,pet-rochemicals,and chemicals.Our highly trained spe

195、cialists allow us to support our clients and help them solve their problems.Cryoinfra is highly innova-tive,and we have many patents across different industries,working with our clients to meet their needs.This year,we are focused on strengthening these relationships and providing services at our co

196、nsistent standard of excellence.INTERVIEWINTERVIEW22 23 GBR SERIES|MEXICO CHEMICALS 2024GBR SERIES|MEXICO CHEMICALS 2024Stefan LepeckiCEOBRASKEM IDESAWhen it comes to demand,there are some concerns marks around the US and Asian economies,but we are seeing signs of recovery.GBR Series MEXICO CHEMICAL

197、S 2024Image courtesy of Braskem IdesaPetrochemicalsPetrochemicalsImage courtesy of PoliolesCarlos TurquieCEOPLASTI PIGMENTOSThere needs to be a stronger culture regarding recycling,which is exacerbated by infrastructure gaps in collection and correct disposal.A difficult year with stabilization in s

198、ight2023 was an extremely challenging period for the petrochemical industry,with margins squeezed due to over-supply.“We have seen new capacity across the world,especially in the US and China,combined with less strong demand in strategic regions such as the US,Europe and Asia,”said Braskem Idesa CEO

199、 Stefan Lepecki.“In this sense,the petrochemical business in general suffered significantly in 2023.”According to figures from the Chemical Industry Association of Mex-ico(ANIQ),production of petrochemi-cals in the country has plummeted from a 2018 volume of 8,068,099 t/y to 4,549,787 t/y in 2022.Af

200、ter years of underinvestment,PEMEX lacks the infrastructure to turn excess gas from oil wells into chemical feedstocks,making Mexico the 7th highest gas burner on the planet.Instead,the industry has turned to imports from the US,and pipeline imports have increased 400%since 2011,accord-ing to the US

201、 Energy Information Ad-ministration,driving costs higher and exposing Mexican chemical industry players to global price fluctuations.In the long-term,the energy tran-sition will reshape the petrochemi-cal industry.Refineries face peak demand for refined products and as the renewable energy transitio

202、n takes off,oil and gas companies must begin making decisions on what they will do with their billions of dollars of assets.A much larger portion of each barrel of crude oil of the future will be dedi-cated to olefins and aromatics,re-shaping the petrochemical landscape.Mexico is feedstock constrain

203、ed,with a continuous insufficiency of raw materials production to meet the needs of the chemical industry.The core cause has been the perilous drop in production by Pemex.Aging infrastructure and lack of investment in the countrys petrochemical com-plexes has been a scourge to industry development.P

204、roduction only contin-ues to drop.“Pemex will stop produc-tion of ethylene oxide in December of 2023,and will overhaul the Morelos plant,which is the youngest of the plants,”Ral Baz Harvill,CEO of Grupo Petroqumico Beta stated.“They have cleared a platform to import ethane,which will guarantee year-

205、round sup-ply.However,the government will not construct another cryogenic plant.”AMLOs government has ignored the needs of the petrochemical indus-try,continuously underappreciating its role in Mexicos supply chain.Baz Harvill explained:“This government changed parties,and they decided to prioritize

206、 the refinery at Dos Bocas,reorienting all the resources around that project.The industry suffered tremendously as a result.”One alternative is to build stronger supply chains with the United States and Canada,the latter of which is in a constant state of ethane oversupply.From a regional supply vie

207、wpoint,the North American oil and gas outlook is positive,driven by rising basic hy-drocarbons production in the US and Canada.David Coindreau,general director of Polioles,explained:“The boom in the US of natural gas and ethane production has led to the de-velopment of the segment of the Mex-ican in

208、dustry dependent on imports.”This has wounded domestic produc-tion.“On the other hand,segments of the chemical industry in Mexico that depend on local production have been declining,”stated Coindreau.“There has been significant growth in the distribution industry to compen-sate for the lack of suppl

209、y.”The situation was exacerbated by by the October 23,2023,decision of the Mexican government to restrict the im-port of over 60 refined petrochemical and petroleum products.The decree had immediate effect,with the govern-ment blocking two railcars of aromatics(ARO 150)shipping from Houston on the 2

210、4th,according to S&P.The govern-ment stated that their intention was to reduce fuel theft and clamp down on the black market of stolen fuel.The move was seen by some as a potential gambit by Pemex to monopolize petro-leum and petrochemical imports.The result was an abrupt halt to im-ports for impact

211、ed companies,throw-ing their supply chains in disarray.These companies spent the end of 2023 and beginning of 2024 scrambling to gather and translate thousands of pages of highly complex information to submit to the government in desperate pursuit of rapid import permit approv-als.Waiting for those

212、approvals left the affected companies at a complete stand-still in parts of their operations.Although the decree was disastrous for chemical companies that used the banned products as inputs,many in the petroleum industry were pleased by the policy change.According to the Mexican government,Mexicos

213、illegal fuels market was approximately 47 mil-lion barrels in 2022.Indeed,according to the government,80%of the fuel in Mexico is potentially adulterated.For companies operating lawfully,compe-tition from the illegal products is fierce.The October 2023 decision built upon a December 2022 regulation

214、that focused on LDA permits at the port.Fu-els at terminals at the port require vol-umetric controls,ensuring that every liter that enters is recorded by the au-thorities.The new regulation extended the need for volumetric controls to petrochemical products,requiring challenging to obtain permits.Al

215、fredo Ison,president of distributor Qumica Delta,stated:“The benefit is that those of us who do receive the permits gain a greater market share.Nonetheless,the policy increases the complexity of importing petrochemicals.”70%of petrochemicals enter the country through the Altamira port.Blockages at t

216、he port had an outsized impact on the larger petrochemicals sector.Speaking of the impact of the initial policy during 2023,Ison said:“In May of 2023,we were able to re-solve the situation,but it generated a supply problem in the market and made it challenging to import prod-ucts into the national t

217、erritory.This was particularly challenging because petrochemical production in Mexico has continued to shrink,which means that distributors must import more products to compensate.”There are,however,some impor-tant steps forward,primarily due to private investment.Braskem Idesa,which has been in the

218、 process of con-structing Terminal Qumica Puerto Mxico,the companys future ethane import terminal,owned and operated in a joint-venture with Advario.The terminal was 50%constructed as of January 2024.The company expects to begin operations in Q1 2025,dras-tically reshaping the countrys petro-chemica

219、l industry.The future of the ter-minal was secured in late 2023.Lepecki explained,“In November 2023,we con-cluded our project financing,which was a success during a challenging moment for the industry.That financing was around US$408 million,representing 70%of the total investment including CapEx in

220、terests and working capital.”The outlook for the petrochemical industry in 2024 is positive,if only slightly.There will be no new capac-ity coming online in 2024 or 2025,and less new capacity coming into opera-tions in Asia than last year.The US and Asian economies both have some question marks,but

221、there are some signs of recovery.“I expect that we will continue in a downcycle,but with better margins and better prices than in 2023,”said Lepecki.“The supply-de-mand dynamics will be more balanced globally,with a slow increase in price.Patricio Gutirrez,chairman of the board of Grupo Idesa,agreed

222、 that there are positive signals.The Mexi-can economy grew by 3.5%in 2023,which could have been higher but was acceptable,and there was acceptable growth in the United States.Gutir-rez said:“I am cautiously optimistic for the Mexican economy and our in-dustry.The global economy has been stabilizing

223、and returning to a relative sense of normality despite ongoing crises because we are getting used and dealing with them.”Automotive growth drives lubri-cant salesThe lubricants segment is moving in lockstep with the larger automo-tive industry,which has recovered to pre-pandemic levels.On some level

224、s,such as the number of trucks sold,the automotive industry is exceed-ing pre-pandemic levels.According to INEGI data,in 2023 Mexican auto production increased by 14%,domes-tic auto sales by 24%,and exports by 15%.“The sector does not suffer from the supply issues with steel and semi-conductors that

225、 were the case not too long ago,so supply chains are func-tioning,internal consumption is rising in Mexico,and exporting volumes go from strength to strength,”said Jos Luis Gzman of Castrol.In 2020,the automotive sector ac-counted for 62%of the Mexicos lubri-cant consumption,making the auto-motive i

226、ndustry a particularly crucial end market(Mordor Intelligence).XXX of Castrol explained:“The lubricants market will grow 3-5%in 2023,in line with the industry,and we think this will be the case for the next 10 years,after which the Mexican market will have been adapting to electric and hy-brid model

227、s,and there will be chang-es to market growth.”In 2024,automotive production in Mexico is expected to grow by 8%ac-cording to the industry group AMIA,with production of over 4,100,000 vehi-cles.In a press conference,AMIA head Odracir Barquera stated:“We have a really positive outlook on this year.”T

228、he automotive industry has long been a driver of the larger chemicals segment,and lubricants in particular,but other industries provide room for expansion.The global wind power industry,for example,requires high-performance lubricants,and it is a growth industry in Mexico for lubri-cants players suc

229、h as Castrol.EDITORIALEDITORIAL26 27 GBR SERIES|MEXICO CHEMICALS 2024GBR SERIES|MEXICO CHEMICALS 2024How does your partnership with Advario support the Puerto Mexico Terminal project?In 2021,we signed an agreement with Pemex and the Mexican government to help us build an ethane import ter-minal.The

230、government supported us by defining the best location,provid-ing access to the right of ways that pass transit land belonging to Pemex,and facilitating permits.We are not a terminal operator,and it was very important to have a partner with experience building and operating this type of terminal.Afte

231、r a long process,we selected Advario,a subsidiary of Oiltanking Group.We decided to create a joint-venture company called TQPM.As of Febru-ary 2023,the company has been cre-ated.Advario has already onboarded us.Progress is proceeding apace,with 30%of the EPC completed.We have already purchased the r

232、equired long-lead items and completed 80%of the engineering.Construction has started,currently focused on the foundations.Partnering with Advario was an excel-lent strategic decision for Braskem Idesa,and we expect the terminal to start operations in 2024.What steps does Braskem Idesa take to work w

233、ith the local commu-nities?Since we built our complex,with an original investment of US$5.2 billion,we have maintained a strong relation-ship with the local community.We structured many programs to facilitate clear communication with the commu-nities and offer jobs.Coatzacoalcos is a poor region wit

234、h significant needs,and we understood that to build the com-pany,we needed to have open meet-Stefan Lepecki CEOBRASKEM IDESAIt is only possible to talk about competitiveness with a clear approach to sustainability and energy,which is crucial to a nearshoring strategy.Could you update us on Grupo Ide

235、sas operations and activities in 2023?Grupo Idesa has three divisions and two joint ventures(Braskem Idesa&CyPlus Idesa).Our petrochemical division is where the companys ori-gins lie,and we have four production plants across industrial sites in Mex-ico.There is also a distribution divi-sion ALVEG wi

236、th nine branches across Mexico that commercializes chemical and petrochemical products,includ-ing fuels for the automobile industry.Finally,we have the logistics division with two operating terminals,one at the port of Veracruz and an inland ter-minal in Tlaxcala.CyPlus Idesa joint venture produces

237、sodium cyanide fo-cused on the mining industry,while the Braskem Idesa joint venture pro-duces polyethylene.2023 was a chal-lenging year for the company,with varying demand levels from differ-ent sectors.There was also an uptick in competition from Asia and North America in the first half of 2023,as

238、 ex-cess capacity abroad usually finds its way to Mexico.What is your perspective on the tra-jectory of the Mexican economy?I am cautiously optimistic for the Mexi-can economy and our industry.The economy grew by 3.5%in 2023,which should be higher but is still acceptable,and there was decent growth

239、in the US.The global economy has been stabiliz-ing and returning to a relative sense of normality despite ongoing global cri-ses because we are getting used to and dealing with them.The same can be said for raw material costs here,which remain high but are not exploding in price,so there is a sense

240、of stability.Patricio GutirrezChairman of the Board and CEOGRUPO IDESAA strong Pemex benefits the entire chemical industry and nation.Investments in maintenance should come first,then into new capacity.ings with the community to establish solutions with the community.How does Braskem Idesa prioritiz

241、e digitalization?Regarding digitalization,we have two focuses:Process efficiency and sus-tainability.Our industrial complex is state of the art in terms of technol-ogy and innovation.We continue to pursue more efficient and safer op-erations through partnerships like our partnership with Honeywell.W

242、e are also doing important work in sustainability.This has three pillars.The first is a commitment to reduce plastic waste;secondly fighting cli-mate change,understanding that we have a power plant and a cracker and we aim to achieve neutrality by 2050;and lastly,we have a commitment to social respo

243、nsibility,especially in our relationship with the local communi-ties.To combat climate change digi-talization and automation are essen-tial for us.We had a partnership with Emerson to implement solutions and controls to reduce our emissions,and we achieved significant milestones in the last two year

244、s.Can you explain Braskem Idesas participation in plastics recycling?To reduce single-use plastic and en-hance recycling and reutilization of plastics is part of the strategy of the industry work that must be done with government,society,our clients,producers,and so on.In Mexico,recycling is already

245、 in a strong position.There are two types of recycling:chemical and mechani-cal.In Mexico,Braskem Idesa focused on investing in mechanical recycling.There is a multi-decade tradition here of working in PT recycling,which has included polyethylene in the past 10 years.The critical issue is collection

246、waste must be collected efficiently,and then it must be sorted and cleaned ef-ficiently.We have an essential partner-ship with one of the most important recycling companies in Mexico,Alca-mare,which has 16 recycling systems worldwide,and together we produce high-quality materials.How can nearshoring

247、 benefit Mexico?Nearshoring is an opportunity to reinforce the companys competi-tiveness and the competitiveness of Mexicos industrial sector.We have considerable requirements in terms of green energy.It is only possible to talk about competitiveness with a clear approach to sustainability and energ

248、y,which is crucial to a nearshor-ing strategy.The ongoing free trade discussions require all the entities private companies,institutions,and governments to define how to do this more competitively and estab-lish clear policies and rules to provide investors confidence.We have all the conditions in N

249、orth America and Mexico to continue developing near-shoring more competitively.What are your priorities for 2024?Our priority is to conclude our termi-nal project,the last major movement in our feedstock strategy.We have also initiated contracts with some Asian companies to construct two ships Brask

250、em Idesa will use exclu-sively.To transport ethane,you must have special vessels.Another critical focus is sustainability,increasing our presence in the plastic waste initiative and our CO2 emissions reduction.From which sectors is the chemi-cal sector seeing the most robust demand?Our countrys majo

251、r consumers of chemical products include the au-tomotive industry,which is growing rapidly and is an excellent market for chemical companies,agriculture and electronics.There is also the personal care sector.Unfortunately,growth in construction,a crucial sector for chem-ical companies,has been slugg

252、ish.What are the major risks and op-portunities associated with near-shoring?Being neighbors with the worlds big-gest economy is an enormous oppor-tunity.Mexico has abundant natural resources that we should be taking advantage of and a well-trained and competitive workforce.However,ourinfrastructure

253、 is the most signifi-cant obstacle.There is a critical need for more investment in highways.The major north-south roadways are satu-rated and must be expanded.In addi-tion,there should be investments in our rail system to alleviate pressure from the roads.Demand for chemical goods outpaces domestic

254、production and makes us reliant on imports,and the lack of infrastructure is another vulnerability point at our ports and border crossings.What do you think is the chemical industrys greatest challenge?Electricity prices are relatively high in Mexico compared to the US.If we can-not lower these ener

255、gy costs and pro-mote a renewable energy matrix,there is a risk that our industry will become uncompetitive and unable to meet the environmental demands of clients.The supply of raw materials is another is-sue,and the country must adequately invest in Pemex and look for strategic alliances with the

256、private industry to capture the potential the industry has.A strong Pemex benefits the entire chemical industry and nation.Invest-ments in maintenance should come first,then into new capacity.How does Grupo Idesa incorporate advanced digital technologies into its operations?Our policy on digital too

257、ls is to gradu-ally adopt tools that are proven to work and can improve our operations.Our production plants are vanguards in this sense and implement state-of-the-art technology.The strategy is to increasingly digitize our processes to automate more functions.Grupo Idesa has also launched pilot pro

258、jects exploring using generative AI to pro-duce relevant information and make decision-making processes faster.What are the companys sustain-ability priorities?2023 is our third year publishing an in-house ESG report.As an indus-try with the leadership of ANIQ,we have implemented the Responsible Car

259、e policy for many years,which has served as the core of the industrys sustainability efforts.We are always searching for new ways to reduce en-ergy consumption and become more efficient.Social and Governance top-ics also are within our top priorities.What will Grupo Idesas strategy be in the next tw

260、o years?We have completed a lengthy corpo-rate restructuring process and will con-solidate this new structure in 2024.INTERVIEWINTERVIEW28 29 GBR SERIES|MEXICO CHEMICALS 2024GBR SERIES|MEXICO CHEMICALS 2024Circular Economy on the Global StageImage courtesy of PoliolesCan you introduce us to Avient?A

261、vient is a global company formerly known as PolyOne.Over the years,we have dedicated ourselves towards the specialty chemicals segment,and in 2020,we acquired Clariants global color concentrates business.The last three years have been particularly dynamic for the company,as we also acquired DSMs pro

262、tective materials unit,thus adding top-quality super fibers to our portfolio.We have two production facilities in Mexico,in To-luca and Mexico City.What is Avients approach to sus-tainability?This year,we were awarded the Gold Ecovadis certification,which is award-ed to only 6%of firms worldwide,re-

263、flecting our companys commitment to sustainable practice and innova-tion.We have an annual 3%waste reduction target and are on track to meet our 55%carbon reduction target for 2030.Avients portfolio of sustainable polymers is significant to the compa-ny,and over a third of our solutions are now sust

264、ainable.Plastics are an Miguel RamrezRBL LatamAVIENTWhat is your perspective on the state of the chemical industry in Mexico?The chemical manufacturing industry has become progressively dependent on raw materials imported from the US or elsewhere.The boom of natu-ral gas and ethane production in the

265、 US has led to the growth and develop-ment of a strong petrochemical indus-try,which used to be dependent on imports.On the other hand,segments of the chemical industry in Mexico that depend on local production have been declining and,as a result,there has been significant growth in the dis-tributio

266、n industry to compensate for the lack of local supply.What is your perspective on rela-tions between the government and the industry?As an industry,we must partner with the government to have a more com-petitive Pemex.A strong,efficient Pe-mex would be transformational for the Mexican chemical indus

267、try,and we must support in developing the conditions to do so.The chemical in-David CoindreauManaging Director POLIOLESexcellent material,but we are not tak-ing full advantage of their use.That is why our focus is on recyclability and reducing carbon footprints.For ex-ample,one of our additives is u

268、sed to make PET plastic bottles and has the benefit of reducing the manufactur-ing process temperature,resulting in lower energy consumption and a low-er carbon footprint.Our foam agents,such as Hidrocerol,replace part of the plastic structure with air,reducing weight.Avient is working extensively o

269、n using and developing post-con-sumer resins to reduce the industrys dependency on virgin resins.What challenges confront the plas-tics industry?Mexican regulation still needs to catch up with the global shift towards environmentally friendly practices.Society and the private sector are ahead of the

270、 government for now,but it is a matter of time.Another challenge is that we need to recog-nize that recycling is an additional process that requires an additional cost.There needs to be a change in mentality to consider this.dustry offers immense potential for economic development,particularly in th

271、e southern regions of the country which translates in better paying jobs and long-term stability.How does Polioles focus on safety?Safety is a core pillar for the company.We have not had an accident in over a year.We seek to promote good be-havior among our collaborators and contractors.In the end,y

272、ou can have the most advanced processes and equipment,but the people involved in the operation are the ones who make decisions.We are constantly training people and giving them the right tools to ensure they are focused on the im-portance of safety.At the end of the day,we want our team to go safely

273、 back home to their families.What is your strategy for the com-ing year?We will continue to adapt to the changing circumstances of our indus-try and broaden our product and ser-vice offering to give the best solutions to our clients.In April 2024,UN member states will gather for the fourth round of

274、treaty talks for a global treaty to end plastic pollution.The efforts are in response to worldwide calls for a legally bind-ing treaty to strengthen regulations for eliminating plastic waste and pol-lution,driven by developing nations that are currently drowning in the waste of developed nations.Acc

275、ording to OECD data,only 9%of plastic gets recycled.With plastic pro-duction doubling between 2000 and 2019,the percentage of waste current-ly recycled is nowhere near enough to make a dent on the reality.The chal-lenge will only increase;by 2060,plas-tic waste production is expected to tri-ple,acco

276、rding to OECD data,of which 50%is destined for landfills.The third round of negotiations in Kenya in November were unsuccess-ful,with no agreement to develop a first draft or commitments for inter-sessional work.The April negotiations,therefore,are crucial to developing a first draft of the final te

277、xt.Member states have committed to signing a treaty by the end of 2024.Miguel Ramrez,general manager of Avient,noted that in Mexico,the private sector and society are ahead of the government when it comes to waste management and sustain-ability.In the packaging industry,for example,Ramrez described

278、strong demand for biosolutions.“Mexican regulation still needs to catch up with the global shift towards environmen-tally friendly practices,”he said.Pentac,a German company devel-oped to meet the need for recycled compound materials,has recently expanded in Mexico.Production at their second product

279、ion plant in Mexico,in Queretaro,is expected to start in Q2 2024.The company,which primarily serves the automo-tive industry,received support from the Secretariat of Sustainable Devel-opment as part of the domestic and global push for more sustainable plastics production.Manuel Iglesias,CEO of Penta

280、c,identified both public pressure and government regulations as driving a global demand to reduce carbon emissions.In Mexico,the regulations are less strict,but automotive produc-ers must operate in line with global expectations.The plastics industry is a major contributor to the greenhouse gas emis

281、sions of the world:indeed,by 2040,greenhouse gas emissions from the plastic system have the potential to grow by 63%.This has led to an opening for Pen-tac,which produces recycled com-pounds that combine recycled and virgin materials.Iglesias stated:“Our materials,when recycled,significant-ly reduce

282、 carbon dioxide generation per the manufacture of each kilo of materials.”Government investment in the in-frastructure for recycling is crucial,as there are significant infrastruc-ture gaps in collection and correct disposal.Government engagement is necessary to make recycling plas-tics more accessi

283、ble.Carlos Turquie,CEO of Plasti Pigmentos,noted,“Bio-degradable products are part of the solution,but they still carry contami-nating traces,so reusing plastics is the most logical path,as it adds the most value to the economy and our clients products.”With growing demands from the public to proact

284、ively address the is-sue of plastic waste,the petrochemi-cals industry is actively seeking new technologies and formulations to support plastics recycling and waste reduction.2024 will be a pivotal year in shaping the future of global plas-tics production and driving the de-velopment of a more funct

285、ional cir-cular economy.“The main challenge for the plastics industry is to focus on sustainable solutions to increase recyclability,”said Ramrez of Avient.“There is a historically negative public perception of our industry;now,we can turn it around.”Strategies to tackle plastic wasteINTERVIEW31 GBR

286、 SERIES|MEXICO CHEMICALS 2024EDITORIAL30 GBR SERIES|MEXICO CHEMICALS 2024What is the history of Resirene?Our primary business is polystyrene production,although we have some other lines of business in the produc-tion of technical compounds,sustain-able solutions and petrochemical dis-tribution.The c

287、ompany has a single production site in Tlaxcala.Half of our products are exported.Can you discuss your sustainable offerings with UBQ?A few years ago,we started collabo-rating with UBQ,creating a high-impact polystyrene composite.This product can be used for a variety of applications that do not com

288、e in to contact with food,such as garden-ing and a wide range of consumer products.The first advantage of our offering was to demonstrate that with an additive we had developed,polystyrene could be compatible with the UBQ product.The product has a near-zero carbon footprint with the benefit of recov

289、ering organic waste in conjunction with a polymer.More recently,we have introduced our Sergio ParedesCEORESIRENEWhat is the history of Grupo Petro-qumico Beta?Grupo Petroqumico Beta was origi-nally established to manufacture a specialty product.We transitioned away from that to manufacturing other h

290、igh specialty ethylene oxide products.For which we have become very successful,and now we have an excellent EO specialty plant.The company also has our own chemists and laboratory.How much ethylene oxide we can produce depends on how much we are supplied by Pe-mex.Last year,we were better sup-plied

291、than many in Mexico because we were willing to make a higher bid to Pemex.What caused the petrochemical sectors raw materials access de-cline?Ethylene oxide,which is the basic chemical we use,has been in very short supply.The lion share of the ethane was being given to Braskem IDESA.Prior to Braskem

292、 entering Mexico,there was more ethane than the petrochemical industry in Mex-ico could use,so the price was be-Ral BazCEOGRUPO PETROQUMICO BETAWhat is the purpose of opening a plant in Mexico?Originally,Pentac was deciding be-tween opening a plant in Mexico and the US.We determined that based on th

293、e location of our current and po-tential clients,the best location was Quertaro.Quertaro has had excel-lent growth in a variety of industries,but particularly in the automotive in-dustry.Additionally,it is on Highway 57,which goes from Queretaro up to Laredo and,therefore,the US.The idea is to be on

294、 the path to supplying the US market.What is Pentacs strategy in Mexico?In Mexico,we have a complete da-tabase of the potential clients in the country due to our extensive knowledge and understanding of the market,particularly the automotive market.Our short-term priority is to prioritize clients wh

295、o have been slowed down by delays waiting for products to arrive from Europe.To carry out this strategy,we have de-veloped and trained an internal sales Manuel IglesiasCEOPENTAC DE MXICOWhat trends have you observed in the Mexican automotive and indus-trial sectors?The automotive industry in Mexico

296、has recovered to pre-pandemic levels,and some metrics,such as the num-ber of trucks sold,are exceeding pre-pandemic levels.The lubricants mar-ket will grow 3-5%in 2023,in line with the industry,and we think this will be the case for the next 10 years,after which the Mexican market will have been ada

297、pting to electric and hybrid models,and there will be changes to market growth.Besides the auto industry,we have a strong presence in the industrial sector with our metalworking fluids and high-performance lubricants,which are indispensable to industrial processes.Castrol is also becoming increasing

298、ly present in the Mexican and global wind power industry.What obstacles to growth do you observe in Mexico?We need to be more agile as a country and open to investment.The govern-ment must invest in basic infrastruc-ture and consider our regulatory envi-Jos GuzmnDirectorCASTROLpolystyrene with post-

299、consumer re-cycled content that we have named Q-rPS;which stands for“Quality Recycled Polystyrene”.We are very proud of this achievement because it represents a big step forward to-wards circularity regarding the use of Polystyrene.This product can be used for food contact applications being certifi

300、ed by the SCS and FDA approved for food contact.How did the market perform in 2023?2023 was a year of correction.That was true for polystyrene too.Com-pared to previous years,demand de-creased throughout the value chain.In early 2024,we think that it will remain at similar levels,and expect that nea

301、r the second half of the year we will see an improvement in gen-eral prices through to 2025.Demand in the market will increase,with im-provement first seen in the US and then moving out to the surrounding regions,and we are very attentive to the North American market.low the price of natural gas her

302、e in Mexico due to supply and demand.Braskem observed the situation and decided to invest in a large plastic manufacturer in Mexico.The minute that the company entered Mexico,the excess of ethane became a defi-cit,and the petrochemical industry at large suffered.For next year Pe-mex is going to impo

303、rt ethane and we expect that the supply of EO will meet the demand.What are your expectations for the production of ethylene oxide in 2023?With ethylene oxide,what happens in the industry depends on the govern-ments priorities.Right now,the gov-ernment is overhauling some plants of which EO has prio

304、rity.They will stop production of ethylene oxide in December of 2023,and will over-haul the Morelos plant,which is the major supplier of EO.They as previ-ously mentioned they have cleared a platform to import ethene,which will guarantee year-round supply.Pemex is taking tangible steps to remedy the

305、supply issue.team who will focus on those clients and seek collaboration with some distribution companies to strength-en our brand in Mexico.Through partnerships with distributors,our own sales force benefits from the sales force of the distributors,as well as their work in activities such as digita

306、l marketing.For a Mexican company to achieve deep penetra-tion of the market,the key is a strong sales force.Pentac is also focused on the US market.Currently,we supply some customers in the US from Germany,but now that we have the production facility in Mexico,it is our target to in-crease our foot

307、print there.We are focused on managing a vari-ety of new developments,particularly the development of materials with colors,with different percentages of recycled material,with different ad-ditives and reinforced materials in or-der to attend not only the automotive industry,but also other industrie

308、s,opening up the possibility of diversify-ing our market.ronment closely because there is much international competition investments,and timing is crucial.We need to be more open to outside investments.Additionally,the energy system in Mexico needs to be updated and strengthened.The obsoleteness of

309、much of the grid will present a chal-lenge not only to outside investment opportunities but also to increasing sustainable practices.There needs to be more investment and moderniza-tion of power systems.What changes are taking place in the industry due to sustainability initiatives?Hybrid and electr

310、ic vehicles are be-coming increasingly relevant,especial-ly as governments focus on sustain-ability.We are going to adapt to these changes,and we are working globally to develop new types of lubricants for this market.We now boast a complete portfolio of lubricants,coolants,and transmission fluids s

311、erving the hybrid and electric markets.In Mexico,we have yet to have this portfolio on offer simply because the hybrid and electric market here is yet to be significant.INTERVIEWINTERVIEW32 33 GBR SERIES|MEXICO CHEMICALS 2024GBR SERIES|MEXICO CHEMICALS 2024Javier ValdsTerritory Head LATAM NorthSYNGE

312、NTAConsumers are increasingly aware of topics related to food safety and security.They want food that is produced in a sustainable way.GBR Series MEXICO CHEMICALS 2024Image courtesy of SyngentaAgrochemicalsImage courtesy of SyngentaAgrochemicalsEduardo Mesinas CruzGeneral ManagerGRUPO LUCAVADespite

313、government efforts to ban some agrochemicals,farmers will still need us as climate conditions continue to worsen.Mexicos agricultural sector employs more than 5 million people,provid-ing the nation with tens of billions of dollars in annual exports.Behind re-cent export growth has been Mexicos innov

314、ative crop protection industry.Recently,strong demand for Mexican beverages such as tequila and mez-cal,has given this industry an added boost.Luis Eduardo Gonzlez,former president of the Mexican Union of Ag-rochemicals Manufacturers and For-mulators(UMFFAAC),stated:“There is still untapped potentia

315、l.About 60%of our agriculture is small and subsis-tence farming,so there is much po-tential for this segment to be better trained and equipped,introduced to technological farming methods,and to diversify the crops in cultivation.”By some measures,the agricul-tural sector has performed strongly;accor

316、ding to the Ministry for Agricul-ture and Rural Development(SADER),the Mexican agricultural trade in the first nine months of 2023 was worth US$72.4 billion,with an agricultural trade surplus of US$6.09 billion.However,overall the agrochemical market was challenging in 2023,with low demand and low p

317、rices.Com-panies had to be highly disciplined about managing inventory and cost structure.“There has been a correc-tion within the agrochemical indus-try,especially in inventories in the The opportunity of new technologiesmajor agricultural markets such as Brazil and the US,”said Jos Mara Bermudez,C

318、EO of Viakem,a contract and development manufacturing company.“We observed a signifi-cant drop in demand,not due to any structural cause,but because of the ups and downs after the pandemic and the volatility created along the value chain.”Climate disasters and regulatory headwinds have both stifled

319、the in-dustrys growth prospects.Regula-tion,in particular,has been a central challenge.Throughout the interviews held for this report,executives in the crop protection space emphasized the burden imposed by regulation that is excessive and,at times,il-logical.Dr.Csar Parada,Valent de Mxicos general

320、director,said:“For many crops,the decisions made by the Mexican government look more political than based on technology and science.”Climate Risks:DroughtIf 2023 will be remembered for one thing by Mexicos farming communi-ty,it will be for the lack of rain.Rain shortfalls represent a growing threat

321、to Mexicos agricultural industry.Ja-vier Valds,CEO of Syngenta,said:“2023 has been a very challenging year in Mexico in terms of rainfall,the driest year in the last thirty.Mexico has suffered from some extreme tem-peratures.The dams are at their low-est point in years,and we have had many crop loss

322、es.”According to data from Conagua,the Mexican National Association for Water,moderate to extreme drought conditions increased by 8.45%in 2023,and in June 2023,rainfall levels were 61%lower than the 1991-2020 average for the same month.These climatic challenges have impacted Mexicos food production,

323、dropping the country from 9th to 10th on the list of largest global food producers in 2023.Mexicos agricultural sector con-sumes 75%of the countrys water,ac-cording to Conagua,though there are competing demands for access to wa-ter as Mexicos population and econo-my grow.Booming cities in the north,

324、such as Monterrey,exacerbate this problem.The lack of rainfall has been impactful and has social implications,setting the stage for competition over water between rural and urban areas.The dry season has impacted sales of certain agrochemical products in the country.According to Nery Echeverra,head

325、of sales in Mexico at Bayer Crop Science:“We have had lower demand throughout the industry for weeds control products because this year has had less rain,and less rain means less weeds.”In addition to dry weather condi-tions,the sector confronted other cli-matic risks in 2023,including storms.In Oct

326、ober 2023,Hurricane Otis dev-astated Guerrero states coastline,causing catastrophic damage to the city of Acapulco and inundating crops across the region.Climate cycles are becoming less predictable,introduc-ing new risks.Luis Osorio,executive director of the industry association Protection of Crops

327、,Science,and Technology(PROCCyT),stated:“The global population is growing,yet ag-riculture faces multiple challenges:Climate change,natural disasters,and regulatory challenges.”The government has taken steps to mitigate the water stress caused by the lack of rainfall and intense competition for wate

328、r between rural and urban areas,including restrict-ing water access to the industrial sector in some affected regions such as Jalisco,Michoacn,Nuevo Leon,and Tamaulipas,among others.The government is also incentivizing changes,promoting crops such as rapeseed,which need far less irri-gation than man

329、y of the fruits and vegetables commonly planted,while discouraging corn production.EDITORIALEDITORIAL36 37 GBR SERIES|MEXICO CHEMICALS 2024GBR SERIES|MEXICO CHEMICALS 2024Could you update us on UMFFAACs activities in the past year?The association has worked intensely in 2023 to support the countrys

330、crop protection and pesticide industries and to communicate to the public and the authorities its relevance to the food production.Under the current govern-ment,there has been an unfortunate misrepresentation of the agrochemical industry,and they have tried to pro-hibit agrochemical products without

331、 a proper scientific basis.UMFFAAC is dedicated to consistent dialogue and communication with the authorities,Congress,Senators,and environmen-tal regulators to promote our industry as healthy,safe,and indispensable to the countrys food production.With-out the crop protection industry,food would bec

332、ome more challenging to grow,scarcer,and therefore more expensive,affecting the lives of ev-ery person in the country.In terms of events,in addition to these informa-tion campaigns organized in defense of the industry,we have also conduct-ed training programs for the safe and proper utilization of p

333、esticides to farm-ers and regional bodies that form the core of our calendar every year.Could you comment on UMFFAACs safety programs?In 2023,UMFFAAC delivered training sessions to over 25,000 farmers on Luis Eduardo GonzlezFormer PresidentMEXICAN UNION OF AGROCHEMICALS MANUFACTURERS AND FORMULATORS(UMFFAAC)Under the current government,there has been an unfortunate misrepresentation of the agroche