Plastics industry shrinks 9% in Mexico

Mexico City – Mexico’s plastics industry has shrunk 9 percent in 2020 and is in crisis mode, their leader said on March 16.

“We have a huge shortage of PET,” said Aldimir Torres, president of the national association of the plastics industry, Anipac, to reporters at a webinar press conference.

He added that economic, social and health “crises” had dramatically affected the industry. COVID-19 “has changed our lives,” he said.

The Mexican plastics sector comprises 4,100 companies that employ a million people, according to Anipac (Asociación Nacional de Industrias del Plástico AC). It comprises 3,580 processors, 165 distributors and 140 recyclers.

In the hope of revitalizing the industry, trade fair specialist Tarsus México will be welcoming around 350 companies from 20 countries to Plastimagen Light from March 22nd to 26th. The virtual event includes nine conferences and panel discussions.

Tony Radoszewski, President and CEO of the US Plastics Industry Association, will speak on March 23rd.

At one point in 2020, Tarsus had hoped to be open to face-to-face visits and to occupy 100-150 booths in Mexico City’s World Trade Center, a number based on surveys conducted during the pandemic. The relentless pandemic in Mexico thwarted that plan. The WTC is no longer used, said a Tarsus spokeswoman.

Much of the industry’s polyethylene comes from Ethylene XXI in the state of Veracruz, which is owned and operated by the Brazilian-Mexican joint venture Braskem Idesa SAPI (BI).

At the beginning of December, the government of populist President Andrés Manuel López Obrador suspended the natural gas supply to the plant in a dispute over two ethane gas supply contracts that were signed in 2010 between BI and the state-owned oil company Petróleos Mexicanos.

The plant’s ethane cracker, which has a capacity of 1.05 million tons of ethylene per year, and three polyethylene plants that together produce 1 million tons per year, were paralyzed.

The complex, which began operations in 2016, resumed full operation in early March after the two parties agreed to amend the ethane supply contract.

By then, the leading independent polymer resin distributor Polímero y Materias Primas Internacionales SA de CV (Polymat) had warned that the decision to cut off the natural gas from Ethylene XXI would “seriously damage the economy of the entire southern region of Mexico and have implications for state and national levels “would have and international level.”

López Obrador’s crackdown on Braskem Idesa is one of many controversial moves affecting industry and private investment during his two-year and three-month term.

When asked by Plastics News to comment on the impact of government power generation and distribution reforms on the plastics industry, Torres did not respond directly, saying, “We believe in our institutions.”

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