MEXICO CITY - DuPont SA de CV, with ambitious plans to dou-ble its Mexico polymers business within five years, is investing $6 million in a two-stage plan to expand its nylon and acetal compounding operation in Mexico City. Executives of DuPont and Dow Qu¡mica Mexicana, in separate interviews at their Mexico City offices, expressed strong optimism about the long-term growth in Mexico's plastics market despite the recent peso devaluation and economic turmoil. Dow Qu¡mica expects to more than triple its plastics business in Mexico by the year 2000.
DuPont is currently expanding its plant in Tlalnepantla, near Mexico City, to boost compounding capacity to 10 million pounds, about a 30 percent increase. The project should be completed by September, said Pedro L. Fern ndez, director of DuPont Mexico's polymers and high performance films business.
A second expansion, planned to begin in late 1996, will push DuPont's compounding capacity in Tlalnepantla to 25 million pounds.
Within the past five years, DuPont has doubled its polymers and films business in Mexico to $50 million in sales. Fern ndez expects to reach $100 million in sales by the year 2000. About 70 percent of production is sold for export markets with the remainder consumed in Mexico.
Fern ndez is looking for strong growth in automotive, food packaging, small appliance and electronics markets.
Fern ndez said the passage of the North American Free Trade Agreement, and the opening of Mexico's economy to many more foreign goods, increased the competitive pressure on Mexican processors and raw materials suppliers. That pressure, he said, was healthy and necessary.
``We like that,'' Fern ndez said. ``It helps give you an edge.''
Because so many of its customers are large, multinational firms that do business in U.S. dollars, the effect of the peso devaluation in December has been negligible, he said. For Mexican-owned businesses, DuPont is working to soften the effects of the weaker peso by providing financing and assistance in raising the productivity of processors' operations, Fern ndez said.
``DuPont has been in Mexico for 70 years and we have had some ups and downs,'' he said. ``We're here for the long run.''
At Dow Qu¡mica Mexicana, 1994 was very definitely an up year. Its plastics business totaled about $100 million in sales, an increase of about 35 percent, said Jorge Barreda, director for commercial plastics. Dow is looking to boost Mexico sales to $350 million by the year 2000, with polyethylene and polystyrene its major products.
Dow had an ambitous growth target for 1995 and that no doubt will have to be scaled back because of the peso crisis, Barreda said. Some Mexican plastics distributors and processors, such as film converters, were hit hard by the devaluation.
``We concede that some of the converters will go into bankruptcy very, very soon,'' he said. ``How many, we don't know.''
As is the case with DuPont, Dow works with many large distributors and multinational firms which will weather the economic crisis. Barreda said Dow's business in Mexico was spread across a wide variety of end markets, with automotive and large appliances looking especially promising.
