MEXICO CITY - Mexico's plastics industry, dominated by small and medium-sized firms, has failed to reorganize its production and distribution to compete in the new global economy, a leading economist says. While sector companies have survived and grown through a difficult period, there is now an urgent need to reduce costs and seek new markets, primarily abroad, according to leading Mexican economic consultant Luis Bravo Aguilera.
One short-term priority for the industry is the creation of a central buying and marketing organization to handle raw materials imports, coordinate the export of higher volumes of competitive products, and seek new product designs and fresh uses for plastics, he said.
Bravo, vice president of Mexico City consultancy Consultores Internacionales S.C., addressed representatives of about 30 industry companies at a seminar to consider Mexico's economic situation, organized by Anipac, the national plastics processors' association. The seminar took place Feb. 17 in Mexico City.
Other speakers at the event traced the macroeconomic picture in Mexico prior to and since the December 1994 peso devaluation crisis. They examined the causes and effects of the economic crisis.
Longer term, Bravo recommended that to reduce costs, many processors should relocate to serve global markets rather than those at home. Of Mexico's 3,000 plastics industry companies, 62 percent remain clustered around the capital, while 14 percent are elsewhere in the state of Mexico, 8 percent in Jalisco and 6 percent in Nuevo Leon around Monterrey.
The consultant said that a central buying/marketing organization would allow parts and end-product specialization, and take advantage of industry capacity and experience. He urged the promotion of plastics recycling to reduce costs and project a modern, environmentally friendly image of the industry.
Bravo said the fact that small and medium-sized firms make up 92 percent of the Mexican plastics industry, producing only 60.7 percent of output, is not a sufficient reason why the sector has failed to adjust to the world marketplace.
Small firms in Asia and Italy are internationally competitive, he said.
The priority for the local industry is ``to strengthen the most vulnerable areas of the productive chain to reduce costs and increase sales,'' he said.