MEXICO CITY - Molders of fiberglass and reinforced plastics in Mexico suffered a severe market recession in 1995 with sales reduced by about 40 percent on average, according to a prominent industry executive. During last year's national economic crisis, as many as 500 businesses closed in the sector, which is dominated by small and medium-sized firms, said Felipe Parrilla, a founder and former vice president of Mexico's reinforced plastics industry trade association, Aniplar.
He said that leaves an industry of just 300 companies, down from the 800 operating in 1994. They are surviving despite current problems, the greatest of which is the lack of liquidity.
Some Mexican molders have survived the bad times by negotiating special deals with raw material suppliers, Parrilla said, which allowed them to obtain small orders to complete individual contracts.
Companies unwilling or unable to meet increasingly demanding standards of quality, productivity and technological efficiency are among those that have closed or soon will, Parrilla said.
Late last year there were signs of a tentative recovery for the industry, with the last quarter showing growth in production of around 2 percent, according to Parrilla, who said that was prompted by a rush of government project funding.
He said while the industry's mainstay construction and automotive markets were hit hard by the events of 1995, companies were obtaining new business in niche areas. Workers thrown out of work by company shutdowns have set up their own small workshops and found new market opportunities.
Parrilla's own company, F. Parrilla y Compania, represents major raw material suppliers and distributes chemical-resistant resins and other resins in Mexico.
According to Parrilla, industry prospects during 1996 are brighter, with growth predicted to reach as much as 5 percent.
Molders of glass fiber and reinforced plastics hope to win new business from major government-initiated infrastructure projects. Among them, said Parrilla, should be the reorganization of public transportation in Mexico City with a requirement for larger vehicles to replace thousands of microbuses.
A plan to extend the metro system should also yield new opportunities to supply carriage seating and electric rail covering, he noted.
Parrilla said he also expects there to be more business in the housing sector to supply shower units, bath and water storage tanks, drainage pipes for public programs, gasoline tanks and pipework for gas stations and telecommunications expansion projects.