MEXICO CITY - Soaring demand in the Americas for plastics packaging is prompting Celanese Mexicana SA de CV to expand its capacity for both PET resin and biaxially oriented polypropylene film in Mexico. Next year, the Mexican subsidiary of Germany's chemical giant Hoechst AG plans to install a new, 28-foot, 55 million-pound-per-year BOPP film line at its Zacapu plant in Michoacan state. It now runs two lines producing a total of about 22.5 million pounds per year there.
Currently, demand is outstripping Celmex's BOPP capacity with growth in North and South America of 5-6 percent a year. The firm estimates that the South American market is expanding at a healthy 10 percent, while growth in Mexico stands at about 8 percent annually.
Now Hoechst is considering adding another 28-foot BOPP extrusion line in Mexico. The line could be built ``a very short time'' after the scheduled US$55 million line due to begin operating in late 1997, according to Thomas Mohr, Celmex chief executive officer.
On the PET resin front, Celmex plans to raise its production 60 percent by mid-1997. It already has a total capacity of about 264 million pounds per year at two plants, and intends to invest US$35 million in a new, 154 million-pound-per-year line at its Queretaro complex by the middle of next year.
Growth in global demand for PET resin is estimated at 9-10 percent a year, while Mexico expects growth of 15-20 percent this year, according to Alfredo Mora, Celmex's operations director for fibers, PET and basic chemicals.
In Mexico, Celmex has enjoyed a strong market position for some years as the major domestic PET resin supplier. In 1995, the firm boosted its share of the domestic market to nearly 80 percent from 65 percent the year before, Mora said in a recent interview at Hoechst's offices in Mexico City.
Until 1995 the firm was producing 187 million pounds per year of bottle-grade PET resin at its plants at Queretaro and Ocotlan, Mexico. But, last year Celmex added a 77 million-pound-per-year PET plant at its Queretaro complex at a cost of about US$70 million.
The firm exports some 30 percent of its PET resin output, chiefly to the United States, while some goes to Latin America. The rest is consumed in Mexico.
In spite of the arrival of new producers in Mexico, including Eastman Chemical Co. and Shell Chemical Co., Celmex intends to maintain a 60 percent share of domestic sales, Mora said.
``We've been in the market since 1984. We've developed very close relationships with customers in Mexico,'' he said.
The Queretaro plant makes copolymer resin for the soft drink and water bottle markets, while Ocotlan produces homopolymer resin packaging for edible oils.
Celmex expects to enjoy strong purchasing power for purified terepthalic acid, with total consumption at the Queretaro staple and PET plants by mid-1997 of more than 770 million pounds per year, Mora said.
``There you have more than the critical mass of a PTA plant,'' he said.
Celmex managers accept that new capacity planned by rival companies will stiffen competition at home and abroad.
With its new PET capacity, Celmex expects to devote about 132 million pounds per year to export, much of it tonnage for Central and South America test marketing.
Hoechst already has a small production presence in Brazil with a 55 million-pound-per-year PET plant created by modifying an existing staple-grade polyester line.
According to Celmex, its German parent already is planning new PET plants in South America, with at least one in Brazil before the year 2000.
The Queretaro expansion is the first step in Hoechst's global strategy of launching a new PET line every two years in different parts of the world, Mora said.
Celmex already has identified its plants for PET and BOPP resins as key to developing new markets in the Americas.
Its BOPP film lines at Zacapu are working at full production to satisfy Celmex's home and export markets, according to flexible packaging marketing director Juan Espinosa. These include the Mexican cigarette industry and integrated and national independent packaging converters.
Celmex claims a 30 percent domestic market share for BOPP film, but is confident it can push that to at least 40 percent with the new line.
A major domestic user of Celmex film is its packaging conversion subsidiary, Novacel SA de CV, jointly owned with Mexico's top bread-products company, Grupo Industrial Bimbo SA de CV.
Bimbo, which just announced plans for major expansion in Mexico, and new plants in Colombia and the United States, itself consumes about 17 million pounds per year of BOPP, Espi-nosa said. Other Novacel clients include PepsiCo's Frito-Lay division, and Mexican foods groups Gamesa and Sabri-tas.
Roughly a quarter of the BOPP output currently is destined for the cigarette industry in the United States, the major foreign market.
Celmex already is a supplier to Philip Morris Cos. Inc., is developing film for Brown & Williamson Tobac-co Corp. and is beginning to supply R.J. Reynolds Tobac-co Co.
However, Espinosa said, the new BOPP line is sorely needed since present ca-pacity is inadequate to supply all Philip Morris affiliates.
``With the new line, we will try to gain more share in the U.S. cigarette market and in some areas of converting - for example, white film - and strengthen our position in Mexico,'' he said.