MEXICO CITY — Processors in Mexico's automotive, household appliance and packaging sectors see 1998 in very positive terms.
Soft drink bottler Coca-Cola Femsa SA de CV reported an 18-19 percent sales boom in the second half of 1997. The results were typical in that sector, according to Hector Trevino Gutierrez, chief financial officer for the Mexico City-based bottler.
``We expect a 10 percent growth in sales volume for 1998, although that could be more,'' he said in the Dec. 18 interview. Trevino and company Vice President Ernesto Torres agreed the use of plastic may increase even more, by as much as 15-20 percent.
Mexican industry officials say the local consumer market is showing increased buying power after the economic recession that started with the December 1994 peso devaluation.
Soft drink companies and their suppliers were a key driver in the 1997 recovery of Mexico's plastics industry, said Rafael Blanco Vargas, president of Instituto Mexicano de Pl stico Industrial, or IMPI. According to IMPI, Mexican firms bought 110 injection and blow molding machines from March to July 1997.
Another growth area for 1998 is in automotive, household appliances and electronics products.
``This is the challenge for Mexican companies to enter this area,'' said Juan Manuel Alvarez, the new president of the Asociacion Nacional de Industrias de Pl stico A.C., or Anipac, in a Dec. 3 interview.
Resin suppliers expect sales to continue to increase in this area. DuPont Mexico expects sales in its plastics division, including engineering plastics, to increase by 20 percent in 1998, the same as in 1997.
``This continues the trend of 25 percent increase in sales for the last 25 years, as metal is substituted for plastics,'' said Pedro L. Fernandez, head of plastics for DuPont SA de CV, in a Dec. 2 interview.
Amoco Chemical de Mexico SA de CV hopes to close a new contract at the beginning of 1998 that increases sales volume for the year by almost 70-80 percent, said German Preigo Montfort, marketing manager for polymers.
The resin sector will be fairly quiet in 1998. BASF Mexicana SA de CV has a plant under construction that will produce ABS, SAN and ASA, but it is not scheduled to start operations until 1999. DuPont Mexico plans to add two production lines in 1999 at its polymers plant just north of Mexico City.
IMPI's Blanco estimates that 80 percent of Mexican processors had debt problems in 1996, which dropped to 70 percent in 1997, and should fall to 50 percent in 1998.
``Before, the problem debts were with banks, suppliers, and for equipment. For next year, the only problem area left will be debts with banks,'' he said. IMPI estimates the total debt for the sector to be $3.4 billion in 1997.
Another trend is the increasing dependence on imported resins.
Plans have stalled to sell some assets of state-owned oil company Petroleos Mexicanos. The long amount of time to sell the plants means a shortage in some materials, as neither Pemex nor the private sector is investing to expand the plants in 1998.
According to data from BASF's plastics division, currently 64 percent of the polyethylene used in Mexico's plastics industry has to be imported.
Blanco expects resin consumption to increase 16 percent in 1998, while Anipac's Alvarez estimates consumption will go from 4.4 billion pounds in 1997 to 4.8 billion in 1998, and reach 5.51 billion in 2000.
And for the overall economy, analysts and the government predict continued stability. The government estimates 1997 gross domestic product growth at 6.5 percent, and estimates 1998 at 5.2 percent.
Some analysts predict even faster growth in 1998, with GDP up 5.5 or even 5.7 percent.