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March 23, 1998 01:00 AM

PLEXCO SETTING UP PE PIPE PLANT IN MEXICO

Joann D. McKinlay PLASTICS NEWS CORRESPONDENT
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    MEXICO CITY — Plexco Inc. is quietly preparing to supply natural gas and water distribution polyethylene pipe in Mexico.

    A Mexico City business columnist on March 10 reported that Plexco had just bought about 10 acres of land in Queretaro, and that the firm plans to invest just over $18 million in the new plant.

    The firm is now seeking legal permits for the operation, according to Plexco directors at the unit's headquarters in Bensenville, Ill., and representatives at the Mexico City office of its parent company, Chevron Corp.

    Plexco will appoint a project director to take charge of construction within two to three months, said Carolina Espinosa, the general director's assistant at Chevron Chemical Latin America Inc. in Mexico City.

    Mexico's energy authorities recently opened the process for companies to bid for contracts to install and supply natural gas distribution networks in Mexico City and the metropolitan area. Several contracts already have been awarded in other parts of the country.

    Mexico City's water distribution system also needs renovation. A local newspaper, La Jornada, reported in January that 40 percent of the water coming into the system is lost through leakage, while some areas of the city have the water supply cut off for a few hours daily.

    One of Plexco's main competitors in the United States, Phillips Driscopipe Inc., has already entered the Mexican market to supply natural gas pipes. The Richardson, Texas-based company formed a joint venture with a Mexican firm, Naucalpan-based PYN SA de CV.

    Driscopipe Mexicana opened its plant in mid-1997 in Tlaxcala, just outside Mexico City, to produce 20 million pounds a year of high density PE pipe.

    Phillips Driscopipe and Plexco tied for 16th in Plastics News' 1997 ranking of North American pipe, profile and tubing extruders; each had estimated sales of $150 million.

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