(April 28, 2008) — Trade show timing can be unfortunate, and that was the case this year as the Plastimagen show in Mexico City was held April 8-11, just a week before the massive Chinaplas show in Shanghai. I'm sure many would-be exhibitors and attendees had to choose between the two, although I was surprised by the number of people I met in Mexico City who were hopping on a flight to China to attend both events.
Talk about being a road warrior. As they say in the NBA, that's a tough back-to-back schedule.
Still, I don't blame them. China may be the land of double-digit plastics growth, but Mexico offers an attractive market too, right in the backyard of U.S. and Canadian suppliers and processors.
Plastimagen even attracted a large contingent of exhibitors from China — about 50 companies, not including firms from Taiwan. Most had small 10-by-10-foot booths with no machines. Some exhibitors hoped to make contacts at Plastimagen who they could see again a week later at Chinaplas, in larger booths featuring machinery or molds.
Mexico is enjoying a growing middle class; a strong economy, thanks to higher prices for oil and natural gas; and a relatively stable national government that is spending money on infrastructure.
One big question mark is still raw materials. This is an issue that Mexico just hasn't been able to solve, although the current government is trying. Although the country has abundant feedstocks, Mexico depends on imports because Pemex Petroquímica SA needs both investment and reform to become more efficient.
Jorge Barreda, commercial director for Dow Chemical Co.'s Mexico City-based unit, echoed other comments when he told me his company's business in Mexico is good — on budget for the year so far, with 7-8 percent sales growth.
“Mexico is going through a big transformation,” said Barreda, who is with Dow Química Mexicana SA de CV. “The question is, what are we going to do with the oil industry, and energy in general?” Dow had a large booth at Plastimagen — in part, Barreda said, as a signal that the company is committed to the market.
Likewise, BASF AG had a big presence at the show, both because Mexico is a growing market for the company, and because executives believe it still shows great promise.
“We are optimistic,” said spokesman Frank Zeller. Just before the show, the Mexican government introduced reforms that could give Pemex more autonomy. “The idea behind it is so that Pemex will act in the future more like a private company — more flexible, more efficient. We see it as the first step in a very positive direction.”
BASF and others are still cautious about the outlook for Mexico, but they see positive signs. The currency is stable, the inflation rate is acceptable, and the government is pretty business-friendly.
“The framework for doing business in Mexico has improved,” Zeller said.
Improved? It sounds to me like Mexico might have a better business climate than the United States right now.
Loepp is Plastics News managing editor and author of The Plastics Blog.