Something strange happened to Mexico's established plastics processing industry over the past year.
Government censuses revealed the existence of 900 companies the sector did not know existed.
The discovery coincides with a surge in attacks on trucks transporting raw materials and manufactured plastic goods. Suspicious minds in the industry believe there is a connection.
Stolen raw materials and products will always have a buyer, said Eduardo de la Tijera, a former president of Mexico's plastics industry association, Anipac.
The previous Anipac figure of several thousand processors in the country appears to be about 23 percent off the higher, more recent estimate. At the very least, industry leaders feel many of the hitherto-unknown companies constitute unfair competition.
Anipac President Eduardo Martínez Hernandez estimated in May that every year, criminal gangs steal 2.2 million pounds of resins from trucks on the country's highways. There's been a resins black market in Mexico for many years, Martínez said.
The criminal issue is one problem facing the domestic sector, according to de la Tijera, who presented his 10th annual report Jan. 26 on the state of the plastics industry. The report was prepared by his consulting company, Grupo Texne of Mexico City. Another problem is an increase in legal imports of finished plastic goods.
Imports from China, South Korea, Taiwan, India, Brazil, Chile and Colombia totaled 698.8 million pounds in 2010, 18 percent up on 2009, he said.
[Domestic] plastics goods production might increase if we were able to contain the imports, he said.
Mexico imported 5.45 billion pounds of plastics goods in 2010, a 22.4 percent increase over 2009, but 3.2 percent less than the 5.64 billion pounds imported in 2008.
In 2010, manufacturers in Mexico processed 9.98 billion pounds of plastics, or 4.6 percent more than in 2009, but still 1.6 percent below the 2008 level of 10.1 billion pounds, said de la Tijera. The industry failed to reach 2008's production levels because average household incomes remained depressed, while exports of manufactured goods totaled a below-par 2.53 billion pounds, compared with 2.1 billion pounds in 2009 and 2.26 billion pounds in 2008, according to the Texne report.
Notwithstanding, exports accounted for 25.4 percent of Mexico's domestic production, compared with 22 percent in 2009 and 22.3 percent in 2008, de la Tijera said.
Mexico's plastics processing industry utilized just 77.1 percent of installed capacity, compared with 74.8 percent in 2009 and 76.7 percent a year earlier. Processors employed 191,200 in 2010, up from 180,200 in 2009 but below 2008's total of 195,700.
Current sales data is unavailable; the most recent figure available is for 2008 157 billion pesos ($14.2 billion at the average exchange rate for that year). More than 50 percent of the sector's value comes from three activities, de la Tijera said: bag and film manufacturing (21.4 percent in 2008), auto parts (19.9 percent) and bottle makers (12.8 percent).
The state of Mexico, which borders on Mexico City, accounts for 23.6 percent of the industry's sales in monetary terms, followed by the Puebla state (9.6 percent), the Federal District of Mexico City (9.5 percent), Jalisco (9.4 percent) and Nuevo LeÃ³n (8.5 percent).
De la Tijera said almost all plastic processors enjoyed higher gross profit margins in 2009 but saw them fall again last year.
In 2009, he said, there was a combined effect of low raw material prices and an increase in the [peso/dollar] exchange rate that favored plastics processors. The opposite happened in 2010 raw material prices went up and the exchange rate stabilized. A similar trend is expected in the coming years.
As far as the immediate future, de la Tijera said the private consumption of plastics will not increase by very much, due to the limits on household spending, a lack of confidence among consumers and high levels of unemployment. Nevertheless, plastics demand domestically could rise between 4.5 and 5.5 percent in both 2011 and 2012.
Exports of plastic components, packaging and such products will depend on the economy in the United States. The construction industry will not be a significant factor in plastics growth in the near future, he added.
Despite Anipac's success in persuading Mexico City authorities last year that recycling is more effective than biodegradation, polyethylene bags are still banned in the states of Aguascalientes, San Luis Potosí, Tabasco, Quintana Roo and Zacatecas, among others, said de la Tijera, urging the industry to take action to overturn the measure.
Anipac stands for Asociacón Nacional de Industrias del Plastico AC.