MEXICO CITY (Nov. 26, 11:40 a.m. ET) —
“Without a doubt this is very unfortunate news for the country,” José Anselmo del Cueto Gracia, Anipac's president told Plastics News by email Nov. 26. He put the total investment at $1 billion and added that the money “that could have been invested in
Del Cueto lamented the loss of many jobs that would have been created had the project gone ahead, adding: “We hope the new administration (of President Enrique Peña Nieto) will give this project the priority it deserves.”
Mexichem SAB de CV, Latin America's largest manufacturer of PVC pipe, vinyl resins and compounds, withdrew from the venture November 22 after expressing its exasperation at Pemex's failure to finalize the deal.
In a filing with the Mexican Stock Exchange, Mexichem, of
It would instead “give priority” to what it described as “its vertical integration plan outside
“Mexichem,” it added, “will continue with its strategy of solid and profitable growth, despite not being able to count on this public-private sector partnership which would modernize our country's (
A Pemex spokesman had no comment on Nov. 23.
But Del Cueto said it was “strategically important” for Mexichem, as
“From the point of view of the processor, this announcement complicates even more the panorama for obtaining raw materials at competitive prices, which could have meant that the industry no longer lost market share to imported finished products.”
He said that imports of end products made from PVC had had a detrimental effect on sectors such as construction in recent years because competitively priced raw materials were in short supply.
Juan José Suárez Coppel, Pemex's managing director, told reporters as recently as late September that the proposed joint venture with Mexichem was “very important.” He hoped Pemex's board of directors would approve it soon.
In July 2011, Mexican consultant Eduardo de la Tijera Coeto said that, if the deal went ahead, “Mexichem will become a very solid company while Pemex's VCM business, which has been very weak, will become stronger and more profitable thanks to the influence of Mexichem. My impression is that it is a win-win situation for both Mexichem and Pemex.”
“The significance of this,” he added, “is that the vinyl chain in
Another consultant, Rina Quijada, CEO of market intelligence company IntelliChem Inc, of
But De la Tijera, managing director of Grupo Texne, of
“That means investment in modernizing some of the facilities, such as some of the furnaces, and improving inter-connection between different units. I'm sure some new engineering design will be needed.”
Mexichem's withdrawal from the project came nine days before the end of the six-year administration of President Felipe Calderón.
Mexichem executives may have thought there was no guarantee the new government, headed by Peña Nieto, of the opposition PRI party, would approve the project. And, even if the new administration favored a deal, final approval was likely to have taken time.