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May 09, 2014 02:00 AM

Crime, lack of talent challenge Mexico's plastics industry

Stephen Downer
Correspondent
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    MEXICO CITY — Aging members of Mexico's plastics industry face a double threat, according to a former leader of the sector: organized crime and a shortage of talent to keep their companies running when they retire.

    Sergio Sosa, former president of the of national plastics association Anipac told Plastics News that crime is sowing uncertainty among investors and would-be investors.

    “We're going through very difficult times with regard to security. As a result, it's becoming less likely that foreign companies will build [more] production plants in Mexico and some Mexican companies want to transfer their operations out of Mexico,” he said.

    His assertion, however, appears to run counter to that of Juan José Rejas, of Mexico City injection molder Soliplas SA de CV, an Anipac member, who claimed in early April that 180 processors had established operations in Mexico in the past two years to supply the auto industry.

    The key question, Sosa wrote in an emailed, Spanish-language response to questions from Plastics News, is: “What can a foreign company do to sell [its products] in Mexico without suffering the effects of crime and what can a Mexican company that has developed its markets in Mexico do when it doesn't want to operate in the midst of danger?”

    He believes a solution is to install plastics processing plants — “which is where the big investments are” — on the U.S. side of the border with Mexico. He moved his one-man technology development company, Sosa Tech Advisors LLC, to McAllen, Texas, six years ago, “and I can tell you that the Rio Grande Valley is an excellent place for plastics processing companies.

    “We want the government to take action to resolve the security situation,” he wrote in a separate email April 17. Insecurity in the north of Mexico is “terrible,” he added.

    He intends to open talks with McAllen's Office of Economic Development in an effort to promote the area as a new plastics industry cluster.

    “When I was Anipac's president, everybody [in the association] complained about a shortage of work — I believe they're still complaining,” Sosa said. “So I began to promote talks, conferences and visits to the border to bring the plastics industry in the center of [Mexico] closer to the export maquiladora industry in the north. The result: after two years of trying, I failed to seriously interest anybody in that market.

    “Most of us are old,” he added, referring to his friends in the industry, “and, unfortunately, finding trained staff able to run the plastics companies we've built up over the years continues to be very difficult.”

    Sosa pointed out that some of the owners of Mexico's 4,000 processing companies “would like their sons or grandchildren to take over” when they retire. “But unfortunately not all of those people have sufficient experience to take on such a responsibility. In fact, a friend of mine has asked me to train his grandson so that he can head the family company in the future.”

    According to industry consultant, Eduardo de la Tijera Coeto, co-founder of Grupo Texne, of Mexico City, 87 percent of Mexican processors are family-run to one degree or another.

    “Although the number of companies with professional management has grown considerably, such companies are in a minority of 13 percent and are medium or large,” he wrote in his regular personal newsletter, Carta al Industrial.

    Sosa, a 35-year engineering veteran of the plastics industry, who for two years (in 1977 and 1978) lived in Germany, where he studied plastics technology, is developing a methodology that he plans to offer clients, called “one-to-one coaching for the plastics industry.”

    “It's a big challenge and I'm not yet in a position to say it'll work. But I believe it's worth looking into.”

    In 2009, Sosa developed a high-impact resistant pallet for Monterrey, Mexico-based Fomento Económico Mexicana SAB de CV, Latin America's largest bottler of Coca-Cola Co. products, in collaboration with Femsa engineers and technicians.

    The pallet uses a process called Inside Injection Foaming (IIF), which won the top Handling & Packaging Materials Award at the International Plastic Design Competition at that year's NPE trade show in Chicago. The pallet is tough enough to be used for 100 trips, as compared to a wooden pallet's 15 to 20 trips and traditional plastics' 30 to 40.

    “I intended to apply the technology to other fields but it's taken me longer than I thought and I'll explain why,” Sosa wrote.

    Femsa asked him to design other pallets using the same IIF technology “and in fact a new generation of IIF pallets was designed for the American market.”

    He also developed a crate for Coca Cola Femsa Colombia, “with foam in the columns to achieve a weight resistance similar to a traditional crate but lighter and less expensive.”

    Although he lives in McAllen, “in fact I travel the world developing projects, visiting potential clients in the U.S., suppliers of machinery, molds and auxiliary equipment in Europe and Asia and working at Femsa plants in Latin America.”

    Anipac is based in Mexico City and has 232 member companies.

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