MEXICO CITY — With electricity in Mexico reported to be between 25 to 73 percent more expensive than in the United States, variable frequency drive (VFD) energy-saving technology is proving to be popular among the country's plastics processors.
“I'm doing as much, if not more, business in Mexico than in the United States,” Robert Knaster, director of sales and business development in North America for British company CCS Technology Ltd.'s SyncroSpeed energy saving system, said in an interview at Plastimagen México 2014.
Knaster, who is based in Huntington Bay, N.Y., told Plastics News that CCS, of Coventry, England, has “seven-figure sales in Mexico.”
“We've been servicing Mexico for four years. On a yearly basis, business has been increasing 20 percent,” he added.
Customers in the country, said Knaster, include Tupperware Brands Corp., whose manufacturing plant in Lerma has 50 injection molding machines and 30 SyncroSpeed VFDs, Luxembourg-based automotive interior components supplier IAC Group, which has half a dozen facilities in Mexico, and Mattel Inc.'s Tijuana plant.
“The high cost of energy here, and capacity issues, are the driving forces” behind CCS's growth in sales in Mexico, Knaster said. “Energy costs are 50 percent higher than in the United States.”
The Mexican government is addressing the problem. This year both houses of congress approved President Enrique Peña Nieto's proposals for energy reform that will, among other measures, permit private investment in the sector.
In a speech at Plastimagen México, Enrique Ochoa Reza, managing director of Mexico's Federal Electricity Commission (CFE), said the price of electricity for consumers in Mexico is 25 percent higher than in the United States. “But without subsidies it's 73 percent more expensive.”
Eighty percent of the cost of generating electricity, he said, comes from the price of fuel used to produce it. “We import a third of our natural gas,” he said.
According to Ochoa, Mexico has a mere 7,047 miles of gas pipelines in the country, many of which are not even interconnected. “It's a system that's nine times smaller than that of the United States,” he said.
CFE is investing $7.4 billion to increase the network's size by 34 percent, Ochoa added. “We will add more pipelines in the center and south of the country by the spring of 2017.”