Mexico City — Milacron Holdings Corp.'s mold supply-related businesses in Mexico has experienced a slowdown in orders from mold makers for about the last six months — first from worries over the future of NAFTA, then from uncertainties about the new Mexican president, a company executive said at Plastimagen.
But Juan Carlos Gonzalez, Milacron's Latin American director, said the future looks good for the growing Mexican mold-making sector. One positive sign: more local mold-making technicians.
Domestic mold making in Mexico has grown mainly because of Mexico's booming automotive sector. Canadian, U.S. and now even some Chinese mold makers are setting up operations in Mexico.
Milacron's mold products offerings include DME mold bases and components and Mold-Masters hot runners and hot runner temperature controllers. The company's Latin American headquarters is in the Querétaro area.
The new U.S.-Mexico-Canada Trade Agreement proposal has taken away the uncertainty that plagued Mexico over the difficult NAFTA negotiations.
"It's a little bit more certainty. When we talk about the relationship with customers and suppliers, and manufacturing programs, it's more stable. However, the political environment is a little bit more complicated," Gonzalez said. He said that Mexican businesspeople are still trying to figure out new President Andrés Manuel López Obrador.
"What we have seen is, he has implemented many reforms to the constitution. He has laid off many government employees. So he has implemented many things in the first 100 days," Gonzalez said. "Unfortunately, he hasn't implemented actions to increase the economy."
López Obrador has delayed spending on infrastructure, and canceled plans to build a new airport in Mexico City.
"It creates some uncertainty that the investors," Gonzalez said. "Even though they are having a good relationship with him, and they have good conversations."
The expected Mexican growth rate for 2019 has been cut from 2.2 percent to 1.6 percent.
López Obrador had pledged growth of 4 percent during the presidential election. Milacron's Gonzalez said that's could still be possible.
"We have the capability. Because of the U.S. market, even though it has not been that certain, [because of NAFTA]," he said. "We have a nice local market, we have the opportunity. Four percent — it's complicated, but do-able. However, we need to concrete actions and plans [from the Mexican president]."
Gonzalez said Milacron is in a good position to serve the growing domestic mold sector, despite some of the current uncertainty. "The installed capacity's there. We have very good technicians already trained. The country's ready to not only to make engineering changes, which is the main purpose. But also to build from scratch, brand new molds," he said.
The growth of skilled mold makers in Mexico makes the sector much stronger, he said.
"We have a better environment, and we can explode in mold making," Gonzalez said. "We're prepared. The industry is prepared."