INCREASING DIVERSIFICATION

Colombia 2016 | INFRASTRUCTURE & CONSTRUCTION | INTERVIEW

TBY talks to Fabio A. Méndez Pinilla, President of MPI Asfaltos, on asphalt demand and the product line.

Fabio A. Méndez Pinilla
BIOGRAPHY
Fabio A. Méndez Pinilla is a chemical engineer, having graduated from the Industrial University of Santander. He has expertise in the development and formulation of emulsions, laboratory testing, the handling of mixtures with emulsions, modified asphalts, polymers, and rubber asphalt. Pinilla has developed multiple publications and has been a speaker at different events at the national and international levels. Currently, he serves as President and Legal Representative at MPI Asfaltos.

How was the previous year for MPI?

MPI sells asphalt to the construction business and we are expecting 2016 to be much better that 2015. In 2015, we forecasted the demand to exceed 70,000 metric tons per month; however, it dropped to 35,000, half of what we were expecting. We export asphalt after buying it from the refinery and transforming it to meet international standards. We have been able to do that for many specifications. There are more players in this market right now, rising from four to six, which has reduced our share of the market. Generally, the road construction business has been delayed because it has not been easy for developers to start new projects and environmental, social, and other issues are delaying projects. We are preparing for the demand of asphalt to increase compared to last year, and consequently we expect the price to rise.

What new innovations are you adding to your products?

We introduced asphalt rubber eight years ago, and this is the best solution for pavements. It is asphalt mixed with tire-crumb rubber. We did all the necessary tests and implemented the technology, and proved that we were providing an excellent product that had been successful in Europe and the US. We are extending this level of quality and value addition and have a new division specializing in pavement preservation. These surface treatment techniques are common in Europe and the US. We are the only ones doing this maintenance service, which puts us ahead of any competitors.

How much of your total production are you exporting?

Exports reached close to 50% of our production in 2015. We were able to ship nearly 6,000 metric tons per month, which was aided by the price of the dollar. The asphalt is shipped from Hawaii to Maine, because we sell it to global suppliers. The use of asphalt rubber is entirely new in Latin American markets, and even in the US. It is used from California to Texas, but other states are not using it yet. We know that technique, and there is no patent holding on it. We are looking to other countries. Logistically, it is not that challenging for us because we have facilities in Cartagena, next to the Caribbean Sea. We make a major effort to participate in meetings and conferences to increase awareness of our services. Part of our strategy here in Colombia is to find an additional refinery to increase the diversity of the pricing, because here the price is fixed.

What is your forecast on asphalt consumption in Colombia in the short term?

It might rise the next year, but not to the level the government is expecting. Besides, cement companies want to get involved in the road construction business. They are of course already involved, but they want to move into the pavement business. I do not see 2016 being easy; however, the good news is that we are producing more value-added products. Contractors do not just look at price, they look at the quality and the way we work.

What do you expect of MPI in the coming year?

It is difficult to forecast projects. I can at least say that in terms of revenue we are expecting the same figures as 2015. In terms of products it is going to be different. Asphalt products and services will be better. We sell half of our product abroad, but those are spot businesses. We will import, not every month but at least once every three months. These commodity companies are vulnerable, because around 50% of their sales depend on 10 customers. At the same time, they want to improve the asphalt themselves but have only one supplier. We buy from Ecopetrol Barranca, but want to diversify our sources, too.