JOSÉ MARÍA BERMÚDEZ

Mexico 2020 | INDUSTRY & MINING | VIP INTERVIEW

TBY talks to José María Bermúdez, President of Dow Mexico, on the firm's success in Mexico, preferred sectors for investment in the country, and the chemical industry's contribution to GDP.

What are the main reasons behind Dow's success in Mexico?

Our 60 years story in the country has been founded in transforming ourselves, because the markets are never stagnant. At Dow, the continuing changes in infrastructure, automotive, construction, packaging, and major sustainability challenges are great opportunities. We trust that our expertise will put us at the forefront of these issues. We are ready for the following challenges that will arise from in the future. We are extremely optimistic that we will continue growing. Also the market is currently characterized by the growth of the middle class, and in effect its increased consumption. Based on this automotive industry, and the manufacturing industry, including oil and gas, have also been the great pillars of Mexico during this period. Dow's current portfolio is aligned with those pillars. The Mexican consumer needs Dow's value chains. Another reason behind Dow's success in Mexico has been the investment in technology and manufacturing. The great investments that Dow did especially in North America have been an important catalyst for us. It has made high-quality products available for the Mexican market. Investments were done, especially in the area of Texas and Louisiana, but also in our Querétaro, Tlaxcala, and Toluca plants. Our local manufacturing network and the one with the US allow us to be extremely competitive to meet these needs. This is why, 25-30% of our business in Latin America is in Mexico. Our relevance in Latin America and globally is evident, for example, we have Research and Development laboratories in Mexico, and it is not just about importing technology from other places and position them locally but also seeing what the Mexican market needs and can provide.. As another example, we have several members of our team in Toluca that have created a patent developed in Mexico that we are marketing today in the world. We actually bring in our global capabilities in order to create things in Mexico.

What sectors are you prioritizing in terms of investment in Mexico next year?

Our presence is diversified, but the first area is related to the consumer sector, which includes our portfolios of packaging, personal care, technology, etc. Almost everything you use at home. Consumer trends go extremely well with the technologies we offer in our portfolio, for example, specialized plastics for packaging that could help us to address food waste, polyurethanes for a more comfortable mattress, or products for sustainable paints. We are in 96% of value chains in Mexico according to our analysis. This can give you a picture of our relevance in almost every market. Besides that, development of technology is necessary for our manufacturing processes. We can proudly say that we had jumped into Manufacturing 4.0. That's why we had implemented state-of-the-art technology in our sites, such as our innovative Mobile Worker project in Querétaro. Which brings the expertise of our people, by taking advantage of newest systems and processes. This is not only for our benefit, but for our customers. We are really optimistic, that's why we had been in Mexico for more than six decades. Regardless of GDP reports, our mentality is to always have a growth plan.

What was the objective behind being the first to improve a road with recycled plastics?

Circular Economy is one of our strategic Sustainability Goals and plastic is one of the noblest materials that can have more than one useful life. For two or three years, there has been a lot of news and actions about plastic waste. Based on this, we are working to provide clear information on plastics, its impact and the huge benefit that a correct waste disposal can bring. We are also designing products that are designed to be recycled since its production, also we will also continue working on packages that use less material, because we have to maintain the balance in the rational use of plastic. And last but not least, we are also developing strong projects that can assure a social impact aligned with the Circular Economy piece. The road is a part of this idea. There are over 400,000 km of unpaved roads in Mexico. There is also the problem of what to do with plastic waste. That's why along with other allies, we managed to create an asphalt road improved with recycled plastic that can increase its durability, and it is competitive in costs for the public and private sector. It is a win-win where the plastic waste is reincorporated in a high-value application. That ecosystem is a winning formula.

What are your priorities as president of ANIQ?

There are two big priorities. The first on is the Circular Economy, with which our industry was one of the first to adopt its principles. On this, we are working with the public policy authorities to seek for alternatives in which the industry, our customers and the consumer feel comfortable with a clear focus on sustainability. That's why we are working to help on rational, data-based public policies. The technology exists, but we need the rest of the value chain to have waste collection, segregation systems, have collection centers, and so on because otherwise there is no matter. We are working together. Public policies must be adequate for all of us to do our job. The second priority is keep growing our capacity and keep gaining relevance as a key industry. Around the 1970s and 1980s, our industry experienced a Golden Age, when PEMEX was a stronger player, we had more integrated chains, and so on; even though, the interesting thing is that in the past six years, our industry in Mexico had more than USD18 billion invested to productive assets. It has been a 5-6% growth per year of continuous demand for the industry; however, the access to raw material and energy has been a challenge. In 2018, the Mexican chemical industry accounted for 2.1% of GDP. Currently, many things have to be imported, or the supplies have to be shipped at great distances before they are delivered to the consumer. We need to keep working to assure the availability of gas and raw materials. The petrochemical industry must be strengthened. It is good for the whole country in any dimension that is seen. There are no advanced economies without strong chemical industries. We have to be specific in the steps to reactivate the availability of materials in Mexico.