Latin American petrochemical industry needs new strategy

Nov 11, 2001 01:00 AM

The Latin American petrochemical industry needs a new strategy as a region, Mexico's Hydrocarbon's Undersecretary Juan Antonio Barges Mestres told attendees of the 21 Latin American Petrochemical Meeting in Rio de Janeiro. "We're all connected," he said. "Like the internet, we must think of how we can link our businesses." He pointed to Mexico's lack of strategy in the past as a mistake.

"This lack of strategy has led to a stagnation of the industry and the loss of Pemex in the domestic market." The undersecretary said he is an advocate of inviting private investment into Latin American markets, which he noted is not yet legal in Mexico. This is changing, he said, under the Mexican presidency of Vicente Fox. "Without private investment, the Mexican economy will die," he said.
"President Fox has instructed us to make those changes because we need those changes." He pointed to the fact that Pemex gives 65 % of each peso it makes to the federal government, which he hopes to see change under theFox administration. "It is impossible to operate a company like this," he said. "We must view Latin America as one big community," Mestres said, stressing again that the nations must consider private investments in order to grow. "We must connect countries and entrepreneurs."

Mexico in particular, he said, needs private investment to explore and develop its oil, gas and chemical markets. He noted that Mexico's geography is very similar to that of Texas, yet Mexico has not developed it hydrocarbon resources to a fraction of the industry found in Texas.
Mexico plans to start studying its petrochemical sector and its pricing structure, partly as a means to attracting investors to the country. Following the undersecretary's speech, several APLA meeting attendees commented that they were impressed with his honesty about the dire straits of the Latin American markets and Mexico's in particular. His speech underscored the commitment attendees also expressed, that APLA members must be honest about the state oftheir businesses and begin working together to improve them.

Source: Platts
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