Has the strong demand experienced by Evonik in 2021 continued into 2022?

Things continue to be very positive for us in Mexico, and Evonik has experienced growth across the board reflected in sales numbers and volume in 2022. However, we are receiving mixed messages about how the market is developing, considering the uncertainties in Europe driven by the situation in the Ukraine. We have also started to hear about some slowdown in the US due to high inflation impacting businesses and rising transportation and energy costs. In Mexico, we have not seen that slowdown yet (as of July 2022), as demand is being driven by manufacturing value chains, either regionally or globally, for the export market. There have been a number of new projects in different segments where companies are either investing in new assets in Mexico or expanding existing assets, which is positive.

What are your views on the current business climate for chemical and petrochemical companies in Mexico?

The chemical industry in Mexico is currently running on 60% of its total installed capacity, mainly due to the lack of raw materials coming downstream from the petrochemical industry and the uncertainty and lack of competitiveness surrounding energy supply. Investment by the private sector is welcome to be able to import raw materials that were historically only available through the local supply of Pemex. I believe there is still a long way to go as the situation for the time being remains pretty much unchanged. This is concerning and could represent in an opportunity lost for Mexico considering that for the relocation of supply chains, nearshoring, the country will be one of the key elements of the China Plus One discussion in the US. We need a strong, robust, competitive and sustainable chemical industry in Mexico to capitalize on this regionalization and advantages such as the United States-Mexico-Canada Agreement (USMCA) and the renewal of the FTA with the European union. All our customers need a strong supply of ingredients for the different industries they participate in. It is important for authorities to realize the relevance of the chemical industry as a key driver of the economy, especially for exports.

Why do you think many chemical companies are moving towards the specialties space?

Today, being competitive depends on the solutions you can bring to the table in sustainability, green chemistry and green jobs. Specialty chemicals allow you to develop solutions that really contribute to this agenda. More companies moving into the specialties space might also be about the level of connection that you develop with customers and partners. You need a much higher degree of intimacy in the development of products and co-innovation process, since specialties are unique to the application of a final product.

Can you elaborate on the importance of plastic recycling from a sustainability standpoint?

Evonik has a growing number of next generation type of products, Next Generation Evonik, which are technologies and solutions that have a positive impact when it comes to sustainability, both in terms of footprint and handprint. Across all 15 of the company’s business lines we consider the circular economy.

What are the advantages of Mexico’s strategic location?

With the openness of Mexico for international trade it has been extremely advantageous to be located here, especially with regard to products coming from the US where we have good access and a competitive position from a logistics and supply chain perspective. I do not believe that we will totally move away from globalization in our industries and businesses, but we are going to see stronger regionalization, and Mexico should be a beneficiary of this.

In 2023 we hope to see the implementation of new projects and expansion of manufacturing capacities in the country. For this to happen, a closer and more meaningful dialogue is needed with the authorities to foster a more competitive chemical industry.