Mexico’s Chemical Sector Calls for Stronger Public-Private Action

At the LVII National Forum of the Chemical Industry, organized by the National Chemical Industry Association (ANIQ), industry leaders urged stronger cooperation between the government and the private sector to reverse declining production, secure raw materials, and position Mexico’s chemical and petrochemical sectors for long-term growth.

Álvaro Fernández, Chairman and CEO, Alfa, emphasized the strategic weight of the chemical industry in Mexico’s economic and technological development. “Our industry contributes around 2% of GDP, 10% of manufacturing output, nearly 1 million jobs, and 6% of manufacturing exports,” he said. “It is an essential economic process and a cornerstone of competitiveness and technological progress in Mexico.”

Fernández acknowledged the government’s openness to dialog under the current administration but said clear, decisive action has yet to follow. “We have seen much greater openness to listening and understanding the challenges, but we have not seen strong and definitive actions to make things move forward,” he said.

He stressed that rebuilding Mexico’s petrochemical base will require long-term vision and sustained commitment. “We have to start working today if we want results in fifteen years,” Fernández said. “This cannot be solved overnight.”

For Fernández, strengthening the petrochemical value chain is not just an energy or industrial matter, it is also a social and economic development issue. “We need to see it not only as a gas or oil problem but as a community and development issue,” he said. “We always talk about developing the south. If we could provide jobs through broader economic development, we could change the reality significantly.”

He warned that the continued decline in domestic production of petrochemical feedstocks threatens Mexico’s industrial base. “Mexico cannot continue like this,” he said. “Soon we will simply not have the raw materials needed to operate.”

To rebuild trust and enable investment, Fernández pointed to the need for greater financial discipline from the state oil company. “We need to solve the issue of payments to PEMEX suppliers to generate confidence,” he said.

While acknowledging Mexico’s dependence on the United States for natural gas and other inputs, Fernández argued that this interdependence can be leveraged strategically. “We have been dependent on the United States for many years, not only for natural gas, but for many products,” he said. “There is nothing wrong with that; it is globalization. Let us take advantage of the opportunity we have right now, while gas prices and supply conditions are favorable. It may not be ideal, but we should work with what we have.”

Above all, Fernández underscored that collaboration between the public and private sectors will be key to revitalizing the petrochemical and chemical industries. “The government cannot do it alone, and neither can we, especially if we continue facing regulatory and permitting obstacles,” he said. “What matters most is to have mechanisms of cooperation with the private sector.”

Industry Needs to Boost Industrial Success

José Carlos Pons, President, ANIQ, and CFO, Alpek, described the current moment as a turning point for Mexico’s petrochemical industry amid global uncertainty and domestic challenges. “Geopolitical and economic conditions remain uncertain, and at the national level we face significant challenges to competitiveness and investment,” he said.

Pons highlighted the industry’s central role in Mexico’s production chain. In 2024, Mexico’s chemical industry produced US$21 billion, equivalent to 1.7% of GDP. The sector was responsible for US$48 billion in trade activity, though the balance remains negative with a US$24 billion trade deficit, mainly due to insufficient raw material supply from PEMEX. “Our sector supplies inputs to 95% of productive industries, from plastics and fertilizers to pharmaceuticals, automotive, agriculture, and textiles,” he said. “We are one of the main engines of economic growth, job creation, and national and international competitiveness.”

To strengthen the industry, Pons outlined four priority areas: securing raw materials, improving regulatory efficiency, ensuring reliable and competitive electricity, and fostering investment. He primarily stressed the need for competitive and sufficient natural gas. Mexico’s high dependence on imported gas poses risks, Pons said. “Energy independence will not only guarantee reliable and competitive supply but will also provide the main raw materials for multiple value chains.” He noted that insufficient supply of key inputs such as ethane, propylene, ammonia, and ethylene oxide has left much of the industry’s installed capacity underutilized.

Reactivating and modernizing PEMEX’s petrochemical complexes, improving its infrastructure, and enabling more efficient imports of raw materials will be crucial. “This must happen while investments are secured and domestic production capacity is rebuilt,” he said.

The declining supply availability of raw materials is also a point of concern. Pons argues that this shortage has left Mexico’s chemical sector operating well below capacity. Key inputs such as ethane, propylene, ammonia, ethylene oxide, and others, are in short supply, forcing plants to idle or run at reduced rates. Reactivating and modernizing PEMEX’s chemical and petrochemical complexes, including targeted conversions to stabilize operations, is essential. At the same time, PEMEX’s logistics and import infrastructure must be upgraded to reliably bring in the volumes of raw materials Mexico currently lacks, bridging the gap while longer-term investments and domestic production ramp up.

His third point focused on agile, internationally aligned regulation. Pons stressed that Mexico needs a regulatory framework that provides certainty and attracts capital. “It is essential to simplify and accelerate the permitting process so that plants can operate on time,” he said. “We must also update Mexico’s regulatory framework to align with international, science-based standards similar to those of our main trading partners.” He welcomed the recent Hydrocarbons Law regulation published on Oct. 3, which incorporated ANIQ’s proposals and clarified the scope of regulation for five petrochemical products, allowing operations to continue normally.

Finally, Pons highlighted the importance of having reliable and competitive electricity. The chemical industry is Mexico’s second-largest industrial electricity consumer, requiring continuous power for its processes. Pons called for targeted investments in energy infrastructure in key petrochemical regions such as Veracruz, Tamaulipas, Nuevo Leon, the State of Mexico, and the Bajio. “We must also incorporate renewable sources into the energy mix to meet Mexico’s international climate commitments,” he added.

Looking ahead, Pons said the industry’s long-term vision is to double its size within 20 years, achieving greater self-sufficiency, import substitution, and high-value job creation. “With continuous dialogue among the public sector, private industry, and ANIQ, we can build a strong, sustainable chemical industry that drives Mexico’s economic growth,” he said.