Alfonso Ortiz Murillo
Oil and Gas Director
View from the Top

Chemical Romance with the Mexican Oil and Gas Value Chain

Wed, 01/22/2014 - 16:44

Q: What motivated Univar’s entry into the Mexican market and which were the first steps you took here?

A: In 1974, Univar, which had a strong presence as a chemical distributor in the US, began to notice that its American customers across a variety of industries were also located in Mexico. They soon began to demand the same Univar services in Mexico as they received in the US, with the same level of reliability, transparency, and credibility in the chemical services they were used to. In response to this demand, Univar acquired a company in northern Mexico to begin its operations as Univar Mexico. When the Matamoros region in northern Mexico began importing chemicals in 1995, Univar purchased Chemcentral in the US, which played a key role in establishing Univar Mexico’s operations in Mexico City. We have now expanded our coverage further, with branches in Guadalajara and Monterrey. Between 2006 and 2007, Univar Mexico began consolidating operations to one location to improve efficiency. Univar’s growth strategy began with the acquisition of additional companies in Mexico and, after two years, the company saw significant sales in multiple markets, from paint to oil and gas. To bolster its logistics capabilities, Univar recently acquired Quimicompuestos, which provided it with 18 additional branches, a truck fleet of more than 110 units, an experienced workforce in the area of logistics, storage, and technical customer service, and an impeccable reputation in quality and service delivery.

Q: What would you define as Univar’s most important competitive advantages?

A: Univar is committed to the quality and reliability of our products and to the delivery of tailored services, whatever our customer’s needs may be. Within the oil and gas industry, we work 24/7, 365 days a year to meet the demands of the sector. The knowledge and technical support that our oil and gas division provides, supported by Univar USA, is also very important. We have more than 600 people working in the oil and gas division in the US, preparing and storing tailored chemical products. We also strive to provide logistics expertise for each storage facility, from Oklahoma and Texas to Mexico, in order to serve the entire supply chain. Following the Quimicompuestos acquisition, Univar expanded its geographic footprint and service offering. From Matamoros, Altamira, Poza Rica, and Minatitlan, we can now deliver our chemical products to oil and gas regions across the country. Since we work with raw materials, we directly service more than 3,500 customers across a range of industries that transform or modify the products that we deliver before selling them. Our oil and gas clients are divided into three segments: upstream, midstream, and downstream. Univar is a leader in the Mexican chemical distribution industry across all these segments. While we might not be the largest distributor in Mexico in terms of overall sales, we are the leader when it comes to service.

Q: How does Univar plan to balance both organic growth and new acquisitions?

A: We pursued multiple acquisitions over the past four years to be able to better serve our customers in Mexico. For example, Univar acquired oilfield technology company Magnablend in 2012, since its packaging and blending capabilities were an important addition to Univar’s positioning in oil and gas. Acquisitions like this that provide additional services and value to our customers are critical to ensure we continue meeting market demands. The conditions in certain regions of the US are not the same as in Mexico so it is important to adapt our products to Mexico’s geological characteristics. Some companies have tried out the same products being used in Texas or Oklahoma here in Mexico and have been successful. However, the results are not necessarily the same given that the geological conditions vary. In that instance, the goal is to bring such formulas to Mexico and adapt them to the Mexican market.

Q: What role can Univar play in helping Mexico address shortages in raw materials for the petrochemical industry?

A: We are constantly assessing the products we are selling to see if there is a possibility of exporting them to other locations worldwide. Therefore, any national manufacturer of a given chemical product can approach us to develop a relationship, and have Univar consume its products and perhaps export them to one of our 182 locations around the world. This is extremely important as Univar deals with a high product volume that can help local manufacturers. Wherever possible, we work with local manufacturers to optimize costs.