Manuel García
General Manager
Arkema
/
Insight

Chemical Seedbed for Industrial Activities

Wed, 01/22/2014 - 16:32

The leading chemical company in France, Arkema, is banking on international consolidation to become a top-tier brand name in specialty chemicals. Having been in Mexico for three decades and with the Energy Reform being enthusiastically received, the country has become a centerpiece of Arkema’s growth strategy. “We are excited about the Energy Reform because we are producers of many technologies for this industry,” expresses Manuel García, General Manager of Arkema. “Chemical companies have a profound influence on Mexico’s economy as they are the starting point for many industrial activities. This is particularly true for companies that produce raw materials much needed in most petrochemical processes.” He is counting on the additional investment that the Energy Reform will bring to create new opportunities for Arkema in various areas, including the oil and gas sector. “These changes will be of significant importance for Arkema, since we work in the upstream and downstream segments with activities ranging from chemicals for extraction to refining products, and petrochemicals.” Since last year, Arkema has made notable progress in PEMEX’s refineries. “Arkema possesses certain special chemicals that are combined with catalysts to help producers in lowering sulfur content in gasoline,” says García.

Arkema has two plants in Mexico, yet many of its specialty chemicals come from elsewhere. García explains that the chemical industry is highly specialized, meaning each plant is devoted to producing only certain types of products. In fact, García states that most of the products his company will continue to use in Mexico will keep being produced in different countries. “Our global capacity is sufficient but this does not stop us from constantly increasing it. Currently, Arkema is suited to serve the Mexican market without the need to expand,” says García. This statement underlines Arkema’s strength, as there have been shortages of raw materials for the chemical industry internationally. For instance, García says there is an availability problem with a certain monomer that is only produced by a few manufacturers, and which has begun to negatively impact different steps of the oil production chain.

Arkema now works for both PEMEX and other players, some of which are adding capacity to domestic plants or implementing new technological features. García claims that working for private parties is not that different from providing services to PEMEX as the contracts and other requirements are similar. The only major difference that he illustrates is that deadlines for delivery of chemicals are usually a lot tighter with private clients. In spite of such complications, García acknowledges that it is his company’s duty to deal with logistics and to be flexible.

García details how his company positions itself in the market, pointing out that global players have the financial resources to invest in plants and technology. Brazil is the leading country for Arkema’s oil operations, although the company has a greater presence overall in Mexico due to its activities in the automotive sector. “Mexico has had plenty of easy oil, therefore it has not had to go into deepwater like Brazil. This does not mean Arkema’s internationally acquired capabilities are not being put to good use in Mexico. For example, the offshore segment is more developed in Mexico than in other parts of the world where Arkema works,” says García. He adds that Arkema will closely monitor PEMEX’s developments in this segment to make sure it liaises with the right potential partners in order to provide the right chemicals and compounds that PEMEX needs. At the same time Arkema has subsidiaries, such as Arkema México, which act as smaller players by supplying products to cover specific market needs. “We like to be able to cover both sides of the coin as sometimes we need to act as a global player, while at other times, we need to provide specialized services,” says García.

Arkema’s plan is to grow at a 10% rate each year, and García believes his company has the connections and technology to achieve this objective. Further investments in Mexico will open more opportunities for Arkema, particularly in supplying additives. Rather than finding new uses for its products, García finds that his company’s growth will revolve around adding capacity in petrochemicals. “Brazilian firm Braskem is making a US$4 billion investment dispersed across different areas of the Mexican industry. The company will produce polyethylene, which will require Arkema’s products,” says García.