This week’s Interview of the Week is with Stefan Lepecki, CEO of Braskem IDESA. Braskem IDESA is an association of Brazil’s Braskem and Mexico’s IDESA and was created in 2010. The association leads the Etileno XXI petrochemical complex for the production of polyethylene and other chemical derivatives in the state of Veracruz.
Q: What are your main operations in Mexico and how does the country fit into your global operations?
A: Braskem IDESA, combines the strengths of Braskem, an active global Brazilian petrochemical business, and Gupo IDESA, a petrochemical group in Mexico. In Mexico, we have won an ethane supply contract from PEMEX that allowed us to build a large Petrochemical Complex. Braskem IDESA is a Mexican company with a large pool of opportunities for our clients based here and with a positive outlook for what the future will bring. We see a positive scenario for the industry in Mexico, our clients feel confident, global demand is inflated and there is a new breed of players introducing new capacities to the local market.
Q: How would you assess the market potential in Mexico for Braskem IDESA’s operations?
A: We started this year on a great note resulting from the extensive consolidation and growth process we experienced during 2017. We focused on stabilizing our operations, defining our plans and assessing our results in terms of both operability and safety. We are proud to say that we managed this operation with a nearly Mexican-only team, which provided the experience and resilience necessary to reinforce our operations. On the other hand, our commercial area was highly successful too and we were able to strengthen the relationship with our local clients and our market penetration.
Q: What factors prompted your results during 2017?
A: We started operations here in mid 2016 and then underwent a stabilization and adjustment process, so we count 2017 as our first year of operations at full capacity. Our numbers were amazing for a young company, and we even experienced far greater growth during the second half of 2017 in comparison to 1H17. We established tight relationships with our clients and partners here and we exploited our advantage as a local producer to secure the supply to meet their needs. We also developed a positive dialogue with PEMEX, our raw material suppler, and we are exploring the different ways in which we can work together for our mutual benefit.
Q: How would you classify the opportunities in Mexico for securing raw materials?
A: Production and commercial chains start with securing feedstock and the potential of Mexico is incredible in that regard, as it has the feedstock reserves and the necessary markets, the two fundamental pillars for this business. It is also an open market for imports, which further supports commercial activity for petrochemicals. We have witnessed how diverse the local market is for petrochemicals and we recognize there is huge potential.
Q: With Mexico entering a new political phase, what areas should the new government focus on?
A: It is essential that the country continues to work under a strong and ambitious industrial policy. This requires constant cooperation between PEMEX, the private sector and regulators to foster a fruitful dialogue on how to apply best practices to the industry. Mexico has a solid basis for feedstock and a dynamic market, so half of the equation is already solved. If we continue working in a collaborative manner, this country will have an unbeatable status as a global center for petrochemicals. The natural resources are here, the logistics networks are established and it is an open and competitive market. The emphasis on the sector is there, so we have to make the most of this situation to propel the sector to new heights.
Q: What are your expectations for the Mexican petrochemical industry and how will Braskem IDESA fit into those prospects?
A: Our main ambitions are to continue growing our market penetration and to consolidate our brand as the partner of choice in Mexico. We are about to unlock additional raw materials and this will set us on the path to open new business lines and venture into new partnerships. Our vision is entirely devoted to growth in the raw material sector and we look forward to expanding our complex here. As for the development of the industry in Mexico, there needs to be an alignment between PEMEX and other public entities and they must bring a bigger spectrum of private sector players into the game. We also expect to see more alternatives for imports and other sources to complement these processes. We remain confident about the great potential that is still to be unlocked in this country and we are eager to see how everything will turn out in the next few years.
This is an excerpt from the 2018 edition of Mexico Oil and Gas Review. If you want to get all the information, plus other relevant insights regarding this industry, pre-order your copy Mexico Oil and Gas Review or access our digital copy.
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