What have been Quimica Delta's main accomplishments in 2022?

Over the past few years, we have strengthened our competitive advantage that is based on scale and volume. As the leading distribution company in Mexico, we move more volume than other companies, which allows us to reduce our operational costs and maximizing efficiency. Our strategy is also based on having long-term partnerships with suppliers and clients. Química Delta has also focused on increasing access to different markets; for example, we expanded our market share in the glycol and alcohol market and the combination of these has allowed us to grow more than 10% in volume this year.

What are the most noticeable demand trends that Química Delta has seen throughout 2022?

In the past four years Química Delta has increased its storage capacity, which allows us to be flexible and adapt to different market trends. We have a total of 40,000 cubic meters of installed capacity in port terminals.

During the pandemic we had to modify and adapt the portfolio of products that were being distributed, which allowed us to grow. There was a demand for paints, household and personal care products, which we were able to supply. After the pandemic, we modified the portafolio again to adapt to the needs of our clients. With this flexibility, we have been able to continue to maintain our growth path.

How have free trade agreements and the diversification of markets impacted Química Delta?

According to the ANIQ, the production of petrochemicals in Mexico has decreased from 10.7 million t/y in 2012 to 4.1 million t/y in 2021. This has forced companies to import supplies from other countries. The fact that Mexico is adjacent to the US helps us maintain a supply of products from that country, especially petrochemicals, and given the volatility of prices, it is more logical to source products from the US. Free trade agreements certainly help us bring in products with low import rates, so the USMCA gives us a huge logistical advantage.

What are challenges that Química Delta faces in maximizing the services and supply chain?

The first challenge we have seen are logistical issues. This year we had a reduction in the number of ships that were serving between Mexico and the US Gulf, causing shipments to be delayed from 15 to 30 days from the time an order was placed. On the other hand, the conflict in Europe has helped us as some ships that were operating there are now operating in the Americas.

The second challenge is the supply of raw materials. These conditions have started to stabilize, but we had to adapt to those conditions.

What have been the repercussions of high inflation and an increase of petroleum prices?

As a distributor, we are forced to pass on costs to our customers when the price of oil rises. However, in October 2022, the price of oil started to stabilize, which means that the price of other products also started to decrease. For example, the price of aromatics, which normally ranges between US$800 and US$900 a tonne, reached US$2,100 in July 2022, but is now returning to normal prices. Some players are lowering their prices for consumers, while others are keeping them high, which unfortunately fuels inflation.

High inflation rates will affect the entire value chain because companies may delay investment in new production capacity. This may lead to a situation where demand outstrips available supply, and we expect this to happen in the coming years.

What are Quimica Delta's main objectives for 2023?

Química Delta plans to consolidate its leadership as a distribution company in Mexico through its strategic alliances and competitive advantages. We established a subsidiary company called Ion Specialties to sell specialty chemicals and fill a market gap that we had identified. We also expanded our total storage capacity in Teoloyucan by 15%. This expansion will be for base oils and glycols with a clean room to serve the USP market in central Mexico.

Internally, we are uprgrading our CRM systems to better serve our clients and improve the efficiency of our services. We are a leading company because we have an enormous capacity to adapt to market conditions and we have built strategic alliances based on mutual trust, product availability, fair prices and the quality of our services.