"Brenntag Mexico is on a solid growth path, which requires investment to expand the capacity for bulk and packaged chemicals and supports the growth of the key industries for the country."

Eduardo Denyer Angel


March 07, 2018

Brenntag’s history in Mexico goes back to the 1980s. How important is Mexico to the company?

Mexico is the second largest market in Latin America after Brazil, so it is very important to Brenntag. In terms of demand from the industrial manufacturing sector, it is almost as big as Brazil. That is why we have been investing and pursuing acquisitions in Mexico. We have a best-in-class distribution facility in central Mexico. We also have facilities in Mexico City, Tijuana, Guadalajara, Monterrey and Villa Hermosa serving all the key industries and markets. 

What are the most important industries for Brenntag in Mexico and can you tell us more about its capabilities?

Brenntag Mexico is well positioned in coatings and construction. Oil and gas is another key sector in upstream operations, refinery activities and production. The food and personal care industries are also substantial consumers of the chemicals we provide with a significant opportunity to grow. While not as big as other sectors, the Mexican automotive industry is growing by double digits and demanding more chemicals and polymers. Specialties chemicals in Mexico represent a significant part of our business. Brenntag’s industry focused strategy and approach is a clear advantage, since our customers are demanding more specialized chemicals and services to make higher quality products for export markets.

Mexico’s infrastructure capabilities include a state-of-the-art coatings and construction application laboratory in Querétaro; flavors, fragrance and colors research site in Mexico City; and a lab in Querétaro for home and personal care. Our talented and fully dedicated industry expert teams are assigned to specific industry segments. Brenntag Mexico is on a solid growth path, which requires investment to expand the capacity for bulk and packaged chemicals and supports the growth of the key industries for the country.

What proportion of your products do you source from the United States?

It has changed over the last two to three years, but roughly 50% to 60% comes from the United States, and 50% to 40% from domestic producers. Northern Mexico sources more products from the US market, while central and southern Mexico draw on domestic producers.

Will the energy reform lead to increased demand for chemicals from the oil and gas industry?

Pemex is undergoing a transformation which is slower than initially estimated. This, in turn has reduced the development of downstream projects. Recently, though, we have seen an increase in demand from the oil and gas industry. If the ethylene chain stabilizes, it will bring more opportunities for downstream activities. The reform will increase the participants and the activity in the upstream and downstream business.

Why are there so many distributors in Latin America and how fast is consolidation happening?

Distributors in Latin America have typically been local and family owned. A few years ago, there were no regional players but this is changing as customers are able to buy products from all over the world. At the same time, the distribution market is demanding more local efficiencies and services. Distribution requires investment and working capital which makes it more difficult for smaller players to compete with international players. This situation is driving the need for consolidation. Ultimately, this will improve the efficiency of our industry.

Will you make further acquisitions and by how much does Brenntag hope to grow by in 2018?

Most global distributors are investing to speed up consolidation and there is an opportunity for Brenntag to engage in M&A activities of mid-sized and small players. Brenntag will pursue this consolidation strategy to boost our growth plan. Most of our recent acquisitions have been of specialty chemical players and this is paying off in terms of return-on-investment and gains in market share. A case in point is food and personal care. Brenntag has a vested interest in helping to consolidate the chemical distribution market, while entering and expanding market participation in key industries, upgrading assets and exceeding local regulations for handling chemicals. We continue to permanently look for operational excellence and efficiencies. Brenntag Latin America will continue to do this in the year ahead


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