APLA '17: Mexico Pochteca eyes sectors in changing chem-distribution sector

12 November 2017 18:51 Source:ICIS News

RIO DE JANEIRO, Brazil (ICIS)--Mexican chemical distributor Pochteca is targeting sectors such as food, agriculture and water to give the company an edge in an industry that is rapidly changing, the company's executive director said.

Pochteca owns distribution centres in Mexico, Central America and Brazil, giving the company a first-hand perspective on the changes happening in the Latin American industry.

Many large chemical companies are consolidating their distribution operations, said Eugenio Manzano, executive director and one of the founders of Pochteca.

He made his comments on the eve of the annual meeting of the Latin American Petrochemical Association (APLA), which begins on Sunday. This consolidation trend is happening to suppliers as well as customers.

This new environment could be a challenge for distributors that are not specialised or that do not differentiate themselves from their peers, Manzano said.

To flourish in this environment, Pochteca is investing in segments that augment its infrastructure and value-added selling concepts, he said.

These sectors touch on a lot of the mega-trends being pursued by the chemical industry. The world's population will continue to grow, raising demand for food, feed and potable water.

This trend has led Pochteca to invest in food and feed; agrochemicals and agriculture; and water and water treatment, Manzano said.

In addition, the middle class is expected to grow in emerging markets, causing new consumers to buy more personal-care goods. More people will move to the cities, a trend that will also change buying habits.

This has led Pochteca to invest in the household and personal-care segment, he said.

Other segments play into the strengths of the Mexican economy. The country ranks among the world's largest automobile producers. Mexico's manufacturing exports exceed all of those of the rest of Latin America. With that, Pochteca is also investing in the automotive and general-manufacturing segments.

Mexico also ranks among the world's major miners, and its oil-and-gas industry is receiving a boost from its recent energy reforms. As a result, Pochteca is targeting both of these segments.

In addition, Pochteca is investing in recycling solvents and chemicals, he said.

All of these segments will be served well by Pochteca's one-stop shop model, Manzano said. The company offers customers such services as technical support, specialty packaging, application labs and inventory management systems.

As part of this drive, Pochteca is certified under the Responsible Distribution programme of the National Association of Chemical Distributors (NACD).

Manzano expects this will all serve Pochteca well during this trend of consolidation, which will affect the company's suppliers and customers as well as its peers in the chemical-distribution industry.

Latin America has hundreds of independent chemical distributors, and Manzano said they will also experience consolidation.

The APLA annual meeting runs through Tuesday.

Interview article by Al Greenwood

By Al Greenwood