Can you update us on Trade Chemicals & Products’ recent operations?

In 2023, Trade Chemicals & Products doubled production and storage capacity. We now have over 5,000 square m². At our plant near the airport, we are now at 6,000 m². We have invested in new tanks, new offices, and a new laboratory. At the beginning of 2024 we hope to sign a contract that will allow us greater market penetration. Manufacturers are looking for stable allies, and we have the coverage to provide that.

What trends have you observed for silicone prices?

After the pandemic, prices stabilized until they reached what they are now, which are the normal market prices. This has allowed us to regularize our production and fully supply client demand. 

Where do you see high demand?

A core market for Trade Chemicals is the detergent market, everything related to the manufacture of cleaning products. Our anti-foaming agents and silicone emulsions are in high demand.

The depreciation of the dollar has resulted in a challenging year. Customers get nervous when the exchange rate starts to increase, and they order less material to try to protect themselves. The exchange rate was very stable all the year. Six months ago, it dropped. This was good because the debts that we have in dollars we were able to resolve at a lower exchange rate, and that allowed us to have greater competitiveness in price for imported products, providing a benefit to our clients. 

What is the greatest challenge facing the Mexican chemical industry?

The political issue is a major factor, particularly because of movement in the labor area. This year we will have a 20% increase in the minimum wage. This will have an impact on our costs, as the new minimum wage will force companies to increase salaries. Therefore, we will have higher labor costs than in previous years. We must pass on that cost to the customers, and so it will continue generating inflation. Political issues in Mexico have six-year time frames, and in the previous term, we were worried about gasoline and supplies, but in this six-year term, I think labor is the most relevant. 

How does Trade Chemicals & Products incorporate advanced technology?

We have been using a digital tool for many years; A search engine that we developed for our buyers. Trade Chemicals uses this tool to distribute requests among sellers in an agile way, enabling the seller to quickly communicate with the person requesting the product. That versatility and speed is enabled by cloud computing. A seller can send a quote within minutes of a shopper looking for a product. Tools like those have allowed us to support our customers.

What are your sustainability priorities?

In the agricultural area, we  now offer products that are kinder to the environment than traditional fertilizers. We seek organic products that can replace chemical ones. Obviously, that is challenging, particularly due to the difference in price, but we are working hand-in-hand with many companies that are equally concerned about the sustainability of the planet. At Trade Chemicals, we want to contribute however we can. 

What are your priorities for 2024?

Mexico is full of opportunities—there are always new factories and new clients. The circumstances of the pandemic inspired us to expand our operations, and we have developed from a small company 24 years ago to a stable name in the market today. 

This year, due to the decrease in prices, Trade Chemicals grew in volume by 15% until November, but in terms of revenue, we dropped by 15%. This means that we have had a price difference of 30% from the prices last year to those today, lowering our profits. Our core strategy for the coming year is to reduce our focus on commodities and increase our attention on manufacturing specialties to compensate for the issue of profit utility. We want to have more profits with the same or less volume, rather than this year’s less profits with more volume. Our salespeople are training to refocus their efforts on products that will give us a greater advantage.