The outlook for the global economy in 2023 looks complicated and uncertain, due to the armed conflict between Russia and Ukraine, which has caused an energy crisis throughout the world; the possibility of the US economy slowing down or entering a recession; to the trade war between the United States and China; to high inflation and rising interest rates to cool the economy.
Despite all this, there are sectors that look favorably on 2023, such as the Mexican cement industry. What is this trust for? There are several reasons: the US infrastructure plan, which is advancing at full speed and which represents an opportunity for cement companies in Mexico, especially those with operations in the north of the country; the infrastructure projects of the federal government, such as the Mayan Train, the new Tulum airport and the Interoceanic Corridor, which goes from Oaxaca to Veracruz; and all the work that the state governments will carry out in the middle of the pre-election year.
But that’s not all, there is also nearshoring, a mechanism by which companies established in Asia, mainly in China, are transferring their manufacturing, assembly or supply processes to Mexicowhich will require the construction of many industrial buildings.
And finally, tourism, which is returning to pre-pandemic levels and is triggering construction in that sector.
With all these opportunities, Jaime Hill Tinoco, CEO of Holcim Mexicotells us what the company is focused on and what its plans are for 2023.
AN: Jaime, what is Holcim Mexico’s growth expectation for 2023?
There is a global crisis in terms of inputs, but in terms of the sector, at least there is in infrastructure. We are looking at 2023 with good eyes, very similar to 2022, but with growth potential in the second half of the year. Why? Because we are finishing important works and starting others. Which ones are we finishing? The Dos Bocas Refinery, with more than 1.5 million cubic meters of concrete supplied in that work. We carry about 80% of that volume
We have the Libertad dam project in Nuevo León, which will finally solve the issue of water shortages in Monterrey. That contract just kicked off, which means we’re going to be entertained in 2023.
And there are also all the opportunities that are coming to Mexico due to the armed conflict between Russia and Ukraine, and the trade war between the US and China, which has triggered the transfer of manufacturing, assembly or supply processes of companies established in the Asian country and other nations of that continent to Mexico, to export to the US and Canada. It is impressive how industrial floors are opening from Mexico City to the north of the country. And yes, there is talk of a possible recession or slowdown in the US economy, but not in the construction sector or in the infrastructure sector.
The infrastructure plan in the US is going full steam ahead and that is an opportunity for Holcim Mexico. Why? Because our Ramos Arizpe plant, in Coahuila, is exporting cement to Texas. Hopefully our Hermosillo, Sonora, plant will export cement to Arizona.
The segment of the bag or sack of cement is slower in terms of consumption. Everyone got excited about the pandemic and expanded or made improvements to their homes, but this has dropped due to inflation, so we see the same scenario for the bag in 2023, although remittances continue to grow and we trust that part of them are directed to the self-construction sector.
As for the housing industry, which is a large consumer of cement and concrete, there is good movement, there are good prospects for growth in states such as Yucatán and Nuevo León, and we believe that it can be further promoted with a national housing plan , which today does not exist or is not so clear.
AN: How is Holcim Mexico preparing to take advantage of all these opportunities?
Over the course of 2022 we have set up additional ready-mix plants in Monterrey and Tijuana. We currently have three plants in Tijuana and six in Monterrey.
We want to set up a concrete plant in Puerto Vallarta, because tourism continues to grow in the San Fernando area to the north, from Nuevo Vallarta to Punta Mita and San Pancho. We are also seeing the recovery of tourism as an opportunity. Tourism has not fallen, it is returning to pre-pandemic levels and Holcim is preparing for that.
In fact, there are plans to invest in San Fernando in the aggregates sector (production of sand and gravel), to manufacture concrete; we want a new aggregates plant in Quintana Roo, because the Mayan Train is going to demand a lot of concrete; and we want to invest in a second sand and gravel crushing plant, since not only the Mayan Train is coming, but also the new Tulum Airport.
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