MEXICO PLANS TO COURT CHEMICAL INVESTORS

MEXICO PLANS TO COURT CHEMICAL INVESTORS

Nearly 100 U.S. investors interested in Mexico's opening of its secondary petrochemical market are expected to attend a conference sponsored by the United States-Mexico Chamber of Commerce this spring.

The conference, scheduled to be held June 7 in Houston, is designed to give American companies an understanding of Mexico's rapidly changing petrochemical industry, said chamber official Gerard J. Van Heuven during a recent visit here.Mr. Van Heuven is executive vice president of the Washington D.C.-based organization. The bi-national chamber is represented in Mexico by the Mexico- United States Chamber of Commerce.

In the past year, Petroleos Mexicanos, or Pemex, the state-owned oil and chemical company, has restructured to cut expenses and operate more efficiently. Part of that effort involves courting foreign investment in certain downstream parts of the chemicals business, after prohibiting most foreign ownership for decades.

"It's a new ball game. Pemex has restructured itself. They want to compete in the international market," Mr. Van Heuven said. "There's joint ventures here in Mexico with Pemex and with Mexican private industry. There's joint venture projects abroad. We want to give U.S. forces a chance to look at the opportunities in June.

Part of Pemex' restructuring has involved the the creation of new operating companies. For example, Mexpetrol, a venture of Pemex and private companies in Mexico, is designed to promote the export of Mexican oil and petrochemical products and services, including engineering and metallurgical services.

To attract foreign interest in the Mexican oil and petrochemical industry, the government last year relaxed its foreign investment regulations. The government increased the number of products designated as secondary petrochemicals to more than 60 and allowed foreigners to control up to 40 percent of an investment. In certain cases, after obtaining government approval, a foreign corporation's share of investment can exceed 40 percent.

The secondary petrochemical list includes such products as acetate vinyl, acetone, ethyl chloride, vinyl chloride, ethylamine and isoprene.

Foreign investment in about 20 basic petrochemical products, including ammonia, benzene, ether and xylene, remains prohibited.

Carlos Lopez Mora, assistant manager of petrochemicals at Pemex, said he was unable to determine if foreign investment in the secondary chemical market has increased since the regulations were revised. "It's still very early to make a judgment. I expect we'll be able to tell a few months from now," Mr. Lopez said.

Mr. Lopez said foreign investors' interest in the Mexican market has increased. In addition to the new regulations, he cited the Latin American country's proximity to the United States and its stock of raw materials, including crude oil and gas, as drawing cards for U.S. investors.

"We also have experience in producing in the petrochemical market for the last 25 years," he added.

Mr. Lopez said Mexico is interested in foreign investment in all petrochemical products. Last fall, the chamber organized a trade mission of about six U.S. companies, whose representatives met with Pemex officials to discuss trade and investment opportunities. Mr.Van Heuven said another trade missions is planned for this September or October. Jose Montemayor, director general of the National Association of Chemical Industries, here, could not be reached for comment.