| The Mexican petrochemical industry, one of the most dynamic sectors in the Mexican economy, is scheduled for a big expansion in the next few years. In spite of the vast oil resources in Mexico, the industry's dependence on imported materials has traditionally been appreciable. Even though the industry has grown rapidly, it has not been able to keep pace with the domestic demand.;A special analysis of the secondary sector indicates that important savings can be achieved with a change of the Mexican constitution. By law, primary feedstocks like ethane, ethylene, propylene and other refinery streams are not allowed to be processed by the private investor. The use of those feedstocks would promote competitive production of some intermediate petrochemicals, avoiding the excessive subsidy that otherwise is necessary to bring the production cost of some secondary petrochemicals to competitive levels.;The current level of energy prices has intensified the research to produce chemicals and energy from renewable sources. Guayule, a source of natural rubber, is one of the most important natural materials under consideration. An economic analysis indicates that guayule rubber can be produced at competitive prices with respect to the energy intensive synthetic rubbers like SBR and polyisoprene. It seems very likely that guayule rubber will penetrate the economy in the next few years.;The ambitious plans of the Mexican government to build a strong petrochemical industry can be achieved in two major steps: first, the industry should reach a high level of independence on imported materials, and secondly, the industry should be able to compete in the world market of major petrochemicals. In this work, a systems analysis of the Mexican petrochemical industry using a mixed-integer programming model is formulated. This formulation lets the model take into account economies-of-scale, which are a key factor for the development of a strong industry. The model is used to study the impact of subsidized prices on the optimal growth of the industry. It is shown how a superior policy of subsidized prices can be identified to promote the development of a competitive industry with an optimum use of basic resources. |
