As Mexico overtakes China as the US biggest trading partner, helping Latin American gain economic importance as a region, we thought it would be timely to have a chat with our top Latin American Distributors in Mexico, Brazil and Argentina to get a firsthand account of the state of the Fluorescent Pigments in their respective countries.
1. How are you seeing the specialty pigment industry evolve now that the disruptions caused by the pandemic are mostly behind us?
Mexico We see that supply is coming back to pre-pandemic levels.
During the pandemic, we experienced a shortage of raw materials, but currently we are seeing higher availability of products.
Argentina In Argentina, at least, the use of specialty pigments, such as fluorescent ones, remains closely associated with fashion and trends. The colors that are on demand are the ones that are considered fashionable and so we plan our stock levels accordingly.
Brazil We see that, after the pandemic most consumers of specialty pigments are adjusting their inventory levels to a lower threshold, since the shortages that we experienced during the pandemic are no longer happening.
We are adjusting inventory levels to supply more and more of our customers “just in time.”
2. Did you make any changes to your business as a result of the pandemic?
Mexico We made a big effort to increase and diversify our total number of customers, hiring additional salespeople. The results have been good in terms of increased sales. We have been keeping more stock and the associated finance costs have been a challenge. We started ordering in higher quantities to take advantage of volume price breaks and because we had to absorb price increases that customers have not accepted. So we are seeing increased sales but lower margins.
Argentina We believe that the pandemic has changed the way people work and interpersonal relationships in general. We have noticed a trend to communicate almost exclusively through chats or video call, rather than the pre-COVID in person visits we used to hold. There is also a desire for quick responses and immediate solutions, which wasn’t so apparent before.
Brazil On the logistic side we reinforced our inventories while in the technical side we are creating more and more catalogues with our portfolio of products, showing the performance of our pigments in customer applications like screen inks, artificial leather, etc. we think this is the key to differentiate us from the competition.
3. What opportunities or markets are you most excited about in the near future and in the long term?
Mexico We are increasing our portfolio of products to have better access to more markets and customers. We are hoping that will have an effect on our sales of fluorescent pigments as well - we think solvent inks could represent a great opportunity.
Argentina We see opportunities in plastic applications that we would like to pursue.
Brazil In the long term, we are excited about fluorescent pigments for metal decoration like aluminum cans for beverages (Beer, Soda, Teas, etc.).
4. What’s the biggest challenge you are facing now?
Mexico Balancing keeping enough stock to support lead times but avoiding overstocking to reduce the high finance costs. And at the same time getting new customers in the pipeline to counteract higher operating costs.
Argentina To overcome Argentina's economic challenges in order to create real and achievable business plans. We need stability and openness to international trade without obstacles or intermediaries.
Brazil The low demand for traditional markets and local competition are a real challenge.
5. Politics and policies affect economies everywhere, but Latin America is known for being especially volatile. What is the current political and economic climate in your country and how are you adjusting from a business perspective?
Mexico The current government policies regarding exchange rate in Mexico is producing a strong peso and has been affecting us and many Mexican companies. For example, we have stock that costed 20 Mexican pesos per USD, and it’s now valued at 17 Mexican pesos per USD. Next year we’ll have elections, and the economy will be volatile, so we’ll have to account for that in our business decisions.
Argentina In recent years, most industries have been affected by economic and exchange rate policies that have constrained business activities in Argentina, both domestically and internationally. We are approaching a new presidential election at the end of the year, and we are hoping the new government will enact business-friendly policies which will enable our company to grow sustainably.
Brazil Not only in Brazil, but the whole South America has been driving for leftist governments. It means more interference in the market, in many cases new taxes and / or bureaucracies. This overall has a negative impact on all industries, and in our customers like ink makers and plastic producers.
Generally speaking, the market size for fluorescent pigment is small in Brazil and we have to be creative to sometimes create the demand and even to gain more market share with better service and being more competitive.
6. Finally, what is your favorite Brilliant fluorescent shade product line and customer application?
Mexico BMS is a big seller for us in the plastics market, so that’s a favorite. And BIBX and BIB2 are great products for Ink.
Argentina BSR Solvent Resistant Series is our favorite because of its versatility.
Brazil Our favorite shade is BNF Pink that is used in colored pencils.