MEXICO CITY—The COVID-19 pandemic has had a disastrous impact on national economies across Latin America, KraussMaffei Group's top executive in the region said April 12.
"A lot of people are saying Latin America has lost 10 years of development due to the pandemic," Klaus Jell, the German injection molding machine maker's vice president responsible for Latin America, told Plastics News in an online interview.
"It's difficult to see where the recovery will come from," he added. "I'm not so optimistic."
Mexico, he said, was typical of countries across the region.
"The government is not giving (financial) incentives to businesses. A lot of our customers are struggling. Interest rates are high. Banks are more cautious about credit. The risk factor is also playing out. We don't have a really strong government," Jell said.
The pandemic has hit Latin America "very hard," Jell said, adding that Latin Americans in general "don't follow the rules," making it doubly difficult for social distancing to be effective. "There is an impact, a very severe impact."
As of April 12, Brazil's total death toll from COVID-19 was 353,000 and Mexico's was 209,000, according to official statistics.
Kell's other title is CEO of KraussMaffei de Mexico and Andina. He has worked with ChemChina-owned KM for 28 years, 11 of them in Latin America, based first in Brazil and then Mexico. He moved to the company's headquarters in Querétaro, central Mexico, five years ago.
Asked whether the company would have a booth at the Plastimagen trade show in Mexico City, planned for the spring of 2022, Kell replied: "We don't know. Digital marketing has been very successful and we need to be careful with the money. … I would love to see people again in a booth. But we need to see how the development on the vaccine front is playing out."
The 2022 show is scheduled to be the first full Plastimagen in three years. Show owner and organizer Tarsus Group organized a virtual Plastimagen Light show and conference in late March. But Kell said "exhibitions only make sense if you can meet people and show something. I would prefer a special show for (machine) manufacturers."
KM, which employs 70 people in Mexico, is the market leader in large presses for the country's automotive industry, Jell said, declining to get into numbers.
Annual growth has been in double digits in recent years, he said, adding that the company had, however, changed tack and was focusing more on selling small- and medium-sized presses, in particular to the medical industry. The intention was to "get away from the risk of the automotive industry."
Small- and medium-sized machines was where "we have had the biggest growth rate."
According to Jell, Mexico's boom years within the international automotive industry, which peaked in 2016, are coming to an end and automakers "will try to produce more in the United States."
The political and economic panorama in Mexico had become more difficult, "so there is not the incentive to invest (in Mexico)… It will be interesting to see what role Mexico will play," in the global automotive industry in the future, he said.