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* Mexican companies flag supply chain worries in earnings
* Bottlenecks hit economy as recovery hits speed bump
* Scarcity of inputs stokes fears about already high
MEXICO CITY, Nov 9 (Reuters) - From the auto industry to
producers of toilet paper and cement, Mexican companies have
been hit hard by bottlenecks in international supply chains,
depressing growth prospects for Latin America's second-largest
Thousands of vehicles have sat on Mexican assembly lines
awaiting missing semiconductors, but the impact of raw material
shortages has been felt right across the corporate landscape.
Time and again in third quarter reports, companies flagged
concerns over the disruptions that are increasingly bleeding
into their bottom line in Mexico, an economy built around free
trade that depends heavily on international supply chains.
Retailers and car companies expect the phenomenon to eat
into traditional pre-Christmas sales, while rising input costs
have fanned high inflation, pushing up interest rates even as
growth expectations for Mexico have been scaled back.
"You can see the impact everywhere," said James Salazar, an
analyst at bank CI Banco. "The problem is that if we keep seeing
a recovery in demand, many companies will be in a jam."
Logistical bottlenecks have forced automakers, which
contribute some 3.4% of Mexican gross domestic product (GDP), to
carry out a slew of temporary work stoppages, curbing business.
Lower output crimped third quarter sales at conglomerate
CYDSA, a maker of coolants for the auto sector, by
2%. At Vitro, which produces windshields, windows
and sunroofs, revenues in its auto business were down 14%.
Manufacturer Nemak, which supplies components
for companies such as Audi and Nissan, had to lower its 2021
sales target to $3.82 billion from $3.9 billion previously.
Lack of materials and delays have taken the shine off the
recovery many companies had anticipated as the hit they absorbed
in lockdowns caused by the COVID-19 scourge wore off.
Mexico's economy shrank 8.5% last year, its worst
performance since the 1930s. Though it is expected to expand
about 6% this year, analysts polled by the central bank in
October shaved two tenths of a percentage point off their 2021
The central bank recently estimated the semiconductor
squeeze could knock one percentage point off GDP growth in 2021.
That pain radiates far beyond carmaking, also engulfing
global cement giant Cemex, a bellwether for broader demand.
The Monterrey-based firm said in the third
quarter international logistics problems and higher costs hit
its operating EBITDA - an indicator of profitability - even
though sales grew in almost all of its markets..
Cemex Chief Executive Fernando Gonzalez said that due to
supply chain disruptions it had reduced 2021 capital expenditure
guidance by $100 million to $1.2 billion.
Internet provider Axtel said shortages would
knock some $2.5 million off its revenues in the second half of
2021 because delays meant delivery times of four to six weeks
had become five or six months, making some projects unfeasible.
Rival America Movil, the company controlled by
billionaire Carlos Slim, is also feeling the pinch.
"I think in all the world, in all Latin America ... there is
lack of handsets," said Daniel Hajj, America Movil's CEO.
With Christmas only weeks away, companies' hopes of lifting
sales risks falling foul of a lack of inventories.
Enrique Guijosa, finance chief of El Puerto de Liverpool
, one of Mexico's main department store chains,
told analysts he expected shortages in sporting gear because of
pandemic-induced shutdowns in countries like Vietnam and China.
Restrictions on goods' availability have translated into
higher prices as companies pass on added costs to consumers.
Inflation is now above 6%, double the central bank's target.
Gruma, a producer of Mexican staple food
tortillas, said it had to put up its cornmeal prices, and
flagged further potential increases next year.
Kimberly-Clark de Mexico, whose portfolio of
brands includes Petalo toilet paper and Kleenex tissues,
announced average price increases of 7% that would become fully
effective at the end of the first quarter of 2022.
(Reporting by Noe Torres
Additional reporting by Sharay Angulo
Editing by Dave Graham and Angus MacSwan)