Strong Mexican market growth has led U.S. materials firm PolyOne Corp. to open a new resin distribution warehouse in San Luis Potosí, Mexico.
Avon Lake, Ohio-based PolyOne also is adding more regional sales support for polymer distribution throughout Mexico, PolyOne Distribution General Manager Robert Zusy said in a recent email to Plastics News.
“Molders and brand owners in the region trust us to help with complex decisions along the product development life cycle,” he added. “Our model is to grow alongside our customers here by providing a supportive infrastructure for their overarching goals.
“We're excited to further enhance our value to customers in Mexico through additional initiatives such as technical training sessions and product design support in 2016 and beyond. We're committed to customer success and growth in this region, and we can now offer our customers in Mexico shorter raw material delivery lead times, more local sales help, and industry-leading service and support earlier in the product life cycle.”
In Mexico, PolyOne is seeing business repatriating from Asia, according to Zusy, who joined the firm in 2002.
“The cost to manufacture is approaching the same in Mexico as it is in China, primarily due to wage increases in China,” he explained. “We've had customers in Asia tell us that they are seeing year over year labor increases of 15 to 20 percent.”
“There's also an added benefit to North American program managers. They can more easily monitor their projects in Mexico than in Asia. Another trend is the expansion of automotive operations in Mexico. It's a mixture of North American, German and Japanese OEMs.”
Among PolyOne's mix of materials, Zusy said that growth in demand “seems to be equally placed across all product families, certainly as you look beyond the maquiladora region.” He added that PolyOne sees this diversified materials trend continuing throughout 2016.
Although there are similarities, Zusy said that the Mexican plastics processing market does differ from that of the U.S. in some ways. “One major departure is that the tier structure for automotive is not fully developed yet,” he said. “In order to fund expansion, most banks require U.S. businesses to show that they already have a manufacturing presence in Mexico. So the ones we see expanding are those that have had previous operations, and in most cases, those are tier one and two suppliers.”
On the customer side, PolyOne's current model in Mexico has been to supply U.S.-based businesses. But Zusy said that the firm also has begun serving Mexican businesses. “The majority of our business is with North American customers, as our strategy has been to support them and expand where they expand,” he explained.
Two recent developments — the new Braskem Idesa polyethylene plant near Coatzacoalcos and the U.S. dollar strengthening vs. the Mexican peso — will impact the regional plastics market, but Zusy said that the extent of that impact “still remains to be seen.”
“Our strategy is to stay focused on providing exceptional service for our customers,” he said.
In addition to its resin distribution efforts, PolyOne operates two manufacturing plants in Mexico — one in Ramos Arizpe Coahuila and one in Toluca.
PolyOne ranks as North America's largest compounder and concentrates maker, and as one of the region's largest resin distributors. The firm employs 7,000 worldwide and posted sales of almost $3.4 billion in 2015. Based on sales, distribution was PolyOne's largest operating unit in 2015, generating just over 29 percent of total company sales.