Mexico City — Latin American market growth is leading materials firm A. Schulman Inc. to add new production lines in Mexico and to plan for a new manufacturing plant in Peru.
The new compounding lines are needed at Schulman's plant in San Luis Potosí to make compounds based on engineering plastics such as nylon and polycarbonate, Schulman executive Gustavo Perez said March 10 at Plastimagen Mexico 2016 in Mexico City. Perez serves as general manager and Americas chief operating officer for the Fairlawn, Ohio-based firm.
Mexican sales of engineering resin compounds into automotive uses were up 15 percent last year for Schulman.
“We're seeing automotive growth opportunities in both export and domestic markets in Mexico,” Perez said. “European OEMs are establishing operations in Mexico to supply Mexico and Latin America.”
In Peru, Schulman “is building a footprint,” according to Perez, because of strong demand for masterbatch concentrates there. No details of the new production site were available, but Perez said Schulman hopes to have it in place during 2017.
In addition to the 20-year-old San Luis Potosí plant — which employs 300 and operates 10 production lines — Schulman's Latin American operations include plants in Brazil and Argentina and two thermoset production sites in Mexico.
Schulman's masterbatch concentrates sales also are strong in Mexico, Perez said. Sales of those materials into agricultural uses grew 10 percent last year, while their sales into packaging applications were up 7-10 percent.
Even when the new lines are in place in San Luis Potosí, Perez said that Schulman will have plenty of room for future growth at the site.
“We're there because it's the best logistics point in Mexico for the markets we serve,” he said. “In a 300-mile radius, there's Monterrey, Guadalajara and Mexico City.”
New polyethylene resin capacity coming online next month in Mexico by Braskem Idesa will provide Schulman with better lead times for material shipments, Perez added. “We're currently at 20 days delivery [of PE] from the U.S., so this will be closer,” he said. Most of Schulman's concentrates are based on PE and polypropylene.
Recent devaluation of the Mexican peso vs. the U.S. dollar has had some effect on Schulman's business in Mexico, but not an undue amount. “Our customers who are in the domestic market are more affected by the peso,” Perez said. “Exports allow other customers to compensate.”
Schulman ranks as a leading compounder and concentrate maker in both North America and Europe, as well as a leading European resin distributor. The firm employs 5,000 worldwide and posted sales of $2.4 billion in it 2015 fiscal year.
