Mexico City — Compounders and concentrate makers are finding a lot to like in Mexico.
Executives with several such firms that met with Plastics News during the recent Plastimagen trade show, held Nov. 7-10 in Mexico City, were optimistic about the Mexican market and its growth potential.
"Mexico provides Ampacet with additional growth opportunities," said Doug Brownfield, strategic business and marketing manager with concentrates leader Ampacet Corp. of Tarrytown, N.Y. "In some cases, we don't have the luxury of expanding in the states anymore. Mexico gets us all the way down to Central America for opportunities in rigid and flexible packaging."
Ampacet recently added two new twin-screw extrusion lines in Querétaro, Mexico, for growth in specialty colors. The firm now has four lines there. Brownfield said much of the firm's Mexican sales are to Mexico-based customers. Ampacet expects double-digit sales growth in Mexico in both 2017 and 2018.
"The Mexican market is growing beyond commodity white and black concentrates," he added.
Gustavo Perez, general manager and Americas chief operating officer with A. Schulman Inc. of Fairlawn, Ohio, added that the Mexican market "has been strong, with good growth in all areas."
He singled out growth of polyethylene and polypropylene compounds in flexible packaging and PP and nylon compounds and blends in automotive. Nylon and PP compounds continue to replace metal parts in under-hood parts and interior trim where lightweighting is needed, Perez said.
He added that the appliance market also was "a success story" for Schulman in Mexico in 2017. Other growth for Schulman in Mexico this year, according to Perez, has come from PE-based agricultural films used in harvesting tomatoes and other fruits and vegetables. "Processors now have packaging lines in greenhouses and even out in the fields," he said.
Schulman in the second half of 2016 added a new compounding line for automotive applications, at its plant in San Luis Potosí, Mexico. That site this year added a cryogenic grinder for materials size reduction.
Officials with PolyOne Corp. of Avon Lake, Ohio, said that the firm has "significantly increased" its commercial presence in Mexico this year. PolyOne has taken that step "to better collaborate with customers in ways that only PolyOne can," Kurt Schuering, commercial vice president, said in a recent email to Plastics News.
One part of that increase is an expanded footprint at the firm's facility in Ramos, where PolyOne has added a warehouse facility and production capacity, while increasing utilization of that capacity. "We're also ramping up cross-business unit collaboration at this facility to improve value to our customers," Schuering said.
"We see the Mexican economy growing in 2018, with automotive, appliances and electrical/electronic manufacturing leading the way," he added. "A certain amount of the increase can be attributed to reshoring."
Masterbatch concentrate maker Polyvel Inc. is working with a distributor to grow its business in Mexico and is adding two new extrusion lines in New Jersey as well. At its headquarters site in Hammonton, N.J., the firm in December will add a new production line and a new lab-scale line, sales engineer Dean Dodaro said. Both will be twin-screw lines, he added.
The new lines are needed to handle growth in a variety of markets, according to Ken Malin, global sales and marketing manager.
Polyvel's customer base includes compounders, recyclers, fiber producers and injection molders. The firm's concentrates can be based on a wide range of commodity and engineering resins and can include additives such as antistats, mold release agents and peroxides.
In Mexico, Polyvel has been selling its materials through distributor Industrial & Chemical Solutions (ICS) for two years. Some Polyvel customers have asked that the firm's materials be available in Mexico as well, Malin added. On the new product front, Polyvel recently introduced a new anti-fog concentrate for food packaging that can be based on polyethylene or polypropylene.
Domo Engineering Plastics US LLC plans to open a company-owned warehouse in Mexico in the next year, as part of the globalization strategy by the maker of nylon and other engineering resins.
CEO Marc Potemans said Domo has done business in Mexico for years, but "more on an import basis." In April, Domo hired Daniel Garcia as commercial director to handle Mexico. Potemans said Domo is beefing up its direct presence in Mexico.
"We're establishing a sales office. We're trying to create a local presence to support our global automotive business, which is growing rapidly here in Mexico," he said. Ludovic Tonnerre, global business unit manager of engineering plastics, added that "the ultimate goal is to have a plant with local production."
That's what happened in the United States in 2015. Domo Chemicals GmbH bought Technical Polymers LLC in Buford, Ga. Earlier this year, the German chemical company renamed the company Domo Engineering Plastics US. Buying the U.S. compounding company gave Domo direct access to U.S. automakers and to German transplant car factories in the southeastern United States.
Nylon has many automotive applications, including high-heat under-the-hood components such as fuel lines and engine covers, as well as sound-deadening parts and luggage racks. Potemans said Mexico does not make nylon resin.
"But there are a lot of nylon-based compounds being made and used here," he said.
Mexico — like other parts of the world — needs more skilled people, and especially technical service people, Garcia said. Potemans said that needs to change.
"The Mexican plastics market here has grown so rapidly over the last few years that the market has grown at a much faster pace than the formation and the acquisition of additional skilled labor. And I think it's a disconnect," he said. "It's a catch-up that has to be happening over the next few years."
