Mexico City — For Ascend Performance Materials, creating compounding operations in Mexico just made sense.
Ascend, which calls itself the largest fully integrated producer of polyamide 66, acquired a compounding facility in San Jose Iturbide, Mexico, in 2022, part of a larger push get closer to the company's global customer base.
Expanding compounding operations beyond the nylon company's traditional base in the Southeast is an approach that's allowing Ascend to more deeply connect with local markets, explained Steven Manning, global business director of engineered plastics.
"We've operated as an integrated supply chain in southeastern United States. We've got a series of five plant sites in the Southeast United States. And those were historically used to serve our global business.
"Since 2018 we've been making strategic investments through acquisitions to localize some of our downstream operations and Mexico is an example of that," Manning explained during an interview at the recent Plastimagen trade show in Mexico City.
Ascend makes resin in the United States through those integrated operations and then provides compounding services in Mexico to be closure and more responsive to customers in that region.
"The vast majority of what we are producing at the facility now actually stays in Mexico. Our initial focus was to work with customers that we had business in Mexico where we had been supplying from the United States," he said.
Ascend has spent the first year or so transitioning existing business from the United States to San Jose Iturbide and now is at the point where the company is seeking new business opportunities, Manning said.
"We have a very diverse set of customers that operate in just about every growing world area. What we've been trying to do is buy assets that can help us services them more locally. Mexico is a significant growth market for the plastics industry.
"If you look at the reshoring that's occurring in Mexico and the industrialization that is happening in Mexico to service the region, it's substantial. And so for us to be close to our customers, we couldn't just operate out of the United States. We needed to operate close to them as they manufacture in Mexico," he said.
"A lot of it was talking to our key partner customers and understanding their growth road map and what they needed from a supplier to be a really strategic growth supplier. It really comes down to understanding what our customers wanted and Ascend setting our business up to be the kind of supplier we needed to be," he continued.
The compounding facility previously was owned by DM Color Mexicana SA de CV, a joint venture between Dainichiseika Group and Mitsubishi Corp.
Ascend, in a separate 2022 deal, also acquired the compounding business of Formulated Polymers Ltd. in India, a move that included a manufacturing site in Chennai and several warehouses across India.
Moving closer to customers, while still providing a consistent product line across the globe from different facilities, is a key for Ascend and customers, Manning explained.
"Certainly the biggest market for the type of nylon Ascend works with is the automotive industry. There's big changes occurring in that industry, for example, transitioning from internal combustion engines to battery electric. That's creating a lot of opportunity and the need for material. That continues to be the largest market segment.
"But certainly a lot of markets like building and construction, broader consumer and industrial markets, electrical markets. Those are all right there in terms of markets that are important for Ascend to grow in," he said.
"I think for us it's being able to supply and have local relationships but also have the same type of supply relationships we are able to have around the world. A lot of our customers are global. They don't want to buy something in Mexico that's different than what's in Europe that's different than what's in China," Manning said.