Mexico Chemicals Report 2008

Industry Overview Mexico accounts for a mere 0.8% of the global chemicals market. The figure is very low considering the nation's abundant resources. Mexico's chemicals industry produces industrial chemicals, agrochemicals, plastics, cosmetics, and paints and coatings. The coil coatings market is one of the fastest-growing segments in the industry. In Q306, the country's chemicals production increased 11% quarter-on-quarter (q-o-q). BASF Mexico (Mexican subsidiary of Germany-based BASF), Celanese Mexicana (Mexican subsidiary of Germany-based Celanese), Mexico-based Dermet de Mexico, Mexichem and Desc are some of the major players in the industry.

Business Environment Mexico's non-tariff barriers include import licensing and permits, and quotas that apply to products, including agricultural products, petroleum and its derivatives, cars, some raw materials for the pharmaceuticals industry and manufacturing inputs. In September 2006, the Mexican government reduced 6,000 import tariffs affecting many sectors of the economy, including the chemicals and plastics industries. According to the National Association of Chemical Industries (ANIQ), the abolition of tariffs is likely to result in invasion of low-cost products from Asia, hindering the growth of the Mexican chemicals and petrochemicals industry.

Industry Trends And Developments In December 2007, US chemical firm Eastman completed the sale of its PET polymers plants in Mexico and Argentina, to Mexican petrochemical, food, auto parts and telecoms conglomerate Alfa. In October 2007, Brazilian adhesives group Artecola bought 54% of Mexican firm Surna, a manufacturer of industrial adhesives based in Mexico City. In the same month, it was reported that Missouri-based carbon fibre producer Zoltek bought the acrylic fibre plant of Mexican chemicals, plastics and textiles manufacturer Cydsa. In September 2007, Mexican chemical producer Mexichem acquired the firm Frigocel, a manufacturer of expandable polystyrene products and its main competitor in central Mexico.

Industry Forecast In terms of value, Mexico's chemicals industry is forecast to touch MXN54.5bn (US$4.91bn) by 2009.

Total production of organic chemicals is forecast to rise to MXN17.86bn (US$1.61bn). Inorganic chemicals output is also expected to climb to MXN4.23bn (US$0.38bn) by 2009. However, investments in the Mexican chemicals industry and the total number of chemicals units are forecast to slide in future.

The number of chemical firms in the country was expected to reduce to 166 in 2006, from 181 in 2005.