"In 2023, we anticipate growing our market reach by double-digits and developing new products, which will be largely driven by the expansion of the Mexican market, as well as our focus on bolstering the paper, mining, and agriculture sector through the use of our products."
What is SNF Floerger's production capacity in Mexico?
We have a manufacturing plant in Toluca where we produce three types of chemicals: dispersants, which are used in various industries such as personal care, home care, and mining; we also produce chemicals for paper production, such as sizing agents, and lastly, dry strength resins and antifoamers. The personal care and home care industries are a very important market for us, accounting for approximately 25% of our sales, followed by chemicals for water treatment, which accounts for 40% of sales. The remaining 35% of our sales go to a variety of different industries such as mining, agriculture, and construction.
What market conditions have led to SNF Floerger's growth in Mexico?
Mexico has a robust industrial sector, such as the automobile, mining, textiles, and personal care industries that export much of their products to important markets like the United States and Canada, as well as supplying the Mexican market. These conditions make Mexico an ideal business place, and SNF Floerger fits into the supply chain of many of these industries.
SNF Floerger has a strong position in the acrylamide market. What are the strategies behind this positioning?
Acrylamide is the base building block for many of the chemicals SNF Floerger produces. We have two divisions within our product portfolio. One consists of products based on acrylamide and the other of organic coagulants. The latter does not consist of acrylamide, but they incorporate some products made with acrylamide. Regarding the acrylamide and organic coagulants market, SNF Floerger accounts for 75% and 85% of the market in Mexico, respectively.
Chemicals for paper production have increased substantially throughout 2022, resulting from consumers transitioning from plastic to paper products. Another factor is the growth of e-commerce, particularly in board and paper packaging. The chemicals that we produce for paper manufacturing are acrylamide based, which has allowed us to further grow in that market.
How has SNF Floerger addressed the growing concern of water scarcity worldwide?
We make products to treat potable water and process water to be repurposed for other uses. For example, municipalities can use the water treatment chemicals we manufacture to kill bacteria and eliminate impurities to provide water for residential use. We have seen a growing demand for these products, especially as water scarcity and the need to reuse water become more relevant.
All the polymers that we produce are made to conserve water and minimize their environmental impact, especially for industrial residual waters that end up in public waterways. Like in mining traditionally, residual water is stored in large containment pools. However, we are developing new water treatment chemicals to reuse water.
What are the factors that could contribute to Mexico being a global leader in specialty chemicals?
Given the proximity of Mexico to the North and South American markets and its infrastructure, Mexico could easily become a global leader. However, an ongoing issue is the availability of basic raw materials that are under the control of Pemex. As a result, many companies must import products from other countries, such as the US. For Mexico to be a global leader, it is important to increase the production capacity of raw materials and further modernize its infrastructure to process petrochemicals.
Where does SNF Floerger identify opportunities for expansion in the Mexican market?
We see a huge opportunity in the agricultural sector. We are in the development stages of products aimed at helping farmers use less water in the fields, as well as reuse residual water for their crops. Additionally, we are developing highly absorbent polymers that can be used in the fields to retain more water and avoid waste. SNF Floerger is focusing on these developments in the Mexican market since it has a vigorous agricultural sector that is growing.
In addition, we want to continue growing in the mining sector given the electricity transition and the increased demand for lithium, copper and nickel to produce electric vehicles. So, there’s opportunities for growth not only in the mining sector, but also the automobile industry. In 2023, we anticipate growing our market reach by double-digits and developing new products, which will be largely driven by the growth of population and expansion of the Mexican market, as well as our focus on bolstering the paper, mining, and agriculture sector through the use of our products.