Image courtesy of Reacciones Químicas

Mexico's specialty chemicals market is dynamic and competitive and continues to attract international attention, confronting any challenges the wider economy might throw at it. Buoyed by strong demand from the automotive sector and its continuous transition towards more sophisticated production and EV adoption, underpinned by US demand and competitive Mexican labor costs, specialty chemicals companies have ridden the nearshoring wave to its height. In addition, 2024 was a historic year for the sector, marked by the Abu Dhabi National Oil Company's (ADNOC) US$12 billion purchase of Covestro, the German specialty chemicals giant. Sustainability and circular economy initiatives, R&D advancements and investments, and the specter of a US-Mexico trade conflict were all on the minds of executives interviewed for this year's report. 

ADNOC's purchase of Convestro has implications for the company worldwide and includes a pledge to retain the management and, therefore, the strategic direction of Covestro's operations and its circular economy commitments. Speaking about ADNOC's takeover, Arturo Molino, managing director of Covestro in Mexico, commented that this injection of fresh capital would allow the company to weather better the cyclical nature of the chemical sector and poise the company for future growth. Molino reiterated Covestro's goal to become a fully circular company by 2035: "Last year, we invested over €374 million in R&D, with a significant portion focused solely on circularity."

Global R&D and infrastructure investments to improve Covestro's sustainability metrics and get closer to the circularity objective have also reached Mexico. Molino added: "In Mexico, we have upgraded the cooling towers at our Santa Clara facility, making them 30% more energy-efficient, significantly reducing energy usage for our cooling needs."

In 2024, Arkema also made a significant global acquisition with implications for Mexico. The company's three principal business segments in Mexico include coating solutions, adhesive solutions and advanced materials. Salvador Soria, president of Mexico, Central America and Andean Region at Arkema, said: "A key development for 2024 is acquiring a business in Toluca, Mexico, focusing on flexible lamination, a specialty chemical segment, which came with Arkema's US$250 million global acquisition of Dow's flexible packaging laminating adhesives business."

Arkema operates five facilities in Mexico, including the newly acquired Toluca plant and facilities in Naucalpan and Querétaro. At the Naucalpan plant alone, Arkema has announced more than a US$10 million investment to upgrade and expand productive capacity, with an eye to the US export market. Like much of the specialty sector, Arkema has watched the automotive industry closely. Soria claimed that the growing role of electric mobility in that industry, mainly for export out of Mexico, was well aligned with Arkema's research spend and alignment with industry megatrends.

The Mexican auto industry set records in 2024 for total production and export of vehicles. Figures from INEGI showed a 5.6% increase in production compared to 2023,

with a 5.4% increase in exports of cars. Mexico now ranks as the planet’s 4th largest producer of automobiles, 95% of which are light passenger vehicles. Forecasts for the sector’s performance in 2025 by Prodensa indicate that it could grow by around 2.7%, as the sector becomes impacted by trade and tariff uncertainty stemming from the United States. In addition to these figures, domestic sales of light vehicles rose by 9.8%. Eduardo Cortés, Latin America general manager at Momentive, said: "As vehicles become more sophisticated and lighter with more technology and plastic components, the demand for specialty materials will continue to increase."
Momentive has recently opened new offices in Mexico City and is exploring the viability of establishing a business support hub for the Americas. Momentive has invested in its sustainability track record and was recently awarded the EcoVadis Gold award. 

The auto industry's impressive growth means there is enough cake for all. Celanese, which in 2024 acquired Dupont's mobility & materials division, has also doubled down on Mexico and the future of its automobile sector. In addition to an acetylene production site in Cangrejera and US$600 million in annual sales in Mexico, the company has recently established a business solution center for customer experience in Mexico City, which will serve Celanese clients across the Americas. 

Other sectors continue to attract interest too. Archroma, which also has the EcoVadis Gold certification, operates three plants in Mexico and serves the textiles and packaging industries. Jeniffer Uribe Porteny, business director Mexico, Andean Region & Central America at Archroma, commented: "The packaging and paper segments are experiencing significant growth driven by shifts from plastic to sustainable materials and the rise of e-commerce… The textile market faces challenges due to high import volumes from China and low tariffs in Mexico, leading to slow growth despite expectations of a nearshoring boom."

A change in management at Pilot Chemical Company – Órgano Síntesis is giving the company a new direction, targeting new markets and diversifying its Mexican portfolio. The new managing director, Bernardo Frisbie, said: "My vision is to guide the organization toward specialty chemicals, personal care, cosmeceuticals, and start collaborating with the pharmaceutical industry, research-driven innovation, and sustainable development."

The personal care and pharmaceutical markets in Mexico grow year on year. Stepan is also targeting these sectors together with its agricultural, industrial and construction portfolio. The company counts on two production plants in the country following the acquisition of a BASF Mexicana plant. Juan S. Agraz, country manager in Mexico for Stepan, said: "We have recently invested in new laboratories and equipment for the consumer and functional industries in Ecatepec, Mexico."

Demand in this sector has attracted the attention of Viakem, a CDMO with a sprawling manufacturing base in Nuevo León. José María Bermudez, CEO of Viakem, said: "Viakem is diversifying into sectors like personal care, household products, electronics and vehicle electrification.  There is a growing pressure to decide between in-house manufacturing and outsourcing, with many companies reevaluating their supply chains and the competitiveness of their cost structures."