Image courtesy of Akzo Nobel

The Mexican paints and coatings sector accounts for nearly 15% of the chemical industry’s total GDP and is responsible for over 17,000 direct jobs, according to figures from ANAFAPYT (National Association of Paints & Inks Manufacturers), the leading industry body in Mexico. Architectural coatings continue to dominate the total value of this market, though the printing ink segment has seen considerable growth in the past year, and automotive coatings are another critical source of demand. 

According to research from Mordor Intelligence, architectural coatings make up approximately 50% of the total value of Mexico’s paints and coatings market. Driven by demand for residential and commercial construction activities, this sub-sector is a great gauge to test the health of the wider Mexican economy, as it sits at the intersection of government spending on public projects, and private capacity and appetite to design, build and renovate residences and workplaces. 

The industry is bracing for trade frictions between the United States and Mexico, and despite recording healthy growth during the past year, challenges remain. Though questions on tariffs in Mexico center so wholly on intra-NAFTA commerce, many in the Mexican chemical industry, including paints and coatings producers, have long argued that some trade barriers should be erected to protect Mexican companies from competitor producers in Asia, which have been able to offer low prices and undercut the domestic market in Mexico. As the Mexican government continues to adapt policy to placate the Trump administration’s outlook on China and unfair trade practices, Mexican producers might receive a windfall as protective measures are taken to restrict access of third-country producers to Mexico. 

ANAFAPYT celebrated its 80th anniversary in 2024 and hosted its biannual LACS (Latin American Coatings Show) in Mexico City, alongside other technical seminars and workshops. Flor de María González, general manager of ANAFAPYT, mentioned the association’s work partnering with the UK’s Lead Exposure Elimination Project (LEEP) alongside the Tanzania Bureau of Standards and Vietnam’s Research Center in 2024. She also pointed out how new technologies are transforming the industry and what ANAFAPYT is doing to support this transformation, saying: “At LACS, we had an Architectural Panel that focused on using AI-driven factory modeling. Many manufacturers are already implementing these technologies, and by the next edition of LACS, we expect to showcase concrete case studies demonstrating the benefits of these innovations, including improvements in efficiency and sustainability.”

Beyond automation, paints & coatings manufacturers are keen to improve their sustainability metrics, supported by ANAFAPYT initiatives that bring local companies and global experts together at technical seminars. As González commented: “Many manufacturers in Mexico are adopting sustainable practices, such as creating VOC-free coatings and improving production processes to be more environmentally efficient.”

Among the companies adopting these practices is Interadi, a Mexican manufacturer that celebrated its 40th anniversary in the industry in 2024. Héctor Jiménez Landa, Interadi’s managing director, said: “We have developed an eco-friendly additive used in resins that significantly reduces VOC emissions in the final product.”

Innovation in the sector is not limited to reducing VOC content or automating processes. One Mexican company, Quimix, identified several macro trends in Mexico, such as growing urbanization rates and changing climate-induced pest patterns, and developed a uniquely homegrown product. According to Marco Torres Hallal, Quimix’s managing director: “We offer the only COFEPRIS-approved product in Mexico, which integrates microencapsulated insecticides that kill pests on contact and protect for up to two years.”

This innovative product has made Quimix a market leader in the urban pest control market, and the company places a high value on further innovative development. Nevertheless, regulatory challenges abound, as Ernesto Bächtold, associate director of Quimix, explained: “In Mexico, registering new products is notably slow and complex, often taking several years. This delay significantly impacts businesses, as registrations are critical assets in our industry.”

In the US, Interadi recently received FDA accreditation and is gaining its EPA certifications, which is part of a strategy to diversify away from Mexico. Landa commented on this shift: “We have seen considerable growth in Central America, exporting larger volumes, which is a major achievement. At the end of 2024, we began sending product samples to the US, specifically to Texas.”

Interadi is not the only Mexican company that has sought greener pastures abroad. Pyosa Industrias, a historical manufacturer in Mexico that celebrated 85 years in business recently, offers a diversified portfolio, with the paints segment accounting for 50% of its sales and plastics and other sectors making up the rest. With exports currently making up some 20% of the company’s annual sales, Moisés Silva, commercial director, believes in the potential to grow this share: “The paint industry in Mexico has experienced a downturn, though the repaint segment is growing. This opening with the US, Canada and Central America has helped us compensate a little for the downturn in Mexico.”

Examples of Mexican paints and coatings companies looking abroad to diversify their markets and insulate themselves from potential domestic shocks is also an example of how Mexico, with one foot south and the other north, is evolving as a regional hub. The narrative on this usually favors multinational companies that establish themselves in Mexico to take advantage of this location, but Mexican companies are also reaping the benefits, as technological knowledge and capital investments continue to flow inwards. 

Nevertheless, the coatings segment in Mexico had a lackluster 2024. With demand for architectural coatings driven in large part by public spending on large infrastructure projects, the past 12 months have seen a downturn in demand. Public spending on infrastructure is also a signal that the economy is performing well, and the recent changes at the top of government in Mexico, which led to a freeze of some spending, had a negative effect on the industry. This downturn in public spending tends to coincide with election years however, and Silva from Pyosa was cautiously optimistic about recent changes in federally administered organizations, saying: “With the change of government in Mexico, there is some optimism, with more technical appointments in the CFE and PEMEX, but we will have to wait and see.”

Others were not as optimistic. Reflecting the skepticism of many on state-financed infrastructure projects, Francisco Rubio, CEO of Kemikals, a distributor of coatings and building materials, said: “Construction activity has been slow, and infrastructure budgets remain limited. Projects and promises like the Mexico-Querétaro train look promising on paper but have yet to materialize.”

Though there has been a shift towards dialogue with the Sheinbaum administration, unease about radical policy reforms has not abated. The most polemic of those policies, judicial reform, is causing concern across the Mexican economy, including the chemical industry. Gerardo Victal, marketing and NBD director Latam at Allnex, summarized a commonly held view among industry executives, commenting: “On the regulatory side, the judicial reforms proposed by the current government are a source of concern for investors and businesses.”

Nevertheless, Allnex is powering on with its plans for Mexico, underpinned by the automotive industry, which continues to deliver results. Victal elaborated on how Allnex is devoting resources to produce more specialized products for the auto industry, which has increasingly sophisticated needs. In addition, sustainability is a key factor. Victal said, “We recently launched a new product called EBECRYL 8466 for the textiles and leather segments, which is a new venture for us. We are expanding, but sustainable growth is essential.”

Rubio from Kemikals also pointed out that despite improvements, the government faces a backlog of serious challenges that hamper growth: “Logistical challenges like rising costs, road congestion, and security issues demand proximity to clients.”

Among the challenges faced by established players in the sector is a dependence on imports of raw materials. Sun Chemical, which has an ink manufacturing plant in Naucalpan, is a leader in the national ink market, counting on a global R&D budget of over US$100 million, which allows it to introduce innovative products. Armando Castillejos Carmero, general manager of Sun Chemical in Mexico, reported annual sales of over US$140 million in Mexico alone, highlighting the market’s importance for Sun Chemical. In addition, Carmero said: “One major challenge is that the chemical sector in Mexico relies heavily on imports for raw materials, such as resins, solvents, and pigments, as there is limited domestic production capacity.”

Inflammatory rhetoric in North America seems to have thrown cold water on any future, warm revision and renegotiation of the USMCA trade deal, though time is yet to tell. The impact on multinational companies which have chosen Mexico as a hub for manufacturing is yet to be seen, but going into the future, the calculus on Mexico’s attractiveness as a nearshoring destination for production might change. Inbound FDI data from the Mexican government shows that the paints, coatings and adhesives manufacturing sector in the country received $US 30.3 million in the period January-December 2024. 

Despite apparent logistical challenges and the potential for reduced US-Mexico trade in the coming four years due to political disturbances, multinationals continue investing in production capacity in Mexico. AkzoNobel, the global paints and performance coatings manufacturer, recently announced sizeable investments in the country. Manoel Torres Rodrigues, vice president of Americas at Akzonobel, said: “Recently, we invested US$3.6 million in the Garcia facility to increase our production capacity by 35% and meet customer expectations regarding growth.”