How has the pandemic impacted Unigel’s performance in Mexico in 2020?

We are one of the lucky ones, as there is a need worldwide for acrylics used for visors and face guards. It is a simple acrylic, not a specialty grade, that we have had to produce in huge volumes. In March, we were uneasy about the prospect of having to reduce production at one of our plants in Mexico, in Toluca or San Luís Potosí. However, in April we started to receive many orders, especially for exports to the US and Canada. The Mexican market picked up later. We actually had to hire more workers to keep up with the demand at one point, and overall, 2020 has been a record-breaking year for us in terms of volume sold.

Can you explain how Unigel has vertically integrated its production of acrylic sheets via its Plastiglas subsidiary in Mexico?

We used to have an agreement with Pemex to produce acrylonitrile for which the main raw material is propylene, which comes from refineries. From there, we obtained a co-product used to produce methyl methacrylate – which is used to make acrylic sheets. However, this stopped in 2017 due to a lack of raw materials from Pemex. Therefore, we had to import feedstock from Brazil, which has kept Unigel vertically integrated in the production of acrylic sheets.

How do you think the Mexican chemical industry could resolve its issue of a lack of feedstock?

Availability of raw materials is everything in the chemical industry, and you have to build your plants as close to the source as possible. Mexico has the potential capacity, but industry must find a way to cooperate with Pemex. Along with ANIQ, we have been talking to the government, insisting that the industry is ready and willing to cooperate with Pemex. However, there needs to be investment into infrastructure to supply raw materials, as well as investment into maintenance on current plants or new plants for Pemex. If this issue is not resolved, companies will have to keep importing feedstock, and more companies will continue investing in the US rather than Mexico.

To what extent has the strong gold and silver market bolstered Unigel's sodium cyanide business?

Unigel has been producing a lot of sodium cyanide in Brazil, and we have a project to produce more, for which we are analysing location options. The gold and silver markets in Mexico are bigger than in Brazil, so ideally we would produce here to reduce logistics costs. However, this comes down to securing raw material contracts for ammonia and natural gas, to ensure the investment is worthwhile.

Why did Unigel decide to build a new plant in Mexico to produce extruded sheets?

We have just finished building a new US$8 million plant in Mexico to produce extruded sheets, to complement Plastiglas’ production of cell cast acrylic sheets. Start-up testing has commenced, with production due to start in December 2020. As the market for this is small in Mexico, it is a product we are looking to export. The demand for acrylics for schools, offices and the health sector in the US in increasing, and we believe this is a growth area in the coming years.

What are the company’s main focus areas in Mexico for 2021?

Unigel is focusing its time, money and R&D efforts on specialty grade and solid surface products, rather than trying to compete in the commodity product market. We intend to start producing coloured and impact grade products in Mexico, for both our extruded and cell cast lines. We will also be producing an autoclave to produce laminated sheets.

We have the largest distribution network throughout the US and Mexico, and want to maintain our reputation for delivering “just in time” products. We have achieved this by sending small volumes of many different products to customers, making Unigel the company with the most flexibility in the market.