Can you give us a brief overview of Sekisui’s presence in Mexico?

Sekisui is a Japanese company with over US$10 billion in revenue. The company has three divisions: housing, urban infrastructure and high-performance polymers. Housing is the largest division and focuses on the commercialization of pre-built houses. The urban infrastructure division covers piping and drainage solutions. Lastly, we have a division in high performance polymers that have applications in mobility, construction, and electronics.

In Mexico, we are focused on the distribution of specialty chemicals such as polyvinyl alcohol (PVOH), expandable microspheres and polyvinyl butyral (PVB) resins. One of our sister companies has a plant in Cuernavaca that produces PVB film with state-of-the-art technology. Sekisui Specialty Chemicals was formed after the acquisition of Celanese’s polyvinyl alcohol (PVOH) business 13 years ago since PVOH is the main ingredient in the production of PVB. Currently, Sekisui S-LEC manufactures films that are used as protective barriers for windshields and windowpanes. This product adds safety and comfort because they make glass impact-absorbent, noise-cancelling, and also saves energy as they are temperature retaining.

What market trends are driving business for Sekisui globally?

Sekisui announced it would increase its production capacity of PVOH by 25% globally. While logistical challenges have interrupted supply chains, we see a great opportunity for expansion in regional markets. During 2022, market prices of PVOH have substantially increased due to a tremendous overdemand post Covid.

Mexico continues to be a strategic market for us, because it serves as a hub for sales across Latin America, which amount for about 10% of our sales worldwide. The market trends that drive our business are the shift to safe and environmentally acceptable products, growth in critical business-like electronics and mobility solutions, and replacement of hazardous chemicals in construction applications.

What strategies underpin the company’s growth projections?

The last two years were challenging, and we lost some market share due to unforeseen contingencies like the winter storm in Texas in 2021 that resulted in the closure of PVOH and VAM production plants across the state. Resuming business was slow because of shortages of spare parts and declaration of force majeure by major raw material suppliers. We are aware that this may happen again and we are investing in updating our production plants worldwide to make them more resistant to extreme weather patterns. In addition, we are evaluating our logistical and manufacturing strategy to provide a more reliable service to our customer base. We are planning on increasing our production and storage capacity in North America and strengthening our distribution strategy based on the lessons we gleaned from the pandemic.

What factors limit Mexico’s potential as a destination for investments in chemical production?

Mexico offers attractive competitive advantages such as lower labor costs and a growing market. Nonetheless, many companies are establishing production sites in the US due to the consistent availability of raw materials. PVOH production plants are expensive, and to make Mexico more attractive for investments it is important to establish consistent sources of raw materials such as ethylene and VAM. For example, the main material for PVOH production is vinyl acetate, and Mexico stopped producing this chemical several years ago. In addition, Mexico needs to implement legal frameworks that protect investments for long-term projects to come into fruition.

What are Sekisui’s main objectives for 2023?

We are committed to reaching our 2030 vision, which is based on ESG goals. We are planning to launch new product lines that are biodegradable and contribute to the circular economy. We are also mindful of the social impact of our business and aim to help with the development of communities through the products we provide as well as through employment and a better quality of life. Based on our strategic goals and the market environment in Mexico and around the world, we plan on doubling our sales by 2030, providing solutions that are good for society, for the environment and for our stakeholders.