How does Charlotte Chemical serve the Mexican chemical industry?

Charlotte Chemical is dedicated to the distribution of specialty chemicals and certain commodities. The majority of what we sell comes from imports. A differentiating factor of Charlotte Chemical is that we look for products that are not manufactured in Mexico. Approximately 70% of the products we sell are sold through representation, in which we represent top quality companies, directly delivering products to customers at their plants or from our warehouses. 

Can you discuss Charlotte Chemical’s performance in 2023?

Overall, 2023 was a good year for Charlotte Chemical. From a margins point of view, it was not as good as the previous two years, as 2023 was a complicated period with significant movement of prices. We had to respond to these price fluctuations with creativity, ensuring that we could offer products in the most competitive way. In terms of volume, Charlotte Chemical grew by 13%. Regarding imports, the company experienced a 25% growth, bringing in far more shipments than in previous years. Our staff has grown to meet the challenges these changes have entailed. 

What steps has Charlotte Chemical taken to digitalize operations?

Charlotte Chemical wanted to become more agile, so we decided to invest in an ERP. We spent six months analyzing options, and then we selected one and started on implementation. One of the challenges at first was convincing our team that the ERP would help us achieve better results. We are more efficient when our people are analyzing information rather than working on something a machine or software can do better. Dedicating our entire team to strategic tasks allows us to develop markets more quickly and optimize our processes. This year, a change in mentality and change in organizational culture began. It is taking work, but we are making progress and gaining more control over our processes. 

How will nearshoring benefit the chemical industry?

Nearshoring seems magical, but it is not. Attracting investment requires a lot of work, and we are seeing cases in industries such as the automotive industry where companies ultimately moved to Canada rather than Mexico. The chemical industry, like the automotive assembly industry, is not labor intensive, so labor is not what is making the difference. We must focus on other attractions, on being more competitive and flexible. Mexicans have speed and flexibility of mind, and these values help us. 

Growth in the country is driven by the automotive industry, with the industry using plastics, coatings, and a variety of chemicals. As the automotive industry grows, people have money to spend on goods and on building houses, further driving the demand for specialty chemicals. When it comes to chemical demand, as the global automotive industry raises standards and demands more certifications, the chemical industry must respond with better, more technical products.  

Can you discuss the state of feedstock supply?

The most significant difficulty facing the chemical industry is the low production of basic petrochemical products. Some years ago, Mexico was a leader in agrochemicals made from ethylene oxide. Today, we do not have enough ethylene oxide, and it is a dangerous product to import from long distances, so that industry is shrinking. For raw materials that are underproduced but are less dangerous to move, the issue is that transportation from across the world is expensive and those logistics costs reduce our competitiveness. 

The country is nowadays more interested in producing gasolines than all the petrochemical range of products, which would bring added value and more jobs in Mexico. The more knowledge of the chemical industry and its importance for contributing to GNP in the government means a greater benefit to the country. The challenge for nearshoring is being able to obtain the raw materials to supply the markets and attend to industry needs. 

What is Charlotte Chemical’s strategy for the next two years and its main objectives?

First, we are working on expanding our business in the plastic industry, with an interesting portfolio of specialized plastic additives. Second, we aim to improve our communication and information systems, allowing us to penetrate other Latin American markets with the products in which we are leaders. Third, Charlotte Chemical intends to continue growing our market share in the products in which we are already leaders.