"In the last years, Croda has made very important acquisitions in the life sciences sector to consolidate its presence in the pharma and agro markets."
How has Croda's business model changed over the past two years?
In the past, we operated in three areas: the industrial area, including petrochemicals, mining, plastic coatings, and lubricants; life sciences, including healthcare & pharmaceuticals and agriculture; and last and most important, consumer care, including personal and homecare businesses. Last year, we divested our industrial business and sold the industrial platform to Cargill. The intention behind this decision was to reinvest those resources in the other two areas. Among the moves we made in the last two years was acquiring a global fragrance company, Iberchem, based in Spain. By adding this portfolio to our own, we have become a very key player in the consumer care sector. In the last years, Croda has made also very important acquisitions in the life sciences sector to consolidate its presence in the pharma and agro markets.
Where do you see the most robust sales within Mexico?
In terms of our overall business, personal care is still our most significant business in Mexico. Our expectation for this sector is that it will continue to perform strongly. However, very strong growth is also expected to come from our pharma and agro divisions.
The global nearshoring trend is evident in all these markets, with many companies starting to increase their investment levels in Mexico as it is a crucial supplier to the US. This is a result of the country’s significant competitive advantages: cheaper labor costs than China, mature manufacturing capabilities and very well-connected with the US. Mexico is definitely an excellent region to attract foreign investment. Based on this, we expect that a strong demand will continue in all the segments where we play: personal and home care, health and agriculture.
Did the global logistics crisis impact your operations?
Supply chain issues impacted us significantly, as the recent logistics situation was extremely challenging. Our operations in the US supply a significant amount of the portfolio we commercialize in Mexico, so we are less dependent on supply from other regions. Therefore, we were able to manage the supply situation relatively well and we avoided disrupting any customers too significantly.
How does Croda center sustainability in its operations?
Our vision is to become the most sustainable specialized chemicals company by 2030. Compared to other chemical companies, we have an excellent starting benchmark. Over 65% of our raw materials today are biobased, and we are confident that we can achieve a minimum of 75% by 2030. We are in the process of executing decarbonization projects for every single one of our manufacturing and commercial sites. Croda has created an entire corporate sustainability structure led by a global Chief Sustainability Officer that will help us to ensure the execution and advances of our sustainability strategy.
In Mexico, there is significant room to improve sustainability metrics within the agrochemical, the personal and the home care areas. Mexico is a major agricultural and manufacturer exporter, and we need to ensure and support sustainable solutions to these markets.
What market trends do you foresee within the Mexican chemical industry for the next five years?
The most exciting trend in the markets where we play is nearshoring and the investment and relocation of R&D and production activities to Mexico. We are also observing very positive investments trends in the pharmaceutical space, with a growing consumer health segment supporting a large internal market in Mexico.
What is Croda’s strategy for the next two years?
On a global level, our strategy is focused on both organic and inorganic growth. Some years ago, we created a global structure to support and reinforce our inorganic growth strategy and it has been working and delivering very well, incorporating high value acquisitions to our organization.
Within Mexico, we are now focusing in the life sciences sector. Starting with some investments in the seed enhancement segment, a strong priority for us, and in the pharma segment with an increasing collaboration on technological innovation for pharmaceuticals. We are working closely with customers, universities and institutes in Mexico to support new technologies development such as local vaccines and others.
Innovation and sustainability are driving everything we do.