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DuPont Mexico TiO2 plant readies for expansion

Increased demand for TiO2 is driving DuPont Mexico's growth.

By Charles W. Thurston

Published February 6, 2007
A stable recovery of the key national economies in the Latin American region over the past two years is fueling a strong increase in demand for titanium dioxide produced by DuPont Mexico and is supporting the company's potential plans to ramp up production by more than 40% to 200,000 metric tons (MT) per year, according to Luis Rebollar, vice president of titanium technologies for DuPont Latin America.

"There have been smooth economic transitions following presidential elections last year in both Brazil and Mexico, so it seems as though political noise is no longer affecting the economies in Latin America, which is a big step for the region," said Rebollar. While the regional gross domestic product expanded by an average of just over four percent during 2006, TiO2 demand grew by approximately 5.5%, although it began that year with a more rapid expansion rate.

Overall, the Latin American market for TiO2 in 2006 amounted to close to 330,000 metric tons, of which Brazil consumed approximately 130,000 MT, Mexico consumed approximately 85,000 MT and Argentina consumed approximately 36,000 MT, Rebollar estimated. In the Latin American region, paint and coatings uses account for about 71% of total consumption, compared with a lower 60% worldwide level. The difference is caused by a more rapid acceleration of per-capita GDP growth and a robust housing market in Latin America.

Rising per-capita GDP has been a critical factor in TiO2 consumption in Latin America over the past two years. At the end of 2004, the first year of strong regional economic recovery after the crash of 2001, per-capita GDP amounted to a little more than $4,000. By the end of 2006, that figure is projected to have increased to nearly $5,500, and to have increased to approximately $6,000 by the end of 2008, according to UBS Warburg's Latin American economic analysis team, led by Javier Kulesz, in Stamford, CT.

Rising prices for TiO2 also have helped shore up DuPont's analysis of plans for expansion at its Altamira facility in Mexico's Pacific coast Tamaulipas state, which must compete with other global sites, including China, for the investment allocation. DuPont recently raised prices for TiO2 in the Middle East and Africa by approximately $100 per MT; the rough average price for TiO2 across all segments and geographic markets is approximately $2,100 per MT, Rebollar estimated.

While a surge in the sales of lower-priced, lower-quality, lower-TiO2-content architectural paint has taken place recently in Latin America in tandem with the increase in per-capita GDP, both mid-range and high-range product consumption also is growing, Rebollar pointed out.

DuPont Mexico is working continuously with its Latin American customers to help improve paint and coatings formulations and application technology, and has strong hopes for the future of its newest Ti-Pure R-902 line there as the market matures. "We buy paint from all the major players in the Latin American market and see quality improving in terms of TiO2 content and properties, which is an interesting trend," said Rebollar.

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