Latin America Reports

Rohm and Haas Upgrades its Technology in Mexico

By Charles W. Thurston | May 14, 2007

Rohm and Haas predicts positive growth in 2007 for its Mexico-based operations.

Rohm and Haas is in the midst of a technology upgrade for its Mexico manufacturing base, and has opted to move its new plant closer to rail and road lines serving the U.S. to gain competitive advantages over the old site. The new facility, which will come on line in March 2008 at the cost of $19 million, will be located outside of Santiago de Queretaro, the capital of Queretaro state, which borders Mexico City and the state of Mexico to the north.

The Queretaro plant initially will manufacture about the same volume of emulsion polymers and polyacrylates as the 46-year-old facility at Apizaco, in Tlaxcala state, which borders the state of Mexico to the east. Once market demand increases for products serving the paint and coatings industry or other segments, production at Queretaro will be ramped up in a step-by-step process, according to Jose Maria Bermudez, the company's new director of the Latin American region, based in Toluca, in the state of Mexico.

The company will transfer all production at Apizaco to Queretaro and will continue to manufacture at Toluca, as well. Sales for the company in Latin America rose last year to $342 million from $308 million in 2005. Global sales for Rohm and Haas were $8.2 billion in 2006. Bermudez declined to cite Mexico production figures or specific product volumes.

Gross domestic product growth in Mexico was projected at the beginning of this year at 3.8% for full year 2007, up from 3.6% in 2005, according to analysts at UBS Investment Research, in Stamford, CT. Inflation is projected to remain flat at 3.3%. The paint and coatings market in Mexico typically grows at a few percentage points faster than GDP, though segment growth is tempered by the impact of the U.S. economy.

Apart from serving the Mexican, U.S. and Canadian markets, the Queretaro plant will better position the company to increase exports to the Caribbean, Central American and the Andean countries, Bermudez said. In addition, Rohm and Haas operates manufacturing facilities in Argentina and Brazil serving the Southern Cone markets.

The investment in the more advanced technology for Queretaro is part of the company's expansion plans in Latin America, called Vision 2010, which also is being implemented in other regions of the world.

"We expect to grow in the region by double digits over the next few years," said Bermudez, who was an architect of the plan for Latin America. "The Mexican market, which traditionally grows by six percent to eight percent, is more linked to the U.S. economic cycles, but should grow more rapidly this year."

Prior to being named regional director in late March, Bermudez served as Latin American Region general manager for paint and coatings materials. He also was appointed to Rohm and Haas' Leadership Council in April, and succeeds Carlos Festa, who has left the company after 20 years.

Rohm and Haas has production facilities in Argentina at Zarate, as well as offices in Buenos Aires. In Brazil, the company has offices in Sao Paulo and a production facility in Jacarei, also in Sao Paulo state. The company also has offices in Santiago, Chile and Baranquilla, Colombia.