Latin America Reports

Rohm & Haas opens $20 million Mexico plant

By Charles W. Thurston | August 11, 2008

Rohm & Haas increases production in the Latin America region.

Rohm & Haas has recently opened a $20 million emulsion polymers and polyacrylates manufacturing plant in Santiago de Quertaro, in Mexico's Quertaro state, replacing an older facility at Apizaco with dated technology. The new facility embodies the company's Vision 2010 plan for the Latin American region, including best technology and lowest cost base. Dow Chemical, which on July 10 purchased Rohm & Haas, plans to operate the company as an independent subsidiary.

The Quertaro facility will have approximately 100 employees. In June, the parent company announced a workforce reduction of up to 140 jobs from locations near Philadelphia and in Delaware.

The new plant is designed to provide Mexico, the Andean countries, Central America and the Caribbean with a high performance technology and services center, as well as with paints, coatings and additives. The plant will also supply some materials to the U.S. Located about 120 miles north of Mexico City in the Parque Industrial Quertaro industrial park, the new plant is adjacent to Mexico's Highway 57, the country's primary trucking artery running north and south.

Rohm & Haas has been ramping up domestic Mexico sales and regional export sales rapidly over the past few years, and expectations are for sales growth of between 10-15% over the coming year, according to Jose Maria Bermudez, the company's Latin America regional vice president and general manager for paint and coatings. In 2007, the company had total sales of $138 million in Mexico, and demand has been up approximately 15% over the first half of 2008, according to comments to the press by Mauro Trevisani, the general manager of Rohm & Haas Mxico, at the plant opening. Expectations are that sales will double by 2010, another company official noted.

Rohm & Haas produces paints, coatings and a range of additives, including biocides, dispersants, opacifiers and rheology modifiers. According to statements attributed to Csar Soto Aguilar, the marketing manager for the company, an additional $5 million to $7 million will be spent over the next five years to improve production of resins and biocides at the Quertaro plant.

Rohm and Haas also has manufacturing facilities in Argentina, Brazil and Colombia. The Brazilian operations generated approximately $100 million in sales in 2007, according to one Sao Paulo report, which also indicated that Rohm & Haas was considering a Latin American paint and coatings acquisition over the near term. Sales in Latin America have been boosted by the housing shortage and by the rising per capita GDP growth.

Mexico's economy is growing much faster than the U.S. economy, and new calculations on the size of the gross domestic product place it at nearly $1 trillion as of January 1, according to Banamex and UBS Pactual. The adjustment in the calculations are likely to boost the current estimate for GDP expansion of three percent this year. The Mexican paint market generally expands faster than overall GDP. In contrast, the company predicted that the U.S. paint market is likely to contract by at least seven percent this year, following a similar contraction in 2007.

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