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Sherwin-Williams targets niches in Mexico

Sherwin-Williams expands operations in Mexico to offset the negative effects of the global recession.

By Charles W. Thurston

Published November 2, 2009
Related Searches: Industrial Coatings Wood Finishes
Sherwin-Williams is responding to the economic crisis in Mexico along with the rest of Latin America with the optimistic determination that has enabled the company to survive there for close to a century.

"We arrived in Mexico during the crisis of 1929, and we don't think the current situation will continue forever," said Heverton Dos Santos, director of Sherwin-Williams' operations in Mexico. "Creativity is what makes the difference between surviving a crisis and not surviving."

A long-time official for Sherwin-Williams in Brazil and now in Mexico, Santos made the comments to local press on the company's 80th anniversary in Mexico, noting that the Mexican market level of 2008 is not likely to return before 2011.

Part of the company's strategy for survival now is to target niches where its products have yet to command strong market share, including aerosols and wood finishes, Heverton said. Among recent product launches or campaigns in Mexico, Sherwin-Williams has begun targeting medical facility consumers for its antibacterial architectural paint line, Loxon Cielorrasos, and has gained new private hospital customers in several key cities. Similarly, Sherwin-Williams' Rexpar line is adding its Pisos de Madera poly­urethane product that targets interior wood finishes market. Additionally new packaging is being used for Novacor Piso, a high-traffic acrylic.

Sherwin-Williams' active trade marks in Mexico include Sherwin Williams; Kem-Tone; Kem-Glo; Lustral; Cromalit; Vini-Hogar; Vini-Mundo; Napko; Nap; and Val.

A year ago, Sherwin-Williams announced plans to increase capacity in Brazil by 60%, through an investment of $18 million. But currently operating in Mexico at only 80% of capacity, Sherwin-Williams still is able to manufacture 90% of its Mexican sales in Mexico. As a result new capacity investment in the region may be delayed. The company's sales declines in Mexico have been worst in the automotive segment, where a drop of 40% has taken place this year.

"The company doesn't disclose its investment plans, but we have made some small acquisitions in Mexico over the past two years, though still not enough to move the meter much," said Mike Conway, a company spokesman in Cleveland, OH/USA.

In 2008, Sherwin-Williams purchased Flex Recubrimientos y Acabados Automotrices, helping firm its leadership in after-market automotive paints. At the time, Flex sales were estimated at $14 million. Sherwin-Williams also purchased industrial coatings manufacturer Napko last year, for which sales were estimated at $20 million.

Sherwin-Williams' paint stores group operated 110 branches in Mexico at the end of 2008, and plans include several more openings. Sherwin-Williams' Mexico manufacturing facilities include locations in Monterrey, Texcoco and Vallejo, within its global finishes group. Distribution facilities in Mexico include locations in Guadalajara, Hermosilla, Mexico City, Tijuana and Vallejo. Overall, the company employs approximately 500 personnel in Mexico, and employment reduction percentages have been limited to single digits.

Efforts to gain public support as a socially-conscious company have led Sherwin-Williams to participate in a host of painting projects, including historic buildings, public arenas and other localized developments. Recently, the company gained publicity for its participation in the Paint Your School program.

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