Mexico’s manufacturing sector is a well-oiled machine. Manufacturing production in Mexico increased 3.37 percent in July 2014 over the same month in the prior year, and it has averaged 2.52 percent over the past decade, according to the Instituto Nacional de Estadística y Geografía (INEGI).
A good portion of the manufacturing growth is dedicated to white goods, and particularly to appliances, with production led by Mabe, based in Mexico City. Globally, appliances represent some 13 percent of the powder coatings market, according to a study by the Paint Research Association.
Mexico’s demand for white goods is driven by the expanding population, which at some 123 million, ranks 11th in global population rankings, behind Japan and ahead of Canada. Thanks to the success of the North American Free Trade Agreement, Mexico’s GDP per capita was close to $8,500 in 2013, compared with China at $3,600 and Brazil at $5,900, according to Trading Economics, using World Bank data.
In September, AB Electrolux agreed to acquire the appliances business of General Electric for $3.3 billion, including a 48.4 percent share in privately-held Mabe. GE Appliances and Mabe have had a joint venture for three decades and a large portion of the GE product line sold in North America was manufactured by Mabe, GE notes. Mabe had 2013 sales of estimate $4 billion and has 21,000 employees.
GE also noted that “By the mid ‘90s, more than two-thirds of all gas ranges and refrigerators imported into the U.S. were designed and manufactured by Mabe in Mexico, while 95 percent of those sold under the General Electric names were designed in Mabe’s San Luis Potosi plant.” Mabe has 15 manufacturing facilities and Whirlpool is now its greatest competitor in Mexico.
As such, Mabe is “the appliance leader in Latin America, it also sells its products in about 70 countries,” Mabe indicated. Mabe’s market share in Mexico is estimated at 47 percent, is 43 percent in Colombia, 60 percent in Venezuela, and 26 percent in Canada, the company indicates.
Among powder coatings suppliers to Mexico, Axalta Coating Systems, based in Philadelphia, in August announced plans to invest $10.5 million in Tlalnepantla, Mexico, to expand capacity to produce resins used in the manufacture of transportation coatings. “We export from Mexico and Colombia to customers in Central America and the rest of South America, respectively. Specifically, we operate in El Salvador, Guatemala and Honduras where we are focused on generating product and brand awareness and are operating with one of the most important distributors of the region,” said Alfredo Villalobos, the company industrial director for Latin America.
Axalta is also targeting the architectural construction sector. “For the architectural segment, we have developed a line of powder coatings based on a sublimation printing process to produce aluminum architectural pieces with unique and attractive finishes and that offer superior performance along with a low cost product portfolio that we believe will also grow in the segment,” he added.
Among other powder coat suppliers to Mexico is TCI of Ellaville, GA, which recently expanded its technical service support in Mexico, with plans to service Latin America in part from there.